- Friday, March 8, 2019
Authors: Eric Schwartz, Jennifer H. Cho and Louise E. Conner
On March 4, 2019, the Supreme Court issued a unanimous decision in Fourth Estate Public Benefit Corp. v. Wallstreet.com LLC holding that, under §411(a) of the Copyright Act, a copyright claimant may file an infringement suit only after the Copyright Office renders a final decision on a copyright application, subject to limited exceptions. Prior to this ruling, circuit courts were split on whether the text of §411(a) granted standing to sue based on the so-called “application approach” (adopted in the 5th, 6th and 8th circuits) or the “registration approach” (adopted in the 10th and 11th circuits). The “application approach” permitted a copyright claimant to commence a lawsuit once a completed application with all three elements (i.e., the application, fee and deposit copy) was properly filed with the Copyright Office. The “registration approach” requires the Copyright Office to render a final decision (either to register or deny a registration) before a claimant may file suit. Justice Ginsburg, writing for the Court, concluded that the plain text of §411(a) “permits only one sensible reading”: the “registration approach.”
The Court reasoned that the text of §411, permitting standing absent a completed registration in some exceptional cases (e.g., live broadcasts and for pre-registrations), would be “superfluous” if the text was read to permit the application approach. Instead, the registration approach is “the only satisfactory reading of §411(a)’s text” per the Court. The Court said that despite the registration requirement, “the Copyright Act safeguards copyright owners, irrespective of registration, by vesting them with exclusive rights upon creation of their works…If infringement occurs before a copyright owner applies for registration, that owner may eventually recover damages for the past infringement, as well as the infringer’s profits.” Thus, registration is similar to an administrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights. The Court acknowledged that registration processing (i.e., pendency) times have increased substantially since the 1976 Act was enacted—now over seven months, on average. However, the Court went on to say that Congress can alleviate delays attributable to staffing and budgetary shortages where the Court itself cannot. The Copyright Office does allow for expedited issuance of a registration certificate for an additional fee ($800 versus $35/$55 for a regular application)—usually within 5 to 7 business days. Additionally, as noted, §408 of the Copyright Act permits pre-registrations (a paper only registration for sound recordings and motion pictures) that grants standing for infringement suits because these types of works are especially vulnerable to pre-release infringement. This provision is undisturbed by the Fourth Estate decision, as are the provisions granting eligibility for damages and attorney’s fees under §412 of the Copyright Act for timely registrations.
Overall, the practical result of the decision is likely to result in a great number of expedited registrations for parties seeking to quickly commence a copyright infringement suit.