United States District Court, E.D. Virginia, Alexandria Division
M. Brinkema United States District Judge
the Court is defendant WH Administrators'
("WHA" or "defendant") Motion for
Attorney's Fees [Dkt. No. 113], in which WHA asks the
Court to award it $1, 382, 567.90 in attorney's fees and
$171, 432.84 in costs. Plaintiff Corepex Technologies
("Corepex" or "plaintiff) argues that WHA is
not entitled to attorney's fees, that the amount of
WHA's fee request is unreasonable, and that the Copyright
Act does not allow for the imposition of nontaxable costs.
For the reasons that follow, defendant's motion will be
civil action, Corepex alleged that after the parties'
contractual relationship broke down, WHA committed copyright
infringement by continuing to use two software programs, ETR
and ETRC, that Corepex had developed for WHA. See Compl.
[Dkt. No. 1] ¶¶ 16-19. WHA asserted a variety of
defenses, including that it has a nonexclusive, implied
license to continue using the software. Def. Sum. Judg. Mem.
[Dkt. No. 65] 21-24.
a company that helps employers administer their health
insurance programs, including by tracking employee
eligibility for benefits under the Patient Protection and
Affordable Care Act. See Id. at 2; Pl. Sum. Judg.
Opp. [Dkt. No. 100] 5; Turner Decl. [Dkt. No. 67] ¶ 2.
As such, WHA maintains databases of employment and healthcare
information for thousands of its customers' employees.
See Def. Sum. Judg. Mem. 2; Pl. Sum. Judg. Opp. 5; Turner
Decl. ¶2. Corepex is an information technology
("IT") company that provides a variety of software
development, IT consulting, and related services to clients.
See Def. Sum. Judg. Mem. 2-3; Pl. Sum. Judg. Opp. 5; Compl.
Ex. 1 [Dkt. No. 1-1] (Interim Independent Contractor
and WHA's relationship began in early 2015. Around that
time, WHA's CEO, Brendan Turner ("Turner"), was
worried that WHA's internal processes for managing
customers' information were too slow to allow the
business to grow in the way that he wanted. See
Turner Decl. ¶ 5. Turner began reviewing various
existing software products and meeting with providers to see
if they would satisfy WHA's needs. See Id. In
January 2015, WHA suffered a server malfunction that cut off
access to its database. See Id. WHA's IT
Director, Gilbert Veney, recommended hiring Corepex to
restore the data and set up a new database. See Def. Sum.
Judg. Mem. 5; Pl. Sum. Judg. Opp. 5; Turner Decl. ¶ 4.
At some point while the parties were working together to
restore WHA's data, they began discussing the type of
software product that WHA was looking to acquire and had a
variety of meetings to go over potential ideas.
point in March, WHA decided to hire Corepex to develop the
software programs it wanted and, on March 31, 2015, WHA and
Corepex executed an Interim Independent Contractor Agreement
("Interim Agreement"), which is attached to the
Complaint. See Compl. Ex. 1. Under the Interim Agreement,
Corepex agreed to provide the following services to WHA: (1)
"new software development support, " including
"working with [WHA] to identify and document
priorities"; (2) "existing software development
support, " including "making changes to existing
software, as well as establishing change controls and
procedures for updating systems in place"; and (3)
"operational and technical support for recurring data
loads." Id. at 7. In return, WHA agreed to pay
Corepex $150/hour, based on written invoices submitted
monthly from Corepex to WHA. Id. As the name
suggests, the Interim Agreement was meant to be a stand-in
agreement while the parties negotiated a future
"Definitive Agreement." Id. at 1. The
Interim Agreement specifically deferred "intellectual
property ownership and access" issues to the Definitive
Agreement. Id. at 4.
executing the Interim Agreement, WHA and Corepex began
working on the software development. A month after the
Interim Agreement was signed, Corepex delivered a version of
the ETR database to WHA for internal deployment. See Def.
Sum. Judg. Mem. 10; Pl. Sum. Judg. Opp. 7; Williams Decl.
[Dkt. No. 66] Ex. 4 (Corepex 30(b)(6) Deposition), at
263:2-:4. After the ETR database went live, the parties began
working on a client-facing version of the software. In June
2016, the ETRC database was launched. See Def. Sum. Judg.
Mem. 10; Pl. Sum. Judg. Opp. 7; Williams Decl. Ex. 4 (Corepex
30(b)(6) Deposition), at 263:5-:7.
the ETR and ETRC software had been delivered, WHA and Corepex
had a billing dispute. As a result, on October 24, 2016,
counsel retained by WHA sent a letter to Corepex informing
Corepex that WHA believed it had materially breached the
Interim Agreement. See Williams Decl. Ex. 43.
Although the parties had been working under the Interim
Agreement for over 18 months, no definitive agreement had
been signed. Pursuant to the terms of the Interim Agreement,
WHA gave Corepex 60 days to cure the alleged breach. See id
Instead of curing the alleged breach, Corepex's counsel
responded on November 14, 2016 by giving the Interim
Agreement's required ten-day notice of termination, see
Compl. Ex. 4. After sending this notice, Corepex obtained
copyright registration for both the ETR and ETRC programs.
See Id. Ex. 2 (registering ETR on November 16,
2016); id Ex. 3 (registering ETRC on the same day).
November 18, 2016, four days after Corepex sent notice of
termination, WHA sued Corepex in state court, alleging fraud
and breach of contract claims related to their billing
dispute. See Def. Sum. Judg. Mem. 15; Pl. Sum.
Judg. Opp. 9; Sheil Decl. [Dkt. No. 68] Ex. 3. Corepex
counterclaimed against WHA for breach of contract, claiming
that WHA was required to pay Corepex under the outstanding
invoices (the ones that WHA claimed were fraudulent).
See Def. Sum. Judg. Mem. 15; Pl. Sum. Judg. Opp. 9;
Sheil Decl. Ex. 4.
January 10, 2017, Corepex filed the current action, alleging
two counts of copyright infringement based on WHA's
continued use of the ETR (Count I) and ETRC (Count II)
software programs and one count of vicarious infringement
based on WHA's allowing its clients to use the ETRC
software (Count III). On September 1, 2017, the Court denied
summary judgment to plaintiff but granted it to defendant,
finding that the undisputed facts established that WHA had at
least an implied license to continue using the ETR and ETRC
software. [Dkt. No. 107].
Standard of Review
copyright infringement action, "the court in its
discretion may allow the recovery of full costs by or against
any party other than the United States or an officer
thereof." 17 U.S.C. § 505. As part of the costs,
the court "may also award a reasonable attorney's
fee to the prevailing party." Id. Under §
505, fees should not be awarded "as a matter of
course"; instead, a district court must "make a
more particularized, case-by-case assessment" in
determining whether to exercise its equitable discretion and
impose fees. Kirtsaeng v. John Wiley & Sons.
Inc., 136 S.Ct. 1985 (2016) (internal quotation marks
omitted). The Fourth Circuit has identified four factors a
district court should consider in determining whether it is
appropriate to award fees in a particular case: "(1) the
motivation of the parties; (2) the objective reasonableness
of the legal and factual positions advanced; (3) the need in
particular circumstances to ...