Chapterhouse is the prevailing party in this case and thus is entitled to its costs. Games Workshop (“GW”) brought this action to shut down—or, at a minimum, radically alter—the business of Chapterhouse, claiming in a letter to Chapterhouse that “all of the 106 products currently marketed on your website infringe in some way our client’s intellectual property rights.” But GW failed—Chapterhouse can still sell many of those products. And factoring in summary judgment, trial, and dropped claims, Chapterhouse won over two-thirds of GW’s copyright and trademark claims. GW was only successful in obtaining a small fraction of the damages it initially sought. Indeed, GW would not have invested in this case as heavily as it did simply to slap Chapterhouse on the wrist.

Chapterhouse recognizes that this is a mixed judgment case and understands the Court’s view that in such a case, seeking attorney’s fees may not be warranted. Chapterhouse therefore did not seek fees in this case. But Chapterhouse is, on balance, the prevailing party and should be reimbursed out-of-pocket costs that were imposed based on GW’s overreaching claims.

I. Chapterhouse Is The Prevailing Party And Is Entitled To Costs.
No matter how the case is sliced, Chapterhouse won substantial relief. GW suggests that the only thing that matters is that it won something at trial. Chapterhouse successfully defended against dozens of claims and hundreds of thousands of dollars in potential damages.Therefore, Chapterhouse is the prevailing party whether one considers the number of claims, the parties’ litigation goals, or the amount of damages.

A. Chapterhouse won the vast majority of the claims asserted.

Chapterhouse won over two-thirds of the copyright claims asserted in this action. More specifically, Chapterhouse won 34 copyright claims on summary judgment. At trial, Chapterhouse won an additional 67 copyright claims. All told, Chapterhouse can continue to sell, without modification, at least two-thirds of the accused products. Similarly, Chapterhouse won over 70% of the asserted trademark claims. Though GW added and dropped marks throughout the case, a comparison of its interrogatory responses reveals that GW asserted infringement of over 140 unique marks. But only 92 trademarks remained for trial. Of these, Chapterhouse won on 54. On sheer math alone, Chapterhouse is the prevailing party.

B. Chapterhouse, not Games Workshop, achieved its litigation goal.

By any metric, Chapterhouse met its litigation goal: it can still sell the vast majority of products GW had accused of copyright infringement and can still use GW’s trademarks to inform consumers that Chapterhouse products are compatible with GW products. In a case such as this, where a defendant in a copyright case has achieved “substantially all the benefits [it] hoped to achieve in defending the suit,” courts have not hesitated to consider it the prevailing party and award costs.

C. Games Workshop received only a small portion of the damages it originally sought.

GW makes much of the fact that the $25,000 jury award was precisely the amount of damages it had requested. But originally, GW sought far more. It elicited testimony from Nick Villacci that Chapterhouse “ha[d] sold $427,226.35 of materials” through January 8, 2013. This was all GW had the burden to do; the burden was on Chapterhouse to prove its expenses. GW let this Sword of Damocles hang over Chapterhouse throughout the thirty months of pretrial litigation and right up until closing argument.

But GW receded from its original demand after Chapterhouse established costs to offset its revenue. As GW now admits, Chapterhouse operated at a 10-15% profit margin. Realizing that it would not prevail on its request for $400,000, GW radically reduced its request to a closing argument plea for $25,000. Indeed, GW would not have incurred the expenses it did if its only goal was to give Chapterhouse a $25,000 slap on the wrist. GW’s allegedly taxable costs alone total over $250,000. And its attorneys’ fees likely reach seven figures, given the length and complexity of this litigation. GW cannot now claim that it received everything it wanted.

D. Games Workshop’s arguments are meritless.

GW’s principal theme is strikingly narrow: nothing else matters but the trial. The 370-plus pre-trial docket entries, the thirty months of pre-trial litigation, the multiple summary judgment decisions—these simply disappear from GW’s field of vision. All that matters, according to GW, is that “[t]he jury found that a majority of Chapterhouse’s products infringed either copyright or trademark or both.” But “substantial relief” requires an assessment of the entirety of the case, not just the claims actually brought to trial. Indeed, GW seeks costs for depositions that were not played at trial and depositions of witnesses that did not testify at trial. GW cannot now contend it is entitled to these costs based on the trial alone.

Finally, GW contends that thirteen of Chapterhouse’s top twenty products were found to infringe. There are two problems with this argument. First, it is irrelevant. Even if all of Chapterhouse’s top twenty products were found to infringe, GW asserted at least 150 total copyright claims. GW cannot escape the consequences of its decision to assert a multitude of meritless claims, whether these claims were “important” or not. GW did not prevail on the majority of its claims, and must now lie in the bed it made. Second, even if the Court were to take into account the relative “importance” of the accused products, that would be counterbalanced by Chapterhouse’s victory on all of GW’s core registered trademarks.

All told, over the course of summary judgment and trial, Chapterhouse won the majority of the claims asserted against it. Despite GW’s best efforts, Chapterhouse can still sell many of the accused products. Chapterhouse is the prevailing party and should be awarded costs accordingly.

II. If Chapterhouse Was Not The Sole Prevailing Party, The Parties Should Bear Their Own Costs.

Even if this Court were to accept GW’s arguments, the jury’s verdict was, at most, a mixed result. And “courts have especially broad discretion to award or deny costs in mixed result cases, including cases in which liability was established but recovery was nominal relative to what was sought.” This Court should use its discretion to deny all costs to GW, as GW’s request would inflict a burden on Chapterhouse that far exceeds the outcome of the trial. Here, Chapterhouse is the defendant—it did not choose to litigate this case. And Chapterhouse is a small company; it was represented in this case pro bono.

In asking the jury for $25,000 in damages (all GW wanted, it now claims), GW claimed in its closing argument that it was “not looking to be punitive.” But it now seeks a cost award that is more than ten times greater than the damage award it requested. Such an award would inflict tremendous financial burden on Chapterhouse. It should be denied. Further, GW won little of what it sought. GW has failed to cripple Chapterhouse’s business. And it lost on the majority of its originally asserted copyrights and trademarks. And it obtained only a small fraction of the damages it initially sought.

GW did not win substantial relief, and a cost award would hurt Chapterhouse far more than the verdict at trial. Accordingly, Chapterhouse respectfully requests that GW not be awarded costs.

CONCLUSION
For the foregoing reasons, Chapterhouse should be awarded $134,097.31 in costs as the prevailing party. Chapterhouse can still sell many of the accused products, having won nearly 70% of the claims asserted by GW in this litigation, and GW did not win substantial relief.
Alternatively, the parties should bear their own costs.