[00:00:18] Speaker 03:
May it please the Court, my name is Andrew Deutsch, representing the Appellant Televisca Polska, which I will call TVP for ease of reference, and I have reserved two minutes for rebuttal.

[00:00:30] Speaker 03:
Your Honors, the District Court committed legal error, which would result in the reversal of its attorneys' fee award by awarding the plaintiff Spansky almost all of its legal fees, $850,000 worth.

[00:00:44] Speaker 03:
for the entire litigation based upon an isolated incident of misconduct after the lawsuit began by a low-level employee of TVP.

[00:00:54] Speaker 03:
Any proof or finding that the fees would have been incurred but for the misconduct is absent from the opinion below.

[00:01:00] Speaker 04:
Did you make that argument below?

[00:01:03] Speaker 03:
We did not, Your Honor, and I know that the plaintiff has argued waiver.

[00:01:08] Speaker 03:
We don't think there is any waiver here.

[00:01:09] Speaker 03:
We had no reason to anticipate

[00:01:12] Speaker 03:
a ruling of this nature.

[00:01:14] Speaker 03:
It was not invited by the plaintiffs.

[00:01:16] Speaker 03:
They did not ask the court.

[00:01:17] Speaker 04:
Well, let me ask about that.

[00:01:18] Speaker 04:
Sure.

[00:01:19] Speaker 04:
So, in your reply brief, you argue that you didn't afford the dismantle for the reasons that you're giving now.

[00:01:36] Speaker 04:
Yes.

[00:01:36] Speaker 04:
And you say that on page 11,

[00:01:39] Speaker 04:
That while SCI did not argue that the fee should be awarded for misconduct, it didn't ask for fees that were causally unconnected.

[00:01:47] Speaker 04:
And for that you cite their memorandum at page 11.

[00:01:53] Speaker 04:
So I look at their memorandum at page 11.

[00:02:06] Speaker 04:
And sure enough, there's nothing there.

[00:02:09] Speaker 04:
However, on page 12, it says, accordingly, SEI respectfully requests that the court award SEI its full attorney's fees, $845,000 some change.

[00:02:22] Speaker 04:
Now, you didn't think that the full amount of $845,000—I'm not talking about you personally, I'm talking about your client—you didn't think that $845,000 was costly connected, did you?

[00:02:33] Speaker 03:
No, and the fight, Your Honor, was not at all over litigation misconduct.

[00:02:37] Speaker 03:
It was over the objective reasonableness of the positions my clients took on merit.

[00:02:41] Speaker 04:
All right, then why didn't you argue that the full amount, $845,000, under any theory, was not costly connected?

[00:02:52] Speaker 04:
When you say that they didn't ask for not causally connected fees, they obviously did in your view.

[00:02:57] Speaker 03:
Well, Your Honor, I think we did not have to anticipate what in our view was effectively a punitive award rather than a compensatory award of fees by the district court.

[00:03:08] Speaker 04:
They asked for $845,000.

[00:03:10] Speaker 04:
And we certainly opposed it, Your Honor.

[00:03:12] Speaker 04:
And you had to oppose it.

[00:03:13] Speaker 04:
And one ground for opposing it, and it's the very ground you're raising here, is that it wasn't causally connected, right?

[00:03:20] Speaker 03:
Your Honor, I can only say that it was not a point that was argued by the plaintiffs below.

[00:03:25] Speaker 03:
It was the parties addressed other issues.

[00:03:29] Speaker 03:
Litigation misconduct was something which we said had not occurred on the merits.

[00:03:34] Speaker 03:
I do not believe we have forfeited the argument.

[00:03:38] Speaker 04:
You had a section of your paper below entitled The Legal Standard for Fees Award under the County Act, but there's no mention of the Goodyear case in there.

[00:03:46] Speaker 03:
Of the Goodyear case, I don't think it was decided at the time, I believe.

[00:03:50] Speaker 04:
Oh, so the issue about causation wasn't even known at the time?

[00:03:55] Speaker 03:
It had been addressed in the Second Circuit's Matthew Bender decision, but the Supreme Court had, at my belief at the time of briefing, not yet ruled on this issue.

[00:04:06] Speaker 03:
Good point.

[00:04:06] Speaker 03:
Thank you.

[00:04:07] Speaker 03:
If I may proceed.

[00:04:08] Speaker 02:
May I just ask, you stress that very heavily.

[00:04:12] Speaker 02:
episode in August, I think 2012, as if it were the only episode of misconduct.

[00:04:19] Speaker 02:
But the judge is very clear that she's relying on Moore, and the phrase is misconduct, including that episode.

[00:04:29] Speaker 03:
But nothing else was, I'm sorry, Your Honor, I'm going to interrupt.

[00:04:31] Speaker 02:
Well, and then there are references to deceptive strategies conducted by your client.

[00:04:41] Speaker 02:
in other parts of the litigation.

[00:04:45] Speaker 02:
So that, I mean, it would seem to me if you really believe that it was only the August 2012 episode that counted, you should have asked for clarification.

[00:04:58] Speaker 02:
Say, Judge, isn't it just that episode?

[00:05:02] Speaker 02:
Why are you talking about including without sufficient detail?

[00:05:07] Speaker 03:
Your Honor, I can only tell you that we would rely on the factual findings of the court.

[00:05:12] Speaker 03:
The court found one incident, made general statements.

[00:05:16] Speaker 02:
It referred to one incident.

[00:05:18] Speaker 03:
Well, the only thing we can tell whether the court exercised its discretion properly is the facts that it referred to in the record.

[00:05:26] Speaker 03:
And that is the only fact that it referred to in the record.

[00:05:29] Speaker 03:
The court found that TVP had intentionally removed geo-blocking.

[00:05:36] Speaker 03:
which it refers to elsewhere, but that is not litigation misconduct.

[00:05:39] Speaker 03:
That is conduct that occurred prior to the suit.

[00:05:42] Speaker 03:
As far as litigation misconduct is concerned, and it is the primary reason which the district court cited for an award of fees, it cited one incident involving three out of the 51 episodes taking place three months after the lawsuit began, and no other incident.

[00:05:56] Speaker 03:
We have no basis.

[00:05:58] Speaker 04:
The district court also referred to deterrence.

[00:06:00] Speaker 03:
I think that deterrence, Your Honor, was an inappropriate consideration here for two reasons.

[00:06:07] Speaker 03:
One, both the district court and... But let me just... I'm sorry, I'd be sure if I understand.

[00:06:12] Speaker 04:
If deterrence was inappropriate, then your argument about causation doesn't...

[00:06:17] Speaker 04:
go far enough, right?

[00:06:19] Speaker 04:
Causation would be enough for some part, deterrence would be enough for the other.

[00:06:24] Speaker 04:
So you have to win the argument that deterrence was an abuse of discretion?

[00:06:28] Speaker 03:
I think there are two pieces to this.

[00:06:30] Speaker 03:
To the extent of fees are awarded on litigation misconduct, the Goodyear establishes that the applicant and the court in finding must find that the fees would not have been incurred but for.

[00:06:41] Speaker 03:
When you reach deterrence, which is a more general consideration, it has to be weighed in the light of whether the positions taken were objectively reasonable by the defendant.

[00:06:50] Speaker 03:
Both the district court and this court found that my client advanced not only objectively reasonable defenses, but ones that had never been ruled on by a federal appellate court before.

[00:07:00] Speaker 03:
We think that there was both no case here for general deterrence because my client's positions were in fact objectively unreasonable.

[00:07:10] Speaker 03:
These are effectively.

[00:07:11] Speaker 02:
It's very clear that fees can be awarded even if the legal theory being advanced by the losing party was objective.

[00:07:21] Speaker 03:
Well, this downgrades what the Supreme Court in Kurtzang said was substantial weight that must be given to objective reasonableness.

[00:07:29] Speaker 03:
And they really are two sides of the same coin.

[00:07:32] Speaker 03:
If a argument is objectively reasonable, then as Kurtzang says, we don't want to deter people from making them by awards of fees.

[00:07:40] Speaker 03:
And there is no evidence here for specific deterrence because that deals with repeat infringers or repeat frivolous suitors.

[00:07:49] Speaker 03:
And there was no adjudication ever prior against my client that it had infringed any copyright either of Aspansky or anyone else.

[00:07:59] Speaker 03:
So we think that that evidence is mostly a failure on the part of the distritor to give the substantial weight to objective reasonableness, which the Supreme Court said it was required to do.

[00:08:12] Speaker 03:
With respect to compensation, which was the other consideration raised by the district court, we think that Goodyear Tire effectively addresses that.

[00:08:20] Speaker 03:
The question is, what should a litigant be compensated for?

[00:08:28] Speaker 04:
If you're about to run out of time, if you want to make an argument about the matrix, you should make it now.

[00:08:34] Speaker 03:
Your Honor, I'm going to reserve on our papers and on the matrix.

[00:08:37] Speaker 01:
Well, can I ask you a question, because you argued in the

[00:08:41] Speaker 01:
district court that an alternative to district court could rely on the AIPLA rates as reasonable.

[00:08:49] Speaker 01:
You argued that what they were asking for exceeded the median rate under that report, but am I reading the record correctly that you thought an AIPLA rate would have been reasonable?

[00:09:03] Speaker 03:
No, Your Honor.

[00:09:03] Speaker 03:
What we were saying was that the burden lay on the plaintiff.

[00:09:06] Speaker 03:
to show the reasonable rates for similar services in the community, namely what is charged for copyright work, litigation in the District of Colonia.

[00:09:15] Speaker 03:
They failed to provide anything of that nature.

[00:09:18] Speaker 01:
Well, you said the court of words, any fees at all to SEI should account for the difference between their rates and the prevailing market rates by recalculating the hourly rate for each qualified professional using the AIPLA report rates.

[00:09:33] Speaker 03:
Indeed, we did, Your Honor.

[00:09:34] Speaker 03:
And you submitted that report.

[00:09:36] Speaker 03:
Yes, Your Honor.

[00:09:39] Speaker 03:
What it results in is a need for reversal and remand, whether it is the USAO matrix that's used or those.

[00:09:47] Speaker 04:
Just to follow through on Judge Maliff's argument, you argued that the Court should look at the AIPLA report.

[00:09:55] Speaker 04:
The court did look at the ILPA report and said that was another basis for deciding, correct?

[00:10:02] Speaker 04:
She said that.

[00:10:03] Speaker 04:
Yes, Your Honor.

[00:10:04] Speaker 04:
Your brief doesn't mention the report at all.

[00:10:07] Speaker 03:
We do not.

[00:10:07] Speaker 04:
We think... So have you waived that argument?

[00:10:09] Speaker 03:
We do not think so.

[00:10:10] Speaker 03:
We think that the court's precedent establishes in Ely that the USAO metrics, and indeed this is how the district courts have interpreted it, accepting for this district court,

[00:10:21] Speaker 03:
that the USAO matrix is the default and that the burden... And it overcomes the AIPLA report?

[00:10:30] Speaker 03:
I can only tell you that subsequent to the time we briefed this, the case law has continued in the direction of saying that the reference point should be the USAO matrix.

[00:10:39] Speaker 04:
So when the judge says, I'm going to rest on the AIPLA report because you asked me to, I don't...

[00:10:46] Speaker 03:
Your Honor, I don't read the district court decision as saying that.

[00:10:50] Speaker 03:
I read the district court decision as awarding the fees that were requested by the plaintiff, which in this case were based entirely on the LSI left and matrix rates.

[00:11:00] Speaker 03:
So the AIPLA rates were not used.

[00:11:03] Speaker 04:
So at page 13 of the district court's opinion, it says, furthermore, the court is of the view that the fees requested by plaintiff's counsel would be reasonable even if measured against the rates in the AIPLA report.

[00:11:18] Speaker 04:
Excuse me for a second, Your Honor, so I can find that reference.

[00:11:22] Speaker 03:
It's at Appendix 1502.

[00:11:25] Speaker 03:
I actually don't have that in front of me right now, Your Honor.

[00:11:33] Speaker 03:
I can only agree that if that's what's there, it's what's there.

[00:11:35] Speaker 03:
But we don't believe we've waived the argument.

[00:11:37] Speaker 03:
We think this is a question of burden on the part of the plaintiff that wasn't carried and a requirement that the district court did not ask of the plaintiff.

[00:11:46] Speaker 03:
which in our view is required by the Ely decision.

[00:11:50] Speaker 01:
Do you, you don't dispute that the litigation was complex or do you?

[00:11:54] Speaker 03:
No, we don't dispute that the litigation was complex.

[00:11:56] Speaker 03:
We dispute that the plaintiff put forth to the district court a basis for assessing what a reasonable fee would be in the District of Columbia.

[00:12:04] Speaker 03:
And both the USAO matrix and the LSI Laffey matrix are used in complex litigation.

[00:12:10] Speaker 03:
It's a question of proving, which the plaintiff did not, whether the higher rates are available, and they didn't do so.

[00:12:18] Speaker 03:
May I still have my rebuttal time here?

[00:12:22] Speaker 03:
You may.

[00:12:23] Speaker 03:
Thank you.

[00:12:23] Speaker 03:
Even though you're two minutes over.

[00:12:26] Speaker 04:
That's the general practice here.

[00:12:27] Speaker 04:
We just ignore the lights.

[00:12:29] Speaker 04:
Go ahead.

[00:12:33] Speaker 00:
Good morning.

[00:12:34] Speaker 00:
May it please the court.

[00:12:35] Speaker 00:
My name is John Pascora.

[00:12:37] Speaker 00:
I'm with the firm of Loeb and Loeb, representing Spansky Enterprises, Inc., the plaintiff below, and the appellee here in this court.

[00:12:46] Speaker 00:
I think the panel has a good grip on the issues in this appeal.

[00:12:52] Speaker 00:
The first being that the district court apply the correct standard and have a basis upon which to award attorney's fees.

[00:13:03] Speaker 00:
And I know that TVP would like to make much of the fact that there was a misconduct finding, and the district court did state that she could award attorney's fees based on the misconduct alone.

[00:13:17] Speaker 00:
There was an entirely separate finding, a basis for the award, that was deterrence.

[00:13:25] Speaker 00:
And this case was a case of deterrence plus.

[00:13:28] Speaker 01:
So the Supreme Court was being quite clear that an award of full attorney's fees, this was effectively full attorney's fees for litigation, is only supposed to happen in exceptional circumstances.

[00:13:42] Speaker 01:
So the district court had to find exceptional circumstances here.

[00:13:49] Speaker 01:
And the district court cited, well, it was willful infringement.

[00:13:54] Speaker 01:
Is it your position that just willful infringement is an exceptional circumstance or is relevant to factor?

[00:14:02] Speaker 01:
It's a factor in exceptional circumstances, just that you meet that mens rea under the Copyright Act?

[00:14:10] Speaker 00:
The standard for an award of attorney's fees under the Copyright Act, as compared to some of the case laws cited by TVP under the patent statutory scheme, does not require exceptional circumstances.

[00:14:28] Speaker 00:
It is enough in a copyright case that if the court were to... I thought Kurt Singh said it was supposed to be exceptional.

[00:14:35] Speaker 00:
But even if the standard were to apply in this case, we have those exceptional circumstances here.

[00:14:41] Speaker 01:
What do you have?

[00:14:42] Speaker 01:
I'm finding a willful infringement, even though their position was objectively reasonable.

[00:14:47] Speaker 00:
I can't agree because the district court below clearly did find a willful, volitional, intentional infringement.

[00:14:58] Speaker 00:
And that's what she wrote in her opinion when she said one basis for the award could be deterrence.

[00:15:07] Speaker 00:
Deterrence alone can support all of the award.

[00:15:10] Speaker 01:
What was she deterring?

[00:15:12] Speaker 01:
Well, an infringement that was willful, but they had an objectively reasonable argument that the law didn't apply to what they were doing, or didn't constitute infringement by them.

[00:15:23] Speaker 00:
I understand what you're saying.

[00:15:27] Speaker 00:
What the court stated, and I actually agree with it, and I think that the vast body of copyright law and attorney fees awards does support this, that where you have a defendant who willfully and intentionally

[00:15:40] Speaker 00:
violates a copyright, one aspect of deterrence is to keep that defendant from engaging in that conduct again.

[00:15:49] Speaker 01:
But then that just makes attorney's fees a matter of course any time willful infringement is found, because someone will say, well, they willfully and intentionally did it, and so they need to be deterred, which will make that.

[00:16:01] Speaker 01:
And that's what Fogarty said we can't do.

[00:16:02] Speaker 00:
No, you're correct.

[00:16:04] Speaker 00:
The test isn't one of, once you satisfy that one element, it's automatic.

[00:16:09] Speaker 01:
Okay, so you agree.

[00:16:10] Speaker 00:
Yes.

[00:16:11] Speaker 01:
Okay, so then what do we have here for putting, you had the one instance of misconduct, which the two fees weren't tailored to, we're putting aside the willful infringement because that by itself can't.

[00:16:25] Speaker 01:
give you fees as a matter of course.

[00:16:26] Speaker 01:
So what do you have here?

[00:16:28] Speaker 00:
Correct.

[00:16:28] Speaker 00:
And I'm not trying to dance around it.

[00:16:31] Speaker 00:
The other aspect of deterrent that the district court actually stated and found and collaborated at length was that in this particular case, there was litigation misconduct.

[00:16:45] Speaker 00:
And I cannot agree with TVP's counsel.

[00:16:47] Speaker 01:
Well, I thought you had started this argument by saying we can put the litigation misconduct aside because we can just rely on deterrents.

[00:16:53] Speaker 01:
And now you're saying,

[00:16:54] Speaker 01:
Well, by deterrence, I'm going to look at that litigation misconduct, which in one instance is not going to get you the exceptional circumstance of fees for the entire litigation.

[00:17:04] Speaker 00:
I understand.

[00:17:05] Speaker 01:
I completely... So what do you have against you for the rest of the litigation?

[00:17:09] Speaker 00:
I'm sorry?

[00:17:10] Speaker 01:
What justifies fees for the entire litigation as opposed to those tied to the misconduct?

[00:17:15] Speaker 00:
In this case, what the district court articulated and what I believe is the law is a deterrence factor for willful infringement and... But you just said we aren't... I feel like I'm kind of going... I'm just not understanding your point.

[00:17:31] Speaker 01:
I'm going in circles here.

[00:17:32] Speaker 01:
Because it seems that you keep citing the misconduct, which was the one instance, and the fact that the infringement was willful.

[00:17:40] Speaker 01:
But as we have already held, their positions in two respects were objectively reasonable to think that they were not engaged in a violation of federal copyright.

[00:17:50] Speaker 01:
It turns out they were wrong.

[00:17:51] Speaker 01:
But it's objectively reasonable in two respects to think that they were not violating copyright law.

[00:17:56] Speaker 01:
So how can it be that there's an ultimate determination

[00:18:00] Speaker 01:
of willful infringement, yes, but they were objectively reasonable, and the misconduct does not justify the full of fees.

[00:18:10] Speaker 01:
It didn't affect the entire litigation.

[00:18:13] Speaker 01:
So I guess I'm still not hearing, and I'm sorry if I'm just not hearing your words correctly.

[00:18:18] Speaker 00:
Let me try and summarize it first, because I am having trouble getting to my second point.

[00:18:24] Speaker 00:
In this case, there's clearly willful and intentional infringement.

[00:18:31] Speaker 00:
I think that in an appropriate case and what the district court found here is the deterrence factor alone can merit a full attorney fee award.

[00:18:41] Speaker 00:
And we say full attorney fees, but SEI never submitted its full attorney fees.

[00:18:46] Speaker 00:
It was reduced fees.

[00:18:48] Speaker 00:
What the second and third points are that in this case, there was also litigation misconduct.

[00:18:56] Speaker 00:
Now, the parties dispute the extent of it.

[00:18:59] Speaker 00:
TVP would have you believe that it was one isolated item of misconduct, but that is not what the district court said in her opinion.

[00:19:07] Speaker 00:
The district court highlighted that, but referenced back her amended findings after trial, which detailed deletion of files.

[00:19:16] Speaker 00:
deletion of the evidence that would have shown that this was done intentionally, and then the creation of new files to support a defense, a factual defense.

[00:19:29] Speaker 01:
Wasn't that all the same?

[00:19:30] Speaker 01:
That's just three ways of describing the same activity.

[00:19:33] Speaker 00:
No.

[00:19:33] Speaker 01:
When they got rid of the evidence that the geo-blocking wasn't in.

[00:19:38] Speaker 00:
The first at trial, the first item,

[00:19:43] Speaker 00:
that I would describe as litigation misconduct based on the district court's award was that the computer files, the actual files that generate your ability to view the programming were deleted.

[00:19:57] Speaker 00:
28 out of 51 in a quick series within two minutes.

[00:20:04] Speaker 00:
The second thing, which the district court focused on because it found it

[00:20:10] Speaker 00:
particularly reprehensible that you would not only kind of delete evidence, but then manipulate the evidence so that it supported your case, and then come to the court and present that evidence as being factually correct when you know that it's not.

[00:20:27] Speaker 01:
That would be tied to that litigation misconduct associated with putting that evidence in.

[00:20:31] Speaker 00:
Correct.

[00:20:31] Speaker 01:
But they still were entitled to litigate and not

[00:20:36] Speaker 01:
I should think not be assessed fees just because they litigated.

[00:20:41] Speaker 01:
We don't think the law applies to us extra-territorially.

[00:20:45] Speaker 01:
We don't think it focuses on the later actor in the process, the downloader.

[00:20:50] Speaker 01:
I do appreciate what the court is saying.

[00:20:52] Speaker 01:
But you got fees for that.

[00:20:53] Speaker 01:
Did you get fees for that litigation?

[00:20:55] Speaker 00:
I'm sorry.

[00:20:56] Speaker 00:
No.

[00:20:58] Speaker 00:
No.

[00:20:58] Speaker 00:
The first time the issue of attorney's fees came up is after the district court's entry of statutory damages.

[00:21:06] Speaker 00:
The district court couldn't have considered the amount of fees as part of the statutory damages award.

[00:21:13] Speaker 00:
But going back to the question that we're facing.

[00:21:16] Speaker 01:
I just want to make sure I'm understanding your answer.

[00:21:19] Speaker 00:
Right.

[00:21:19] Speaker 01:
When you put in your fees for this litigation.

[00:21:22] Speaker 01:
Yes.

[00:21:23] Speaker 01:
Did it start after our prior decision, or did it include the time in which you were also... I know you didn't include the fees in our court, but it did include the fees in district court for litigating extraterritoriality.

[00:21:38] Speaker 01:
and the argument that the downloader is responsible for it.

[00:21:42] Speaker 00:
Correct.

[00:21:43] Speaker 00:
Correct, it did.

[00:21:43] Speaker 01:
It did include those fees?

[00:21:45] Speaker 00:
It did.

[00:21:46] Speaker 01:
So you got fees for what we said was objectively reasonable.

[00:21:50] Speaker 00:
And the district court said that as a legal matter,

[00:21:54] Speaker 00:
those arguments are objectively reasonable but I submit to the court when you're a company and you know you've intentionally done something you willfully did something and instead of admitting it and saying we have three two or three legal defenses to that infringement

[00:22:12] Speaker 00:
Instead, you deny the allegation and you inject into the case and create the cost to just expand exponentially a bunch of defenses that are based on a false premise, which is that you never did it in the first place.

[00:22:27] Speaker 00:
I see my time's up.

[00:22:29] Speaker 02:
Could I just ask a question, and that is, how do we get to the LSI FLAFE index?

[00:22:37] Speaker 00:
Well, in this case, what Spansky Enterprises' position the whole time was, was that it was a complex litigation, a complex commercial litigation.

[00:22:48] Speaker 00:
And we reduced the attorney's fees to the LSI.

[00:22:53] Speaker 02:
But there's the other Laffey index, right?

[00:22:56] Speaker 02:
Yes.

[00:22:56] Speaker 02:
Right.

[00:22:58] Speaker 02:
So what's the basis of choosing LSI over the other?

[00:23:02] Speaker 00:
The first is exactly that it was a complex case.

[00:23:07] Speaker 02:
So the other one doesn't cover complex commercial litigation at all?

[00:23:12] Speaker 00:
The other one does, but what it's been used for is in certain types of claims, routine types of claims, which the courts in this circuit have held on a number of occasions

[00:23:25] Speaker 00:
don't present complex litigation circumstances, that matrix would apply.

[00:23:32] Speaker 04:
That matrix was developed for suits against the government.

[00:23:36] Speaker 00:
In suits against the government, FOIA disputes where you would eventually get your fees at the end of the day.

[00:23:42] Speaker 00:
This court and the district courts of health, that's not complex litigation.

[00:23:47] Speaker 00:
What we presented in this case was that this copyright dispute was complex litigation, and that the fees for those sort of complex litigation are built into the adjusted LSI Laffey matrix rates.

[00:24:03] Speaker 00:
They are consistent with what you see from the various polls that were submitted, including the survey.

[00:24:08] Speaker 00:
Right, right.

[00:24:09] Speaker 00:
Now, I know that.

[00:24:09] Speaker 02:
I know that.

[00:24:10] Speaker 02:
But the reliance was on the LSI.

[00:24:13] Speaker 00:
And it wasn't a district court because the district court judge did find, based on a number of factors, that this was a complex civil litigation.

[00:24:26] Speaker 00:
I thank you for your time, unless there's something else.

[00:24:32] Speaker 03:
Thank you, Your Honors.

[00:24:33] Speaker 03:
I want to address one point, which I think has been confused by counsel for the plaintiff.

[00:24:38] Speaker 03:
And that is the distinction between pre-litigation and post-litigation conduct.

[00:24:43] Speaker 03:
All of the other issues cited by the district court, including the conduct by TVP in February, took place before the lawsuit began, and they were effectively bound up and had a determination that the infringement was willful.

[00:24:55] Speaker 03:
They were not litigation misconduct.

[00:24:57] Speaker 03:
They did not, in fact, cause any fees to be incurred in the way that litigation misconduct

[00:25:03] Speaker 03:
involved as discussed in who your tire does.

[00:25:06] Speaker 01:
They said you tried to introduce this as evidence, these altered records as evidence, so that seems to bridge the pre-litigation litigation line, doesn't it?

[00:25:16] Speaker 03:
We disputed, completely disputed the idea that these had been altered because it was our view that there were a... We would have to find clear error here.

[00:25:26] Speaker 04:
Are you making that argument that we have to overturn our fact determination?

[00:25:31] Speaker 03:
The clear error is the award of litigation.

[00:25:33] Speaker 04:
So then we're going to assume for the moment that you exist.

[00:25:35] Speaker 03:
And the second clear error is giving determinative weight to deterrence in the face of arguments that both the merits panel of this court and the district court found were objectively reasonable.

[00:25:47] Speaker 04:
Well, can I hold on to that for a minute?

[00:25:49] Speaker 04:
All right.

[00:25:49] Speaker 04:
So assuming you haven't waived the causation argument, your argument is that they are entitled to compensation for the litigation misconduct, for costs arising out of the litigation misconduct, but not for the other

[00:26:05] Speaker 04:
piece, right?

[00:26:06] Speaker 03:
That is correct.

[00:26:07] Speaker 04:
So all that the fees for that do is pay them back for the extra costs.

[00:26:15] Speaker 04:
That has no deterrent effect because if a party can raise its opponent's costs and the worst that happens is the party gets that cost back,

[00:26:25] Speaker 04:
It's not really much of a deterrent.

[00:26:27] Speaker 04:
So the judge said this was egregious, and she said that deterrence of future violations represents an important consideration in this case.

[00:26:36] Speaker 04:
And then she says not only because of TVA's, TVP's litigation misconduct, why isn't it sufficient that she is trying to deter future egregious litigation misconduct?

[00:26:50] Speaker 03:
Egregious was the very words used by the district court in Goodyear Tire, Your Honor.

[00:26:55] Speaker 03:
And the Supreme Court found that notwithstanding the assessment made by the district court of how profound the litigation misconduct might be, the principle of fee shifting is compensatory.

[00:27:09] Speaker 03:
You are awarded fees for what you had to do as a result of misconduct.

[00:27:13] Speaker 04:
Are you saying that Goodyear Tire and the other cases say you can't award fees for deterrence?

[00:27:18] Speaker 03:
I'm saying that with respect to the litigation is conduct branch of this, deterrence is not relevant.

[00:27:25] Speaker 03:
The Federal Circuit in the Rembrandt case said that while deterrence is a consideration as to whether fees should be awarded, it cannot be a consideration in the amount of fees awarded.

[00:27:36] Speaker 03:
It's only a question of whether there are or aren't fees awarded.

[00:27:39] Speaker 03:
Did you make that argument?

[00:27:40] Speaker 03:
We did in our reply brief, Your Honor.

[00:27:41] Speaker 03:
Did you make that argument for the district court?

[00:27:43] Speaker 03:
the decision had not been made.

[00:27:46] Speaker 04:
So I checked and Goodyear came out one month after the district courts, after your reef in the case.

[00:27:54] Speaker 04:
Why didn't you file afterwards?

[00:27:57] Speaker 03:
I don't think we were aware of it at the time, Your Honor.

[00:27:59] Speaker 04:
Supreme Court decision on the very issue in front of you?

[00:28:02] Speaker 03:
We were not aware of it, Your Honor, but I don't believe that it changes the law, that it binds

[00:28:07] Speaker 03:
binds this court's review of what the district court did.

[00:28:10] Speaker 03:
If the Supreme Court has changed the law or made it clearer since the district court ruled, that is the law to be applied in this case.

[00:28:17] Speaker 03:
Unless there's been a waiver.

[00:28:19] Speaker 03:
Pardon me?

[00:28:19] Speaker 04:
Unless there's been a waiver.

[00:28:20] Speaker 03:
Unless there's a waiver, but Your Honor, we think not only has there been no waiver, but this is an important case that ought to be addressed by this court.

[00:28:28] Speaker 03:
It's one of these issues that will arise again and again, and this case presents a good vehicle for its decision.

[00:28:34] Speaker 02:
Could I just ask you about the proposition that the legal argument you made was subjectively reasonable?

[00:28:43] Speaker 02:
If we assume that the proof of the infringement is basically clear except for the fact of the

[00:28:56] Speaker 02:
defense that you raised on the factual issues, could you not have simply said, yeah, of course, this conduct occurred.

[00:29:09] Speaker 02:
But we believed and believed at the time that it was legal because it was not covered by the copyright laws.

[00:29:17] Speaker 02:
And then that would have been a simple legal argument.

[00:29:21] Speaker 02:
The court would have resolved.

[00:29:25] Speaker 02:
And because she concluded it was not right, he would have lost and the litigation fees would have been trivial.

[00:29:34] Speaker 03:
Unfortunately, Your Honor, we're staring at the clearer review for the factual findings below.

[00:29:40] Speaker 03:
But it has been my client's view.

[00:29:41] Speaker 03:
It continues to be that he did not deliberately remove geo-blocking.

[00:29:46] Speaker 02:
I understand that.

[00:29:46] Speaker 02:
I take the point on that.

[00:29:49] Speaker 02:
But that doesn't explain why one has to have a lengthy trial on the facts, which were apparently

[00:30:01] Speaker 02:
And no one's mentioned the Terlecki evidence.

[00:30:06] Speaker 02:
You have things going way beyond the single episode that seem to have been the basis of the defense.

[00:30:13] Speaker 03:
Your Honor, I can only say that it was my client's sincere belief and I presented it to the best of my ability, which I think was recognized by the district court in her merits opinion, that there were valid reasons to contest that my client had removed geo-blocking.

[00:30:29] Speaker 03:
that there were two forms of failsafe for geoblocking that was not removed.

[00:30:34] Speaker 03:
And we presented that evidence for the consideration of the court.

[00:30:38] Speaker 03:
We did not view this as a walkover for the plaintiffs.

[00:30:41] Speaker 03:
And we felt that it was worthwhile presenting both our expert testimony and our factual testimony for the consideration of the court.

[00:30:49] Speaker 03:
The facts simply were not agreed to.

[00:30:51] Speaker 03:
And I don't believe having objectively reasonable arguments

[00:30:55] Speaker 03:
together with facts that we felt we could sustain, most of which have nothing to do with the alleged either willfulness conduct or litigation misconduct.

[00:31:04] Speaker 03:
I would be doing my client a disservice not to have presented them to the district court.

[00:31:09] Speaker 04:
I think the district court made clear that you personally were not in any way responsible for this.

[00:31:13] Speaker 03:
No, I understand.

[00:31:13] Speaker 04:
There's no doubt about that.

[00:31:15] Speaker 04:
The question is your client unknown to you is the problem.

[00:31:22] Speaker 03:
My duty as an attorney, I felt that it was necessary to present these facts.

[00:31:26] Speaker 03:
If the court has no other questions, thank you very much for your time.

[00:31:29] Speaker 03:
Thank you.