No fee award for the defendant who won a fair use dismissal against MCM Group 22

The decision

The memorandum decision and order is Document 56 in MCM Group 22 LLC v. Perry, No. 1:22-cv-06157 (GBD) (VF) (S.D.N.Y.), signed October 13, 2026 and filed October 14. It reviewed de novo, as both parties agreed, Magistrate Judge Valerie Figueredo's August 20, 2026 order denying the defendant's motion for attorney's fees.

Background

MCM Group 22 LLC owns by assignment a registered copyright in a video; the assignor received the rights under a restitution order from the Southern District of California. MCM sued, alleging infringement through the defendant's social media post reproducing a still frame from the video. On February 3, 2026 the court dismissed the case, holding fair use clearly established on the face of the complaint; it described the post as commentary with a markedly different purpose from the original. The defendant then moved for fees as the prevailing party under 17 U.S.C. 505.

What the court decided

Applying the Fogerty factors and Kirtsaeng, the court held that losing on the merits does not make a claim objectively unreasonable. MCM's argument that discovery was needed to decide whether the post was commentary had a reasonable basis in Hirsch v. CBS Broadcasting, even though it did not prevail. The court found no improper motive, holding that MCM's reference to the restitution order that enabled the suit is not one, and that the defendant's First Amendment interest was vindicated by the dismissal. It found no need for compensation or deterrence against a reasonable claim, noting that a defendant who wins on fair use at the pleading stage has arguably benefited by protecting itself from similar suits in the future.

The court denied the motion. It also denied defense counsel's fee application for a co-defendant whom MCM voluntarily dismissed, holding that a voluntary dismissal does not make that party a prevailing party under section 505.