Simple Mistake on Copyright Registration Could Cost $1 Million
After fabric designer Unicolors Inc. (Unicolors) won a nearly $1 million verdict against H&M in a 2016 copyright infringement case, H&M appealed, arguing that Unicolor's copyright application contained mistakes rendering it invalid. The Ninth Circuit Court of Appeals overturned the verdict, stating that Unicolors was aware of the inaccuracies in its copyright application, and therefore the copyright application should be rendered void.
If the copyright application is declared void, the entire verdict would be thrown out because a copyright registration is a prerequisite to filing a lawsuit and to receive certain types of copyright damages and attorneys’ fees. Unicolors appealed, and the U.S. Supreme Court granted certiorari, agreeing to hear the case.
Unicolors is arguing that a 2008 law known as the PRO-IP Act prevents a copyright registration from becoming void for what it describes as merely "immaterial registration errors." Rather, Unicolors claims that the PRO-IP Act requires evidence of fraud on the copyright office to allow an application to be considered to be void. Fraud, however, is a high legal standard, requiring heightened pleading requirements and evidence showing that someone intentionally lied.
Regardless of this ruling, the case demonstrates the need for particular mindfulness in filing copyright applications. Because one cannot file a lawsuit without a copyright registration, a void registration will prevent one from enforcing their rights or obtaining damages for infringement, including the right to request attorney's fees or statutory damages of up to $150,000 per copyright. Without a valid registration, a copyright owner's practicable ability to sue is materially diminished - if not wholly eliminated.
Copyright application regulations can be complicated and are often changing, making it easy for an applicant to make a mistake that could void a registration. Even if a mistake does not rise to the level of causing a registration to become void, a mistake on an application creates an opportunity for opposing counsel to argue for a complete dismissal. The result - as it was with Unicolors - could be years of litigation in what may otherwise be a straightforward infringement case.
Before filing a new copyright application, consider the following:
- Use of Counsel: Consider retaining experienced IP counsel to assist and advise you.
- Type of Work: Determine the type of work being registered, noting particular nuances; e.g. music has two different copyrights - sound recordings and compositions.
- Who is the Author and Owner? Determine the author, noting that the author is different than the claimant (the owner), and further noting that work for hire laws can change the author in certain employment situations. One should also consider that many copyrights have joint authors and joint claimants.
- Publication: Determine if the work has been published. Published works have different rules and application requirements than unpublished works.
- Publication Dates: Be particularly mindful to make sure creation dates and/or publication dates are accurate for each work.
- Multiple Works: If you are attempting to register a group of works in one application, carefully review the rules as they have recently changed. Note that there are strict requirements regarding what you can and can't do and what application forms you must use for different scenarios. For example, you will need to carefully consider whether the work is published or unpublished, whether the type of work can be registered in a group, the year of creation, and whether the author is the same for all claimed rights.
- Expediting your Application: If litigation is imminent or you are looking to enforce rights quickly, consider filing an expedited application, known as a request for "special handling." The cost is currently $800.
If you have questions about this or other copyright issues, please contact one of our Copyright attorneys.
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