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Mere Mistakes Don’t Ax Copyright Registrations, Justices Say (2)

Feb. 24, 2022, 3:19 PMUpdated: Feb. 24, 2022, 8:56 PM

An alleged infringer has to show a registrant knowingly submitted inaccuracies to the Copyright Office to invalidate a copyright registration, the U.S. Supreme Court said in effectively restoring a nearly $800,000 award.

Copyright Act language providing that inaccuracies don’t invalidate a registration if the registrant didn’t know about them doesn’t distinguish between factual and legal inaccuracies, the high court said in a copyright fight between Unicolors Inc. and H&M Hennes & Mauritz LP .

The 6-3 reversal of a U.S. Court of Appeals for the Ninth Circuit decision set a high bar for invalidating registrations, reassuring rightsholders who may have made inadvertent errors. Registration is required to sue for infringement, and registration before infringement entitles a plaintiff to seek statutory damages and attorneys’ fees.

In an opinion by Justice Stephen Breyer, the court agreed with Unicolors that the text of the law explicitly requires “knowledge that it was inaccurate"—legally or factually—to void a registration, and that H&M provided no evidence of such knowledge. Breyer reprised a bird-identification analogy he made during oral argument, with misidentification of traits being factual mistakes, and misinterpretation of what traits said about species being legal mistakes.

“The labeling problem here is one of law. Does that difference matter here?” Breyer wrote. “We think it does not.”

Breyer rejected H&M’s argument that it will become too easy for copyright holders to avoid consequences of inaccurate applications by claiming ignorance, because courts can find willful blindness satisfies the knowledge requirement.

Before the ruling, copyright groups, rightsholder groups and some intellectual property professionals worried the Ninth Circuit opinion that was reversed would hurt rightsholders. Now “copyright holders and applicants can breathe a sigh of relief,” intellectual property attorney Preetha Chakrabarti of Crowell & Moring LLP said in an email.

“This decision is encouraging for artists and designers who rely on copyright registrations to protect their rights, but do not always have the means to hire counsel to ensure that their applications are legally and factually perfect,” Chakrabarti said.

Other legal professionals as well as some retail and fashion groups warned Unicolors’ position would hinder defenses against entities who register large volumes of copyrights primarily to earn money through litigation.

But a signatory to a friend-of-the-court brief backing H&M, intellectual property law professor Mark A. Lemley of Stanford University, said the willful blindness caveat mitigated his concern.

“The result is ultimately not bad. The biggest risk from the case—that it would immunize copyright trolls who break the rules of copyright registration—seems less likely now,” Lemley said in an email.

Different Question

Three justices dissented, saying the case should have been dismissed because Unicolors and the court addressed a question different from the one Unicolors raised in its petition.

Justice Clarence Thomas, joined by Justice Samuel Alito and partly joined by Justice Neil Gorsuch, said Unicolors’ petition asked to settle a split where the Eleventh Circuit said “deceptive intent” was needed to invalidate a copyright while the Ninth said “there is no such intent-to-defraud requirement.”

Thomas said Unicolors’ briefing instead claimed “knowledge” in the law is only satisfied by actual knowledge rather than actual or constructive knowledge, and that it applies to legal or factual knowledge, issues not addressed in the split.

Unicolors secured a nearly $800,000 statutory infringement and fees award after a jury found H&M copied its fabric designs. But the Ninth Circuit faulted the lower court for not granting H&M’s post-trial request to ask the Register of Copyrights for an opinion on whether errors in a group copyright application would have caused it to deny registration if the agency had known.

The Ninth Circuit said Unicolors knew the fact that a few designs had been reserved for certain customers, so it didn’t matter whether Unicolors knew that meant they weren’t legally “published” together and ineligible for group registration.

Unicolors was represented by Orrick, Herrington & Sutcliffe LLP and Doniger / Burroughs APC. H&M was represented by Stris and Maher LLP and Nixon Peabody LLP.

The case is Unicolors v. H&M Hennes & Mauritz LP, U.S., No. 20-915, opinion 2/24/22.

(Updated with additional reporting)

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

To contact the editors responsible for this story: Keith Perine at kperine@bloomberglaw.com; Renee Schoof at rschoof@bloombergindustry.com