Seventh Circuit Remands Safety Manual Copyright Infringement Case to Award Attorneys' Fees to Prevailing Defendant

Holding:

In this infringement dispute over plaintiff-appellee Eagle Services Corp.'s ("Eagle") copyrighted safety manual, the U.S. Court of Appeals for the Seventh Circuit reversed the decision of the District Court for the Northern District of Indiana's decision, and remanded the case to compute and award reasonable attorneys' fees to defendant-appellant H20 Industrial Services, Inc. ("H2O"). Eagle sued H20 in the U.S. District Court for the Northern District of Indiana for copyright infringement for the use of Eagle's safety manual. H20 prevailed in the District Court on a motion for judgment as a matter of law, but appealed the District Court's refusal to grant attorneys fees. On appeal, the Seventh Circuit overturned the District Court's finding that the suit was not frivolous and was not filed in bad faith. The rule in a copyright case, under Copyright Act, 17 U.S.C. Section 505, is that a prevailing defendant receives an award of attorneys' fees unless the plaintiff shows its lawsuit was neither frivolous or filed in bad faith. Here, Eagle failed to demonstrate the validity of its suit against H2O and was ordered to pay attorneys' fees.

Detailed Summary:

Plaintiff-appellee Eagle was in the business of cleaning up contaminated sites. Four staff members left their employment with Eagle to form their own company (defendant-appellant H2O) to compete with Eagle. Opinion, p.1.

Eagle had a copyrighted safety manual, pursuant to a compilation under 17 U.S.C. Sections 101 (“compilation”), 103(b), as the manual consisted mostly of quotations from Occupational Safety and Health Act (“OSHA”) regulations.  H2O later prepared its own manual, and other than two Eagle spies used by Eagle to obtain under cover its copies of its own manual from H20,  no prospective customer of H2O was ever shown the Eagle…

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