Lynwood Investments CY Limited v. Konovalov
- Maxine Chesney
- 3:20-cv-03778
- U.S. District Court · Northern District of California
- 15
In Lynwood Investments v. Konovalov, Judge Chesney denied a stay and found defendants entitled to copyright attorneys’ fees, postponing only the amount determination.
The F5 Entities and Individual Defendants were found entitled to seek attorneys’ fees from Lynwood under the Copyright Act, but the amount remained unresolved pending supplemental submissions and further briefing.
What happened
In Lynwood Investments CY Limited v. Konovalov, the defendants asked for attorneys’ fees after the court dismissed Lynwood’s claims and Lynwood dismissed the remaining claims. Lynwood had also appealed the dismissal order and asked the court to wait for the appeal.
The defendants argued that Lynwood’s copyright claim was unreasonable because it did not adequately identify the copyrighted work or which defendant allegedly infringed it. Lynwood opposed the fees and argued that the court should defer deciding them until after the appeal.
Judge Chesney denied the request to delay the fee decision. She found the defendants entitled to attorneys’ fees under the Copyright Act but did not decide the amount because their records did not provide enough detail; she allowed them to supplement their motions and set deadlines for further briefing.
The detailed version
- Lynwood Investments CY Limited v. Konovalov · No. 3:20-cv-03778
- Maxine Chesney
- Dec. 20, 2022
Background
Lynwood filed this action seeking more than $750 million in alleged damages arising from a claimed conspiracy to take the NGINX enterprise from Rambler Internet Holding LLC. The court’s prior orders dismissed the claims that remained selected for litigation, and Lynwood later dismissed the 16 claims that had been stayed. Lynwood appealed the August 16, 2022 dismissal order; the opinion states that the appeal was pending before the Ninth Circuit.
The F5 Entities—F5, Inc., NGINX., Inc. (BVI), and NGINX Software, Inc.—asked for $837,602.15 in fees under section 505 of the Copyright Act. The Individual Defendants—Maxim Konovalov, Igor Sysoev, Andrey Alexeev, Maxim Dounin, Gleb Smirnoff, and Angus Robertson—asked for $770,367.10 under the same statute. The requests covered work defending Lynwood’s direct copyright-infringement claim and claims the defendants described as related.
Request to Delay the Fee Decision
Lynwood asked the court to wait until the Ninth Circuit resolved the pending appeal. The court applied four factors commonly used to decide whether to stay, or pause, proceedings during an appeal: the likelihood of success on appeal, possible irreparable harm without a stay, injury to other parties, and the public interest.
The court found that three factors weighed against a stay and one factor favored it. Lynwood had not made a strong showing that it was likely to succeed on appeal and had not shown irreparable harm. The court could not definitively determine whether the defendants would be harmed by a stay because the record did not provide information about Lynwood’s finances, so that factor favored a stay. The court found that deciding the fee issue promptly would better serve judicial efficiency. It therefore denied Lynwood’s request for a stay.
Entitlement to Fees
Under the Copyright Act, a court may award a reasonable fee to the prevailing party. The court considered the defendants’ degree of success, whether Lynwood’s copyright claim was objectively unreasonable, and whether a fee award would further the Copyright Act’s purposes.
The court found that the defendants achieved complete success because all of Lynwood’s claims had been dismissed with prejudice. It also found Lynwood’s copyright claim objectively unreasonable, although not frivolous. In the court’s view, Lynwood failed to identify the copyrighted work with sufficient specificity, failed to identify which defendants allegedly infringed which copyright, and continued asserting that the copyrighted work included software that had been conceived but not developed, even after these deficiencies had been identified.
The court further found that awarding fees would advance the Copyright Act’s purposes. It reasoned that the lawsuit sought more than $750 million and requested destruction of copies of NGINX software, while evidence submitted by the defendants indicated that any loss Rambler arguably suffered was around $810,000. The court concluded that all three factors it analyzed favored a fee award. It did not address the parties’ arguments about Lynwood’s motivation because it found the other considerations sufficient.
Amount of Fees
The court had not yet determined the amount of fees. It explained that the lodestar method calculates a fee by multiplying the reasonable hours worked by a reasonable hourly rate, while excluding excessive, duplicative, or unnecessary work. The court found that the defendants’ supporting records were not specific enough to determine whether the claimed hours were reasonably spent. For example, the records often grouped multiple kinds of work together or failed to explain the subjects researched or investigated.
The court therefore gave both groups of defendants leave to supplement their motions with more detailed records. It set January 17, 2023, for the defendants’ supplemental submissions, February 7, 2023, for any opposition, and February 21, 2023, for any replies. The motions would then stand submitted unless the parties were otherwise advised.
Disposition
The court found the defendants entitled to an award of attorneys’ fees, denied Lynwood’s request to defer the fee decision, and allowed the defendants to supplement their motions as to the amount. The opinion did not set the final dollar amount of fees.
Read the full 15-page opinion on CourtListener, the free public archive maintained by the Free Law Project.