The U.S. Court of Appeals for the Eleventh Circuit affirmed a district court’s decision holding that the voluntary dismissal of a copyright owner’s claims does not make the defendant a prevailing party entitled to recover attorneys’ fees under the Copyright Act. Affordable Aerial Photography, Inc. v. Prop. Matters USA, LLCCase No. 23-12563 (11th Cir. July 30, 2024) (Wilson, Grant, LagoaYY.)
Affordable Aerial Photography (AAP) has filed suit against Property Matters and Home Junction for allegedly infringing the copyright of a 2010 photograph titled “Presidential Place Front Aerial 2010 AAP,” which depicts an aerial view of a condominium complex. AAP owns all of Robert Stevens’ real estate photographs and related products (slideshows, virtual tours, stock photography) and licenses them for limited use by clients, such as luxury real estate companies. Property Matters is a real estate brokerage and Home Junction is a real estate marketing solutions and services provider that designed and maintains Property Matters’ website.
The work was published with copyright management information and registered with the Copyright Office in April 2018. During or before April 2017, the work appeared on Property Matters’ website without permission, but AAP did not discover the alleged infringement until February 2022. After AAP filed suit, Property Matters filed a motion to dismiss the complaint, arguing (in relevant part) that 17 U.S.C. § 507(b) provides a three-year statute of limitations from the time the claim accrues (ieApril 2017) to file a civil action, and therefore AAP’s action was filed more than two years late. The district court denied the motion without prejudice. AAP then filed a notice of voluntary dismissal without prejudice under Rule 41(a)(1)(A)(i) with respect to its action against Property Matters and soon thereafter filed a joint notice of settlement with Home Junction, closing the case.
Property Matters then moved for attorneys’ fees under 17 U.S.C. § 505, asserting that “the court may also award reasonable attorneys’ fees to the prevailing party as part of costs.” AAP argued that Property Matters was not the prevailing party because the voluntary dismissal was without prejudice and the statute of limitations had not yet expired. The district court found that the voluntary dismissal did not materially alter the legal relationship between the parties. The district court applied the discovery rule to conclude that AAP’s claim of copyright infringement did not arise until the company discovered the alleged infringement in February 2022, and that AAP was therefore not barred from asserting its claim of copyright infringement in a separate action against Property Matters until February 2025. Property Matters appealed.
Review of the legal question in the appeal proceedings newthe Eleventh Circuit affirmed. The court reasoned that a defendant is not the prevailing party when a plaintiff’s action is voluntarily dismissed without prejudice under Rule 41(a)(1)(A)(i). This is true regardless of whether a statute of limitations has expired. The court explained that a defendant does not attain prevailing party status solely because a plaintiff is unlikely or unable to re-state his claims as a practical matter. Instead, the district court itself must act to dismiss or reject the plaintiff’s claims. The court rejected the cases Property Matters cited in support of its arguments because there were substantial differences in the facts. The court found that a defendant can be considered a prevailing party after voluntary dismissal with Prejudice or sometimes even voluntary dismissal without Prejudice if the dismissal occurs after the statute of limitations has expired. However, because AAP’s copyright infringement claim against Property Homes was voluntarily dismissed without prejudice and the statute of limitations had not yet expired, Property Homes could not be considered a prevailing party when it came to recovering attorneys’ fees.
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