Revisiting If Suing Bloggers For Copyright Infringement Can Be Profitable–BWP v. Mishka

Ever since the Righthaven debacle, I’ve been wondering about the profitability of copyright enforcement actions against bloggers. Bloggers aren’t the deepest pockets, and numerous copyright doctrines make wins and big judgments expensive and unlikely, plus a single 505 fee shift can erase accumulated profits from many small-scale wins (see, e.g., 1, 2, 3, 4).

Today’s case gives us some additional numbers to crunch. Mishka runs a fashion blog. It included 2 photos to which BWP owned the copyrights. (BWP is a familiar name on this blog). BWP sued in August 2013. As usual in these circumstances, BWP didn’t send any takedown notices, and Mishka deleted the photos upon receiving the complaint. In March 2016, BWP accepted an offer of judgment for $7,500 plus “costs and attorney [sic] fees in the amount to be set by the Court.”

The magistrate judge is not impressed by this case:

The crux of this action is Mishka’s posting of two BWP photographs on its relatively unknown blog, and for this transgression, plaintiff has accepted a very reasonable offer of judgment in the amount of $7,500. This offer which is within the range of statutory damages permitted in a copyright infringement action, is sufficient to compensate plaintiff and deter infringement. In light of this reasonable award for the posting of two photographs, attorney’s fees are not necessary to further deter infringement on the part of defendant. Here, Mishka cooperated in ceasing any potentially infringing conduct upon being served with the lawsuit by immediately removing the photographs from its blog. One wonders whether a cease and desist letter to plaintiff would have better served the Copyright Act’s objectives and obviated the need for this lawsuit. Moreover, defendant made its position clear from the start that it was a small business and it made multiple attempts to settle this matter.

This sound familiar. In the Righthaven cases, judges expressed similar sympathies for small-time bloggers who didn’t receive a takedown notice. As a result, the magistrate recommends zero attorneys’ fees.

Nevertheless, the magistrate calculates the awardable fees if the supervising judge disagrees. Plaintiff’s lawyer asked for about $45k in fees based on about 105 total hours of work by 3 attorneys. The court haircuts the hourly rates and the hours spent, setting the number at $14k. The court also awards the $400 filing fee.

The PACER docket grows oddly quiet after this ruling from December. I emailed counsel for both sides to figure out why. I confirmed that plaintiff’s counsel didn’t challenge the magistrate ruling, but I’m less clear why the supervising judge hasn’t acted on the magistrate’s uncontested report. Assuming the supervising judge approves the report, the plaintiff will get a total of $7,900 from this case ($7,500 damages + $400 for the filing fee).

Assuming the defendant actually pay and the plaintiff’s counsel gets 100% of the payment, and ignoring any other out-of-pocket costs incurred along the way, the lawyers will get $75/hr–a far cry from the lead plaintiff counsel’ purported hourly rate of $700–for 3 years of litigation. Is that a good economic deal?

There are good reasons to believe no dollars will be forthcoming. I noticed that the defendant has been sued separately by Bank of America for over $400k (American Express Bank, FSB v. Mishka NYC, LLC, Docket No. 522511/2016 (N.Y. Sup Ct. Dec. 20, 2016)). Sounds like there may be a creditor queue.

Last summer, I blogged about a P2P enforcement action where the court denied attorneys’ fees, turning a win in court into a bad financial loss. The same appeared to have happened here. I once again have to ask: can widespread copyright enforcement actions be profitable?

Case citation: BWP Media USA, Inc. v. Mishka NYC LLC, 2016 WL 8309676 (E.D.N.Y. Dec. 28, 2016)

UPDATE: The supervising judge approved the magistrate’s report: “the Court has carefully reviewed the report and recommendation, and finds it to be correct, well-reasoned, and free of any clear error. The Court, therefore, adopts it, in its entirety, as the opinion of the Court. Accordingly, BWP’s request for attorney’s fees is denied, but BWP is awarded $400 in costs.”