Copyright Clarity from the U.S. Supreme Court

March 5, 2019

The U.S. Supreme Court recently decided two cases that have major implications in the copyright area. Here's what you need to know.

Takeaway One: File Quickly

Yesterday, the U.S. Supreme Court unanimously decided that a copyright registration is required in order to sue for copyright infringement. The various appellate courts had been split: some had permitted copyright owners to sue even before an application had been granted, while others required the registration prior to suit. The issue arose due to this language in Section 411(c) of the Copyright Act: "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." (emphasis added) The next sentences of Section 411(c) allow a plaintiff to sue even if the Copyright Office has rejected the application - but only if the plaintiff notifies the Copyright Office of the lawsuit.

Advocates for the "application approach" argued that registration occurred when a proper application had been submitted to the Copyright Office for processing. The "registration approach" faction contended that registration occurred only when the Copyright Office issued the actual registration certificate.

Justice Ruth Bader Ginsburg authored the decision for the Court, holding that "If application alone sufficed to "ma[ke]" registration, §411(a)'s second sentence - allowing suit upon refusal of registration - would be superfluous. What utility would that allowance have if a copyright claimant could sue for infringement immediately after applying for registration without awaiting the Register's decision on her application?"

The Court noted that the "application approach" would, of necessity, require two different meanings for that one critical word - registration - and that such a construction is "improbable." While the Court recognized that processing delays of seven months are unpalatable, it flatly stated that any such remedy belongs to Congress, not the courts. (An applicant can pay extra for swift processing in the case of infringement.)

The takeaway from this clarifying decision is that copyright applications should be filed as soon as the work is published, and no later than three months from that date, to preserve the ability to recover statutory damages and attorneys' fees in a successful litigation.

Takeaway Two: Watch Your Budget

In another decision issued yesterday, the U.S. Supreme Court decided the meaning of the words "full costs" in Section 505 of the Copyright Act. The Ninth Circuit Court of Appeals had granted Oracle $12.8 million in fees and costs for Rimini Streets' copyright infringement, including expert witness fees, e-discovery costs and jury consulting expenses. The question was whether "full costs" should be interpreted in light of the general federal statute (28 USC Sections 1821 and 1920) or not. The latter specifies six categories of permitted costs that can be recovered in litigation. The Court refused to expand "full costs" beyond the statutory limitations, which means that expert witness fees, e-discovery costs and jury consulting expenses are not recoverable even in a successful copyright litigation.

Accordingly, the fact that these costs (which are often substantial) are not recoverable will no doubt be considered in pre-litigation strategy, and litigation budgets will now list two categories of costs: those that are recoverable and those that aren't.

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