March 15th, 2019
The United States Supreme Court recently clarified a significant issue of copyright law in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, No. 17-571 (Mar. 4, 2019), settling any dispute concerning when copyright owners may sue for infringement. Copyright protection exists “in original works of authorship fixed in any tangible medium of expression.” 17 U.S.C. § 102(a). Authors have “exclusive rights” to, among other things, reproduce, distribute, and display their original works immediately upon creation. See 17 U.S.C. § 106. While copyright protection is automatic, in that it exists at the time an original work is created, the right to enforce the exclusive rights appurtenant to a copyright through a lawsuit is not. Indeed, apart from narrow statutory exceptions, the Copyright Act bars any “civil action for infringement of [a] copyright . . . until . . . registration of the copyright . . . has been made.” 17 U.S.C. § 411(a).
In Fourth Estate, the Petitioner Fourth Estate Public Benefit Corporation (Fourth Estate PBC) licensed journalism works to Wall-Street.com, LLC (Wall-Street) for use on its website. Fourth Estate, slip op. at 1-2. The license agreement required Wall-Street to remove any licensed content from its website before canceling the agreement. Id. at 2. However, after Wall-Street canceled the license agreement, it continued to display the content produced by Fourth Estate PBC. Id. As a result, Fourth Estate PBC sued Wall-Street for copyright infringement based on Fourth Estate PBC’s filed applications to register its copyrights in the licensed works. Id. Since the U.S. Copyright Office (Copyright Office) had not acted on the copyright applications, Wall-Street moved to dismiss the lawsuit on the grounds that copyright registration had not been made under § 411(a). See id. The United States District Court for the Southern District of Florida granted Wall-Street’s motion to dismiss and the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal. See id.
The delineation of when a copyright registration “has been made under § 411(a)” has been the basis for a longstanding split among U.S. Courts of Appeal. Id. (citations omitted). At the time Fourth Estate PBC filed its Petition for a Writ of Certiorari, “[f]our appellate courts ha[d] resolved the question presented, dividing evenly on the issue.” See Petition for a Writ of Certiorari at 9, Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, No. 17-517 (October 13, 2017). The divided appellate courts found that a copyright registration “has been made” under § 411(a) when either: (1) the copyright is registered by the Copyright Office (the registration approach); or (2) the copyright owner’s complete application for registration is received by the Copyright Office (the application approach). See Fourth Estate, slip op. at 2. The Ninth Circuit and Fifth Circuit each adopted the application approach and held that receipt of a complete application by the Copyright Office satisfied the registration requirement of § 411(a). See Petition for a Writ of Certiorari at 10, Fourth Estate, No. 17-517 (citations omitted). In reaching this conclusion, the Ninth Circuit and Fifth Circuit embraced the rationale that requiring a copyright applicant to wait on the Copyright Office’s treatment of an application “create[s] a period of legal limbo in which suit is barred” and found it was more efficient or resulted in little, if any, prejudice to the parties to allow a lawsuit to proceed while a copyright application was pending. Id. at 11-12 (citations omitted). “By contrast, the Tenth Circuit, like the Eleventh Circuit, . . . [adopted the registration approach and] held that ‘[t]he plain language of the statute’ requires the copyright owner to await the Copyright Office’s action before he may sue.” Id. at 13 (citing La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1200-01 (10th Cir. 2005)). While the difference in these statutory interpretations may seem academic, in practice the competing interpretations of § 411(a) could have a substantial impact on the timing of a civil action for copyright infringement because the average processing time for a copyright application by the Copyright Office is seven months. U.S. Copyright Office, Registration Processing Times (Oct. 2, 2018), https://www.copyright.gov/registration/docs/processing-times-faqs.pdf (as last viewed on March 11, 2019).
Recognizing the inconsistency among lower courts, the Supreme Court granted Fourth Estate PBC’s Petition for a Writ of Certiorari “to resolve [the] division . . . on when registration occurs in accordance with § 411(a).” Fourth Estate, slip op. at 2. The Supreme Court analyzed the text of § 411(a) and concluded that “[t]he registration approach . . . reflects the only satisfactory reading” of this statute. Id. at 4. In reaching this decision, the Supreme Court noted that the first sentence of § 411(a) provides that “no civil infringement action ‘shall be instituted until preregistration or registration has been made.’” Id. at 4-5 (citing 17 U.S.C. § 411(a)). However, the next sentence of the statute “sets out an exception to this rule: When the required ‘deposit, application, and fee . . . have been delivered to the Copyright Office in proper form and registration has been refused,’ the claimant ‘[may] institute a civil action, if notice thereof . . . is served on the [Copyright Office].’” Id. at 5 (emphasis added). The Supreme Court found that “[i]f application alone sufficed to ‘ma[ke]’ registration, § 411(a)’s second sentence—–allowing suit upon refusal of registration—would be superfluous.” Id. For this reason, the Supreme Court found that the application approach “requires the implausible assumption that Congress gave ‘registration’ different meanings in consecutive, related sentences within a single statutory provision.” Id. The Supreme Court rejected “this improbable construction” and found that “registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright.” Id. at 1, 5.
In reaching its conclusion, the Supreme Court did not ignore the arguments advanced by Fourth Estate PBC regarding the negative impact that the registration approach could have on copyright owners. However, the Supreme Court found Fourth Estate PBC’s “fear [to be] overstated” because while the average processing time for copyright applications may currently be longer than in years past, there is still “ample time to sue after the [Copyright Office’s] decision, even for infringement that began before submission of an application.” Fourth Estate, slip op. at 11. Furthermore, damages are not lost under the registration approach because “a copyright owner can recover for infringement that occurred both before and after registration.” Id. at 1. The Supreme Court also pointed out that the Copyright Act allows for expedited examination of a copyright application. Id. at 11 n. 6. Finally, the Copyright Act permits the commencement of an infringement suit before undertaking registration for a work that is “vulnerable to predistribution infringement.” Id. at 3-4. However, even if delays in the Copyright Office may negatively impact copyright owners, the Supreme Court noted that these issues are related “in large measure, to staffing and budgetary shortages that Congress can alleviate, but the courts cannot cure.” Id. at 12.
TAKEAWAY: The Copyright Act impels prompt registration of copyrights and a copyright owner desiring to immediately enforce its exclusive rights in an original work would be wise to heed this directive. While a copyright owner can recover damages for infringement that occurred both before and after registration, a copyright owner generally cannot commence a lawsuit for copyright infringement before the copyright is registered with the Copyright Office.