US Supreme Court Resolves Circuit Split Ruling that a Copyright Owner Can’t Sue before the Copyright Register has Processed its Copyright Application

On March 4, the US Supreme Court rules that that a copyright owner can bring a copyright infringement lawsuit only after the Copyright Register has processed its application for copyright registration, that is, either issued a registration certificate or denied registration. The copyright owner cannot sue shortly after it just filed an application for copyright registration, while the application is still pending.

Fourth Estate Public Benefit Corp. v. Wall-Street.com, 586 U.S. ___ (2019), Docket No. 17-571 https://www.supremecourt.gov/opinions/18pdf/17-571_e29f.pdf

This decision is disappointing news to many copyright owners. By contrast, those who cheer various internet freedoms including the unhindered exchange of ideas (and content) and value the competition, or believe in strict interpretation of laws, might welcome this decision.

Here is the crux of the legal issue. The US Copyright Act, Title 17 U. S. C. §411(a) states that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.” Some have interpreted the wording “registration has been made” that a complete application has been submitted to the Copyright Office, together with the payment of an official fee. (Yours truly has taken this position in some cases advising clients that this position in any circuit is vulnerable to motion practice by defendant.) Indeed, many authoritative experts argued for that position. For example, professor Paul Goldstein wrote in his treatise that permitting an infringement lawsuit as soon as an application for registration was filed was “the better rule” because delays inherent in processing an application could prejudice the copyright holder, especially when seeking immediate injunctive relief.

This is how the case has developed. Fourth Estate Public Benefit Corporation, an online news and content publisher, licensed some of its articles to Wall-Street.com, a news website. (Not to confuse this obscure online publication with the Wall Street Journal.) The license agreement required Wall-Street.com to remove from its website all content produced by Fourth Estate before canceling the agreement. Wall-Street canceled but continued to display articles produced by Fourth Estate. Fourth Estate sued Wall-Street for copyright infringement. The complaint alleged that Fourth Estate had filed “applications to register [the] articles [licensed to Wall-Street] with the Register of Copyrights.” Because the Register had not yet acted on Fourth Estate’s applications, the District Court for the Southern District of Florida, on Wall-Street’s motion, dismissed the complaint, and the Eleventh Circuit affirmed. The Eleventh Circuit held that “registration . . . has [not] been made” under §411(a) until the Copyright Office registers a copyright.

Thereafter, the Register of Copyrights refused registration of the articles Wall-Street had allegedly infringed.

In October 2017, Fourth Estate filed a Petition for Writ of Certiorari with the Supreme Court of the United States. Cert was granted and the Court heard oral arguments on January 8, 2019.

On March 4, the Court, in an 9–0 decision, written by Justice Ginsburg, has ruled that a copyright owner cannot file an infringement lawsuit until the Copyright Office has registered the work at issue, a process that can take many months. Wall-Street won.

It is amazing that in our polarized country the Supreme Court has found an issue on which it ruled unanimously!

The Court relied primarily on legislative history and textual analysis to hold that “[Section 411(a)] focus[es] not on the claimant’s act of applying for registration, but on action by the Copyright Office — namely, its registration or refusal to register a copyright claim.”

The Court paid lip service to the principle that copyright exists from the moment a work is created and fixed in tangible form. That means that copyright protection for US works should be automatic. However, many clients and non-US lawyers wonder what good this principle does if you cannot protect your copyright in court timely and cost-effectively!

The Court recognized that delays in the registration process raise serious concerns. Yet, the Court noted that an expedited registration, for a hefty fee, is available. The Court also pointed out several exceptions to the registration requirement.

What are the implications for businesses? IP attorneys have always advised clients about the importance of timely copyright registration. This Supreme Court’s decision just reinforces this advice.

Copyright law and litigation attorneys and analysts differ on the practical significance of this decision focusing on different aspects.

Here is what Jessica Litman wrote in popular SCOTUSblog:


https://www.scotusblog.com/2019/03/opinion-analysis-a-copyright-owner-cant-sue-for-infringement-before-the-register-has-processed-its-copyright-registration-application/

James Hough of large West-coast based international law firm Morrison & Foerster LLP wrote in Law360:


I tend to agree that this decision is not a game changer, and is not necessarily that bad to copyright owners, as it may seem. Although I do not personally agree with the approach the Court has taken, having certainty is a good thing. In this sense, it is a good development that now we can counsel copyright owners with more clarity. After all, what businesses value the most is the predictability of the legal system. This decision certainly brings more predictability.

Text © 2019 Maxim A. Voltchenko

* This piece is not intended to be a review of U.S. law. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.

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