Robbins, Joe v. Svehla, Scott et al

Brief in Opposition

W.D. Wis.September 20, 2016

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN JOE ROBBINS, individually and on behalf of others similarly situated, Plaintiff, v. SCOTT SVEHLA; et al., Defendants. Case No. 3:16-CV-532-jdp Hon. James D. Peterson ECF Case Electronically Filed PLAINTIFFS’ MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTIONS TO DISMISS THE COMPLAINT Kevin P. McCulloch Nate Kleinman THE MCCULLOCH LAW FIRM, PLLC 155 East 56th Street New York, New York 10022 T: (212) 355-6050 F: (206) 219-6358 kevin@mccullochiplaw.com nate@mccullochiplaw.com Dated: September 20, 2016 Attorneys for Plaintiffs Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 1 of 10 1 Plaintiff Joe Robbins (“Plaintiff”), by and through undersigned counsel, hereby submits this memorandum of law in opposition to the Motions to Dismiss filed by Defendants Nicholas Martin and Gerald Miller (Dkt. No. 12) and Defendants Scott Svehla and Scott’s Brewery Collectibles, LLC (Dkt. No. 15) (together as “Defendants”). PRELIMINARY STATEMENT Plaintiff does not dispute that the United States Copyright Office has not yet issued a certificate of registration for the photograph at issue in this action. Plaintiff does dispute, however, the Defendants’ argument that this requires dismissing his claims. Contrary to Defendants’ suggestion, Section 411(a) does not require that the Copyright Register approve and issue a certificate of registration in order for a copyright owner to bring suit. Instead, Section 411(a) merely requires that the copyright owner have filed a “claim” for registration, and the Copyright Act is explicitly that “applicants” may bring suit for infringement. Defendants’ motions also conspicuously ignore Seventh Circuit case law finding that an application for registration is sufficient to meet the statutory requirement for bringing suit and a litany of district court decisions in this Circuit flatly rejecting the Defendants’ contentions on their motions to dismiss. ARGUMENT I. FILING AN APPLICATION FOR REGISTRATION SATISFIES THE COPYRIGHT ACT’S REQUIREMENTS FOR BRINGING SUIT FOR INFRINGEMENT. A. The Application Approach Controls In This Circuit. Section 411(a) of the Copyright Act states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a). Section 411(a) “does not implicate the subject-matter jurisdiction of federal courts.” Reed Elsevier v. Muchnick, Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 2 of 10 2 559 U.S. 154, 169, 130 S.Ct. 1237, 176 L.Ed.2d 18 (2010); see also Johnson v. Cypress Hill, 641 F.3d 867, 873 (7th Cir.2011) (same). Instead, compliance with the registration requirements of 17 U.S.C. § 411(a) is a statutory “prerequisite to suing for infringement.” Reed Elsevier, 559 U.S. at 157 (“Section 411(a)' s registration requirement is a precondition to filing a claim”). Although Defendants’ motion entirely ignores this issue, courts in this Circuit acknowledge that the “circuits are split as to whether ‘preregistration or registration’ for purposes of § 411(a) is complete when a copyright application is made (the ‘application approach’), or only after the Copyright Office has acted on the application (the ‘registration approach’).” Panoramic Stock Images, Ltd. v. John Wiley & Sons, Inc., 963 F. Supp. 2d 842, 848 (N.D. Ill. 2013) (“Panoramic v. Wiley”). Contrary to Defendants’ suggestion, the Seventh Circuit has approved and applied the application approach. See Chicago Bd. of Educ. v. Substance, Inc., 354 F.3d 624, 631 (7th Cir. 2003) (holding that approval of registration is not required and only “an application for registration must be filed before the copyright can be sued upon”) (emphasis added); accord Cosmetic Ideas, Inc. v. IAC/Interactivecorp., 606 F.3d 612, 616 (9th Cir. 2010) (noting that “the Fifth and Seventh Circuits have adopted the application approach”) (citing Substance, 354 F.3d at 631). Ignoring Substance entirely, Defendants instead rely entirely on dicta from subsequent decisions, including Neri v. Monroe, 726 F.3d 989, 990 (7th Cir. 2013), and Brooks-Ngwenya v. Thompson, 564 F.3d 804 (7th Cir. 2009). In neither case, however, was the Court of Appeals called on to determine whether a pending application was sufficient, and there is nothing in the holding of either case that supports the Defendants’ position. In fact, the Brooks–Ngwenya decision acknowledged the circuit split and found it unnecessary under the circumstances to take sides on that issue because the Copyright Office had rejected the application and thus the question was not properly before the Court. See 564 F.3d at 806 (“The circuits have split over whether Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 3 of 10 3 registration is complete when an application is made or only after the Copyright Office has acted on the application. . . . But however that issue is resolved, the Copyright Office had acted on Brooks–Ngwenya’s application before she filed this lawsuit, and section 411(a) is explicit that an applicant refused registration may still sue for infringement.”). Defendants’ reliance on Brooks- Ngwenya to support the “registration approach” is disingenuous and unsupported. Indeed, the Brooks-Ngwenya decision even cites to Substance to note that decision acknowledged that “an application for registration must be filed before the copyright can be sued upon.” Id. at 806. District courts in this Circuit have similarly noted that the Seventh Circuit’s decision in Neri “did not present the application vs. registration issue raised here, and there is no indication that Neri intended to commit the Seventh Circuit to the registration approach.” Panoramic v. Wiley, 963 F. Supp. 2d at 848. While there have been occasional outlier decisions (which are the only ones cited by Defendants), an honest review of the case law shows overwhelmingly that district courts in this Circuit consistently have applied the application approach and rejected motions to dismiss that rest on the claim that a pending registration does not meet the statutory requirements of Section 411(a). See Panoramic v. Wiley, 963 F. Supp. 2d at 850 (“This court agrees with this analysis and accordingly adopts the application approach. Having adopted that approach, the court denies Wiley’s motion to dismiss claims involving Photographs that are the subject of pending copyright registration applications.”); Panoramic Stock Images, Ltd. v. McGraw–Hill Cos., Inc., 961 F.Supp.2d 918, 926–27, 2013 WL 4047651, at *7 (N.D. Ill. Aug. 9, 2013) (noting that “the court understands the cases in this Circuit to adopt the application approach”); Panoramic Stock Images, Ltd. v. Pearson Educ., Inc., 2013 WL 2357586, at *2 (N.D. Ill. May 29, 2013) (finding that “the Seventh Circuit appears to follow the application approach, whereby receipt by the Copyright Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 4 of 10 4 Office of a complete application satisfies Section 411(a)”); Leventhal v. Schenberg, 917 F.Supp.2d 837, 844–45 (N.D. Ill. 2013) (“In response to the pending motion to dismiss, Leventhal explains that he ‘completed his copyright application, paid the proper fee, and applied for copyright registration electronically on February 9, 2012, prior to submitting his Second Amended Complaint [that same day].’ . . . No more is required at this stage of the litigation.”); Hard Drive Prods., Inc. v. Does 1–55, 2011 WL 4889094, at n. 2 (N.D. Ill. Oct. 12, 2011) (concluding that “this Circuit appears to follow the application approach”); Goss Int'l Americas, Inc. v. A–Am. Mach. & Assembly Co., 2007 WL 4294744, at *3 (N.D. Ill. Nov. 30, 2007) (“Additionally, the statute allows a party to sue for infringement not only after approval of a copyright registration application, but also after a refusal of that registration application. It hardly seems fair, then, to refuse plaintiff the opportunity to sue for infringement until the Copyright Office takes some action when plaintiff will be able to sue after that determination, regardless of the outcome.”); Woollen, Molzan & Partners, Inc. v. Indianapolis–Marion Cnty. Pub. Library, 2006 WL 2135819, at *2 (S.D. Ind. July 28, 2006) (same). Defendants’ motion conspicuously ignores this litany of decisions endorsing the application approach. In one significant decision, the Northern District of Illinois weighed the various arguments in favor of each approach and concluded that the application approach met the statutory requirements of the Copyright Act and was more consistent with Congress’ stated goals. See Panoramic v. Wiley, 963 F. Supp. 2d at 849-50. That conclusion relied heavily on the Ninth Circuit’s decision in Cosmetic Ideas, Inc. v. IAC/Interactivecorp., 606 F.3d 612 (9th Cir. 2010), where that Court of Appeals “conclude[d] that the application approach better fulfills Congress’s purpose of providing broad copyright protection while maintaining a robust federal register.” Id. Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 5 of 10 5 at 619. The analysis provided in Cosmetic Ideas is persuasive and demonstrates conclusively why the application approach is correct: First, the application approach avoids unnecessary delay in copyright infringement litigation, which could permit an infringing party to continue to profit from its wrongful acts. Section 411(a) allows a party, after applying for registration, to litigate the claim whether the Copyright Office accepts or rejects the registration. See 17 U.S.C. § 411(a) (permitting an applicant to bring an infringement suit after the Register has rejected his or her registration, so long as the Register is notified of the suit); see also Forasté, 248 F.Supp.2d at 77 n. 10; Prunté, 484 F.Supp.2d at 40. Under the registration approach, however, a party must wait on the Copyright Office's affirmative acceptance or rejection, despite knowing that suit can proceed in either event. As the leading treatise on copyright explains, the registration approach thus creates a strange scheme: “[G]iven that the claimant ... will ultimately be allowed to proceed regardless of how the Copyright Office treats the application, it makes little sense to create a period of ‘legal limbo’ in which suit is barred.” See 2 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 7.16[B][1][a][i] (2008) (“Nimmer”). The application approach avoids this legal limbo—and avoids prolonging the period of infringement—by allowing a litigant to proceed with an infringement suit as soon as he has taken all of the necessary steps to register the copyright at issue. Moreover, the application approach avoids delay without impairing the central goal of copyright registration. As explained above, copyright registration is now a voluntary procedure, with the pre-litigation registration requirement acting as an incentive to help Congress maintain a robust national register of copyrights. See H.R.Rep. No. 94–1476, at 158, 1976 U.S.C.C.A.N. at 5774 (“Copyright registration for published works, which is useful and important to users and the public at large ... should ... be induced in some practical way.”). This goal, however, is accomplished equally by the registration and application approaches, as either approach requires a party to submit the information necessary to add the copyright to the federal registry. See 17 U.S.C. §§ 408–409 (setting forth the steps an applicant must take to register a copyright). The registration approach's added requirement of affirmative approval or rejection before suit thus amounts to little more than just the type of needless formality Congress generally worked to eliminate in the 1976 Act. On this point, it is telling that even many courts adopting the registration approach have recognized that “construing the statute this way leads to an inefficient and peculiar result.” Brush Creek, 2002 WL 1906620, at *4 (quoting Ryan, 1998 WL 320817, at *2); Loree Rodkin, 315 F.Supp.2d at 1056–57 (same); Strategy Source, 233 F.Supp.2d at 3 (same). We agree. It makes little sense to dismiss a case (which will likely be refiled in a matter of weeks or months) simply because the Copyright Office has not made a prompt decision that will have no substantive impact on whether or not a litigant can ultimately proceed. Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 6 of 10 6 Furthermore, in addition to being generally inefficient, in the worst-case scenario the registration approach could cause a party to lose its ability to sue. The Act provides a three-year statute of limitations for copyright infringement actions. 17 U.S.C. § 507(b). Thus, under the registration approach, a plaintiff who applied for registration towards the end of the three-year period could see the statute of limitations expire during the time it took the Copyright Office to act on the application. See Nimmer § 7.16[B] [1][a][i] (“[G]iven ... a three-year statute of limitations for recovery of all damages caused by copyright infringement, the narrow[registration] approach may indeed occasion complete inability to recover damages....”). This result does not square well with § 410(d)'s mandate that an application's effective registration date should be the day that a completed application is received. In specifying that registration is to be dated as of the date of application—not approval—Congress sought to ensure that an applicant did not suffer the consequences of a delay by the Register. See H.R.Rep. No. 94–1476 at 157, 1976 U.S.C.C.A.N. at 5773 (noting that the provision is designed to “take [ ] account of the inevitable timelag between receipt of the application and other material and the issuance of the certificate....”). Only the application approach fully protects litigants from any disadvantage caused by this timelag. Finally, we find unpersuasive the argument that deference to the Register requires adoption of the registration approach. This argument posits that Congress structured the Act to require the Register's approval or rejection of registration before suit because it wanted the Register to determine the propriety of granting copyright registration in the first instance. See, e.g., Strategy Source, 233 F.Supp.2d at 4. However, as Nimmer explains, “the pace of litigation entails that the Copyright Office will typically have granted or refused registration during its pendency.” Nimmer § 7.16[B][1][a][i]. Thus, should the Register determine that it wanted to reject an application already in litigation, it would still have an opportunity to appear. Id. Furthermore, the Register's decision of whether or not to grant a registration certificate is largely perfunctory, and is ultimately reviewable by the courts.13 There is, therefore, no compelling justification for delaying litigation until after the Register has acted on an application. The two processes—registration approval by the Copyright Office and an underlying infringement case in the courts—can occur simultaneously with little or no prejudice to any involved parties. We therefore hold that receipt by the Copyright Office of a complete application satisfies the registration requirement of § 411(a). This interpretation ensures the broad copyright protection that the 1976 Act provided. It “best effectuate[s] the interests of justice and promote[s] judicial economy.” Int'l Kitchen Exhaust Cleaning Ass'n v. Power Washers of North America, 81 F.Supp.2d 70, 72 (D.D.C.2000). This approach also fully accomplishes the central purpose of registration—the compilation of a robust national register of existing copyrights— and at the same time avoids unfairness and waste of judicial resources. Cf. Lau Ow Bew v. United States, 144 U.S. 47, 59, 12 S.Ct. 517, 36 L.Ed. 340 (1892) (“Nothing is better settled than that statutes should receive a sensible construction, such as Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 7 of 10 7 will effectuate the legislative intention, and, if possible, so as to avoid an unjust or an absurd conclusion.”); United States v. Leon H., 365 F.3d 750, 753 (9th Cir.2004) (citing Lau Ow Bew, 144 U.S. at 59, 12 S.Ct. 517). Id. at 619-21. B. The Application Approach Is More Consistent With The Text And Purpose Of The Copyright Act. Defendants’ motions wrongly assume that the Copyright Act requires that the Register of Copyrights issue a certificate before suit can be filed. Contrary to Defendants’ suggestion, Section 411(a) does not require that a registration be completed to file suit, only that a “claim” for registration be made. See 17 U.S.C. § 411(a). Moreover, although Section 411(a) sets for the registration requirement, it actually is Section 410(d) that establishes the standards for achieving “registration” and that provision does not require or even imply that the Register must issue a certificate for “registration” to be achieved. On the contrary, Section 410(d) provides that “[t]he effective date of a copyright registration is the day on which an application, deposit, and fee, which are later determined by the Register of Copyrights or by a court of competent jurisdiction to be acceptable for registration, have all been received in the Copyright Office.” 17 U.S.C. § 410(d) (emphasis added). Section 408 similarly provides that a copyright owner “may obtain registration of the copyright claim by delivering to the Copyright Office the deposit specified by this section, together with the application and fee [.]” 17 U.S.C. § 408(a) (emphasis added). There is no requirement that the Register take any action for the copyright owner to “obtain registration” under this provision. The Copyright Act also provides that approval of registration by the Register is not necessary in order for registration to be effective. In fact, not only is approval not required, but the statute expressly allows an “applicant” to initiate suit, even if the “registration has been refused.” 17 U.S.C. § 411(a). Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 8 of 10 8 The suggestion that the Register’s action on a pending application is necessary also improperly ignores that the Register is not the only entity authorized to perform this task. Instead, Section 410(d) allows either “the Register of Copyrights or [ ] a court of competent jurisdiction” to determine whether an application is “acceptable for registration.” 17 U.S.C. § 410(d). Requiring that the Register issue a certificate to fulfill the “registration” requirement improperly ignores that Congress expressly permitted courts to conduct the same review. See Cosmetic Ideas, 606 F.3d at 621 (“[T]he Register’s decision of whether or not to grant a registration certificate is largely perfunctory, and is ultimately reviewable by the courts. There is, therefore, no compelling justification for delaying litigation until after the Register has acted on an application.”). Requiring a certification of registration also improperly ignores Congress’ goal that claimants would not be prejudiced by the “inevitable timelag between receipt of the application and other material and the issuance of the certificate.” See H.R. Rep. No. 94–1476 at 157, 1976 U.S.C.C.A.N. 5659 at 5773 (1976). The risk of prejudice to copyright owners caused by such a needless delay is why commentators also agree that the application approach is superior. See 2 Melville B. Nimmer & David Nimmer, NIMMER ON COPYRIGHT § 7.16[B][1][a][i] (2008) (“[G]iven that the claimant . . . will ultimately be allowed to proceed regardless of how the Copyright Office treats the application, it makes little sense to create a period of ‘legal limbo’ in which suit is barred.”). The rule proposed by Defendants’ motions “thus amounts to little more than just the type of needless formality Congress generally worked to eliminate in the 1976 Act.” Cosmetic Ideas, 606 F.3d at 620. CONCLUSION For the forgoing reasons, Defendants’ Motions to Dismiss should be DENIED. Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 9 of 10 9 Respectfully submitted, Dated this 20th day of September, 2016. THE MCCULLOCH LAW FIRM, PLLC By: Kevin P. McCulloch Nate Kleinman 155 East 56th Street New York, New York 10022 T: (212) 355-6050 F: (206) 219-6358 kevin@mccullochiplaw.com nate@mccullochiplaw.com Attorneys for Plaintiff Case: 3:16-cv-00532-jdp Document #: 18 Filed: 09/20/16 Page 10 of 10