Don’t hold your breath after copyright ruling

On Monday, in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 2019 DJDAR 1773, the U.S. Supreme Court unanimously found in favor of respondent Wall-Street.com, LLC and affirmed the 11th U.S. Circuit Court of Appeals' decision holding that absent a specific statutory exception, a copyright owner cannot initiate a lawsuit until it obtains a certificate of copyright registration from the Copyright Office. The decision resolves a long-stranding circuit split and definitively rejects the position advanced by petitioner Fourth Estate Public Benefit Corporation -- endorsed by both the 5th and 9th Circuits -- interpreting the Copyright Act as allowing a copyright owner to file suit as soon as it had filed an application for copyright registration.

Section 411(a) of the act states that, "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" and Section 410(a) and Section 410(a) of the Copyright Act, titled "Registration of claim and issuance of certificate," states that after examining an application, the "Register [of Copyrights] shall register the claim and issue to the applicant a certificate of registration." 17 U.S.C. Sections 410(a) and 411(a).

In its decision for Wall-Street, the 11th Circuit joined the 10th Circuit in adopting the "registration approach." Proponents of this approach have long argued that this statutory text unambiguously requires that a copyright owner obtain a certificate of registration from the Copyright Office before initiating a lawsuit. In contrast, proponents of the "application approach," claim that "registration" is ambiguous because some parts of the Copyright Act suggest that "registration is accomplished by completing the process of submitting an application" and does not require any action by the Copyright Office. Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 618-19 (9th Cir. 2010).

Focusing on broad themes associated with the most recent overhaul of the Copyright Act in 1976, proponents of the application approach argued that Congress' purpose in many of the revisions it adopted was to provide "broad copyright protection while maintaining a robust federal register." Cosmetic Ideas, Inc., 606 F.3d at 618-19. They further argued that this purpose was better served by the "application approach," which avoids delays in enforcement litigation while still serving Congress' intent of having a robust register of copyrights. Id. The Supreme Court observed, however, that adopting the interpretation of "registration" advanced by the application approach would render the second sentence of Section 411(a) -- which allows a copyright owner whose application for registration is refused to initiate a lawsuit if it complies with certain additional notice and filing requirements -- superfluous. Of course, avoiding interpretations that render statutory language superfluous is a basic principal of statutory interpretation. The Supreme Court also observed that interpreting "registration" in this way would require it to adopt the "implausible assumption that Congress gave 'registration' different meanings in consecutive, related sentences within a single statutory provision."

The Supreme Court specifically refuted Fourth Estate's contention that the legislative history of the Copyright Act supports the application approach. It rejected Fourth Estate's contention that the revision was meant to adopt the application approach, as had been urged in a 1958 dissent in the 2nd Circuit. Instead, it observed, the revision affirmed the registration requirement and addressed the issue raised in the 2nd Circuit case by including an exception allowing an owner to sue if its application were refused. Further, the Supreme Court noted, Congress repeatedly "resisted efforts to eliminate" the registration requirement, including in 1993, when it specifically considered but declined to adopt a proposal that would have allowed suit immediately upon submission of an application.

The Supreme Court did not dispute that the application approach produces a logical and desirable outcome, nor did it dispute that the registration approach involved delays and "administrative lag." These issues though, it said, must be solved by Congress. Given Congress' historical resistance to eliminating the registration requirement, as well as the current legislative gridlock in Washington, copyright owners should not hold their breath for new legislation.

At the end of the day, this is primarily a procedural issue; it affects the timing of when a suit can be filed but has virtually no impact on the rights of or remedies available to copyright owners. Although the ability to file suit may be delayed, a copyright owner can still recover pre-suit damages. Further, as the Supreme Court points out, the possibility that the delay in obtaining a registration would be so long that the statute of limitations would expire is remote.

What then should copyright owners and litigants do? As a threshold matter, owners should file copyright applications early and, in urgent cases, pay the $800 fee to obtain expedited processing. In the instant case, Fourth Estate's copyright application was rejected. Thus, it can simply re-file its claims if it complies with the additional requirements imposed in Section 411(a). It is unclear what Fourth Estate gained -- other than a resolution to a long-standing debate -- by proceeding with the instant lawsuit rather than simply refiling immediately upon rejection of its application. Additionally, it seems that any defendant in a copyright lawsuit filed before a copyright registration was obtained has a basis for moving for dismissal. It remains to be seen how lower courts will handle such motions in cases where a registration certificate has subsequently issued; dismissing a lawsuit only for it to be immediately refiled and begun again seems indefensibly inefficient.