On March 4, 2019, the Supreme Court of the United States decided two cases that will impact the ability to practically enforce copyrights.
In Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, SCOTUS held that under section 411(a) of the Copyright Act, a party can sue for copyright infringement only after official registration with the Copyright Office. This means that when a party merely submits an application for copyright registration, and registration is still pending with the Copyright Office, the party cannot yet file suit for copyright infringement. In addition, the Court held that upon proper registration of the copyright, the copyright holder can sue and recover not only for the infringement that occurred after the registration, but also the infringement that occurred prior. The three year statute of limitations for civil suits would still apply same as before.
Fourth Estate Public Benefit Corporation (“Fourth Estate”) is an online news organization that licensed various articles to another news organization, Wall-Street.com, LLC (“Wall-Street”). Pursuant to Fourth Estate’s and Wall-Street’s licensing agreement, if Wall-Street were to cancel the agreement, it had to remove all content on Wall-Street’s site provided by Fourth Estate. However, Wall-Street did not abide by this provision, and upon cancellation of the agreement, Wall-Street’s site continued to display articles created by Fourth Estate.
Subsequently, Fourth Estate filed suit against Wall-Street for copyright infringement, alleging that Fourth Estate had filed applications with the Copyright Office to register its articles licensed to Wall-Street. However, at issue in this case was the fact that the articles provided by Fourth Estate had not yet been officially registered by the Copyright Office. Therefore, the District Court held that Fourth Estate could not sue Wall-Street until Fourth Estate’s copyrights were effectively registered. The Eleventh Circuit affirmed the District Court’s decision, and Fourth Estate appealed to the U.S. Supreme Court.
In a unanimous opinion, SCOTUS affirmed the lower court’s decision, holding that a copyright holder can only sue for copyright infringement following the official registration of the copyright by the Copyright Office, and not when the Copyright Office receives the application for registration. In reaching this decision, SCOTUS relied on the provision in section 411(a) of the Copyright Act, which states that no copyright lawsuit can be instituted until registration has been made. This provision permits a copyright holder to sue for infringement following the delivery of an application only in cases where the Copyright Office refuses to register a copyright claim and the copyright holder serves notice of the lawsuit on the Register of Copyrights. The Court found that it would be superfluous if a claimant could sue as soon as it files an application to register. The Court also added that Congress had previously refused to enact legislation that would have expressly permitted suit to be brought after an application was filed.
In another case – Rimini Street, Inc. v. Oracle USA, Inc., – the Court held that a court’s discretion to award “full costs” did not apply to expert witness fees or other “costs” that are not specifically delineated in 28 U.S.C. §1821 or 28 U.S.C. §1920. The case stemmed from Oracle’s obtaining of a $12.8 million award of litigation expenses, including fees for expert witnesses, e-discovery, and jury consulting. The Court’s decision significantly narrows the fees that victorious parties could expect to have awarded to them.
The effect of both decisions is to make it more difficult to proceed with a copyright infringement suit from a practical perspective. With respect to obtaining a registration, the Copyright Office does allow for expedited filings where litigation is anticipated, but this comes at a cost in excess of $700 more than regular registration. In turn, without the threat of having to cover a significant portion of a potential plaintiff’s expenses, accused infringers are likely to be less afraid about the consequences of a law suit (though a victorious defendant similarly would not be entitled to collect the full extent of its legal costs).
With the exception of truly distinguished works that have major calculable value in the marketplace, potential plaintiffs are likely to become that much more reliant on the threat of statutory damages and attorneys’ fees under sections 504 and 505 of the Copyright Act. These remedies are already often the key to having any practical way of enforcing your rights, and they’re only available if the plaintiff has registered the applicable copyright with the U.S. Copyright Office in a timely manner. Though there are some limited exceptions and nuances throughout the Copyright Act, a timely registration is typically one that is filed either before the infringement occurred, or, regardless of the timing of the infringement, within three months of “publication” – a defined term in the copyright act that may differ from typical notions of publishing a work.
Because it’s pretty likely that content creators might not be too concerned with registration until after an infringement has occurred, we’ve been counseling our clients to make it a habit to register works with the U.S. Copyright Office no later than three months after publication.
The Fourth Estate and Rimini decisions provide clarity over two fundamental provisions of the Copyright Act: the proper timing of an infringement suit and the amount of recoverable costs after a successful cause of action. Clients must acclimate to these changes for enforcement of their copyrights and assess how these changes will affect their registration, protection, and litigation strategies. Even with these two new SCOTUS decisions, however, our advice remains the same: timely registration of your copyright will give you a practical and effective way to enforce your rights.
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