The US Supreme Court held that the Copyright Act’s safe harbor provision for unintentional mistakes made in copyright registrations applies equally to mistakes of law and fact.
A copyright registration is a powerful tool in the intellectual property owner’s arsenal. It is the ticket to entry required to bring a civil action for copyright infringement seeking injunctive relief and/or damages.[1] If timely filed, a registration can entitle the owner to special remedies, including statutory damages and attorneys’ fees.[2]
As a result, copyright registrations become obvious fodder for attack by copyright defendants seeking to limit their liability. Of course, copyright applicants should provide accurate information to the Copyright Office in their applications. But what happens when the applicant makes a mistake about the facts or the applicable law?
Section 411(b)(1) of the Copyright Act contains a safe harbor provision that safeguards a copyright registration from invalidation “regardless of whether the certificate contains any inaccurate information,” unless (1) the applicant included the inaccurate information in its application “with knowledge that it was inaccurate” and (2) the inaccuracy of the information, if known, would have caused the Copyright Office to refuse registration.[3]
The Supreme Court’s decision in Unicolors, Inc. v. H&M Hennes & Mauritz, L.P.[4] addressed the question of when a mistake in an application will be deemed to be made “with knowledge that it was inaccurate” and therefore ineligible for this safe harbor.
Unicolors Inc. owns various copyrights for fabric designs that it alleged were infringed by H&M Hennes & Mauritz L.P. At the district court, a jury found in Unicolors’ favor and found H&M liable for nearly $800,000. H&M moved to set aside the jury’s verdict as a matter of law, arguing that Unicolors’ registration was invalid because Unicolors improperly filed a single application seeking registration for 31 separate works.
Unicolors sought to register the 31 works in a single application based on a Copyright Office regulation that allows multiple works to be covered by a single registration if they were “included in the same unit of publication.”[5] Because some of the fabric designs were published at different times and Unicolors was aware of when those fabrics were published, H&M argued that Unicolors knew that these designs did not satisfy the “single unit of publication” requirements and could not be registered via a single application.[6]
As a result, H&M argued that the first statutory requirement for invalidating Unicolors’ registration (a knowing inaccuracy) was satisfied and that the district court should move to the second requirement and ask the Register of Copyrights whether she would have refused to register Unicolors’ works in that application if the Copyright Office had been aware of the inaccuracy (i.e., the varying publication dates for the works included in the application). The district court denied H&M’s motion, finding that because Unicolors did not know that it had failed to satisfy the “single unit of publication” requirement when it filed its application, the purported inaccuracy could not invalidate the registration.
The US Court of Appeals for the Ninth Circuit sided with H&M and reversed. In its view, it did not matter whether Unicolors knew that it had failed to satisfy the single unit of publication requirement because the Section 411(b) safe harbor only excused good-faith mistakes of fact, not law.[7] In the Ninth Circuit’s opinion, because Unicolors knew that some of the 31 designs were published at different times, Unicolors had not made a good-faith mistake of fact in its application.
In a 6–3 decision,[8] the Supreme Court vacated the Ninth Circuit’s decision, holding that “a certificate of registration is valid even though it contains inaccurate information so long as the copyright holder lacked ‘knowledge that it was inaccurate,’”[9] and that “[l]ack of knowledge of either fact or law can excuse an inaccuracy in a copyright registration.”[10]
The Supreme Court explained that its conclusion followed from the text of the statute. “Both case law and the dictionary tell us that ‘knowledge’ has historically ‘meant and still means the fact or condition of being aware of something.’”[11] Thus, if Unicolors was not aware that its 31 designs did not meet the legal requirements to qualify as a single unit of publication, then it did not submit an application “with knowledge that it was inaccurate.” According to the Supreme Court, “Nothing in the statutory language suggests that this straightforward conclusion should be any different simply because there was a mistake of law as opposed to a mistake of fact.”[12]
The Supreme Court also relied on nearby statutory provisions to confirm that “knowledge” refers to knowledge of the law as well as the facts. It noted that applications to register call for information that requires both legal and factual knowledge, such as whether a work was made “for hire” and when and where a work was “published,” and that inaccurate information is equally (if not more) likely to arise from a mistake of law.[13]
The Court also concluded that if Congress had intended to impose a scienter standard other than actual knowledge, then it would have done so explicitly, citing other provisions of the Copyright Act that imposed different state-of-mind requirements, such as “reasonable grounds to know,” “actual knowledge or reasonable grounds to believe,” or “deliberate ignorance of the truth or falsity of information.”[14]
According to the Supreme Court, cases decided before Congress enacted the Section 411(b) safe harbor also overwhelmingly held that inadvertent mistakes on registration certificates did not invalidate the copyright registration and bar infringement actions, even when those mistakes were mistakes of law. The Supreme Court could not find any indication that Congress intended to alter this well-established rule.
Lastly, for “those who consider legislative history,”[15] the Supreme Court concluded that Congress intended the Section 411(b) safe harbor “to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations.”[16] “Given this history, it would make no sense if §411(b) left copyright registrations exposed to invalidation based on applicants’ good-faith misunderstanding of the details of copyright law.”[17]
The Supreme Court rejected concerns that its interpretation of the safe harbor would make it too easy for copyright holders to avoid the consequences of an inaccurate application by claiming a lack of knowledge. It noted that courts need not accept a copyright holder’s claim that it was unaware of relevant copyright law.[18] Moreover, it noted that in civil cases, willful blindness may support a finding of actual knowledge. “Circumstantial evidence, including the significance of the legal error, the complexity of the relevant rule, the applicant’s experience with copyright law, and other such matters, may also lead a court to find that an applicant was actually aware of, or willfully blind to, legally inaccurate information.”[19]
Likewise, the Supreme Court rejected H&M’s argument that the Court’s interpretation is foreclosed by the maxim that “ignorance of the law is no excuse.”[20] The Court concluded that this maxim, which normally applies in criminal cases where a defendant claims to be unaware of the existence of a statute proscribing his conduct, “does not apply in this civil case concerning the scope of a safe harbor that arises from ignorance of collateral legal requirements.”[21]
For litigants, the Unicolors decision arguably raises the bar for copyright defendants attempting to invalidate copyright registrations. In many circumstances, there will not be direct evidence that a copyright holder knowingly submitted inaccurate information to the Copyright Office in its copyright registration application, especially when the alleged inaccuracy relates to a legal conclusion, such as whether a work constitutes a work made for hire or a published work under the Copyright Act. In these cases, defendants will need to gather either evidence demonstrating the copyright holder was willfully blind as to the relevant issue or circumstantial evidence that the copyright holder knew its legal position was incorrect yet nevertheless proceeded to make an unjustified claim.
In addition, the significance of the advice of counsel defense may become more important in assessing claims under the Section 411(b) safe harbor. One might expect evidence that a copyright applicant sought legal guidance in the application process to be helpful evidence that any mistake of law was not made with actual knowledge. On the other hand, one can imagine that some copyright defendants will argue that an applicant’s failure to obtain legal advice in connection with an inaccurate claim in a copyright registration might constitute at least willful blindness, especially if the copyright holder is a sophisticated party with access to copyright counsel. These issues are likely to be the source of heated battles in future litigation.
For copyright holders, even though the Unicolors decision arguably makes it harder to invalidate their copyright registrations based on the inaccuracy of the information therein, they still should take reasonable steps to ensure the accuracy of information in copyright applications and to defend against any argument that the holder knowingly submitted inaccurate information to the Copyright Office. As a result, copyright holders should consider archiving internal documents supporting the assertions made in copyright applications, auditing the accuracy of information listed in copyright registrations before bringing suit, and correcting inaccuracies discovered in an audit.
Contacts
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Washington, DC
Ron N. Dreben
Dana S. Gross
Anita B. Polott
Cassandra Sciortino
Chicago
Kathryn A. Feiereisel
San Francisco
Carla B. Oakley
Gene K. Park
Lindsey M. Shinn
Boston
Joshua M. Dalton
[1] Fourth Est. Pub. Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881, 892 (2019) (explaining that a copyright registration is required prior to filing suit except for limited circumstances).
[2] 17 U.S.C. § 412.
[3] 17 U.S.C. § 411(b)(1).
[4] Unicolors Inc. v. H&M Hennes & Mauritz L.P., 595 U.S. __, No. 20-915 (2022) (describing “unit of publication” requirements under 37 C.F.R. § 202.3(b)(4)); see also US Copyright Office, Compendium Of US Copyright Office Practices § 1103.1 (3d ed. 2021) (explaining that a “unit of publication is a package of separately fixed component works that are physically bundled together for distribution to the public as a single, integrated unit, and all of the works are first published in that integrated unit”).
[5] Unicolors, No. 20-915, slip op. at 3.
[6] Id.
[7] Id. at 3-4.
[8] The dissent argued that the Court should have dismissed the writ of certiorari as improvidently granted because they believed that Unicolors had abandoned the actual question presented in its petition for a writ of certiorari and instead proposed novel questions of copyright law that no other court addressed previously.
[9] Id. at 2.
[10] Id.
[11] Id. at 5 (quoting Intel Corp. Investment Policy Comm. v. Sulyma, 589 U.S. __, __ (2020) (slip op. at 6)).
[12] Id.
[13] Id.
[14] Id. at 6.
[15] Id. at 7.
[16] Id.
[17] Id.
[18] Id. at 8.
[19] Id.
[20] Id.
[21] Id.