Grecco v. Age Fotostock America, Inc.

Nature of the motion

Age Fotostock America, Inc. moved under Federal Rule of Civil Procedure 54(d) and 17 U.S.C. § 505 for an award of its costs and reasonable attorneys’ fees as the prevailing party. The court decided the motion based on the parties’ written submissions and without oral argument.

Background

Michael Grecco is a photographer who licenses his photographs through Michael Grecco Productions, Inc. Four photographs taken in the 1990s were at issue. The photographs were uploaded to a website operated by agefotostock Spain, S.L., where they were displayed and offered for licensing in the United States. Age Fotostock America was described as agefotostock Spain’s local United States distributor and as having a limited sublicense to images uploaded to the website.

The plaintiffs sued Age Fotostock America, alleging direct and secondary copyright infringement under 17 U.S.C. § 106 and removal or alteration of copyright-management information under 17 U.S.C. § 1202(b). The court previously denied the defendant’s motion to dismiss. It later denied the plaintiffs’ motion for partial summary judgment and granted the defendant’s cross-motion for summary judgment in its entirety. The court’s earlier opinion concluded that the Copyright Act did not extend protection to unconsummated offers, that the secondary-liability claims lacked sufficient connections to the United States, and that the plaintiffs had not presented enough evidence of the required intent or knowledge for their § 1202 claim. Judgment was entered for Age Fotostock America, and the case was dismissed with prejudice.

Parties’ arguments on fees and costs

Age Fotostock America argued that the plaintiffs’ claims were objectively unreasonable because, before and at the beginning of the lawsuit, they had been told that agefotostock Spain operated the website and that Age Fotostock America had not issued licenses or made sales to end users for the photographs. The defendant also argued that the plaintiffs continued litigating after discovery confirmed those facts, and characterized Michael Grecco as a serial litigant who had filed more than one hundred copyright cases since 2016.

The plaintiffs opposed the request. They argued that the case involved difficult and unsettled copyright questions, including whether an unconsummated offer to distribute a work can violate a copyright owner’s rights. They also argued that filing many infringement cases did not itself show bad faith or unreasonableness.

Court’s analysis

Under § 505, a court may award full costs and reasonable attorneys’ fees to a prevailing party in its discretion. The court must exercise that discretion equitably, considering factors such as frivolousness, motivation, objective unreasonableness, and the need for compensation or deterrence, while applying those considerations evenhandedly to prevailing plaintiffs and defendants.

The court concluded that the plaintiffs’ claims were “far from objectively unreasonable.” A central issue—whether an unconsummated offer to distribute a copy can itself constitute copyright infringement—had not been resolved by the United States Court of Appeals for the Second Circuit. The court also noted that another decision from the same district had adopted a different interpretation. The existence of conflicting authority supported the conclusion that the plaintiffs’ position was reasonable even though they did not prevail.

The court further explained that the plaintiffs were not required to rely on the defendant’s and its parent company’s representations, particularly because those representations included legal conclusions. Whether there were enough additional facts connecting conduct abroad to the United States for secondary copyright liability involved both legal and factual questions. The court also rejected the argument that the number of infringement lawsuits filed by Grecco necessarily showed unreasonableness or bad faith, and it did not infer bad faith from his work helping photographers seek compensation for unauthorized uses.

Disposition

The court denied Age Fotostock America’s motion for costs and attorneys’ fees. It directed the Clerk of Court to close the motion on the docket.