Copyright Act's Safe Harbor Protects against Unknown Inaccuracies of Facts or Law

Copyright Act’s Safe Harbor Protects Registrations against Unknown Inaccuracies of Facts or Law

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Overview


The Supreme Court of the United States held that lack of factual or legal knowledge can excuse an inaccuracy in a copyright registration under a safe harbor contained in the Copyright Act. As a result, an applicant’s inadvertent mistake of fact or law in applying for a copyright does not render the subsequent copyright registration invalid. Unicolors, Inc. v. H&M Hennes & Maurtiz, L.P., No. 20-915 (Feb. 24, 2022). Justice Breyer delivered the opinion of the Court, with a dissenting opinion by Justice Thomas in which Justice Alito joined in full and Justice Gorsuch joined in part.

In Depth


BACKGROUND

The copyright statute, 17 U.S.C. § 411(b)(1)(A-B), states that a certificate of registration is valid regardless of whether the certificate contains any inaccurate information unless:

  • The inaccurate information was included on the application with knowledge that it was inaccurate.
  • The inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.

Unicolors obtained a jury verdict against H&M for copyright infringement. After the trial, H&M filed for judgment as a matter of law that the copyright registration was invalid because Unicolors failed to comply with certain requirements of copyright law. Specifically, H&M argued that Unicolors did not meet the US Copyright Office’s regulation that a single application may cover multiple works only if they were “included in the same unit of publication” because Unicolors filed a single application seeking registration for 31 separate designs. H&M asserted that Unicolors did not meet this requirement because Unicolors initially made some of the 31 designs available for sale exclusively to certain customers while offering the rest to the general public. The district court denied the motion, finding that Unicolors did not know of the inaccuracies when it submitted the application. H&M appealed.

On appeal, the US Court of Appeals for the Ninth Circuit issued a decision overturning the district court. The appellate court rejected the district court’s requirement that H&M demonstrate that Unicolors intended to defraud the Copyright Office at the time of its application filing. The appellate court held that once a defendant alleges that (1) a plaintiff’s certificate of registration contains inaccurate information, (2) “the inaccurate information was included on the application for copyright registration” and (3) the inaccurate information was included on the application “with knowledge that it was inaccurate,” a district court is required to submit a request to the Register of Copyrights “to advise the court whether the inaccurate information, if known, would have caused [it] to refuse registration.” Unicolors petitioned for certiorari.

SUPREME COURT DECISION

The initial question presented to the Supreme Court was whether “the Ninth Circuit erred in breaking with its own prior precedent and the findings of other circuits and the Copyright Office in holding that 17 U.S.C. § 411 requires referral to the Copyright Office where there is no indicia of fraud or material error as to the work at issue in the subject copyright registration?” During briefing, however, Unicolors changed the question to “whether the ‘knowledge’ element precludes a challenge to a registration where the inaccuracy resulted from the applicant’s good-faith misunderstanding of a principle of copyright law” (rather than a mistake of fact). Justice Thomas was not pleased with this change, stating in dissent that he “would not reward Unicolors for its legerdemain, and because no other court had, before today, ever addressed whether §411(b)(1)(A) requires “’actual knowledge.’” Justices Alito and Gorsuch joined Justice Thomas in dissent, noting that Unicolors’ arguments were not, as originally presented, meant to resolve a circuit split, but rather presented novel questions of copyright law that no other court had previously addressed. However, the Court found that the petition asked it to decide whether a registration may be invalidated even though there are no “indicia of fraud,” which, in turn, includes an analysis of a “knowing misrepresentation.” The Court found that the “knowledge” question was a “subsidiary question fairly included” in the petition’s question and previously addressed by the Ninth Circuit.

Justice Breyer delivered the opinion for the Supreme Court, beginning with an ornithological analogy. The analogy begins with a birdwatcher mistakenly labeling a scarlet tanager as a northern cardinal. The birdwatcher may not have seen the relevant features, or they may not have known what specific features are different. In either case, it is a labeling mistake. Similarly, Unicolors stated that when it submitted its copyright application, it was not aware that its collection of multiple designs sold separately to different parties did not satisfy the “single unit of publication” legal requirement for including all designs in a single unit copyright registration. Therefore, Unicolors mistakenly labeled its 31 designs as a single publication. The Court found this explanation satisfactory to rely on the safe harbor provided by §411(b)(1)(A) and noted that “if Unicolors was not aware of the legal requirement that rendered the information in its application inaccurate, it did not include that information in its application with knowledge that it was inaccurate.” The Court found nothing in the statute that suggests this conclusion should be any different if the mistake was one of fact or law.

Conversely, the Supreme Court found ample support in nearby statutory provisions to confirm that the “knowledge” element applies to knowledge of the law, as well as the facts, noting that inaccurate information in a copyright registration is equally likely to arise from a mistake of law as a mistake of fact—particularly where the applicants include creative artists (like poets and painters) without legal training. The Court found further support in numerous provisions contained in the Copyright Act, suggesting that if US Congress intended to impose a scienter standard other than actual knowledge it would have said so explicitly. The Court further pointed to cases decided before Congress enacted §411, where courts overwhelmingly held that inadvertent mistakes on registration certificates did not invalidate a copyright. Legislative history was also persuasive to the Court, noting that Congress intended §411 to make it easier for non-lawyers to obtain valuable copyright registrations, which provide a copyright holder with “important legal advantages, including the right to bring a ‘civil action for infringement’ of the copyrighted work.”

Addressing H&M’s argument that the Supreme Court’s interpretation of the statute will make it too easy for copyright holders to claim lack of knowledge to avoid the consequences of an inaccurate application, the Court described many factors the lower courts may use to analyze such cases. The Court also explained that no court is required to automatically accept a copyright holder’s claims of lack of knowledge, stating “willful blindness may support a finding of actual knowledge,” as will circumstantial evidence, the significance of the legal error, the complexity of the relevant rule and the applicant’s experience with copyright law. The Court further rejected H&M’s argument that “ignorance of the law is no excuse,” noting that this legal maxim does not apply in a civil case concerning the scope of a statutory safe harbor provision arising from ignorance of collateral legal requirements.

The Supreme Court vacated the Ninth Circuit’s decision and remanded for further proceedings. Following the decision, counsel for H&M stated “[t]he existing testimony shows Unicolors was, at best, willfully blind to the requirement that all works in a group application be published together. H&M appreciates the dissenting justices’ acknowledgement that Unicolors abandoned its original position. On remand, we remain committed to challenging the validity of Unicolors’ copyright, and we are looking ahead to the next phase of litigation.”