What Does The Recent Copyright Registration Ruling Mean For Your Business?

03/08/2019
Client Alert

In Fourth Estate Public Benefit Corp. v. Wall-Street.com, the Supreme Court resolved a longstanding circuit split by unanimously holding a copyright owner of a United States work[1] may not file an infringement lawsuit until after the Copyright Office has completed its review of the copyright owner’s application and has issued (or definitively declined to issue) a certificate of registration. In so holding, the Court recognized that delays in the registration process mean “the statutory [registration] scheme has not worked as Congress likely intended.”[2] Those delays may increase as copyright owners react to this recent ruling, because some commentators reacted to this holding by urging companies to ensure prompt registration of all of their copyrightable works. This may be warranted in some cases, but several reasons should temper any rush to change existing practices.

  • The Fourth Estate decision reaffirms the bedrock principle that copyright exists from the moment a work is created and fixed in tangible form. As Justice Ginsburg explained: “An author gains ‘exclusive rights’ in her work immediately upon the work’s creation, including rights of reproduction, distribution and display.”[3] Registration remains voluntary and should be approached with the same cost / benefit framework as any other business decision. The benefits of registration existed before the Fourth Estate decision and continue to exist now: statutory damages and attorney’s fees are available only for post-registration infringements, and a certificate of registration is considered prima facie evidence of copyright validity if obtained within five years of first publication.
  • The Fourth Estate decision highlights the availability of pre-registration for authors of works that are especially vulnerable to pre-distribution infringement.[4] These include motion pictures, sound recordings, musical compositionsokay , literary works intended to be published in book form, computer programs, video games, and advertising or marketing photographs.[5] Much of the value of these types of works could be lost if immediate injunctive relief is not available to copyright owners as soon as their work is published. Waiting until after publication to apply for copyright registration, and then waiting even longer until a certificate of registration issued before commencing a lawsuit, could mean that an infringer would be able to diminish, if not destroy, the copyright owner’s investment.
  • Pre-registration addresses this problem. Following a limited review of the pre-registration application, the copyright owner can immediately file an infringement lawsuit upon publication of the work. But any such lawsuit is subject to dismissal if the copyright owner does not apply for registration promptly after the work is published.[6]
  • Similarly, the author of a live broadcast (or a live stream) can sue for infringement before applying for registration but will face dismissal of the lawsuit if the application for registration is not submitted within three months.[7]
  • The Fourth Estate decision emphasizes the safeguards available to copyright owners irrespective of registration due to the immediate vesting of exclusive rights upon creation of a work. The Court noted: “If infringement occurs before a copyright owner applies for registration, that owner may eventually recover damages for the past infringement, as well as the infringer’s profits.”[8]
  • The Court highlighted the availability of expedited processing as a means of addressing plaintiff’s concern that a copyright owner might be deprived of rights during the waiting period while an application for registration is under review. Expedited processing is available (for a fee of $800) when litigation is pending or planned. The Copyright Office tries to act within five working days on expedited applications, but it remains to be seen whether it will be able to maintain this pace if the Fourth Estate decision causes an increased volume of expedited processing requests.

The Court recognized that delays in the registration process raise serious concerns. Justice Ginsburg also acknowledged Professor Goldstein’s view that permitting an infringement lawsuit as soon as an application for registration was filed was “the better rule” because delays inherent in processing an application could prejudice the copyright holder, especially when seeking immediate injunctive relief.[9] Several influential amici, including the Recording Industry of America, the American Bar Association, and the Author’s Guild, made similar points.

Why reject “the better rule”? The Court relied primarily on textual analysis to hold that “[Section 411(a)] focus[es] not on the claimant’s act of applying for registration, but on action by the Copyright Office—namely, its registration or refusal to register a copyright claim.”[10] Perhaps equally important, the Court made clear that registration delays are “attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but Courts cannot cure.”[11] Picking up on this theme soon after the decision was announced, plaintiff Fourth Estate immediately called on Congress to remedy the long delays currently experienced by copyright owners in the registration process.

Whether you should change your copyright registration practices in reaction to the Fourth Estate decision depends on the type of copyrighted works your business creates and your expectations regarding litigation to enforce your rights. If your works are entitled to pre–registration and you believe infringements are likely upon first publication, you should consider pre-registration. Otherwise, please contact us to discuss whether an adjustment to your current practices is warranted.

 


 

[1] Owners of foreign copyrights (that is, works whose country of origin is not the United States) can usually file suit without prior registration. But even owners of foreign copyrights must register their works in order to enjoy a presumption of validity, seek statutory damages, or obtain an award of attorney’s fees.

[2] Slip Op. at 12.

[3] Slip Op. at 3.

[4] Copyright Act § 408(f)(2).

[5] 37 C.F.R. §202.16(b).

[6] Copyright Act § 408(f)(3).

[7] Copyright Act § 411(c).

[8] Slip Op. at 10.

[9] Slip Op. at 11, quoting 1 P. Goldstein, Goldstein on Copyright §3.15, p.3:154.2 (3d ed. 2018 Supp.).

[10] Slip Op. at 5.

[11] Slip Op. at 12.

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