Copyright Doubleheader At The Supreme Court

The Supreme Court unanimously decided two Copyright Act cases on March 4, 2019.

• In Rimini Street, Inc. v. Oracle USA, Inc., the Court held that the provision in the Copyright Act that gives federal district courts discretion to award “full costs” to a party in copyright litigation, 17 U. S. C. §505, covers only the six categories specified in the general costs statute, 28 U. S. C. §§1821, 1920.
• In Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, the Court explained that 17 U. S. C. §411(a) direction that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title” bars commencement of an infringement suit, until the Copyright Office registers a copyright. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration.

Rimini

In Rimini, a jury awarded Oracle damages after finding that Rimini had infringed various copyrights. The District Court also awarded Oracle fees and costs, including $12.8 million for litigation expenses such as expert witnesses, e-discovery, and jury consulting. Affirming the $12.8 million award, the Ninth Circuit acknowledged that the costs awarded covered items not included within the six categories of costs that may be awarded against a losing party, as is enumerated in 28 U. S. C. §§1821 and 1920 . The Circuit found the award proper because the Copyright Act, 17 U. S. C. §505, allows district courts to award “full costs” in copyright litigation.

The Supreme Court unanimously reversed. The Court first explained that §§ 1821 and 1920 define what the term “costs” includes in federal statutes such as §505. Congress may authorize awards of expenses beyond those six categories, but courts may not award litigation expenses that are not specified in §§1821 and 1920 absent explicit Congressional authorization. The Court found that the Copyright Act is not such explicit authorization.

The Court rejected all of Oracle’s arguments to the contrary. First, the Court rejected the suggestion that the word “full” authorized courts to award expenses beyond those set forth in §§1821 and 1920, explaining that the term “full” is an adjective that means the complete measure of the noun it modifies and does not, therefore, alter the meaning of the word “costs” in §505. Rather, “full costs” are all the “costs” otherwise available under the relevant law.

Second, the Rimini Court found that “full costs” in the § 505 was not an historical term of art encompassing more than the “costs” listed in §§1821 and 1920. The Court refused to undertake “extensive historical excavation” into the English copyright statutes to determine the meaning of costs statutes.

Finally, the Court rejected the notion that its holding rendered the word “full” to be mere surplusage. Indeed, it noted that accepting Oracle’s argument would render the next sentence of § 505 – allowing the award of attorney’s fees – largely redundant.

As a result, the Court vacated and remanded the costs award to comply with the limits of §§1821 and 1920.

Fourth Estate

In Fourth Estate, the Court unanimously resolved a Circuit split as to the meaning of “registration” for purposes of when a copyright infringement lawsuit may be brought. Fourth Estate had filed applications to register articles which it claimed were infringed with the Copyright Office, but the Register of Copyrights had not acted on those applications at the time Fourth Estate filed its infringement suit. The district court dismissed the complaint, under 17 U. S. C. §411(a), which instructs states that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.” The Eleventh Circuit affirmed, holding that “registration . . . has [not] been made” under §411(a) until the Copyright Office registers a copyright.

The Court agreed, holding that registration occurs only after the Copyright Office registers a copyright, at which point a copyright claimant may commence an infringement suit. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration.

Justice Ginsburg, writing for the Court, explained the Copyright Act grants an author “exclusive rights” immediately upon the work’s creation. 17 U. S. C. §106. A copyright owner may institute a civil action for infringement of those exclusive rights, §501(b), but generally only after complying with §411(a)’s requirement that “registration . . . has been made.”

Rejecting the suggestion that registration occurs when a copyright owner submits a proper application for registration, the Court found that the actual registration approach reflects the only satisfactory reading of §411(a)’s text. First, the Court observed that §411(a)’s first two sentences focus on action by the Copyright Office – namely, its registration or refusal to register a copyright claim, and explained that if application alone sufficed to “ma[ke]” registration, §411(a)’s second sentence – which permits a copyright claimant to file suit when the Register has refused an application – would be superfluous. The Court made the same point regarding the third sentence of § 411(a): allowing the Register to “become a party to the action with respect to the issue of registrability of the copyright claim” would be negated if an infringement suit could be filed and resolved before the Register acted.

Justice Ginsburg also counseled that the §410 confirms that application is discrete from, and precedes, registration, while §408(f)’s preregistration option would have little utility if a completed application sufficed to make registration for purposes of § 411(a).

Although Fourth Estate pointed to other Copyright Act provisions used the phrase “make registration” or a variant to describe what a copyright claimant does, it acknowledged that determining how the Copyright Act uses the word “registration” in a particular provision requires examining the “specific context” in which the term is used. In the view of the Court, the “specific context” of §411(a) permits only one sensible reading: “registration . . . has been made” refers to the Copyright Office’s act granting registration, not to the copyright claimant’s request for registration. The Court relegated Fourth Estate’s contrary reading to a misapprehension of the significance of certain 1976 revisions to the Copyright Act.

Fourth Estate argued that, because (under §408(a)) “registration is not a condition of copyright protection,” §411(a) should not bar a copyright claimant from enforcing that protection in court once an application has been made for registration. The Court found that this claim ignored other safeguards in the Copyright Act.

For example, copyright owners are vested with exclusive rights upon creation of their works and prohibiting infringement from that point forward. To recover for such infringement, copyright owners must simply apply for registration and await the Register’s decision. Additionally, preregistration infringement suits are permitted with respect to works vulnerable to predistribution infringement.

Finally, the Court found unpersuasive the argument that delays in registration now amount to months, and not a mere few weeks, because, in the Court’s view, such delays did allow the Court to judicially revise the text of §411(a).

Two decisions; two results relatively faithful to statutory text.