Feb 14 | 2019

Supreme Court To Clarify When Copyright Owners Are Permitted To Sue

The U.S. Supreme Court recently heard arguments in Fourth Estate v. Wall-Street.com.  The case deals with a dispute about when a copyright owner is eligible to sue to protect its infringed work.  More specifically, the issue before the Court was whether the Copyright Act requires one to file a lawsuit as soon as all materials for copyright registration have been filed with the Copyright Office, or only after the Copyright Office has acted on the application by issuing registration.  The outcome of this case is critically important for copyright owners because it will affect copyright owners’ enforcement strategy.

In order to understand the case’s importance, one first must understand what copyright protects and how an owner can enforce its rights.

Copyright Protection

Copyright is a bundle of exclusive rights granted to the owner of any creative work of expression fixed in a tangible form.  Books, songs, artwork, software, photographs—all are examples of works covered by copyright.  The owner of a copyrighted work controls how the work can be reproduced, distributed, publicly displayed, performed, and used to create derivative works.  The rights associated with copyright attach the moment the work is fixed in some form (e.g., written, put to canvas, videotaped), which means a copyright owner can enforce its rights upon fixation, at least through means outside of filing a lawsuit in federal district court. 

Enforcement

A copyright owner who discovers another’s use of a substantially similar work in violation of one or more of the owner’s exclusive rights can and should enforce its rights, because failing to enforce could lead to an erosion of rights.  Enforcement can take many forms, such as sending demand letters; filing takedown requests with online service providers, e-marketplaces, and social media sites; terminating license agreements; or suing in court.  However, one cannot sue for copyright infringement in federal district court until the owner “registers” the work with the Copyright Office.  Now that it has heard the Fourth Estate case, the Supreme Court will decide when “registration” for purposes of lawsuit eligibility occurs—when one files an application with the Copyright Office or when the Copyright Office issues a certificate of copyright registration.

Details of the Case

Fourth Estate Public Benefit Corp. sued Wall-Street.com after Wall-Street.com failed to stop using content it licensed from Fourth Estate after the expiration of a license.  Fourth Estate filed a copyright application before suing Wall-Street.com, but the Copyright Office had not yet issued the registration certificate for Fourth Estate’s work.  The district court and the Eleventh Circuit Court of Appeals dismissed the suit because registration had not occurred when the lawsuit was filed.  This requirement that copyright registration must have issued at the time of filing a lawsuit is known as the “Registration Approach.”  The Tenth Circuit also follows this approach, but other Circuits, notably the Fifth and Ninth, take the opposite “Application Approach”—allowing a copyright owner to sue so long as the owner submitted its copyright application materials with the Copyright Office.  Because of the split in the circuits and the importance of this case to copyright owners, the Supreme Court took the case.

Arguments Before the Supreme Court

The parties’ argued their respective interpretations of Section 411(a) of the Copyright Act, which states, in part: “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title” (emphasis added).  Fourth Estate argued that the language of the statute allows one to sue once a copyright owner submits its materials with the Copyright Office, but Wall-Street.com and the U.S. Solicitor General took the opposite view, arguing that the statute requires the Copyright Office to issue registration before suit may be filed in court. 

The Justices appeared to side with the statutory interpretation favoring the Registration Approach, as argued by that Wall-Street.com and the federal government.  Nevertheless, the Justices did seem sympathetic to Fourth Estate’s policy argument that the Application Approach avoids unnecessary delays in litigation, which could adversely affect copyright owners’ enforcement efforts.  Indeed, Fourth Estate made a compelling argument that infringement in 2019 occurs at a much faster pace and broader scope than when the Copyright Act was last overhauled in the 1970s.  If the Court rejects the Application Approach, Fourth Estate argued, copyright owners big and small would be required to use the Copyright Office’s expedited processing in order to sue in a timely manner, and expedited processing comes at considerable cost—more than fourteen times the cost of regular processing.

What to Expect

It is difficult to know how the Court will rule.  Despite sympathy for the delayed enforcement copyright owners might experience if the Court does not adopt the Application Approach, the Justices’ interpretation of the Copyright Act compels a finding of  the Registration Approach, and this could trump any public policy considerations.  If the Registration Approach prevails, expect a lobbying push from rights holders to persuade Congress to amend the Copyright Act and allow copyright owners a faster and less expensive route to federal court.

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