Supreme Court Agrees to Hear Another Case on Copyright Act’s Registration Requirement

On June 1, 2021, the Supreme Court of the United States granted certiorari in Unicolors, Inc. v. H&M Hennes & Mauritz (H&M). Unicolors sued H&M for copyright infringement, alleging that H&M sold garments featuring artwork for which Unicolors obtained a copyright registration. In an effort to seemingly save money on registration costs, the artwork was part of a collection of 31 separate designs that were registered as a single unit. H&M argued the registration was invalid because Unicolors intended to defraud the Copyright Office by using a single registration for separate works. The Court of Appeals for the Ninth Circuit held that showing intent to defraud the Copyright Office is not a requirement for determining registration invalidation. However, the Ninth Circuit concluded that the case had to be remanded because the district court should have stopped the proceedings to ask the Copyright Office to advise on whether Unicolors knowingly including inaccurate information would have caused the registration to be refused. The Supreme Court will review whether the Ninth Circuit erred in holding 17 U.S.C. § 411 requires referral to the Copyright Office even when there is no indication of fraud in the copyright registration. IP Law Daily interviewed Finnegan partner Margaret Esquenet for her thoughts on the case.

Margaret said:

“Section 411(b) requires that the misstatement be both knowing and material and provides that the Copyright Office should be allowed to provide input where such allegations are made. On its face, the language does not technically require a finding of fraud (e.g., an intent to deceive for gain) but rather a knowing misrepresentation. That said, most courts looking at the issue have read it as an intent-to-defraud standard. This interpretation makes sense in the context of copyright registration because, among other things, applications are often filed directly by creators rather than lawyers, and the higher standard would protect such copyright owners against collateral attacks on their registration absent a showing of fraud."

In response to a question about the need for a bright-line rule, Margaret said, “Whether a bright line test would be useful is a closer question. On one hand, it’s generally easier to evaluate issues when there is a simple test. On the other hand, it’s often difficult to determine when knowing misrepresentation ends and fraud begins, so even if the Court determines that the misrepresentation must have been made with the intent to defraud, the factual inquiry regarding that issue under FRCP 9 could take substantial party and court resources."

Margaret also answered a question about the Supreme Court’s Fourth Estate Public Benefit Corp. v. Wall-Street.com decision, which held that the registration requirement is satisfied only when the Copyright Office registers a copyright, and not when the application is filed. She provided insights as to how the Justices might approach the Unicolor case in light of the Fourth Estate decision:

“In Fourth Estate the Court determined that a registration in hand was necessary and appropriate and facilitated litigation, making registration critical. Because the Court required registrations, it will likely tread carefully on invalidating registrations for any reason other than fraud, but the issue is nuanced. On one hand, the Court may want to protect rights-owners who have secured registrations and avoid vitiating their rights in ambiguous situations, putting form over substance, which would favor the fraud standard. On the other hand, the Copyright Office, the public, and litigants benefit from accurate records, which would favor the knowing misrepresentation standard. It will be interesting to see how the Court deals with this tension.”