This guest post was written by Crystal R. Nobregas, a Southwestern Law School fourth-year evening program student who is taking the Entertainment Law and the Emerging Web class.
The 400 or so staffers of the U.S. Copyright Office in 2017 processed 468,000 claims and issued registrations for intellectual property protection to more than 414,000 applicants. The office, which handles submissions with and without correspondence and via online and snail mail, reports its work can take anywhere from 1 to 37 months to complete, averaging about 6 months for the bulk of the filings made on its web site.
But the killer question persists for creatives — especially in a time when their music, books, screen plays, plays, and visual presentations can go in a blink from chart toppers to cellar dwellers: In the law’s eyes, just when can they sue someone to protect their works? Can Hollywood wannabes still rely on the mythical practice of sealing up that career-making script in an envelope and mailing it back to themselves in the belief that this practice just could be a cornerstone of a lawsuit against IP infringers?
The issue of the timing of copyright lawsuits has consumed at least 20 esteemed federal jurists nationwide, and soon will land in the laps of nine more — the justices of the U.S. Supreme Court.
That’s because the U.S. Court of Appeals in the Tenth and Eleventh Circuits, in keeping with lower court rulings in their jurisdictions, have held “that a copyright owner may not sue infringers until after the Copyright Office has acted on the application and registered (or refused to register) the copyright claim.”
The U.S. Court of Appeals in the Fifth and Ninth Circuits have disagreed, finding in cases from their jurisdictions that, “’registration of [a] copyright claim has been made’ within the meaning of § 411(a) when the copyright holder delivers the required application, deposit, and fee to the Copyright Office.”
Wall-street.com and Fourth Estate
The high court has decided to consider the appellate split and potentially to resolve it by taking up a case involving a web site, wall-street.com, and licensing and infringement disputes against it by a news organization called Fourth Estate.
Fourth Estate owns the copyright in its “journalists’ works and licenses them to a cloud-based news organization called AHN Feed Syndicate; AHN Feed Syndicate, in turn, licenses them to others.” Wall-street.com secured a license from AHN Feed Syndicate to use Fourth Estate’s work. But the web site subsequently cancelled that account, thereby terminating its license.
Fourth Estate has argued that it now should be allowed to sue wall-street, since the news organization says its application, work, and fee have been submitted to the Copyright Office.
After all, “the statute provides that the ‘effective date of a copyright registration’ is not the date of issuance of the certificate but is instead ‘the day on which an application, deposit, and fee, which are later determined . . . to be acceptable for registration, have all been received in the Copyright Office.’ Id. § 410(d),” Fourth Estate has griped to courts.
Fourth Estate contends that finding in the alternative “leads to pointless delay and may prejudice the rights of copyright owners despite their compliance with the statute’s requirements,” and moreover, in 2016 the Copyright Office only “refused registration on . . . less than 3 percent [of claims].”
The news organization says it is unacceptable to accept bureaucrats’ pokey decision-making to stall valid legal claims to protect IP, especially because copyrights, unlike patents, exist in legal terms as soon as an original work gets fixed in a tangible medium, regardless of the office’s ultimate finding.
But the defendant web site argues that delaying until the Copyright Office has acted on an application “will rarely have any practical effect on a copyright owner’s rights or remedies,” and “[t]he Act’s plain language compels that result, and every other indication of Congress’s intent confirms it.”
The Eleventh Circuit has ruled in wall-street’s favor, finding infringement suits can be brought only after the Copyright Office has acted.
That ruling, however, led to a flurry of “friend of the court” briefs arguing for a reversal of that standard.
Indeed, the high court has received amicus filings on its impending case from The American Bar Association, The Copyright Alliance, National Music Publishers’ Association, et al., Authors Guild and Other Artists’ Rights Organizations, and The International Trademark Association.
The case is docketed for oral argument, and the high court typically decides matters in the same term as it has heard such argument.
Rimini Street and Oracle
Meantime, the justices also have accepted another case involving copyright suits and the all-important legal fees charged in them: Rimini Street Inc. vs. Oracle USA Inc. Here, again, the high court confronts a split in the appellate circuits interpreting the Copyright Act’s allowance of prevailing parties in copyright cases to recovery of “full costs.” Judges in the Eighth and Eleventh circuits have limited this to taxable costs, with the Ninth permitting non-taxable costs.
The long-running case involves Oracle USA’s computer software and Rimini Street, a high-flying vendor that says it provides IT support for it. Rimini Street’s controversial business practices led to an infringement suit, with a court ruling against Rimini Street and its CEO Seth Ravin. They were hit with just under a $50 million judgement, as well as $77 million in attorney fees, costs, and pre-judgment interest.
The adverse verdict against Rimini Street and Ravin included non-taxable costs that they have contested, including expert and consulting fees and electronic discovery charges. These amounted to $17.7 million or so, which the court trimmed to $12.8 million.