The US Court of Appeals for the First Circuit reversed a district court's order granting a motion for attorneys' fees pursuant to the Copyright Act, finding that the dismissal deferred adjudication on the merits to an arbitrator and defendant could not be considered the prevailing party in the action. Luis Adrián Cortés-Ramos v. Sony Corporation of America, et al., Case No. 16-2441 (1st Cir., May 4, 2018) (Barron, J).

In 2014, Luis Adrián Cortés-Ramos, a Puerto Rican musician, entered a song contest organized by Sony by submitting one of his original songs. Ricky Martin was set to sing the winner's song at the grand opening of the Federation Internationale de Football Association World Cup championship, and the song was to be included on the 2014 World Cup album. Cortés-Ramos did not win the competition. Later in 2014, Ricky Martin released a song titled "Vida." Cortés-Ramos believed it was almost identical to the song he submitted in the contest and filed a lawsuit in district court against Sony and Martin, claiming direct and vicarious copyright infringement under the Copyright Act. Cortés-Ramos later dismissed his claims against Ricky Martin.

The district court granted Sony's motion to dismiss, holding that Cortés-Ramos was bound by the arbitration clause included in the rules for the contest. The court also held that Cortés-Ramos' copyright claim failed in part because he did not register his song, and that Cortés-Ramos did not provide factual allegations to support his claim that the works were almost identical to allow the court to "infer that there was factual copying." Cortés-Ramos appealed, and the First Circuit affirmed the district court's ruling compelling arbitration, noting that Cortés-Ramos's claims had not been extinguished but simply left to the arbitrator to decide.

On remand, Sony moved for attorneys' fees. The district court awarded Sony $47,601.78 in attorneys' fees, holding Cortés-Ramos' claims to be "objectively quite weak," and found Sony to be the prevailing party. Cortés-Ramos appealed.

Under the Copyright Act, the district court may allow the recovery of full costs and reasonable attorneys' fee by the prevailing party. The First Circuit reversed the award of attorneys' fees, finding that Sony did not qualify as the prevailing party because the only material alteration in the parties' legal relationship concerning the Copyright Act arose from a ruling regarding the forum in which Cortés-Ramos' Copyright Act claims must be heard, and under this rubric, Sony was not considered the prevailing party under the Copyright Act.

Attorneys' Fees Award Dismissed Pending Arbitration

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.