Live Face on Web, LLC v. Renters Warehouse, LLC

Background

Live Face on Web, LLC develops software and video technology that allows customers to display a virtual “personal host” on their websites. Live Face sued Renters Warehouse, LLC and Kevin Ortner for alleged copyright infringement based on a personal host featured on Renters Warehouse’s website. Live Face alleged that Ortner was an owner, chief executive officer, or president of Renters Warehouse during the relevant period.

Discovery responses revealed that Brenton Hayden, rather than Ortner, was Renters Warehouse’s chief executive officer during that period. Live Face then moved to dismiss its claim against Ortner, explaining that contradictory public information had made its decision to name him reasonable. The court granted that motion on August 28, 2018, and dismissed the claim against Ortner with prejudice. The court previously denied Ortner’s request for fees and costs under Rule 68 but did not otherwise address fees and costs between Ortner and Live Face.

Motion for Fees and Costs

Ortner sought attorneys’ fees and costs under Section 505 of the Copyright Act, which permits a court to award fees and costs to a prevailing party in its discretion. Live Face argued that the motion was untimely, that Ortner was not a prevailing party, and that the circumstances did not justify an award.

Timeliness

The court held that Ortner’s motion was timely. The applicable rule generally requires a fee motion to be filed within 14 days after judgment unless a statute or court order provides otherwise. The court determined that the deadline ran from the October 2, 2018 judgment, not the August 28 dismissal order, making Ortner’s October 11 motion timely.

Prevailing-Party Status

The court held that Ortner was a prevailing party under Section 505. A prevailing party is one who obtains court-ordered relief that materially changes the parties’ legal relationship. The court concluded that dismissing Live Face’s claim against Ortner with prejudice materially changed that relationship. Ortner therefore could seek fees and costs, although this did not guarantee an award.

Equitable Factors

The court then exercised its discretion under Section 505. It considered factors including whether Live Face’s position was frivolous or objectively unreasonable, whether Live Face had an improper motive, and whether fees were needed for compensation or deterrence.

The court found that Live Face’s decision to name Ortner was objectively reasonable enough to weigh against awarding fees. Although Live Face may not have conducted basic research before naming him, its explanation based on contradictory public information was plausible. The court also found no improper motive. Live Face sought dismissal shortly after learning through discovery that Ortner did not control the website during the relevant period. Finally, the court found little need for compensation or deterrence because Live Face’s position was neither objectively unreasonable nor frivolous, and the court discerned no improper motive. This factor weighed only marginally in Ortner’s favor.

Disposition

Balancing the factors, the court held that they did not support an award of attorneys’ fees and costs under Section 505. The court denied Kevin Ortner’s motion for attorneys’ fees and costs.