Important Copyright Case before U.S. Supreme Court

between a rock and a hard place

Important Copyright Case before the US Supreme Court

by Susan Basko, esq.

On January 9, 2019, the U.S. Supreme Court will be hearing a case that will decide a very important question regarding Copyright.  The rule, written in US Copyright law, is that a person must register copyright on a creative, original work with the US Copyright Office before that person can file a copyright infringement lawsuit regarding that work.  However, the question is:  What does it mean to register?  Is it good enough to put in the application, deposit (copy of the item to be registered), and the fee?  Or does the law actually require the application to be accepted and registered by the US Copyright Office, a process that takes 6 months to a year?  That is the question that will be decided.

The case is called FOURTH ESTATE PUBLIC BENEFIT CORPORATION V. WALL-STREET.COM.  Fourth Estate provides content for news websites that subscribe to its service.  Wall Street was one of the subscribers to its content. Fourth Estate required its subscribers to delete all of the Fourth Estate contents off its websites when canceling a subscription. Wall Street cancelled its subscription, but left the Fourth Estate content on its websites.  Fourth Estate sued for copyright infringement after filing a copyright application, but before that application had been granted or denied.

Federal courts work in circuits, so that federal appeals are valid for an entire circuit, which encompass several states.  With this question, the 10th Circuit and 11th Circuit  have decided that the copyright registration must be either granted or denied before an infringement lawsuit can be filed. The 10th Circuit is a block of western mountain and plains states - Wyoming, Utah, Colorado, Kansas, New Mexico, and Oklahoma.  The 11th Circuit is the southeastern states of Florida, Alabama, and Georgia.

The 5th and 9th Federal Circuits have held that a Copyright registration has taken place when the application, deposit, and fee have been sent to the Copyright office.   The 5th Circuit is Texas, Louisiana, and Mississippi.  The 9th Circuit is California, Nevada, Arizona, Washington, Oregon, Idaho, Montana, Alaska, Hawaii, Guam, and the Northern Mariana Islands.  Copyright applications can be, and usually are now, made online, so this process takes under one hour.  Thus, the people in the 5th and 9th Circuits have the advantage of at least 6 months over those in the 10th and 11th Circuits.

The question being decided by the US Supreme Court is this:

17-571 FOURTH ESTATE PUBLIC BENEFIT CORPORATION V. WALL-STREET.COM
DECISION BELOW: 856 F3d 1338

QUESTION PRESENTED:

Section 411(a) of the Copyright Act provides (with qualifications) that "no civil action for
infringement of [a] 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." 17 U.S.C. §
4ll(a). The question presented is:

Whether "registration of [a] copyright claim has been made" within the meaning of§ 411
(a) when the copyright holder delivers the required application, deposit, and fee to the
Copyright Office, as the Fifth and Ninth Circuits have held, or only once the Copyright Office
acts on that application, as the Tenth Circuit and, in the decision below, the Eleventh Circuit
have held. 

WHY THIS IS IMPORTANT: With the internet, we are able to instantly publish words, pictures, videos, etc.  If our works are creative and original, and set into tangible form (such as being written, photographed, recorded, etc.), they are imbued with copyright upon their being set into tangible form.  However, the copyright law says we cannot use a lawsuit to protect the copyrights unless we first register copyright.  If we were to follow the rule that "registration" means the full six month of longer process of the Copyright Office registering or denying registration, that leaves the works without the full protection of the law for those 6 months. If we follow the rule that says filing the Copyright application, paying the fee, and depositing the material is "registering," then the works can have the full benefit of the law once the application is filed.  The key then is to be sure to file a Copyright application before filing any copyright infringement lawsuit.  Since this law is interpreted differently by the Courts in these different circuits, those who feel they need to file a copyright infringement lawsuit to protect their works may need to "forum shop" to file their lawsuit in a court in one of the circuits that requires only the filing of a copyright application and not its acceptance and registration by the Copyright office.

This gap of 6 months or more can matter a lot because the statute of limitations on Copyright infringement is only 3 years after the copyright claim "accrues".  After 3 years, the copyright holder is barred from filing a lawsuit.  If the copyright holder has to wait 6 months or more for the copyright to be registered, that cuts the window of time in which a lawsuit can be filed.  But, does the claim accrue at the time of the infringement (known as the injury rule) or does it accrue when the copyright owner finds out about it (known as the discovery rule)?  Different courts across the nation have interpreted this in different ways.  Most federal circuits use the discovery rule -- that the statute of limitations begins to run when the copyright owner knew or should have known that the copyright was being infringed.

Interestingly, it is the 10th and 11th Circuits that follow the more time-limiting "injury rule" and also require the full registration to take place.  These two limitations can severely limit the time frame in which a copyright owner in the 10th and 11th Circuits would be able to file an infringement lawsuit.  For  example, a copyright might be infringed and the copyright owner might not find out about it for a year or two  -- and then, if the work is not already registered, would in addition have to wait the 6 months or longer for the Copyright office to register the work.  That would narrow the window for filing a lawsuit to a few months or in many cases, remove the possibility altogether.

The anticipated result of this Supreme Court case will be to bring the 10th and 11th Circuits into line with the rest of the nation, so that there is a more uniform Copyright protection nationwide.  If the Supreme Court issues a decision other than bringing the 10th and 11th Circuits in line with the rest of the nation, we can foresee a lot more forum shopping on Copyright law cases stemming from within the states in those circuits.  Companies within those states may wish to incorporate a branch elsewhere and register their copyrights from a location that has more normal copyright protections.  Again, the states that are affected by the copyright unfriendly rulings in the 10th and 11th Circuits are Florida, Alabama, Georgia, Wyoming, Utah, Colorado, Kansas, New Mexico, and Oklahoma.  The Courts in these two Circuits have essentially stripped a great deal of copyright protection from the people in those states.

OTHER TYPES OF COPYRIGHT PROTECTION:  A great deal of commerce and communication is now done on the internet.  There are several potent forms of copyright protection that exist on the internet that do not apply off the internet.  Among these are the system of having DMCA  (Digital Millennium Copyright Act) registered agents and sending DMCA takedown notices.  Other protections include the takedown systems provided on some of the internet giants, such as Amazon, Youtube, Facebook, and Twitter.

My personal experience is that the Copyright takedown systems are robust on Amazon and Facebook, and very weak and poorly run on Youtube and Twitter.  To add insult to injury, Youtube, which is owned by Google, engages in the incredibly dangerous and harassing practice of posting the name of the copyright holder who has had a video removed -- so that the infringer and his or her fans know exactly who to target and stalk and hack and harass.  There is no legally valid reason for Youtube to engage in such a dangerous practice.  This is yet another example of the practices of Youtube and Twitter both devising systems that create bizarre obstacles for those being injured by the sites' users to simply have the offending materials deleted.  Both sites seem to cater to the users who are offensive or even deranged, rather than simply following basic law and normal concepts of protecting the public from users intent on harming others.

Very few people can afford to file a Copyright lawsuit.  However, Copyright registration is in and of itself a very good protection -- because it opens the possibility and the threat that one could file a copyright infringement lawsuit.  In addition, prompt registration after creation of the work or before the work is infringed brings the added benefits of the possibility of high dollar amount statutory damages, rather than whatever damages can be proven, as well as the possibility of being awarded lawyer fees.  Copyright infringement statutory damages are set very high -- about $150,000 per item infringed -- and this can be had even if the actual damages would be minimal, or de minimis.  The possibility of being awarded lawyer fees can sometimes entice a lawyer to take a case from a client unable to pay.  These two benefits of registering can provide a very powerful impetus to getting an infringer to stop infringing and/or to settle quickly.

Unfortunately, this very dilemna has been abused by Copyright Troll lawyers who have done such idiotic things as filing lawsuits against lots of people who downloaded a song or movie off websites that lured and invited them to do just that.  Some lawyers or their clients have even been caught baiting infringers with tagged porn movies to download -- and then be sued.  Other Copyright Troll lawyers have gone on fishing expeditions where they send out mass mailings about potential copyright infringement, to try to threaten people into settling.  Courts have hammered down on some of these Copyright Trolls, thank goodness.  Copyright is not a game and should not be used to bait and attack.

For the honest creative person who is looking to protect their creative, original work, registering Copyright promptly is a very excellent protection.

For start-up businesses looking for a place to establish -- there are reasons most of the start-ups situate themselves in the States where the courts are copyright-friendly.