On March 4, 2019, the U.S. Supreme Court resolved an intriguing circuit split in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC. Justice Ginsburg authored the unanimous decision, holding: “registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright.” The Court rejected the argument by Fourth Estate that the registration requirement of the Copyright Act was accomplished by filing an application for registration. In its rationale, the Court leaned heavily on the language of the statute.
The Copyright Act (17 U.S.C. §411(a)) reads: “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. In any case, however, 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.”
Simply put, the Court stated that, “if application alone sufficed to ‘make’ registration, §411(a)’s second sentence –allowing suit upon refusal of registration –would be superfluous.”
The Court examined other provisions of the statute to interpret the meaning of §411. The Court found that the phrase “after examination” in §401 meant that “registration,” as used in the statute, follows action taken by the Register. The statute provides an exception to the registration requirement before suit through preregistration of a work that may be “vulnerable to predistribution infringement –notably a movie or musical composition,” and permits the start of an infringement action prior to registration for some live broadcasts.
How will the fashion business be affected by the ruling? This being an industry that spans the world, many creators argued in amicus briefs that requiring pre-suit registration for U.S. authors and domestic works placed them at a disadvantage since such a requirement conflicted with the Berne Convention’s de-emphasis on copyright formalities. However, the Court’s decision noted that the U.S. Congress had the opportunity to amend the copyright statute in 1988, 1993, and 2005, but declined to remove the registration formality in each instance.
The Court also pushed back against Fourth Estate’s argument that the Copyright Office’s processing time for applications was too slow, and instead pointed out that expedited processing was available, albeit for an additional $800 fee. The Court also indicated that the Copyright Office’s slow processing times could be improved should Congress address budgetary and staffing shortages.
In practice, the amount of time the Copyright Office takes to process an application is less relevant once the registration issues.
Since copyright subsists from creation in tangible form, requiring registration prior to commencing a suit for infringement does not preclude copyright owners from recovering compensatory damages from infringement that occurred prior to registration. A registration within three months of first publication will relate back to the publication date for purposes of recovery of statutory damages and attorneys’ fees; and the effective date of the registration is the date on which the copyright application is submitted and completed with the submission of the deposit copy and payment of the registration fee.
The Court’s decision is understandable as it is compelled by the statutory language. But what does this mean for creators, practitioners, and other stakeholders? Only the future will tell the long term effects in the fashion industry, but the message remains clear: if a design that is protectable by copyright is important, register it as soon as you can, preferably before it is distributed or displayed to the public, if you want to obtain the best protection and the broadest remedies in the United States.
Credit: Candace R. Arrington
On January 8, 2019, the U.S. Supreme Court heard oral arguments in, Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC. The court is expected to resolve a decades-old split of opinion among the federal Circuit Courts on whether the Copyright Act permits a lawsuit to be filed upon submission of a copyright application or not until the copyright registration certificate has been issued or refused.
The language in the statute is simple. 17 U.S.C. § 411 reads: “no civil action shall be instituted until … registration of the copyright claim has been made in accordance with this title.” The statute also provides that, “[i]n 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.”
In this case, Fourth Estate sued Wall-Street.com when the website continued to publish Fourth Estate’s work after the expiration of the limited license that had been granted to the website. Fourth Estate filed copyright applications for the misappropriated online publications and then asserted a claim for copyright infringement; however, its claim was dismissed by the Eleventh Circuit because the Copyright Office had not yet issued registration certificates. As have the Courts of Appeal for the Third and Seventh Circuits, the Eleventh Circuit follows the Tenth Circuit’s “registration approach,” which requires the Copyright Office to have acted on an application for registration by approving or denying it prior to initiating a lawsuit. The Fifth and the Ninth Circuits, however, follow the “application approach,” which allows for the commencement of an action upon filing a copyright application.
The split among those courts has large implications for photographers, writers, musicians, and fashion designers. For instance, the Copyright Office application processing time is notoriously slow: it can range from six months to more than a year to issue a registration. Creators are forced to endure an unpredictable wait time – or avoid that delay by paying an additional $800 special handling fee for expedited processing. In a seasonal industry such as fashion, where trends evolve so quickly and styles head to market within just a few months from creation, a small company cannot afford to sit back and wait for its copyright applications to be processed if infringement appears to be a credible threat, but it may also find that filing multiple applications with very significant expedited processing fees imposes an unacceptably great financial burden.
The fashion industry is a multi-billion dollar international industry. It has been argued that requiring the issuance of a registration certificate (or a refusal to register from the Copyright Office) for American authors and domestic works before litigation can commence conflicts with the de-emphasis on copyright formalities established by the Berne Convention, which governs copyrights across the globe. For now, this is all in the hands of the Supreme Court. We will provide a follow-up post when its decision is rendered.
Credit: Candace R. Arrington
Registering copyrightable designs as “unpublished” collections can be an efficient and cost effective way to register multiple two dimensional print patterns in a single registration. But to derive the benefits of registration, you need to be able to identify the designs included. Standard Fabrics International, Inc. (“Standard Fabrics”) learned that lesson the hard way, when it sued Louise Paris, Ltd. and its retail customer for copyright infringement of one of the fabric designs it claimed was part of its “Spring Summer, Collection 1”.
To succeed in a suit for copyright infringement, you must prove that the design in issue was registered with the Copyright Office. To register, you must submit a copy of the design with an application for registration.
Standard Fabrics’ registration identified its work only as “Spring Summer, Collection 1”. Nothing in the title referred specifically to the particular design number that was the subject of the suit. Therefore, Standard Fabrics was required to prove that the design was actually included in the collection registered. Because Standard Fabrics could not prove the design infringed was part of the collection registered, it was denied judgment on its infringement claim.
The problem Standard Fabrics faced can be avoided. In an application to register a collection of designs, be sure to set forth the design number for each design covered by the application. Each individual design in the collection can be uploaded separately on the Copyright Office’s electronic website and appropriate records of the upload can be printed and maintained.
The Copyright Office generally maintains deposit copies of unpublished works. It will provide copies of these for use by the lawyers for parties to litigation, but it requires a written application in its proscribed form and time to search for, reproduce and certify its records. The fee charged for this service can be hundreds of dollars, as the Copyright Office will charge for its time as well as imposing copying and certification fees.
But beware, the Copyright Office does not undertake to retain deposit copies of published works. Full term retention must be arranged for a fee.
Credit: Helene M. Freeman
Luxury, being the thematic opposite of necessity, must be at least as much about what you desire as what you need. Building a brand to fill that role requires both diligence and self-restraint.
A luxury brand and its products should be readily identifiable as superior to both existing and aspirational customers. That is not to say that that non-luxury brands and their products do not require legal protection; we are simply recognizing that the luxury premium adds a new class to the market—those aspirational customers—whose perceptions and desires are vital to the future of brands in the luxury sector. For that reason, and many others, it is particularly important for luxury brands to work with counsel to identify and protect all the important proprietary elements that are capable of being protected. That includes protection, where appropriate, by trademark (and trade dress) registration, design patent registration, and—something rather unique to the United States—copyright registration.
With few exceptions, it is generally better to err on the side of more rather than less when it comes to registrations. Styles and style names that will only be in the catalog for a season or two are usually not worth the trouble, but anything of medium to long-term consequence to the bottom line and brand value almost certainly is. In these posts, we will go into more detail about various forms of legal protection, but a key guideline is this: once each season, have a look at what engages the public with your brand and your products and how that engagement might lead you to adjust your legal protection program. There is probably no more important work that marketers and counsel can undertake together in order to make your protection program both thorough and cost-effective.
This year, the International Trademark Association held its annual meeting in Hong Kong, giving the world’s intellectual property lawyers the opportunity to congregate in an important commercial city where branding is all. Once a playground for bargain hunters for, consumer electronics and rapidly cut and stitched men’s suits, Hong Kong has become a destination for consumers of luxury goods. Indeed, I cannot remember seeing another city in which almost any international luxury brand I can think of had more than one boutique. What was particularly interesting this time is that, for various reasons, visitors from the mainland were uncommonly absent, with the result that, in every store in which I had a look, the sales floors were empty of patrons. That may be a temporary problem, but it raises a bigger question: as surely as luxury is about something greater than necessity, it is also about relative inaccessibility; it is an experience over and above the ordinary that is made all the more desirable by its very lack of ubiquity. When luxury is everywhere, can it start to look commonplace? The risk is that new entrants will have a chance to succeed (in no small part due to their newness and limited production) in poaching customers sated by what has become too familiar. That may be healthy for the marketplace but not for you if you have a valuable brand.
There are no perfect formulas, of course, but here is a general reflection that might well apply when protecting a luxury brand and its products: under law, more is better; when preserving the reputation of a luxury brand and its products in a business sense, less may sometimes indeed be more.
Credit: Alan Behr