Supreme Court examines requirement of attempted fraud in copyright case
The Supreme Court of the United States granted certiorari in Unicolors, Inc v H&M Hennes & Mauritz, LP June 1, 2021. From a narrow perspective, the Court must decide whether the Ninth Circuit correctly concluded that a federal district court assessing the validity of a copyright registration with alleged inaccuracies, but no indication that these inaccuracies were claimed for the purpose of fraud – must return this registration to the Copyright Registry for reconsideration under 17 USC § 411 (b). More generally, the Court can decide whether, in order to invalidate a copyright registration, the Copyright Act requires a finding that a claimant intended to defraud the Copyright Office or whether a mere misrepresentation is sufficient.
Unicolors is a textile designer who creates and markets fabrics designed for clothing manufacturers. Some Unicolors models are available to all customers, while others are “contained works” available only to a specific customer.
In January 2011, Unicolors presented an assortment of thirty-one models (including nine “confined” models, twenty-two not) to its internal sales team. In February 2011, Unicolors filed a copyright application for a unitary registration covering these thirty-one models. Unicolors claimed in its application that all designs contained in the filed documents had been published as a single block in January 2011. After the application became registration number VA 1-770-400 (“the registration 400 ”), Unicolors sued H&M for copyright infringement of certain models covered by the ‘400 registration.
District court decision
A jury found that H&M had willfully infringed one of Unicolors ‘designs allegedly covered by the’ 400 registration. In an attempt to overturn the jury’s verdict, H&M challenged the validity of the ‘400 registration, claiming that the thirty-one models covered by the’ 400 registration were not offered in a single unit as of January 2011. More Specifically, H&M argued that, unlike Copyright Office regulations requiring that a single unit recording be published “as a single work” and only covers works that are “included in a single publication unit.”37 CFR § 202.3 (b) (4), only some of the models covered by the ‘400 registration were released in January 2011. Due to this inaccuracy, H&M asked the court to return the registration to the Copyright Office in under section 411 (b) to allow the Office to review the validity of the registration.
The district court dismissed this request, finding that H&M had failed to demonstrate that Unicolors intended to defraud the Copyright Office, and that although Unicolors may have marketed and sold various works included in the recording separately ‘ 400, these works could still have been published on the same day.
Decision of the ninth circuit
On appeal, the Ninth Circuit ruled that the district court erred in concluding that the fraud was necessary to refer the case to the copyright register under section 411 (b). Thus, the Ninth Circuit overturned the judgment and award of attorney’s fees against H&M and referred the matter back to the district court with instructions to submit an investigation to the Copyright Registry. The Ninth Circuit acknowledged that previous court rulings “have suggested that there is an intent to defraud requirement for the invalidation of the registration”, but found that the court had “recently clarified that there is no ‘there was no such requirement of intent to defraud’ in Gold Value Int’l Textile, Inc. v Sanctuary Clothing, LLC, 925 F.3d at 1147 (9th Cir. 2019).
Regarding the issue of publication, the Ninth Circuit recognized that the meaning of publication of works as a “single unit” in 202.3 (b) (4) (i) (A) was a matter of first impression, and that such language “requires the registrant to first publish the collection of works in a single, consolidated collection. And because the confined drawings were not placed in the showroom for sale at the same time, this requirement was not met for works covered by the ‘400 registration.
The court ruled that, despite known inaccuracies in the application to register the ‘400, H&M was not entitled to a legal judgment. Instead, the district court was ordered to “ask the copyright registry to tell the court whether the inaccurate information, if known, would have caused the registry … to deny it. registration ”in accordance with 17 USC § 411 (b) (2).
Petition for Certiorari
On June 1, 2021, the Supreme Court granted Unicolors’ certiorari application on the following issue:
Did the Ninth Circuit err in breaking with its own precedent and the findings of other circuits and the Copyright Office in holding that 17 USC § 411 (b) requires referral to the Copyright Office when there is no is there any indication of fraud or material error as to the work involved in the copyright registration?
Therefore, the Court will hear Unicolors’ argument that the Ninth Circuit erred in concluding that there was no requirement to invalidate the intent to fraud record. In its petition, Unicolors highlighted a circuit split on this issue, citing cases in the Eleventh Circuit, Third Circuit, and Seventh Circuit that either outright or implicitly endorse a requirement of intent to cheat in conflict with the Ninth Circuit ruling. . Unicolors also argued, in support of a requirement of intent to defraud, that “many courts, legislative and administrative authorities and the main copyright treaty have uniformly interpreted [the PRO-IP Act of 2008] … To allow invalidation under Section 411 (b) only where it is demonstrated that the owner acted in bad faith or intended to defraud the Copyright Office.
The Court dismissed Unicolors’ claim for certiorari on a second issue, namely whether several designs included in a single copyright application constitute a “single publication unit” if those designs are published on different dates.
In granting certiorari, the Court may intend to resolve an apparent circuit split over whether there is a requirement of intent to fraud before a referral is made to the Copyright Office under the section 411 (b). The Court may also intend to clarify the strength of the presumed validity of a copyright registration and / or the extent to which the Copyright Act requires courts to defer to decisions. of the Copyright Office under Section 411 (b) (2) as to whether any inaccuracies, would have caused the Office to refuse the registration.
Ultimately, because intent to defraud is generally difficult to prove, the court’s ruling is expected to have a significant impact on the strength of copyright records and their vulnerability to validity attacks based on perceived inaccuracies. in the records. As a result, the ruling has the potential to impact copyright enforcement practices, which authors may need to reassess as a result of the court ruling.
The case is Unicolors, Inc. v. H&M Hennes & Mauritz, LP, 20-915
© 2021 Finnegan, Henderson, Farabow, Garrett & Dunner, LLPRevue nationale de droit, volume XI, number 168