LawFlash

Supreme Court to Consider Copyright Registration-Before-Suit Rift

July 12, 2018

The US Supreme Court will consider whether a copyright owner can commence an infringement lawsuit as of the date of application for registration, or as of the date when the US Copyright Office has approved or denied the application. The ruling will clarify the preconditions on copyright infringement actions imposed by 17 USC § 411(a).

The US Supreme Court granted a writ of certiorari petition on June 28 in Fourth Estate Public Benefit Corporation v. Wall-Street.com, LLC, a case from the US Court of Appeals for the Eleventh Circuit. The primary issue before the Court is whether under 17 USC § 411(a), a copyright owner can bring a lawsuit for copyright infringement once “the copyright [owner] delivers the required application, deposit, and fee to the Copyright Office,” (the Application Approach), or only once “the Copyright Office acts on that application” (the Registration Approach).[1] Although § 411(a) states that a copyright infringement action may be commenced once “preregistration or registration of the copyright claim has been made,”[2] preregistration is only available where “a work is still being prepared for commercial release” and applies to only six narrow classes of work.[3]

Courts that have adopted the Application Approach have relied on the text of 17 USC §410(d), which states that the effective date of a copyright registration is the day on which the application, deposit, and fee were received by the Copyright Office.[4] Proponents of this approach also reason that since § 411(a) provides an alternative means for an applicant to bring an action for copyright infringement in the event that the Copyright Office ultimately denies the application, it is inefficient—and potentially harmful—to make copyright owners wait months for a decision as the statute of limitations for filing suit runs.[5]

Conversely, courts that have adopted the Registration Approach rely on the plain text of §411(a), which states that copyright owners may commence an infringement suit only after the Copyright Office has reviewed the relevant application and either approved it (at which point a registration will issue) or denied it.[6] Although it may leave copyright owners with less time to seek a registration, proponents of the Registration Approach assert that copyright law’s underlying policy is better served by encouraging copyright owners to register promptly.

BACKGROUND

Fourth Estate Public Benefit Corporation (Fourth Estate) licensed journal articles to Wall-Street.com (Wall-Street) to be published on the latter’s website. Wall-Street’s licensing agreement stated that it was required to remove Fourth Estate’s content from its website before cancelling its agreement. When Wall-Street later cancelled its agreement but failed to remove Fourth Estate’s content, Fourth Estate filed a suit for copyright infringement against Wall-Street and its owner, Jerrold Burden.[7] Wall-Street and Burden moved to dismiss, arguing pursuant to §411(a) that Fourth Estate could not bring suit because the Copyright Office had not yet approved or denied an application for registration. The district court agreed with Wall-Street and, on appeal, the Eleventh Circuit affirmed, holding that “[f]iling an application does not amount to registration.”[8] The panel acknowledged that the “question when registration occurs has split the circuits,”[9] but found that “the text of the Copyright Act makes clear that the Registration Approach that the [Eleventh Circuit] endorsed is correct.”[10]

The Supreme Court granted Fourth Estate’s subsequent petition for writ of certiorari. The Copyright Office’s position is that “the Register must have acted on an application for copyright registration—either by approving or refusing registration—before the copyright owner may institute a copyright-infringement suit.”[11] Consistent with this position, the Copyright Office provides a mechanism for expedited consideration of a copyright application filed in anticipation of litigation for an additional fee.[12]

IMPACT

If the Supreme Court adopts the Registration Approach, a number of intermediate solutions may still be available for copyright owners who have filed suit while their application for registration is still pending. First, if the Copyright Office approves or rejects an application before the defendant has filed a motion to dismiss, the copyright owner could seek to amend its complaint.[13] Indeed, courts have granted leave to amend or have permitted the filing of a new complaint that relates back to the original filing date of the copyright application for the purposes of computing the statute of limitations in such circumstances.[14]

Additionally, although actions for copyright infringement would be impacted by the Supreme Court’s ruling, other actions should remain unaffected. For instance, courts have largely agreed that actions for injunction are not actions for copyright infringement and are therefore not subject to § 411(a).[15] Even the Eleventh Circuit in Fourth Estate acknowledged an exception that allows “’injunctive relief to be sought prior to registration’” where the unregistered work is part of a “continuing series of original works created with predictable regularity,” there is a previous “infringement of a registered work,” and a “substantial likelihood of future infringements.”[16] Also, courts have found other actions, such as those arising under the Digital Millennium Copyright Act,[17] seizures of pirated goods,[18] declarations of copyright ownership,[19] and even counterclaims of non-infringement[20] to be claims to which § 411(a) presents no bar. Indeed, a party who prevails on a claim of non-infringement can even seek attorney fees without needing to satisfy the registration requirement of § 412.[21]

Alternatively, if the Supreme Court adopts the Application Approach, then the question remains about the status of lawsuits that have been dismissed with prejudice based on a copyright owner who had applied for, but had not yet received, a certificate of registration at the time of filing. Additionally, it is unclear what would happen to cases that were dismissed without prejudice where the court granted leave to amend within a certain number of days and the Copyright Office did not issue a decision until after that time period.

In the meantime, individuals currently contemplating filing a suit for copyright infringement who have yet to receive a certificate of registration or denial from the Copyright Office should consider expediting their application. Although the expedited fee is more costly than a standard application ($800 in addition to the regular online filing fee of $55 or paper filing fee of $85), it could help save the lawsuit from dismissal should the Supreme Court adopt the Registration Approach. [22]

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the authors, John A. Polito, David R. Kocan, and Tania Prado from our San Francisco office, or any of the following lawyers from Morgan Lewis’s trademark/copyright team:

Boston
Joshua M. Dalton
Rachelle A. Dubow
David O. Johanson

San Francisco
Rochelle D. Alpert
Peter Byrne
Nicholas T. Herrera
Carla B. Oakley
Gene K. Park
Sharon R. Smith
Jenna K. Stokes

Washington, DC
Kristin H. Altoff
Robert C. Bertin
Karen A. Butcher
Ron N. Dreben
J. Kevin Fee
Rachel E. Fertig
Dana S. Gross
Carole R. Klein
Susan Baker Manning
Daniel S. Marks
Anita B. Polott
Seth A. Rappaport
Jordana S. Rubel
Jane W. Wise
Joseph E. Washington



 

[1] Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 856 F.3d 1338 (11th Cir. 2017), cert. granted, No. 17-571 (US June 28, 2018). The Application Approach has been adopted by the Fifth and Ninth Circuits and the Registration Approach by the Tenth and Eleventh Circuits.

[2] 17 USC § 411(a).

[3] See Preregistration (Copyright Office) here.

[4] 17 USC § 410(d).

[5] Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 7.16(B)(3)(b)(ii) (2018) [hereinafter Nimmer].

[6] 17 USC § 411(a).

[7] Fourth Estate at 1339.

[8] Id. at 1341.

[9] Id. at 1340.

[10] Id. at 1341.

[11] Id. at 12.

[12] See here for more on fees. (Copyright Office)

[13] Nimmer at § 7.16(B)(3)(b)(iii).

[14] Id. citing ISC-Bunker Ramo Corp. v. Altech, Inc., 765 F. Supp. 1308, 1309 (N.D. Ill. 1990); M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1488-89 (11th Cir. 1990); Positive Black Talk, Inc. v. Cash Money Recordings, Inc., 394 F.3d 357, 365 (5th Cir. 2004); K-Beech, Inc. v. Doe, 2012 US Dist. LEXIS 22727 (Dist. Col. Feb. 23, 2012).

[15] See, e.g., Olan Mills, Inc. v. Linn Photo Co., 23 F.3d 1345, 1349 (8th Cir. 1994) (“The power to grant injunctive relief is not limited to registered copyrights, or even to those copyrights which give rise to an infringement action.”); Dielsi v. Falk, 916 F. Supp. 985, 994 n.6 (C.D. Cal. 1996); Stuart Weitzman, LLC v. Microcomputer Res., Inc., 542 F.3d 859, 865 n.6 (11th Cir. 2008).

[16] Fourth Estate at 1342 (citing Stuart Weitzman at 865 n.6).

[17] See, e.g., I.M.S. Inquiry Mgmt. Sys., Ltd. v. Berkshire Info. Sys., Inc., 307 F. Supp. 2d 521, 531 (SDNY 2004) (citing 3 M. & D. Nimmer, NIMMER ON COPYRIGHT, § 12A.18[B] (2003)); Exec. Corp. v. Oisoon, LLC, 2017 U.S. Dist. LEXIS 159922 (M.D. Tenn. Sept. 28, 2017); Med. Broad. Co. v. Flaiz, 2003 US Dist. LEXIS 22185, at *3 (E.D. Pa. Nov. 25, 2003).

[18] See, e.g., Olan Mills, Inc. v. Linn Photo Co., 23 F.3d 1345, 1349 (8th Cir. 1994) (“The power to grant injunctive relief is not limited to registered copyrights, or even to those copyrights which give rise to an infringement action.”); Dielsi v. Falk, 916 F. Supp. 985, 994 n.6 (C.D. Cal. 1996); Stuart Weitzman at 865 n.6.

[19] See Corwin v. Quinonez, 858 F. Supp. 2d 903, 908 (N.D. Ohio 2012); Woodfords Family Servs., Inc. v. Casey, 832 F. Supp. 2d 88, 94 (D. Me. 2011).

[20] See, e.g., Lee v. Makhnevich, 2013 U.S. Dist. LEXIS 43760, *15-16 (S.D.N.Y. Mar. 27, 2013); Anton Sport, Inc. v. Monkey Boy Graphix, Inc., 2008 U.S. Dist. LEXIS 126128, *3-4 (D. Ariz. Jul. 22, 2008).

[21] See, e.g., 16 Casa Duse, LLC v. Merkin, 791 F.3d 247, 263 (2d Cir. 2015) (awarding $185,000 for copyright declaratory relief claim); see also, e.g., Latin American Music Co. v. ASCAP, 642 F. 3d 87, 90 (1st Cir. 2011) (“As a matter of law, the statute does not apply to a defendant who is successful in defending claims that it infringed.”).

[22] Fees (Copyright Office). In May 2018, the Copyright Office proposed raising the fee for expedited processing to $1,000. See 83 Fed. Reg. 24060 (May 24, 2018) (to be codified at 83 CFR pt. 201).