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Article: November 2017: Trademark & Copyright Litigation Update

Business Litigation Reports

When Is a Copyright Owner Allowed to Sue? The Supreme Court May Decide. A recent decision by the U.S. Court of Appeals for the Eleventh Circuit, Fourth Estate Public Benefit Corporation v. Wall-Street.com, LLC, 856 F.3d 1338 (11th Cir. 2017), has prompted a petition for certiorari to the U.S. Supreme Court, asking the Court to address a technical—but crucial—issue with respect to when a copyright action may properly be filed. Specifically, the Court has been asked to resolve a longstanding disagreement among courts of appeals as to whether a copyright owner may file a claim for infringement upon the mere filing of an application for a registration, or whether she must first wait until the Copyright Office actually issues the registration.

Before copyright owners may initiate a copyright claim in federal court, they must first “register their works.” Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 157 (2010). To this end, section 411(a) of the Copyright Act provides, “no civil action for infringement of the copyright in any United States work shall be instituted until … registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a). Courts of appeals, however, disagree whether the act of “registration” occurs when a copyright owner applies for a registration or when the Copyright Office actually issues the registration. The Tenth and Eleventh Circuits have adopted the “registration approach”—i.e., “registration” occurs only after the Copyright Office has reviewed the owner’s application and made a determination; the Fifth and Ninth Circuits, however have adopted the “application approach”—i.e., “registration” occurs at the time the owner files an application for a registration. Which test a court applies has important repercussions for when a copyright owner may bring suit.

The Registration Approach. Under the registration approach, used by the Tenth and Eleventh Circuits, a copyright owner may sue for infringement only after the application for copyright has been approved and the registration has issued. See, e.g., Fourth Estate, 856 F.3d at 1341; La Resolana Architects v. Clay Realtors, 416 F.3d 1195, 1202 (10th Cir. 2005). Courts adopting this approach reason that the plain language of the Copyright Act, which requires that “registration … has been made,” dictates this outcome. See Fourth Estate, 856 F.3d at 1341 (“[T]he text of the Copyright Act makes clear that the registration approach … is correct.”); La Resolana Architects, 416 F.3d at 1202 (“Courts employing the Registration approach interpret the Act using the plain language of Title 17, as we have done.”). As the Eleventh Circuit further explained, multiple sections of the Copyright Act together define “registration as a process that requires action by both the copyright owner and the Copyright Office,” and other subsections of the Copyright Act confirm that “an application alone is insufficient for registration.” Fourth Estate, 856 F.3d at 1341. While the Eleventh Circuit acknowledged that an owner who files an application late in the three-year statute of limitations period for copyright claims “risks losing the right to enforce his copyright in an infringement action because of the time needed to review an application,” such a risk should encourage owners to register their copyrights promptly. Id. at 1342.

The Application Approach. In contrast, under the application approach, a copyright owner can sue for infringement any time after it has properly filed a valid application for a registration to the Copyright Office. See, e.g., Cosmetic Ideas, Inc. v. IAC/InterActiveCorp, 606 F.3d 612, 616-19 (9th Cir. 2010) (discussing and adopting the application approach); Positive Black Talk Inc. v. Cash Money Records, 394 F.3d 357, 365 (5th Cir. 2004) (“[T]he Fifth Circuit requires only that the Copyright Office actually receive the application, deposit, and fee before a plaintiff files an infringement action.”). In the Ninth Circuit’s view, for example, the statutory language of the Copyright Act is unclear with respect to the meaning of “registration”: While some language in the Act suggests that registration requires some action on the part of the Copyright Office, other language suggests that a copyright owner’s compliance with application formalities is alone sufficient. Cosmetic Ideas, 606 F.3d at 617. Finding that the statutory language does not compel the adoption one approach over the other, the Ninth Circuit looked to the “broader context of the statute as a whole,” including that the 1976 Copyright Act intended to broaden the scope of works subject to copyright protection, while simultaneously creating incentives for copyright holders to register their works. Id. at 618-19. The application approach, the Ninth Circuit reasoned, better fulfilled these purposes because: (1) it allows a copyright owner to initiate suit right away rather than having to wait an indeterminate time for a decision by the Copyright Office; and (2) it avoids the risk of the copyright owner losing its ability to sue. See id. at 619-20. Because the statute of limitations for a federal copyright claim is only three years, an owner who wishes to bring suit toward the end of that period would lose the ability to initiate a claim if she had to wait for the Copyright Office to issue a registration; the application approach removes that risk. Id. at 620.

In Fourth Estate, the test applied proved outcome determinative—the plaintiff had filed an application for, but had not yet received, a registration, resulting in dismissal of its complaint. Should the Supreme Court grant the petition for certiorari and resolve when the act of “registration” occurs for the purpose of initiating a copyright action, it would bring much needed clarity to copyright plaintiffs and defendants alike, and eliminate the regional disparity resulting from the differing approaches.