Good Job Games Bilism Yazilim Ve Pazarlama A. v. Saygames LLC

• Decision Date: 04 May 2023
• Docket Number: 19-cv-07916-EMC
• Parties: GOOD JOB GAMES BILISM YAZILIM VE PAZARLAMA A., Plaintiff, v. SAYGAMES LLC, et al., Defendants.
• Court: U.S. District Court — Northern District of California

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GOOD JOB GAMES BILISM YAZILIM VE PAZARLAMA A., Plaintiff,
v.
SAYGAMES LLC, et al., Defendants.

No. 19-cv-07916-EMC

United States District Court, N.D. California

May 4, 2023

ORDER GRANTING DEFENDANT'S MOTION FOR ATTORNEY'S FEES DOCKET NO. 103

EDWARD M. CHEN UNITED STATES DISTRICT JUDGE

Plaintiff Good Job Games (“GJG”) sued Defendant SayGames, LLC (“SG”) for copyright infringement. The Court initially dismissed GJG's amended complaint for failure to state a claim with leave to amend. GJG never amended its complaint. SG subsequently moved for attorney's fees under Section 505 of the Copyright Act. In response, GJG filed a notice of voluntary dismissal without prejudice pursuant to Rule 41(a)(1).

Pending before the Court is SG's motion for attorney's fees. Having considered the papers submitted as well as the oral argument of counsel, the Court hereby GRANTS the motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

GJG and SG are both mobile videogame developers. In September 2019, GJG released a game called Crazy Jump 3D, in which players launch objects from a cannon and into a bucket by manipulating objects that alter their trajectory. Docket No. 71 (“FAC”) ¶ 50. In October 2019, SG published its own game, Cannon Shot!, in which players fire balls from a cannon into a bucket by navigating them through various obstacles. FAC ¶ 51.

GJG filed suit against SG on December 3, 2019, claiming that SG's mobile game Cannon Shot! infringes GJG's mobile game Crazy Jump 3D. Docket No. 1. SG moved to dismiss for lack

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of personal jurisdiction and failure to state a claim. Docket No. 20. The Court granted SG's motion to dismiss on jurisdictional grounds. Docket No. 30. GJG appealed, and the Ninth Circuit reversed and remanded for jurisdictional discovery. Docket No. 43, 44.

GJG filed an amended complaint following jurisdictional discovery. Docket No. 71. In a motion to dismiss, SG renewed the arguments for lack of personal jurisdiction and failure to state a claim. Docket No. 75. The Court found personal jurisdiction over SG but dismissed the amended complaint for failure to state a claim on the merits of the copyright claim. Docket No. 100 (“Order”), at 16. In particular, the Court found that several of the common features between Crazy Jump 3D and Cannon Shot! are unprotected because these features are inherent aspects of physics puzzle games. Id. at 14. Moreover, the protected elements that remain (i.e., colors, decorative shapes, animations, design levels and layouts other than the basic design of the cannon and bucket game) are not substantially similar across the games. Id. at 15. The Court concluded that “[b]ecause the protected elements of the works are not substantially similar, GJG has no viable copyright claim as a matter of law. Thus, the Court dismisses the complaint for failure to state a claim.” Id. at 15-16.

The Court afforded GJG until January 6, 2023, to amend the complaint. Id. GJG failed to file an amended complaint. At the hearing herein, GJG confirmed it never intended to amend.

On January 20, 2023, SG moved for $133,976.17 in attorney's fees and costs pursuant to Section 505 of the Copyright Act, asserting it was entitled to fees as the prevailing party. Docket No. 103 (“MAF”). Two days later, GJG filed a notice to voluntarily dismiss this action without prejudice pursuant to Federal Rule of Civil Procedure 41(a)(1)(A)(i) and asked that each party bear its own costs and fees. Docket No. 106. On February 3, 2023, GJG submitted its opposition to SG's motion for fees, arguing, inter alia, that SG is not entitled to attorney's fees and costs under the Copyright Act because SG is not a prevailing party since GJG dismissed the complaint without prejudice. Docket No. 107 (“Opp.”). SG replied and requested an additional $34,790 for attorney's fees and costs associated with this instant motion, bringing the total requested amount to $165,351.17. Docket No. 110 (“Repl.”).

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II. LEGAL STANDARD

A. Prevailing Party

Section 505 of the Copyright Act allows a court to award “a reasonable attorney's fee to the prevailing party as part of the costs.” 17 U.S.C. § 505 (emphasis added). Per the plain language of Section 505, a district court's “discretion to award attorney's fees . . . is triggered only if the party in fact prevailed on the copyright claim.” Cadkin v. Loose, 569 F.3d 1142, 1147 (9th Cir. 2009) (citing Fantasy, Inc. v. Fogerty, 94 F.3d 553, 555 (9th Cir. 1996)).

B. Discretionary Factors

Once a district court determines that the threshold requirement of “prevailing party” has been satisfied, it may then apply Section 505 by “first, deciding whether an award of attorney's fees is appropriate [through the balancing of several non-exclusive factors] and, second, calculating the amount of the award.” Id. The factors identified by the Supreme Court for the first prong include “‘frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence' . . . so long as such factors are faithful to the purposes of the Copyright Act.” Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994). “Although objective reasonableness carries significant weight, courts must view all the circumstances of a case on their own terms, in light of the Copyright Act's essential goals.” Kirtsaeng v. John Wiley & Sons, Inc., 579 U.S. 197, 209 (2016).

III. DISCUSSION

A. Prevailing Party

The Court first considers the threshold issue of whether SG is a prevailing party in light of the Court's dismissal of GJG's complaint with leave to amend, GJG's failure to amend within the time allowed for amendment, and GJG's subsequent voluntary dismissal of the action without prejudice pursuant to Rule 41(a)(1).

Following the dismissal of a claim, a defendant is a prevailing party if the dismissal creates a “material alteration of the legal relationship of the parties.” Cadkin, 569 F.3d at 1148. Material alteration exists, inter alia, where plaintiff's ability to “refil[e] the claim against the defendant in

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federal court” is impeded. Id. at 1150 (finding material alteration where “plaintiff is judicially precluded from refiling the claim against the defendant in federal court”). Typically, a dismissal without prejudice-unlike dismissal with prejudice-does not materially alter the legal relationship of the parties. Id. at 1150 (holding that defendants are not prevailing party where the dismissal without prejudice does not deprive plaintiffs of the ability to refile their copyright claims in federal court); Anderson, 2020 WL 5057581, at *4 (“[D]ismissal with prejudice may serve as a basis for awarding attorney's fees to a defendant as the prevailing party.”). In this case, the Court did not dismiss without prejudice; it dismissed the complaint on the merits as a matter of law and gave leave to amend within 30 days which GJG failed to do.

GJG argues that the Court's dismissal with leave and GJG's voluntary dismissal without prejudice do not materially alter the parties' legal relationship because GJG remains free to refile copyright claim in federal court. See Opp. at 2-6. SG responds that after the time permitted for leave to amend expired, the dismissal in this particular case precludes GJG from refiling a copyright claim, at least a claim identical to the one in the FAC-the copyright infringement claim against the accused game at issue. The Court thus examines the preclusive effect resulting from its dismissal of the parties. In particular, the Court examines whether issue preclusion or claim preclusion would prevent GJG from refiling a copyright infringement claim against SG's accused game.

1. Issue Preclusion

Future litigation of an issue presented and necessarily decided in a prior action between the same parties is foreclosed by the doctrine of issue preclusion. Allen v. McCurry, 449 U.S. 90, 94, 101 S.Ct. 411, 414 (1980). Issue preclusion applies when: “(1) the issue necessarily decided at the previous proceeding is identical to the one which is sought to be relitigated; (2) the first proceeding ended with a final judgment on the merits; and (3) the party against whom collateral estoppel is asserted was a party or in privity with a party at the first proceeding.” Hydranautics v. FilmTec Corp., 204 F.3d 880, 885 (9th Cir. 2000). The Court addresses these elements in turn.

a. Identical Issues

Should GJG bring another copyright suit against SG regarding the two games, any issue

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sought to be relitigated would be identical to the issue decided in the Court's dismissal order, which necessarily decided the substantive issue of copyright infringement. “For purposes of issue preclusion, ‘necessarily decided . . . means only that the court undeniably decided the issue' in the previous proceedings.” Droplets, Inc. v. Yahoo! Inc., No. 12-CV-03733-JST, 2019 WL 5781915, at *4 (N.D. Cal. Oct. 15, 2019) (quoting U.S. v. Johnson, 256 F.3d 895, 915 (9th Cir. 2001)). An issue is necessarily decided where “a court hears ‘evidence and argument from both parties, and specifically rule[s] on the issue,' a party may not escape the ruling's binging effect on the ground that it was not logically essential to the court's ultimate determination.” Id. (citing United States v. Weems, 49 F.3d 528, 532 (9th Cir. 1995)). Here, the record is clear that the Court ruled on the merits. It heard evidence and legal arguments from both parties. It performed an “analytic dissection” between protected game features and unprotected game features. Order at 13. And it thoroughly discussed the substantial similarity between the protected elements of the two games, which was essential to the Court's rejection of the copyright claim. Order at 12-15. The Court necessarily decided the substantive issue of substantial similarity between potential elements, the sine qua non of...