Historically, copyright matters have largely been a matter of "a losing infringer has to pay the copyright holder's costs and attorney's fees, except at the margins of the law; and a losing copyright holder may have to pay the winning infringer's attorney's fees, unless he/she had a damned good basis for claiming infringement." Judge Cooper's unpublished decision on fees in Ellison puts it this way:
The court declines AOL's request for attorneys' fees. As noted by AOL itself, the action was a case of first impression under the Digital Millennium Copyright Act, 17 U.S.C. § 512. Based on the dearth of legal authority and the complexity of legal issues presented, Plaintiff could have reasonably believed that the claims he was advancing against AOL were meritorious. Far from being objectively unreasonable, Plaintiff's arguments were both reasonable and well presented, although ultimately unavailing. Defendant's contention that Plaintiff should have been well aware that section 512(a) clearly precluded AOL from liability is disingenuous; the Court itself spent easily over one hundred hours researching the law and analyzing the evidence in the instant case and reached its final decision after months of careful consideration. Moreover, the Court does not agree with AOL that Plaintiff's litigation conduct was "unreasonable" and evidence of an irrational or improper "vendetta" against AOL. Finally, an award of attorneys' fees to AOL would not advance the purposes of copyright law. To the contrary, it would likely have a chilling effect on copyright holders, who would be less likely to seek legal protection for their copyrights in the future, even in situations in which their infringement claims were potentially meritorious.
Ellison v. Robertson et al., No. 00-4321 FMC (RCx), Dock. No. 222 (15 May 2002) at 2–3 (footnote omitted). (Keep in mind that this precedes our victory on appeal; all Judge Cooper had before her was her grant of summary judgment to AOL.)
As complex as this is, the situation is much worse in trademark law. Under the Lanham Act, attorney's fees may be awarded in "exceptional cases," 15 U.S.C. § 1117(a), and statutory damages are available only for "counterfeit marks." To say the least, despite the strident claims of every litigant that his or her case is "exceptional," awarding attorney's fees in trademark actions is far less common than in copyright actions. Then, too, the tension noted in previous entries between likelihood of confusion and the quality of the "copying" of a mark makes some of the most egregious misuses rather a more difficult case to prove.
So, however strong the theoretical underpinning for treating fan fiction (and, more generally, playing in other creators' sandboxes) as closer to a trademark matter than to a copyright matter absent literal copying (or, in some extreme instances, literal copying followed by alterations perceived as sufficient to evade a charge of literal copying), in practice we're stuck with continuing to see the case law developed under copyright theories. By itself, this explains why courts—particularly the Second Circuit—have so badly mangled the theoretical basis of copyright actions: In practice, unless a copyright cause is available, a creator whose sandbox has been invaded may have no avenue for legal relief. Perhaps this points out another problem with trademark law, in that trademark is a hybrid theory. Rather than being purely (or close to purely) a matter of intellectual property law, it originated as consumer-protection law and has since moved toward intellectual property—largely for procedural reasons, as governments stopped enforcing trademarks and left enforcement to those whose marks were at issue.
What this really means, in the end, is that despite my particular preferences, and the vastly clearer theory of derivative-work liability that one can obtain by ignoring copyright doctrine, this entire essay may have been little more than a theoretical exercise. Unless, of course, it somehow becomes (in)famous enough to catalyze some serious reform efforts, which is not very likely!
In any event, I will wrap up soon. I promise. (Trust me. I'm a lawyer.)