The U.S. Supreme Court Issues Two Recent Copyright Decisions

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On a busy Monday for copyright law that saw everything from the return of RBG to discursions about hot dogs at sporting events, the Supreme Court issued two unanimous opinions concerning requirements for filing copyright infringement suits and the damages that successful plaintiffs can recover.

Certificates before Suits: The Registration Approach Wins the Day in Copyright Infringement Claims

Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, LLC, Slip Op. No. 170571 (Mar. 4 2019)

Ruth Bader Ginsburg’s unanimous opinion in this case resolved a lingering circuit split: whether a copyright infringement plaintiff can file suit after applying for a copyright with the U.S. Copyright Office (the “application approach”), or whether a copyright plaintiff must wait for the U.S. Copyright Office to actually issue a registration (or deny it) before filing suit (the “registration approach”). Justice Ginsburg’s opinion unequivocally holds that the registration approach is the proper analysis – meaning copyright plaintiffs should have their registration certificates in hand before filing suit.

In this case, Fourth Estate Public Benefit Corporation was a news organization that licensed certain works to Wall-Street.com, LLC, a news website. Fourth Estate sued Wall-Street.com after Wall-Street.com cancelled their license agreement but continued publicly displaying Fourth Estate’s news articles outside the scope of any license. Fourth Estate’s seemingly clear case of infringement turned murky when it filed suit before the U.S. Copyright Office had ruled on its pending copyright applications.  The U.S. Copyright Office had not yet granted (or denied) a registration, and Wall-Street.com argued that 17 U.S.C § 411(a) barred the claim.

That section requires, in part:

[N]o civil action for infringement of the copyright of any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.  In any case, however, where the deposit, application, and fee required for registration … registration has been refused, the application is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.

The parties argued over the verbiage “registration … has been made.” Is registration “made” once you’ve properly submitted your copyright application? Or is registration only “made” once the U.S. Copyright Office issues a registration certificate? Unlike the Ninth and Fifth Circuits, which had adopted the application approach, the Eleventh Circuit (where Fourth Estate filed suit) adopted the registration approach and determined that Fourth Estate could not proceed without the certificate in hand.

Supporting the Registration Approach Six Ways from Sunday

On Monday, the Supreme Court definitively affirmed, holding that registration “is made” only with issuance of the certificate. The decision relied on at least six different rationales:

  • Statutory Interpretation Principles
    • Statutory interpretation principles require courts to give effect to all words in a statute. Here, the Supreme Court found that the application approach would have rendered the second and third sentences of § 411(a) meaningless. 
  • Case Precedent
    • The Supreme Court found the registration approach supported the majority opinion authored by the famous Judge Learned Hand in a prior case, in which he had held that the Register of Copyright’s issuance of a certificate was the trigger for a copyright owner’s entitlement to sue.
  • International Harmonization
    • The Supreme Court found it persuasive that while Congress removed foreign works from § 411(a)’s registration requirements to comply with the Berne Convention, Congress declined to remove those same registration requirements for domestic works.
  • Legislative History
    • The Supreme Court also found it persuasive that Congress had previously rejected legislative proposals to allow suit immediately upon submission of a registration application—thus, implicitly rejecting the application approach.
  • Secondary Authority
    • The Supreme Court noted that a leading treatise on copyright law (Goldstein on Copyright) described the registration approach as “the better rule.”
  • Separation of Powers
    • Finally, the Supreme Court made an appeal to separation of powers principles, acknowledging that processing times for registrations have been experiencing significant delays, but finding that the “staffing and budgetary shortages” in the U.S. Copyright Office were things that the “courts cannot cure” and that Congress would have to alleviate.

Complying with the Registration Approach

If you are a copyright owner, there are several things you can do to position yourself for protecting your copyrights under the registration approach:

  • Be proactive. Bradley’s intellectual property lawyers have experience in applying for copyright protection covering all types of creative works. Let us help you navigate the U.S. Copyright Office’s rules on deposit copies, publication requirements, etc. Filing applications to protect your copyrightable material before disputes arise provides you with the required registration (or official refusal) you need so that you can act swiftly when an infringer surfaces. As Justice Ginsburg notes, the Copyright Office currently has a processing time of seven months.
  • Expedite your application. If you think litigation might be imminent, consider filing an expedited copyright application. Bradley’s attorneys are experienced in filing applications for expedited processing. While the fee to expedite an application is a steep $800, you typically have your copyright registration (and license to sue) in hand within a week.
  • Consider preregistration options. The Copyright Act allows owners of certain types of works to apply for “pre-registration,” which serves only as a “place-holder” for a formal registration and allows a copyright owner to sue for infringement before a work is commercially-released. Bradley attorneys can help you determine if your motion picture, sound recording, musical composition, book, computer program, or advertising/marketing photograph is eligible for this type of early protection. Pre-registration does not take the place of formal registration requirements, which have strict one- to three-month deadlines.  
  • Be exceptional. As Justice Ginsburg notes, there are several “explicit carveouts from § 411(a)’s general registration rule.” Bradley’s attorneys can help you determine if any of the explicit statutory exemptions, such as exceptions for live broadcasts or visual artists, might apply to you.
  • On the defense. If you have been sued for copyright infringement, Bradley’s attorneys can help you determine if the plaintiff has a valid copyright registration. If they do not, the Fourth Estate case may provide authority for an early dispositive motion.
  • Be calculating. Even though you have to wait for registration (or refusal) before filing suit, Justice Ginsburg’s opinion makes it clear that you can still collect for damages incurred prior to filing your lawsuit. However, official registration does affect certain remedies that are available to you —such as statutory damages, attorney fees, and costs (though, as discussed below in the Supreme Court’s other new opinion, this doesn’t mean all expenses). Our attorneys can assist you in calculating your case’s potential value (or your potential exposure) depending on your effective date of registration.

“Not Hot Dogs” – Counting the Costs in Rimini Street Inc. v. Oracle USA Inc.

The Supreme Court’s other copyright opinion on Monday limited a damages award by limiting the definition of “full costs.” In that case, Oracle had successfully sued Rimini for infringing copyrights while providing software maintenance services to Oracle users. The district court awarded $96.25 million to Oracle, including $12.8 million for “costs” such as expert witnesses, e-discovery, and jury consulting.

Oracle’s claim for these broad-ranging costs was that the Copyright Act awarded “full costs” under 17 U.S.C. § 505, and that “full costs” must have a more expansive meaning than the “costs” typically awarded in other statutes and governed by 28 U.S.C. §§ 1821 and 1920. These “costs” are generally the costs of the court for handling the case and costs of witnesses traveling to court for trial — not a party’s out-of-pocket litigation expenses. The Ninth Circuit affirmed the award. Rimini’s appeal to the Supreme Court challenged only that part of the damages award constituting $12.8 million in “full costs” that related to Oracle’s litigation expenses.

The Supreme Court unanimously reversed, holding that an award of “full costs” is limited to those costs in 28 U.S.C. §§ 1821 and 1920. Oracle’s claim for its broader litigation expenses was therefore unfounded. As Justice Kavanaugh pithily put it, “‘A ‘full moon’ means the moon, not Mars. A ‘full breakfast’ means breakfast, not lunch. A ‘full season ticket plan’ means tickets, not hot dogs. So too, the term ‘full costs’ means costs, not other expenses.”

The Ninth Circuit’s award of other litigation expenses was an outlier to begin with — counsel for Oracle had been unable to cite even a single prior case applying the “full costs” statutory language in the manner it sought. This case serves more as an example of statutory interpretation and enforcement of consistency across circuits with limited impact on litigants and proceedings going forward. Litigants can simply expect that courts will continue to tax costs but only of the usual types and amounts, even in copyright cases.