On May 29, 2020, the Ninth Circuit continued the trend of courts more closely scrutinizing the plaintiff’s compliance with registration formalities in copyright infringement lawsuits. Registration formalities have received more attention since the Supreme Court’s ruling in Fourth Estate Public Benefit Corporation v. Wall-Street.com, LLC. There, the Supreme Court resolved a split in the Circuit Courts and held that merely submitting a copyright registration application prior to filing an infringement lawsuit is insufficient. The plaintiff must receive a response to the application prior to filing.
As discussed later in this article, the role of copyright registration in copyright infringement litigation is inconsistent amid conflicting policy goals. The problem is not that the Supreme Court and Ninth Circuit misinterpreted the Copyright Act. The problems lie in the Copyright Act itself.
Overview of the Ninth Circuit’s Opinion
In an opinion designated for publication, the Ninth Circuit Court of Appeals reversed a copyright infringement judgment in favor of textile-design creator Unicolors, Inc. against clothing retailer H&M and remanded. In the opinion, the Ninth Circuit addressed the district court’s denial of H&M’s defense that Unicolors’ copyright registration was invalid because it contained inaccurate information.
Unicolors had created a textile design known as “Xue Xu.” Unicolors created the Xue Xu design for initial use by a single customer, a so-called confined design. In February 2011, Unicolors filed a “single-unit registration” with the U.S. Copyright Office for 31 separate designs. Unicolors included the 31 designs in one application to save money on registration fees. The application listed a first publication date of January 15, 2011, for each of the designs. However, in the case of the Xue Xu design, January 15, 2011, was merely the date when Unicolors presented the design to its salespeople, not when it was displayed publicly.
In 2015, H&M began selling a jacket and skirt containing the Xue Xu design. Unicolors filed suit in the Central District of California for copyright infringement and was ultimately awarded damages, attorneys’ fees, and costs.
On appeal, H&M argued that Unicolors’ copyright application contained inaccurate information. As the Ninth Circuit noted:
“possession of a registration certificate does not satisfy the Copyright Act’s registration requirement if the registrant secured the registration by knowingly including inaccurate information in the application for copyright registration that, if known by the Register of Copyrights, would have caused it to deny registration.”
As the Ninth Circuit further explained, once a defendant alleges that the plaintiff’s certificate of registration contains inaccurate information which the registrant included in the application “with knowledge that it was inaccurate,” the district court must then submit a request to the Register of Copyrights to advise the court whether the inaccurate information, if known, would have resulted in a denial of the registration.
The Ninth Circuit held that the district court committed two substantive errors. First, the district erred when it found that H&M was required to show that Unicolors intended to defraud the Copyright Office. The Ninth Circuit noted that it recently had clarified that there is no intent-to-defraud requirement in Gold Value International Textile, Inc. v. Sanctuary Clothing, LLC. (Earlier Ninth Circuit cases had stated explictly that an intent to defraud was a requirement, but this was brushed off as dicta in Gold Value International Textile.) The Ninth Circuit found that H&M’s showing that Unicolors knew that it included designs that were confined and, therefore, published separately to exclusive customers, was sufficient.
Second, the district court erred by concluding that Unicolors’ application did not contain inaccuracies. The Ninth Circuit held that a collection of works may only be registered “as one work” or as a “single unit” under 37 C.F.R. § 202.3(b)(4) if “the registrant first published the collection of works in a singular, bundled collection.” An example of such a single unit of publication includes works “that are physically bundled together and distributed to the public as a unit, such as a board game containing instructions, a game board, and sculpted playing pieces.” Unicolors’ application was improper because it included designs that were published separately to exclusive customers.
The Ninth Circuit remanded, finding that while Unicolors’ registration
“contained known inaccuracies, that does not mean H&M was entitled to judgment as a matter of law. Rather, the district court was required to ‘request the Register of Copyrights to advise the court whether the inaccurate information, if known, would have caused the Register…to refuse registration.’”
Copyright Law Should Be Reformed
Congress should reconsider whether applying for copyright registration should be required to pursue a copyright infringement claim.
The law’s treatment of copyright formalities lacks consistency. While registration is required to initiate a lawsuit, the plaintiff may file the registration after the infringement occurred. Additionally, while the plaintiff must wait for the Register of Copyrights to determine whether to grant the registration, if the registration is rejected on substantive grounds, the plaintiff is free to initiate a lawsuit anyway.
This inconsistency is largely a result of tensions in policy. On the one hand, one of the fundamental principles of copyright protection is that an author accrues copyright protections by creating an original work, not by registering it. Strict registration requirements run counter to this goal. Indeed, copyright law has generally been amended over time to relax formalities, not to impose them. However, Congress clearly wants to incentivize people to file copyright registrations, and more to the point, pay registration fees.
Copyright registrations may seem cheap, starting at $45. However, these fees can add up for business that create large amounts of content. Furthermore, penalizing honest mistakes may pressure businesses to hire counsel to assist with the process.
Even if registration were not a prerequisite to a copyright infringement claim, there would still be incentives to register. Notably, registration prior to infringement or within three months of publication is required for statutory damages and attorneys’ fees. One of Unicolors’ mistakes on its copyright application was that it listed the “Xue Xu” design as having been published. Ironically, since it was in fact unpublished, Unicolors could have properly registered the design, along with the nine other misclassified unpublished designs, in a single “unpublished collection” registration under United Fabrics Intern., Inc. v. C&J Wear, Inc. Unicolors likely did not know it had this option.
In any analysis, the role of the Register of Copyrights, especially in the era of massive amounts of online publications, should be considered in a sober manner. The Copyright Office primarily acts as a repository. The Copyright Office has approximately 400 employees and yet processes over 500,000 claims per year. The Compendium of U.S. Copyright Office Practices states: “Ordinarily, the Office does not conduct investigations or make findings of fact to confirm the truth of any statement made in an application, such as whether a work has been published or not.”
The treatment of registration in copyright litigation is puzzling when compared to trademark law. In trademark infringement lawsuits, registration is not a prerequisite. Additionally, statutory damages are less common in trademark cases.
However, registration serves a more important purpose in trademark law. A copyright infringement plaintiff must prove the copying of an original work that the defendant has previously seen. In the case of trademark, a business owner may not know if a certain name or combination of words is being used by another business without performing research.
Scott Lesowitz, graduated from Harvard Law School cum laude in 2007 and is a former Assistant U.S. Attorney. He now practices civil litigation in Los Angeles, California.
Suggested citation: Scott Lesowitz, Reforming the Copyright Act: Registration and Infringement, JURIST – Professional Commentary, June 9, 2020, https://www.jurist.org/commentary/2020/06/scott-lesowitz-copyright-act-reform/.
This article was prepared for publication by Tim Zubizarreta, JURIST’s Managing Editor. Please direct any questions or comments to him at commentary@jurist.org
