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FASA CORP. v. PLAYMATES TOYS

April 1, 1998

FASA CORPORATION and VIRTUAL WORLD ENTERTAINMENT, Plaintiffs,
v.
PLAYMATES TOYS, INC., Defendant.



The opinion of the court was delivered by: CASTILLO

MEMORANDUM OPINION AND ORDER

 This is the fourth and hopefully last opinion this Court will issue in this hotly contested copyright and trademark lawsuit. It is the Court's sincere hope that this opinion, which addresses prevailing defendant Playmate Toys, Inc.'s ("Playmates") request for attorneys' fees against the losing plaintiffs, FASA Corporation and Virtual World Entertainment ("FASA"), will once and for all end this litigation, which involved the parties' copyright and trademark rights to their respective robot-like battlefield characters and toys.

 Relevant Facts

 This lawsuit pre-exists this Court's tenure. This Court received this trademark and copyright case in May of 1994. The facts surrounding this lawsuit are adequately set forth in the prior three opinions this Court has already written in this case: Fasa Corp. v. Playmates Toys, Inc., 869 F. Supp. 1334 (N.D. Ill. 1994) (" FASA I") (partially granted and partially denied defendant's motion for summary judgment); Fasa Corp. v. Playmates Toys, Inc., 892 F. Supp. 1061, 1070 (N.D. Ill. 1995) (" FASA II") rejected Playmates' affirmative defense of waiver); and Fasa Corp. v. Playmates Toys, Inc., 912 F. Supp. 1124-74 (N.D. Ill. 996) (" FASA III") (Court's findings of fact and conclusions of law, which entered judgment for Playmates on FASA's remaining trademark and copyright claims). The Court will assume that the interested readers of this opinion have familiarity with the Court's prior three opinions and will not repeat all the facts contained in those opinions herein.

 Procedural History

 This Court has previously addressed the issue of Playmates' attorneys' fees and, in the exercise of its discretion, has consistently declined to make such an award. Initially, after exhaustively reviewing the extensive evidence presented by the parties at trial, and preparing numerous drafts of a complex and detailed opinion resolving vigorously contested issues, the Court concluded:

 
The bottom line in this case is that Playmates made a conscious business decision that it could proceed with the development of its EXO-SQUAD toy line after it had been given access to the BATTLETECH designs without the necessity or cost of obtaining a license from FASA. After extensive and undoubtedly costly litigation, this business decision has been found by this Court not to violate FASA's legal rights. Nevertheless, the Court believes that the facts of this case do not warrant the imposition of any costs upon FASA for seeking to vindicate its legally protectible rights. This case is dismissed with prejudice with both sides to bear their own costs.

 FASA III, 912 F. Supp. at 1174.

 Thereafter, at Playmates' request, the Court clarified that its initial decision was intended to deny not just costs, but also attorneys' fees:

 
The only reason I'm making a record about this is to tell you that I've considered the case. I considered it very closely. I considered it against the standards that are set by the Lanham Act and the Copyright Act for attorneys' fees, and it was not an accident by any sense of the word that I indicated that the parties are to bear their own costs, which I fully interpreted to mean attorneys' fees.
 
I cannot conclude in good faith that those standards have been met, whether or not we're talking about the Trademark Act, and we're talking about the B[ASF] Corp. v. Old World Trading Company, which is the Seventh Circuit case in 1994, 41 F.3d 1081, or whether or not I look to the Supreme Court's case in Fogerty v. Fantasy, Incorporated, 510 U.S. 517, 114 S. Ct. 1023, 127 L. Ed. 2d 455 (1994) or whether I look at the way Judge Shadur has interpreted that in Sassafras Enterprises, 889 F. Supp. 343, and some of the Third Circuit and Second Circuit cases that I've taken a look at. I'm very mindful of the fact that this was an expensive piece of litigation. I'm very mindful of that, and I learned, I am telling you, the hard way about how much evidence was before the Court and how many nuances there were to that evidence, and it is with all of those things in mind that I'm going to deny your motion for attorneys' fees and deny your motion for clarification.

 Transcript of February 13, 1996 Hearing at pp. 2-3.

 This matter is now back before the Court because on appeal the Seventh Circuit indicated it was unable to ascertain the standard used by the Court in exercising its discretion to deny fees:

 
Although we think it possible that the district court applied the proper legal standard and did not abuse its discretion in denying Playmates its fees, we have reluctantly concluded that the court's order may also have been based on a misapprehension of the standard for copyright cases established in Fogerty v. Fantasy, Inc., 510 U.S. 517, 127 L. Ed. 2d 455, 114 S. Ct. 1023 (1994). We therefore remand the case to the district court so that it may reconsider or clarify its order in light of this standard.

 FASA Corp. v. Playmates Toys, Inc., 108 F.3d 140, 141 (7th Cir. 1997). The facts in this case have not changed since the Court made its two previous rulings. After a careful evaluation of the parties' post-remand briefs on the remaining attorneys' fees issue, this Court does not see any reason to change its view that Playmates is not entitled to attorneys' fees under the circumstances presented by this case. Thus, the Court issues this fourth opinion to clarify its prior orders that denied Playmates its attorneys' fees.

 Analysis

 In compliance with the Seventh Circuit's opinion, Playmates has limited its request for attorneys' fees at this stage of the litigation to the Copyright Act. *fn1" The Copyright Act of 1976 provides in relevant part that in any copyright infringement action "the court may... award a reasonable attorneys' fee to the prevailing party as part of the costs to be determined in the Court's discretion." 17 U.S.C. ยง 505 (1996). The United States Supreme Court has admonished that fees should not be awarded as a matter of course, but in light of various equitable factors, keeping in mind the purpose of the Copyright Act and treating prevailing plaintiffs and prevailing defendants alike. Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n. 19, 127 L. Ed. 2d 455, 114 S. Ct. 1023 (1994). In Fogerty, the Court rejected the frequently used "dual standard", according to which prevailing plaintiffs were generally awarded attorneys' fees as a matter of course, while prevailing defendants had to show that the original suit was frivolous or brought in bad faith. However, the Court also rejected the "British ...


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