Supreme Court Requires Completed Copyright Registration Before Filing Suit–Fourth Estate Public Benefit v. Wall-Street (Guest Blog Post)
Guest Blog Post by Tyler Ochoa
On March 4, 2019, the U.S. Supreme Court decided Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, No. 17-571, 139 S.Ct. ____, 2019 U.S. LEXIS 1730. The case involved the interpretation of section 411(a) of the Copyright Act, which provides: “no civil action for infringement of the 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.” The question presented in Fourth Estate was whether it is sufficient to have submitted an application for registration, accompanied by payment of the required fee and deposit of the requisite copies, or whether the Copyright Office must have acted on the application before filing. Resolving a circuit split on the question, a unanimous Supreme Court (in an opinion by Justice Ginsburg) held that registration “has been made” “when the Register has registered a copyright after examining a properly filed application.” Slip op. at 12.
A Brief History of Copyright Registration
The Copyright Act of 1790 required a copyright claimant to register the title of the work beforepublication, in the federal district court where he or she resided. Act of May 31, 1790, c. 15, §§ 3, 1 Stat. 124. The registration requirement was carried forward in the Copyright Act of 1831. Act of Feb. 3, 1831, c. 16, § 4, 4 Stat. 436. In 1870, the registration function was transferred to the Library of Congress (which enabled it to build its collection by receiving one of the copies deposited with the registration). Act of July 8, 1870, §90, 16 Stat. 198. In 1897, the registration function was delegated to the U.S. Copyright Office, headed by the newly-designated Register of Copyrights. Act of Feb. 19, 1897, 29 Stat. 545. As before, registration was required before publication in order to obtain a valid copyright.
The 1909 Copyright Act changed the rules. It provided that a person “may secure copyright for his work” by publishing the work with proper copyright notice, and that the person “may obtain registration of his claim to copyright” by submitting the required deposit copies “accompanied … by a claim of copyright” (the application). Act of March 4, 1909, § 10, §12, 35 Stat. 1075. To incentivize registration, the 1909 Act provided: “No action or proceeding shall be maintained for infringement of copyright in any work until the provisions of this Act with respect to the deposit of copies and registration of such work shall have been complied with.” Id. Thus, the 1909 Act effectively decoupled the existence and validity of the copyright from the registration, but it made registration a prerequisite to an infringement suit.
The Copyright Act of 1976 provided that “no action for infringement of the copyright in any work shall be instituted until registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a) (as enacted). There were two exceptions. First, “where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute an action for infringement,” but the applicant must notify the Register, to give her the opportunity to intervene and defend the decision not to register. Id. Second, “when the first fixation of [the work] is made simultaneously with its transmission,” the copyright owner may file an infringement suit if it registers within three months after the transmission. (This exception was enacted as subsection (b), but it is now found in subsection (c).) 17 U.S.C. § 411(c).
When the U.S. joined the Berne Convention, effective March 1, 1989, it had to change its laws regarding notice and registration, because Article 5(2) of the Berne Convention provides that “[t]he enjoyment and the exercise of these rights shall not be subject to any formality.” As a result, Congress made the notice requirement optional for all works. It was reluctant to give up the registration requirement, however, because it served several valuable purposes, including the deposit for the Library of Congress. Consequently, Congress waived the registration requirement for foreign works, but it retained the registration requirement for domestic works. Section 411(a) was amended to read: “Except for actions for infringement of copyright in Berne Convention works whose country of origin is not the United States, … no action for infringement of the copyright in any work shall be instituted until registration of the copyright claim has been made in accordance with this title.” As further amended in 1998, this clause became “no 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,” with the definition of “United States work” moved to section 101. (A “United States work” is a work first published in the United States, or simultaneously published in the United States and any foreign country; or an unpublished work (or a work first published in a nation with whom the United States does not have a copyright treaty) for which all authors are citizens of or domiciled in the United States. 17 U.S.C. § 101.)
In 1990, Congress enacted the Visual Artists Rights Act (VARA), which provides limited “moral rights” of attribution and integrity to the authors of a “work of visual art.” 17 U.S.C. § 106A. Because these rights are required by the Berne Convention (for all works, a fact conveniently overlooked by Congress), Congress added an exception to the registration requirement, for “an action brought for a violation of the rights of the author under section 106A(a).” 17 U.S.C. § 411(a).
In 2005, Congress added another exception to the registration requirement, for so-called “preregistration.” As amended, section 408 requires the U.S. Copyright Office “to establish procedures for preregistration of a work that is being prepared for commercial distribution and has not been published.” 17 U.S.C. § 408(f)(1). By statute, preregistration is limited to “any work that is in a class of works that the Register determines has had a history of infringement prior to authorized commercial distribution.” 17 U.S.C. § 408(f)(2). By regulation, those classes of works are (i) motion pictures; (ii) sound recordings; (iii) musical compositions; (iv) literary works being prepared for publication in book form; (v) computer programs (including videogames); and (vi) advertising or marketing photos. 37 C.F.R. § 202.16(b)(1). If a work is preregistered, the applicant must then submit a completed application for registration within three months after the work is published, 17 U.S.C. § 408(f)(3), or any previously-filed action for infringement will be dismissed. 17 U.S.C. § 408(f)(4). (Preregistration is rarely used; an average of about 800 works per year were preregistered in 2013-2017, less than one-fifth of one percent of the number of regular registrations.)
Finally, in 2008, Congress limited the registration requirement to civil actions for infringement, resulting in the language that we have today: “Except as [otherwise provided], … no civil action for infringement of the 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. § 411(a). This sentence has two implicit exceptions to the registration requirement: works that are not “United States works” do not have to be registered, and suit may be commenced after preregistration but before registration. There are three additional exceptions: if a completed application, deposit and fee are filed, but registration is refused; actions for violations of section 106A (moral rights for works of visual art); and actions for infringement of a work first fixed simultaneously with its transmission, for which registration must be made within three months after the transmission.
The Circuit Split
The language of section 411(a), requiring that registration “has been made” before an infringement suit may be commenced, generated several questions. First, does section 411(a) require only a completed application, or does it require that the application has been approved (or rejected)? Second, if registration has not been made, does that deprive the court of subject-matter jurisdiction, or is it simply an objection on the merits? Third, may (or must) a court raise the lack of registration sua sponte (on its own motion), or must it wait until an objection is raised by the defendant (meaning the registration requirement implicitly may be waived)?
On the first question: In order to register a copyright, the copyright claimant must submit a completed application and the required deposit (two complete copies of the best published edition for a published work, one copy for an unpublished work), plus the registration fee ($35 for an online registration). 17 U.S.C. § 408(a), (b). If the registration is approved, “[t]he effective date of [the] registration is the day on which [the] application, deposit, and fee … have all be received in the Copyright Office.” 17 U.S.C. § 410(d). Once the applicant has submitted the application, deposit, and fee, it has done everything in its power to accomplish registration. Moreover, the Copyright Office might take months to approve or reject an application. Therefore, the Fifth and Eighth Circuits adopted the position of Nimmer on Copyright and held that submission of a completed application, deposit, and fee was sufficient to meet the requirement that registration “has been made.” See Apple Barrel Prods. v. Beard, 730 F.2d 384 (5th Cir. 1984); Action Tapes, Inc. v. Mattson, 462 F.3d 1010 (8th Cir. 2006). The Tenth and Eleventh Circuits, however, held that the “plain language” of the statute required that registration actually be granted or refused, not merely that a completed application be received. See M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486 (11th Cir. 1986); LaResolana Architects v. Clay Realtors Angel Fire, 416 F.3d 1195 (10th Cir. 2005). The Seventh Circuit, paradoxically, took both sides of the question. Compare Chicago Board of Education v. Substance, Inc., 354 F.3d 624 (7th Cir. 2003) (application for registration must be filed) with Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004) (application must be either granted or refused).
On the second question, however, the Courts of Appeals that had addressed the issue were unanimously of the opinion that the registration was requirement was jurisdictional, so that a district court lacked subject-matter jurisdiction if registration had not “been made” (whatever that meant). See In re Literary Works in Electronic Databases Copyright Litigation, 509 F.3d 116 (2d Cir. 2007) (collecting cases). And because objections to subject-matter jurisdiction must be raised sua sponte, that answered the third question as well. Nonetheless, some courts allowed a claimant to file an amended complaint as soon as a registration was obtained. See, e.g., M.G.B. Homes, 903 F.2d at 1489.
The Supreme Court answered the second question first. In Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010), the Court reversed the Second Circuit’s judgment in In re Literary Works, holding that section 411(a) is not “jurisdictional,” so that failure to register does not deprive the district court of subject-matter jurisdiction. The ruling revived a proposed settlement of a class action that included both registered and unregistered copyrights. However, at that time the Court expressly “decline[d] to address whether § 411(a)’s registration requirement is a mandatory precondition to suit that … district courts may or should enforce sua sponte by dismissing copyright infringement claims involving unregistered works.” Id. at 171.
After Muchnick, the Ninth Circuit joined the Circuits that held that a completed application was sufficient, see Cosmetic Ideas, Inc. v. IAC/Interactive Corp., 606 F.3d 612 (9th Cir. 2010); while the Eleventh Circuit reiterated its position that Copyright Office action was required. See Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 856 F.3d 1338 (11th Cir. 2017). The Supreme Court granted certiorari in the Fourth Estate case to address the circuit split.
The Opinion
After setting for the facts and describing the registration system, the Court began by looking to the language of the statute. The first sentence of section 411(a) requires that registration “has been made” before suit is filed; but the second sentence allows suit to be filed if an application to register has been made and refused. “If application alone sufficed to ‘ma[ke]’ registration, §411(a)’s second sentence—allowing suit upon refusal of registration—would be superfluous.” Slip op. at 5. The third sentence allows the Register to intervene to defend its decision not to register; again, this provision would be superfluous if suit could be filed before the Register had acted. Id. (The Court analogized the registration requirement to exhaustion of administrative remedies.)
Bolstering this “plain meaning” are two other provisions of the Act. Section 410 describes registration as something that happens after the Copyright Office “examines” the application and “determines” that the deposit qualifies as copyrightable subject matter, implying that additional action is required after the application is filed in order for registration to have “been made.” Slip op. at 6. And the exception for preregistration would make little sense if a copyright owner could simply file an application for registration and sue immediately upon discovering a pre-publication infringement. Slip. Op. at 7.
The Court noted that Congress was not consistent in its usage of “registration”; in some places it appears to refer to actions taken by the copyright claimant, while in other places it appears to refer to actions taken by the Copyright Office. Slip op. at 7-8. (The error is compounded by section 411(a)’s use of the passive voice: “until registration of the copyright claim has been made.” Had Congress used the active voice, it would have had to specify who was making the registration: the applicant, or the Register.) Because the word “registration” is context-specific, the Court fell back on its plain-meaning interpretation of the phrase.
Next, the Court noted that several unsuccessful attempts had been made to eliminate the registration requirement. Congress responded to these attempts by enacting more exceptions and providing for preregistration, rather than changing the registration requirement itself. Slip op. at 9-10.
Finally, Fourth Estate argued that having to wait for registration might deprive a copyright owner of its rights. The Court rejected that argument, because a copyright owner can sue for damages for past infringement; it merely has to wait until the Copyright Office has acted. Slip op. at 10-11. The Court also noted that while the statute of limitations for infringement claims is three years, the average processing time for registration applications is only seven months, making it unlikely that the statute of limitations will expire before suit can be filed. Slip op. at 11-12. The Court acknowledge that seven months is far longer than the one to two weeks it took to process applications when the statute was drafted; but it concluded that Congressional staffing and funding decisions did not override the statutory language. Slip op. at 12.
The Fourth Estate opinion is consistent with Congressional intent to encourage registration as a routine matter. If the case had come out the other way, it would have allowed a copyright owner to wait until infringement occurs before filing an application for registration.
Consequences
Under Fourth Estate, copyright owners are well-advised to register their copyrights as a routine matter, in order to be able file suit promptly upon discovering any infringements. (For photographers, group registration is available for groups of unpublished photographs.) In addition, there are two other stronger incentives to register a work promptly. First, under section 410(c) of the Copyright Act, a “certificate of registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.” Thus, in order to prove ownership of a valid copyright, a copyright owner needs only introduce the registration certificate and any transfers that have occurred since the registration was made. 17 U.S.C. § 410(c). (This incentive is somewhat diminished, however, since the evidentiary weight accorded to a certificate filed more than five years after first publication is “within the discretion of the court,” and courts routinely accept late-filed registrations.) More importantly, section 412 of the Copyright Act provides (with three exceptions) that “no award of statutory damages or attorney’s fees … shall be made for (1) any infringement of copyright in an unpublished work commenced before the effective date of its registration; or (2) any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work.” The three exceptions are also exceptions to the registration requirement: actions for violations of section 106A (moral rights for works of visual art); actions for infringement of a work first fixed simultaneously with its transmission; and actions for infringement of a work that has been preregistered. 17 U.S.C. § 412.
A foreign copyright owner is also well-advised to register his or her copyrights as a routine matter. Significantly, neither section 410(c) nor section 412 is limited to “United States works.” Thus, even though the copyright owner of a work of foreign origin may commence an infringement suit without registering the work, he or she cannot recover statutory damages or attorney’s fees unless he or she registers the work before the infringement commenced. Moreover, a foreign copyright owner who has not registered does not get the benefit of the presumption of validity, and the foreign copyright owner has the burden of proving that the work was first published in an eligible foreign country, and that it was not simultaneously published in the United States, in order to avoid the registration requirement. See, e.g., Kernal Records Oy v. Mosley, 694 F.3d 1294 (11th Cir. 2012).
Under Fourth Estate, a copyright owner who discovers infringement but has not registered will have to file an application promptly and wait for the Copyright Office to act before filing an infringement lawsuit. The Supreme Court noted that the average time for a registration to issue is currently about seven months. If a copyright owner needs or wants to act more quickly, however, the Copyright Office does offer “special handling” for “pending or prospective litigation” for an additional fee of $800, for which the Office “make[s] every attempt to examine the application … within five working days.” Compendium of U.S. Copyright Office Practices § 623.4 (3d ed. 2017).
Fourth Estate still leaves a number of questions unanswered, however. May a judge raise the lack of registration sua sponte, or must he or she wait until the defendant raises the issue? See Roberts v. Gordy, 877 F.3d 1024 (11th Cir. 2017) (error for judge to raise issue of invalidity of registration sua sponte). If the defendant must raise the issue, can the lack of registration be waived if the defendant fails to do so promptly? Id. at 1028 (failure to plead an affirmative defense of invalidity of registration ordinarily results in waiver). If the plaintiff fails to obtain a completed registration before filing, must the lawsuit always be dismissed and refiled, or can the failure be “cured” by filing an amended complaint after registration is completed? (If so, a plaintiff would still have to seek “special handling” to obtain a registration certificate before a motion to dismiss could be heard.) Finally, if the statute of limitations expires after the application and lawsuit have been filed, but before the registration issues, will an amended complaint “relate back” to the original filing date for purposes of the three-year statute of limitations? See Fed. R. Civ. P. 15(c). One suspects some courts will be reluctant to deprive a copyright owner of an infringement action simply because of Copyright Office delay in acting upon an application. On the other hand, a copyright owner who registers promptly will most likely never find itself in such a position.
Obviously, the “special handling” option is most important for copyright owners who wait until the three-year statute of limitations has almost expired. Prudent lawyers in this situation will request special handling to avoid the risk. But as more copyright owners request special handling as a result of the Fourth Estate decision, the Copyright Office may find itself unable to meet its aspirational goal of acting on all such applications within five working days.
Conclusion
The circuit split regarding the meaning of section 411(a) has festered for far too long—three decades at least. The Supreme Court is to be congratulated for finally resolving it. Moreover, the substance of the answer was far less important than it was for the Supreme Court to pronounce a definitive answer one way or the other. Courts and litigants could easily adjust to either rule, so long as the answer was clear; it was the uncertainty that caused litigants and courts to waste far too much time and money during the past three decades. Now we have a clear answer. The major sticking point will be making sure that the Copyright Office has a large enough budget to process applications in a timely manner. And eventually, some copyright owner will screw up and courts will have to decide the statute of limitations question. But until then, the Supreme Court’s decision removes a major source of uncertainty concerning the commencement of copyright infringement actions.
Postscript
On the same day, the Supreme Court also decided Rimini Street, Inc. v. Oracle USA, Inc., No. 17-1625, 139 S.Ct. ____, 2019 U.S. LEXIS 1733. In a unanimous opinion by Justice Kavanaugh, the Court held that the “full costs” which a district court may award under section 505 of the Copyright Act include only those costs specified in 28 U.S.C. sections 1821 and 1920, including amounts for filing fees, marshal’s fees, transcripts, printing, photocopying, compensation for court-appointed expert witnesses and interpreters, and per diem and mileage expenses for witnesses. If Congress had intended “full costs” to include all other litigation expenses, as Oracle had contended, then the second sentence of section 505, authorizing the district court to award attorney’s fees in addition to costs, would have been unnecessary. The ruling overturns an award of $12.8 million to Oracle for costs that included “expert witness fees, e-discovery expenses, and jury consultant fees,” slip op. at 6, and it overturns the Ninth Circuit’s idiosyncratic practice of awarding such litigation expenses as costs.