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From Intellectual Property Law Daily, March 4, 2019

Copyright owner cannot sue for infringement until Copyright Office rules on registration application

By Thomas Long, J.D.

High Court resolves circuit split; rejects the "application approach," which allowed copyright owners to proceed if they had applied for copyright registration by the time the alleged infringement took place.

Registration of a copyright occurs, for purposes of the Copyright Act’s requirement that a copyright owner register a copyright before commencing an infringement suit, when the Copyright Office registers a copyright, and not upon filing of the application, the U.S. Supreme Court has unanimously held. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration, the Court decided. Online news publisher Fourth Estate Public Benefit Corporation had asked the Court to resolve a split among the circuit courts of appeal between the so-called "registration approach," making an issued registration a prerequisite to an infringement suit, which had been adopted by the Tenth and Eleventh Circuits. The Fifth and Ninth Circuits have followed the "application approach," which requires copyright owners to plead only that they had applied for copyright registration by the time the alleged infringement took place. In the Court’s view, the registration approach reflected the only satisfactory reading of the relevant statutory provision, 17 U.S.C. §411(a). The Court affirmed a decision of the U.S. Court of Appeals in Atlanta, which held that Fourth Estate had not met the statutory prerequisite for bringing an infringement suit (Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, March 4, 2019, Ginsburg, R.).

Fourth Estate produced online news content and licensed its articles to participating websites. News website operator Wall-Street.com, LLC, obtained licenses to multiple articles that were produced by Fourth Estate. The license agreement between Wall-Street and Fourth Estate required Wall-Street to remove all licensed content from its website before cancelling its account with Fourth Estate. Fourth Estate sued Wall-Street because Wall-Street continued to display licensed articles after cancelling its account with Fourth Estate. Wall-Street and an individual co-defendant sought dismissal on the ground that the Copyright Act allowed infringement suits only if the Register of Copyrights had approved or denied an application to register the copyright at issue. The district court dismissed Fourth Estate’s complaint for failure to comply with Section 411(a), and the Eleventh Circuit affirmed, concluding that the registration approach was more consistent with the language and intent of the Copyright Act.

Copyright owners possess certain exclusive rights in their works immediately upon the works’ creation, pursuant to 17 U.S.C. §106. Section 501(b) of the Copyright Act provides that a copyright owner may bring a civil action for infringement of those rights, but Section 411(a) requires that suit may generally only be brought after the owner has complied with that section’s requirement that "registration ... has been made." According to Justice Ginsburg, writing for the Court, although an owner’s rights existed apart from registration, registration was akin to an administrative exhaustion requirement that the owner must satisfy before suing to enforce those rights.

Under limited circumstances, Justice Ginsburg noted, copyright owners may sue for infringement before obtaining a registration. For example, in situations in which a copyright owner is preparing to distribute a work that is vulnerable to infringement prior to distribution, such as a movie or a song, the owner can apply for a preregistration under Section 408(f)(2). An owner also may sue for infringement of a live broadcast before it is registered, pursuant to Section 411(c). Neither exception was applicable to this case. Moreover, preregistration served only as a preliminary step prior to a full registration, and an infringement suit brought under the preregistration exception could be dismissed unless the owner applied for registration promptly after the work was published or infringed. Under the live broadcast exception, the owner must register the work within three months of its first transmission or face dismissal. Therefore, even under the exceptions, the copyright owner still had to register the work at issue in order to maintain an infringement suit.

Under Section 411(a), "registration ... has been made," and a copyright owner may sue for infringement, when the Copyright Office registers a copyright, the Court said. Section 411(a)’s first sentence provides that no civil infringement action "shall be instituted until preregistration or registration of the copyright claim has been made." The section’s next sentence sets out an exception to this rule by providing that, when the required "deposit, application, and fee ... have been delivered to the Copyright Office in proper form and registration has been refused," the claimant may institute a civil action, if notice thereof is served on the Register of Copyrights. The text of Section 411(a) focused not on the claimant’s act of applying for registration but on action by the Copyright Office—specifically the Office’s issuance of a registration or its refusal to issue one, the Court said. If application alone sufficed to "make" registration, Section 411(a)’s second sentence—allowing suit upon refusal of registration—would be superfluous, in the Court’s view.

The third and final sentence of Section 411(a) further persuaded the Court that the statute required action by the Register before an infringement suit may be brought. That sentence allowed the Register to become a party to the action with respect to the issue of registrability of the claimed copyright. According to the Court, this allowance would be negated if an infringement suit could be filed and adjudicated before the Register acted on an application. Other provisions of the Copyright Act supported adoption of the registration approach, the Court said. For example, Section 410, covering the Register’s issuance or refusal to issue a registration certificate, treated applications differently from registrations. Section 410(d) provided, in cases involving registrability disputes, that the effective date of a copyright registration was the date on which an application, deposit, and fee (which are later determined by the Register of Copyrights or by a court of competent jurisdiction to be acceptable for registration) have all been received in the Copyright Office. "There would be no need thus to specify the ‘effective date of a copyright registration’ if submission of the required material qualified as ‘registration,’" the Court explained.

In arguing in favor of the application approach, Fourth Estate primarily contended that the Copyright Act used "the phrase ‘make registration’ and its passive-voice counterpart ‘registration has been made’" to describe submissions by the copyright owner, rather than Copyright Office responses to those submissions. Fourth Estate argued that Section 411(a)’s requirement that "registration ... has been made in accordance with this title" most likely refers to a copyright owner’s compliance with statutory requirements for registration applications, and it pointed to other Copyright Act provisions that appeared to use the phrase "make registration" or one of its variants to describe what a copyright claimant does. However, as Fourth Estate acknowledged, understanding the meaning of "registration" in a particular provision depended on its context, and in the High Court’s view, the specific context of Section 411(a) permitted only one sensible reading: permits only one sensible reading: The phrase "registration ... has been made" refers to the Copyright Office’s act granting registration, not to the copyright claimant’s request for registration.

Fourth Estate also argued that, because "registration is not a condition of copyright protection," pursuant to Section 408(a), Section 411(a) should not bar a copyright claimant from enforcing that protection in court once an application for registration has been filed. However, the Court said, the Copyright Act safeguards copyright owners by vesting them with exclusive rights upon creation of their works and prohibiting infringement from that point forward. If infringement occurs before a copyright owner applies for registration, that owner may eventually recover damages for the past infringement, as well as the infringer’s profits, once the owner has applied for registration and awaited the Register’s decision. Once the Register grants or refuses registration, the copyright owner may also seek an injunction barring the infringer from continued violations, as well as an order requiring the infringer to destroy infringing materials, the Court explained.

The Act’s explicit carveouts from Section 411(a)’s general rule adequately protected copyright owners’ rights during any gap between application and registration, in the Court’s view. The Court also waved away Fourth Estate’s argument that copyright owners ran the risk of being time-barred under the Copyright Act’s three-year statute of limitations if the registration approach were adopted. The Court opined that Fourth Estate’s fear was overstated because the average proceeding time for an application was seven months, leaving ample time to file suit.

This case is No. 17-571.

Attorneys: Aaron M. Panner (Kellogg, Hansen, Todd, Figel & Frederick, PLLC) for Fourth Estate Public Benefit Corp. Peter K. Stris (Stris & Maher LLP) for Wall-Street.com, LLC.

Companies: Fourth Estate Public Benefit Corp.; Wall-Street.com, LLC

MainStory: TopStory Copyright

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