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March 05, 2019

SCOTUS: Copyright Owners Must Wait for Application to Process Before Suing

WASHINGTON, D.C. � In a unanimous opinion issued yesterday, the U.S. Supreme Court held that �registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright,� settling a split between lower judicial circuits as to when rightsholders may file copyright lawsuits.

For the adult industry, the court�s decision is important because adult entertainment works are so often published � and subsequently infringed upon � long before the Copyright Office finishes processing the applications for copyright related to those works.

The case, Fourth Estate Public Benefit Corporation v. Wall-Street.com, pitted news organization Fourth Estate against the website Wall-Street.com. The fundamental facts of the case, related below, were never in dispute.

Fourth Estate produces online news articles, which it licenses to various websites while retaining the copyrights to those articles. Wall-Street.com licensed articles from Fourth Estate under a license agreement which required Wall-Street to remove all content produced by Fourth Estate from its website in the event Wall-Street cancelled its Fourth Estate account.

Wall-Street continued to display the articles after cancelling its Fourth Estate account, leading Fourth Estate to file a copyright infringement complaint against Wall-Street and its owner, Jerrold Burden. As noted by the district (trial) court, however, �the complaint did not allege that the Register of Copyrights had yet acted on the application.�

The district court dismissed Fourth Estate�s complaint, holding that the Copyright Act �permits a suit for copyright infringement only after the Register of Copyrights approves or denies an application to register a copyright.�

The 11th Circuit Court of Appeals later upheld the district court�s ruling, holding that �filing an application does not amount to registration.�

In its decision issued yesterday, the Supreme Court concurred with the lower courts, rejecting Fourth Estate�s �application approach� to interpreting 17 U.S.C. �411(a).

Writing for the unanimous court, Justice Ruth Bader Ginsburg wrote that if applying for a copyright alone were enough to �make registration� then �411(a)�s second sentence, which allow ssuit 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?� Ginsburg asked rhetorically in the opinion.

�Proponents of the application approach urge that �411(a)�s second sentence serves merely to require a copyright claimant to serve �notice [of an infringement suit]�. on the Register.� This reading, however, requires the implausible assumption that Congress gave �registration� different meanings in consecutive, related sentences within a single statutory provision,� Ginsburg added. �In �411(a)�s first sentence, �registration� would mean the claimant�s act of filing an application, while in the section�s second sentence, �registration� would entail the Register�s review of an application. We resist this improbable construction.�

The language of �411(a)�s third sentence also argues against Fourth Estate�s interpretation of the statute, Ginsburg asserted.

�The third and final sentence of �411(a) further persuades us that the provision requires action by the Register before a copyright claimant may sue for infringement,� Ginsburg wrote. �The sentence allows the Register to �become a party to the action with respect to the issue of registrability of the copyright claim.� This allowance would be negated, and the court conducting an infringement suit would lack the benefit of the Register�s assessment, if an infringement suit could be filed and resolved before the Register acted on an application.�

While Ginsburg and the other justices were not unsympathetic to the potential plight of a rightsholder in having to wait until their application is processed and approved, given the waiting period is substantially longer these days than when the Copyright Act was first codified, the court ultimately determined those waiting periods were unlikely to derail a copyright complaint. They also concluded it�s not the court�s role to fix problems which stem from the Copyright Office being underfunded and understaffed.

�Fourth Estate raises the specter that a copyright owner may lose the ability to enforce her rights if the Copyright Act�s three-year statute of limitations runs out before the Copyright Office acts on her application for registration,� Ginsburg wrote. �Fourth Estate�s fear is overstated, as the average processing time for registration applications is currently seven months, leaving ample time to sue after the Register�s decision, even for infringement that began before submission of an application.�

Ginsburg observed that delays in the Copyright Office�s processing of applications are �attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure.� �Unfortunate as the current administrative lag may be, that factor does not allow us to revise �411(a)�s congressionally composed text,� Ginsburg added.

Importantly, the court�s ruling does not mean rightsholders cannot seek damages for infringement which takes place between the time of their application and its approval.

As Ginsburg noted in the opinion, �411(a) provides an exception to the registration requirement under which �in any case� 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 a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.�

You can read the court�s full opinion here.

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