IP Law News

Lawsuits Must Wait for Copyright Office, High Court Rules (1)

March 4, 2019, 3:52 PM

A copyright holder can’t sue for infringement before the U.S. Copyright Office has registered or rejected the work, a unanimous Supreme Court has ruled.

The high court March 4 rejected Fourth Estate Public Benefit Corp.'s argument that the act of applying for copyright registration meets the requirement for filing an infringement suit. Wall-Street.com LLC argued the law plainly requires a copyright holder to have a Copyright Office registration in hand before suing for infringement.

The ruling will most impact efforts to get restraining orders and preliminary injunctions, copyright attorney Aaron Moss, a copyright attorney at Greenberg Glusker Fields Claman & Machtinger LLP in Los Angeles said.

Justice Ruth Bader Ginsburg, writing for the court, interpreted “registration” as Copyright Office approval. She acknowledged that infringement could continue while the Copyright Office considered an application, but said those damages could still be recovered. Ginsburg also said Fourth Estate “overstated” fears that creators could lose the ability to enforce their rights.

“Delays in Copyright Office processing of applications, it appears, are attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure,” Ginsburg wrote.

The decision affirms a ruling by the U.S. Court of Appeals for the Eleventh Circuit and upends precedents in the Fifth and Ninth Circuits. The latter two courts had endorsed the “application approach,” meaning copyright owners only needed proof that they applied for a registration even if the Copyright Office hadn’t issued a final response.

Parsing the Language

Fourth Estate, a nonprofit journalism group, applied for a copyright registration at the U.S. Copyright Office shortly before suing Wall-Street.com in March 2016. Fourth Estate alleged Wall-Street.com copied and distributed Fourth Estate’s works after canceling its license to use them.

The first sentence of Section 411(a) of the Copyright Act bars infringement suits before copyright registration “has been made.” The second allows copyright holders to sue even if the Copyright Office rejects the application, as long as the applicant notifies the office first—a distinction that would be unnecessary if simply filing a copyright application allowed one to sue, Gisnburg wrote.

Fourth Estate argued the second sentence simply adds the requirement to notify the Copyright Office, letting it have a say in litigation. But Ginsburg said that reading still “requires the implausible assumption that Congress gave ‘registration’ different meanings in consecutive, related sentences.”

The final sentence of Section 411(a), which allows the Register of Copyrights to participate in a lawsuit involving a rejection, also would be negated if applicants could sue and have suits resolved before the Copyright Office acted on an application, Ginsburg wrote.

Ginsburg also pointed to examples where “Congress resisted efforts” to eliminate the registration requirement.

Policy Implications

Despite Fourth Estate’s stated fears, the court noted that even the delayed registration process leaves “ample time” to sue before the three-year statute of limitation expires. It also noted the availability of an expedited application for an additional fee and preregistration processes for certain time-sensitive works, as well as ability to recover damages accrued during any Copyright Office delay.

Attorneys told Bloomberg Law that the high court’s decision, most importantly, clarifies the law and provides national consistency.

Moss said he’s seen the Ninth Circuit’s “application approach” most frequently invoked against movie studios in bids to block a movie release they say infringe their screenplay. Now that tactic could only work if a work was already registered or, possibly, if the screenwriter paid the accelerated fee.

“This may actually cut down on the number of nuisance suits often brought by people when popular movies come out,” Moss said.

Jason Bloom of Haynes and Boone LLP, who signed onto a brief by the International Trademark Association backing Fourth Estate, still thinks an application approach better for public policy, but of the justices added, “you can’t fault their conclusion.”

Kellogg Hansen Todd Figel & Frederick PLLC and Schneider Rothman Intellectual Property Law Group PLLC represented Fourth Estate. Streis & Maher LLP and David A. Geller represented Wall-Street.com.

The case is Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, U.S., No. 17-571, 3/4/19

To contact the reporter on this story: Kyle Jahner in Washington at kjahner@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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