ARCHIVES : May 2010

In the Ninth Circuit, Plaintiffs Need Only Apply
Court Adopts “Application Approach” to Registration as a Precondition to Filing Suit

The Ninth Circuit has chosen sides in the debate over what constitutes “registration” sufficient to file suit, adopting what has come to be referred to as the “application approach.”  Cosmetic Ideas, Inc. v. IAC/InteractiveCorp, __ F.3d __ (9th Cir. 2010).  Section 411(a) of the Copyright Act provides that “no 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.”  In order to register a copyright, the claimant must file with the Copyright Office (1) an application, (2) a deposit copy of the work being registered, and (3) a filing fee.  If, upon examination, the Copyright Office determines that the material deposited is copyrightable and that the other requirements of the statute have been met, then it registers the claim and issues a certificate of registration.  The Copyright Act gives no guidance, however, as to whether “registration” for purposes of filing suit occurs upon submission of the application, deposit copy and filing fee (the “application approach”), or whether it occurs after the Copyright Office determines that the material deposited is copyrightable and “registers” the copyright (the “registration approach”).  Courts have split on the question. Compare, e.g., La Resolana Architects v. Clay Realtors Angel Fire, 416 F.3d 1195 (10th Cir. 2005) (collecting cases and adopting registration approach) with In re Napster, Inc., 191 F. Supp. 2d 1087 (N.D. Cal. 2002) (application approach).

The court started its search for an answer in the plain language of the Copyright Act.  Sections 408 through 412 each addresses some aspect of registration.  Portions of sections 410 and 411 suggest that registration requires the Copyright Office to take affirmative steps after the filing of the application, deposit copy and fee, indicating that the registration approach is the correct one.  But the court found that other sections lead to the opposite conclusion.  Section 408, for example, states that a copyright owner “may obtain registration . . . by delivering to the Copyright Office” the application, deposit copy and fee.  Moreover, § 410(d) provides that the effective date of registration is the date the application, deposit copy and fee are received by the Copyright Office – not when the Copyright Office takes action to register or deny the claim.

Because the court found the plain language of the Act conflicting, it turned to the purpose of the statute and its underlying policies.  Though the 1976 Act made registration optional, Congress valued having a robust registry of existing copyrights.  Accordingly, it built various incentives into the Act to encourage copyright owners to register and deposit copies of their works.  For example, in order to be eligible to recover statutory damages and attorney’s fees in the event of infringement, the copyright owner must have registered the work before the infringement began.  The registration certificate is prima facie evidence of the validity of the copyright and the facts stated in the form when the work is registered before, or within five years of, publication of the work.  Perhaps most importantly, registration is a prerequisite to bringing a lawsuit for copyright infringement.

In view of these incentives, the court found that the “application approach better fulfills Congress’s purpose of providing broad copyright protection while maintaining a robust federal register.”  The application approach avoids “unnecessary delay” in litigation by allowing a plaintiff to sue immediately after filing the application for registration, rather than waiting for the Register to take action, during which time the infringer could continue to profit from its wrongful conduct.  Moreover, a plaintiff could lose its rights due to the statute of limitations while waiting for registration to issue.  Given that § 411(a) allows a plaintiff to litigate its claim even if the Copyright Office rejects registration, the court found it made little sense to put potential plaintiffs in such a state of “legal limbo.”

With the Ninth Circuit now having signed on to the “application approach,” the tally of circuits which have weighed in on the issue stands as follows:

Application approach: Fifth, Seventh and Ninth Circuits

Registration approach: Tenth and Eleventh Circuits

District courts in circuits which have not yet ruled on the issue remain all over the map – sometimes even within the same district.

Practice tip

Before filing suit, it pays to know whether your circuit has weighed in on this issue, and if so, whether it adopted the application or registration approach. If you find yourself in a “registration” jurisdiction and are eager to file suit on an unregistered copyright, consider taking advantage of the “special handling” registration process, which provides for expedited registration of the claim upon payment of a premium filing fee (currently, $760 instead of the $35 charged for normal handling of electronically filed claims). Particulars of this process can be found in Copyright Office Circular 10.

2nd Circuit Rejects Crumby Old PI Standard
Applies eBay to Preliminary Injunctions in Copyright Cases

Holden Caulfield might have called it a crumby old rule.  Using more diplomatic terms, the Second Circuit concluded that the standard it has long applied to preliminary injunctions in copyright cases is “inconsistent with the ‘test historically employed by courts of equity,’” and has been abrogated by the Supreme Court’s ruling in eBay v. MercExchange.  Salinger v. Colting, __ F.3d __ (2d Cir. 2010).

Salinger pitted J.D. Salinger against an author who wrote a sequel to the iconic novel “Catcher in the Rye” entitled “60 Years Later: Coming Through the Rye.”  As its title implies, “60 Years Later” picks up the story of Holden Caulfield (referred to as “Mr. C”) in his 70’s, in a world that also includes Mr. C’s now-elderly author, a fictionalized Salinger.  Faux Salinger is haunted by his creation and wants to bring him to life to kill him, but ultimately cannot bring himself to do so.  Instead, he frees Mr C, who then reunites with his younger sister, Phoebe, and estranged son, Daniel.

Consistent with his famous and longstanding practice of refusing to authorize adaptations of his work, Salinger sued to enjoin the U.S. publication of “60 Years Later.”  In July 2009, the District Court granted Salinger’s motion for a preliminary injunction, finding that (1) Salinger has a valid copyright in “Catcher” and the Holden Caulfield character; (2) “60 Years Later” does not constitute a fair use; and (3) “60 Years Later” infringes Salinger’s copyrights.  Courts in the Second Circuit have long issued preliminary injunctions in copyright cases upon a finding of irreparable harm to the plaintiff coupled with a likelihood of success on the merits; significantly, courts presumed irreparable harm if the plaintiff could establish a prima facie case of copyright infringement. The District Court adhered to this standard in granting Salinger’s request for a preliminary injunction.  Though the court noted that the Supreme Court had recently rejected the practice of presuming irreparable harm in the eBay case, it reasoned that eBay “dealt only with the presumption of irreparable harm in the patent law context, and thus is not controlling in the absence of Second Circuit precedent applying it in the copyright context.” Salinger v. Colting, 641 F. Supp. 2d 250, 268 n.6 (S.D.N.Y. 2009).

The Second Circuit held that the standard enunciated in eBayapplies to preliminary injunctions in copyright cases, reasoning that the the Supreme Court relied not merely on patent law, but on traditional principles of equity as well as copyright cases in reaching its conclusion.  Thus, in order to obtain a preliminary injunction in a copyright case in the Second Circuit, the plaintiff must demonstrate (1) either (a) a likelihood of success on the merits or (b) sufficiently serious questions going to the merits to make them a fair ground for litigation and a balance of hardships tipping decidedly in the plaintiff’s favor; (2) a likelihood that the plaintiff will suffer irreparable harm absent the injunction; (3) the balance of hardships between the plaintiff and defendant tips in the plaintiff’s favor; and (4) issuance of the injunction will not disserve the public interest.  Courts may no longer presume irreparable harm.  Rather, they must “actually consider the injury the plaintiff will suffer if he or she loses on the preliminary injunction but ultimately prevails on the merits, paying particular attention to whether the remedies available at law, such as monetary damages, are inadequate to compensate for that injury.”

In considering the first factor – the probability of success on the merits – the Second Circuit cautioned courts to be “particularly cognizant of the difficulty of predicting the merits of a copyright claim at a preliminary injunction hearing,” especially where the defendant has raised a “colorable” fair use defense.  With respect to the second and third factors – irreparable harm and balancing of hardships – the only relevant harm is that which occurs to the parties’ legal (commercial) interests and which cannot be remedied after a final adjudication.  Both plaintiffs and defendants in copyright suits have property interests in their respective works, as well as First Amendment rights of expression (including, on the part of plaintiff copyright owners like Salinger, the right not to speak) at stake. 

The Second Circuit vacated the preliminary injunction and remanded to the District Court to consider the remaining eBayfactors.  It was careful to note, however, that it agreed with the District Court that Salinger was likely to prevail on the merits and would not disturb that finding.  Moreover, it cautioned that its ruling “is not to say that most copyright plaintiffs who have shown a likelihood of success on the merits would not be irreparably harmed absent preliminary injunctive relief.  As an empirical matter, that may well be the case, and the historical tendency to issue preliminary injunctions readily in copyright cases may reflect just that.”  This caveat seems practically to invite district courts to continue to find irreparable harm as a matter of course where the plaintiff has established a likelihood of success on the merits.