Supreme Court’s Strict Construction of Copyright Act Pre-Suit Requirements Likely to Up the Ante on “Preregistration”

The Supreme Court held on March 4 that a copyright owner may not file a lawsuit alleging infringement without first securing a registration from the Copyright Office. The opinion resolves a longstanding split in federal appellate courts regarding whether a pending application—rather than a registration—is sufficient to satisfy the Copyright Act’s requirements. The decision virtually guarantees that content owners will be far more likely to apply for a “preregistration” before publishing their works, burdening a federal agency that, the Court acknowledged, is already facing staffing and budgeting shortages.

In Fourth Estate Pub. Benefit Corp. v. Wall-Street.com LLC, Fourth Estate, a news organization, sued its licensee for allegedly failing to remove articles from its website after canceling the parties’ license agreement. No. 17-571, 2019 WL 1005829, at *2 (U.S. Mar. 4, 2019). The plaintiff had filed applications for copyright registrations, but had not obtained the registrations themselves. The Court held that the plaintiff had failed to satisfy 17 U.S.C. § 411(a), which prohibits a copyright owner from filing an infringement lawsuit “until preregistration or registration of the copyright claim has been made in accordance with this title.” The Court held that the phrase “registration … has been made” to mean “when the Copyright Office registers a copyright.”Id. at * 4.

The decision resolves a long-running split in federal appellate courts. The Fifth, Seventh, and Ninth Circuits had adopted the “application approach,” which only required a copyright holder to apply for registration before bringing an enforcement action. SeeCosmetic Ideas Inc. v. IAC/Interactivecorp., 606 F.3d 612, 614 (9th Cir. 2010). The Eighth, Tenth, and Eleventh Circuits had adopted the “registration approach,” seeM.G.B. Homes Inc. v. Ameron Homes Inc., 903 F.2d 1486, 1488 n.4 (11th Cir. 1990), which the Fourth Estate Court affirmed. The Supreme Court ruled in favor of the registration approach by examining other provisions of the Copyright Act—such as exemptions for works that are more “vulnerable” to pre-distribution infringement (like movies and songs) and for live broadcasts. For both, the statute permits a copyright owner to obtain a preregistration, after which the owner may file a lawsuit for infringement. See 17 U.S.C. §§ 408(f), 411(c). These provisions, the Court reasoned, “would have little utility if a completed application constituted registration.” Id. at *5.Ultimately, any copyright owner that obtains a preregistration must still obtain a registration promptly after publication, to avoid dismissal of an infringement lawsuit. 17 U.S.C. § 408(f)(3),(4).

On the same day as Fourth Estate, the Court strictly interpreted another copyright provision. In Rimini St. Inc. v. Oracle USA Inc., the Court limited district courts’ discretion to award “full costs” under 17 U.S.C. § 505. No. 17-1625, 2019 WL 1005828, at *2 (U.S. Mar. 4, 2019). Some courts had interpreted the statute, which permits “recovery of full costs by or against any party,” to allow recovery of costs other than the six categories of litigation expenses set forth in 28 U.S.C. §§ 1821 and 1920. The Supreme Court disagreed, overturning a district court order awarding technology company Oracle more than $12 million in costs, including for expert witnesses, electronic discovery, and jury consulting.