### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 18

- 31160

SOUTHERN CREDENTIALI NG SUPPORT SERVICES, L

. L

. C

. ,
P laintiff

– Appell ee Cross

- Appellant

v.
HAMMOND SURGICAL HOS PITAL, L

. L

. C

. , doing business as Cypress Pointe Surgical Hospital; HAMMOND SURGICAL HOSPITAL MANAGEMENT COMPANY, L.L.C. , Defendant s

– Appell ant s Cross

- Appellees

Appeal s from the United States District Court for the Eastern District of Louisiana

Before OWEN , Chief Judge, and HAYNES and COSTA, Circuit Judges. GREGG COSTA, Circuit Judge:
A plaintiff must usually prove damages to recover in a lawsuit. But to encourage compliance, some laws provide automatic damages. The Copyright Act of 1976 is an example. It has a provision allow ing a copyright holder to
ele ct statutory damages

— in an amount the court sets between $750 and $30,000 per infringed work, rising to a possibility of $150,000 per work for willful infringement

— instead of actual damages. See 17 U.S.C. § 504

. Statutory damages are not available, however, in all copyright cases

. A plaintiff cannot recover s tatutory damages , and sometimes more importantly , attorney ’ s fees, for “any infring ement” a defendant commences before the plaintiff registered the copyright . 17 U.S.C. § 412. That limitation encourages United States Court of Appeals Fifth Circuit 

### FILED January 9, 2020

Lyle W. Cayce Clerk Case: 18-31160 Document: 00515265620 Page: 1 Date Filed: 01/09/2020No. 18

- 31160

2 authors to register their works quickly, allowing potential infringers to readily determine whether a work is protected. Mason v. Montgomery Data, Inc. , 967 F.2d 135, 144 (5th Cir. 1992). We have interprete d section 412 to bar s tatutory damages even for a defendant’s postregistration cop ying of a plaintiff’s map if copying also occurred before registration

. Id. The question this case poses is whether that
bar also applies when the defendant engages in a different type of infringement after registration . For example, what if a defendant distribute s the work after registration rather than continuing with the earlier copying?
I. In 2010, Southern Credentialing Support Services began providing
health care c redentialing services to Hammond Surgical Hospital. Credentialing is a process doctors must complete to practice at hospitals.
Doctors submit basic application forms , which are common across facilities, a s well as delineation of privileges forms, which d iffer for each institution to reflect hospital policies as well as state and federal regulations. Credentialing service providers verify the information doctors provide. Some companies, like Southern Credentialing , try to obtain a competitive advantage by designing custom forms for their clients. Southern Credentialing created two packets of forms for Hammond : an initial credentialing application packet and a recredentialing packet. The initial packet was 83 pages long , which i ncluded 8 base documents common to all credentialing applications, several forms required by law, and 33 specialty

specific delineations. The recredentialing packet was 113 pages long, consisting of an original reapplication packet, the 8 base documents, and the
33 specialty

- specific delineations. In 2013, Southern Credentialing stopped providing credentialing
services to Hammond. Hammond soon contracted with another company for Case: 18-31160 Document: 00515265620 Page: 2 Date Filed: 01/09/2020No. 18

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3 credentialing services. The forms that the new provider used contained fifty pages that were identical to Southern Credentialing’s forms. From 2013 until 2017, doctor s would register on the new provider’s website and access the application through a password

- protected portal. By 2017, the new provider had posted the documents in a way that enabled anyone who knew where to look for the forms on its website to access them without a password.
W hen it was working with Hammond, Southern Credentialing had not registered any copyrights in its application packets. On learn ing that
Hammo nd was still using its forms after the companies had parted ways , Southern Credentialing registered a copyright for the original packe t in February 2014 and the recredentialing packet in July 2014. A few days after registering the second copyright, Southe rn Credentialing sent a n email to Hammond asserting that Hammond’s ongoing use of the credentialing forms infringed Southern Credentialing’s copyright s

. Hammond responded that the forms were not eligible for copyright protection
and ask ed Southern Credentialing to identify which documents it believed were protected. A dditional exchanges between the parties did not resolve the dispute

. So Southern Credentialing filed this suit

. It claimed that Hammond infringed its copyright s over the initial and reapplication packet s

. Southern Credentialing sought summary judgment, which the district court granted as to the existence of the copyright s and infringement.
To determine dama ges, t he district court held a bench trial. During the trial, Southern Credentialing elected statutory damages

. The court held that it could award statutory damages despite section 412’s bar because the defendant’s post

- 2017 internet distribution of the packets was “different in kind” from its pre
- 2017 infringing activity

. After determin ing that Hammond’s infringem ent was not willful , it awarded Southern Credentialing $5,000 Case: 18-31160 Document: 00515265620 Page: 3 Date Filed: 01/09/2020No. 18

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4 ($2,500 for each packet). The court also ruled that Southern Credentialing was
entitled to attorney’s fees and costs, though it has not yet determined the

amount. Finally, the court issued a p ermanent injunction barring Hammond from infring ing Southern Credentialing’s copyright s

. Hammond appeals , arguing that 17 U.S.C. § 412 bars awarding statutory damages and attorney’s fees because Hammond began infringing before Southern Credentialing regist ered its copyright s

. Hammond also appeals both grants of summary judgment , arguing that Southern Credentialing’s forms lack originality and that , in any event, it did not copy those forms

. Southern Credentialing also appeals , arguing that Hammond’s infringement was willful. Wil l fulness only matters if any award of statutory damages is permissible.
II. We first address whether Southern Credentialing possessed valid copyright s in its credentialing packets

. Copyright protection “ subsists

. . . in original works of authorship fixed in a ny tangible medium of expression. ” 17 U.S.C. § 102(a). Hammond challenges only the originality of the packets

. A work is original if it exhibits a minimal degree of creativity. Feist
Pub l’n s., Inc. v. Rural Tel. S er v. Co. , 499 U.S. 340, 345 (1991). Facts are not original , so they are not eligible for protection. Id. at 345−46; 17 U.S.C. § 102(b). Likewise , blank forms an author designs merely to record information are not eligible for copyright. Eng ’g Dynamics, Inc. v. Structural Software, Inc. , 26 F.3d 1335, 1344 n.11 (5th Cir. 1994). But copyright does extend to the creative elements of compilations of facts and blank forms, including the
selection and arrangement of information that enable effect ive use. See Eng’g Dynamics, Inc. v. Structural Software, Inc. , 46 F.3d 408, 4 09 (5th Cir. 1995). The copyright in such works is necessarily thin and protects only the original elements of the form. See Feist , 499 U.S. at 349. Case: 18-31160 Document: 00515265620 Page: 4 Date Filed: 01/09/2020No. 18

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5 Southern Credentialing’s forms meet th e low bar for originality

. Southern Credentialing select ed and arrange d information in an efficient way

. Among other things, the forms eliminat e unnecessary questions that appear

on competitors’ forms

. Indeed, Hammo nd admit s that Southern Credentialing’s forms enabl ed Southern Credentialing to process applications

at a much faster than average rate. Presumably the efficiency of Southern Credentialing’s forms is why Hammond continued to use them with the new credentialing company, even after Southern Credentialing protested. Although laws and hospital policies dictate the contents of the credentialing forms, Southern Credentialing’s unique selection and arrangement of information exhibit creative expression

. Th at distinctive arrangement distinguishes the credentialing applications from the once
ubiquitous white pages that the Supreme Court held lacked originality because market forces required alphabetical phone directories. Feist , 499 U.S. at
3 63−6 4. In contrast to the uniform arrangement used in the phone directory business, c ompeting health care credentialing servicers use forms that are compiled and arranged in different ways

. Such differentiation within the industry demonstrates originality

. See Eng ’g Dynamics , Inc. , 26 F.3d at 1346 (holding that a computer program that simulated engineering problems was original because its algorithm differed from its competitors’ algorithm that achieved the same output)

. Southern Credentialing ha s valid copyright s protecting the selection and arrangement o f information in its credentialing forms.
III

. The next question is whether Hammon d infringed those copyrights. Copying protected material is infringement. 17 U.S.C. §§ 106, 501. A defendant unlawfully copies if it uses protected elements of a work and there is a substantial similarity between the protected work and the allegedly Case: 18-31160 Document: 00515265620 Page: 5 Date Filed: 01/09/2020No. 18

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6 infringing work. Bridgmon v. Array Sys. Corp. , 325 F.3d 572, 576 (5th Cir. 2003). D etermining whether two works are substantially similar usually requires a side

- by

- side comp arison to identify whether the protected elements and elements in the allegedly infringing work are so alike that a layperson
would view the two works as substantially similar. See i d. at 576−77. But such
an element

- by

- element comparison is un necessary whe n the allegedly infringing work extensively copies the protected material verbatim, such that protected elements of the original work are necessarily incorporated into the
latter work. Cf. Eng’g Dynamics, 26 F.3d at 1348 ( collecting cases noting that works with thin copyright nevertheless are infringed when copied verbatim). Hammond copied Southern Credentialing’s packets. Large portions of Hammond’s new application are taken verbatim from South ern Credentialing’s packets

— approximately 50% of Southern Credentialing’s materials are included in the new forms

. Although th e copyright in factual compilations is necessarily thin, wholesale duplication of half of a protected
work necessarily incorporat es its protected elements

. See Feist , 499 U.S. at 348 (“Others may copy the underlying facts from the publication, but not the precise words used to present them.”).
The district court correctly concluded that Hammon d infringed valid copyrights of South ern Credentialing. We thus affirm the permanent injunction it entered barring future infringement

. IV. That brings us to the novel issue this appeal poses : whether section 412 bars Southern Credentialing from recover ing statutory damages. As mentioned at the outset, the Copyright Act prohibits the recovery of statutory damages and attorney’s fees for “any infringement of copyright in an Case: 18-31160 Document: 00515265620 Page: 6 Date Filed: 01/09/2020No. 18

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7 unpublished work commenced before the effective date of its registration.

. . .” 1
1 7 U.S.C. 412 (1)

. S ection 412’s “any infringement” and “commenced” language is ambiguous as applied to multiple infringements of the same work over time.
Mason , 967 F.2d at 143. Those words could be read to bar statutory damages for all future infring ements of the work if the defendant began any infringement prior to registration

. Id. In that case, any preregistration infringement of a book or song would bar statutory damages for any postregistrat io n sales of those works. The other possibility is that the text only bars statutory damages for those infringements beginning before registration

. Id. Under th is reading , if a defendant beg an a new infringement after registration

— by, for example, selling additional copies of the infringing song

— the plaintiff c ould recover statutory damages even if the defendant’s earlier sales of the song predated registration.
Mason resolved that ambiguity. W e held that section 412 (2) bars statutory damages when the sa me defendant infringed the same work in the same fashion before and after registration. 2 Id . at 14 3−4 4. The plaintiff had published 233 maps from 1967 to 1980, registering one map in 1968 and the remaining 232 in 1987. Id

. at 144. The defendant copied each map repeatedly from 1982 to 1989

. Id. at 137. We held the defendant could not be liable for statutory damages under section 412 except for its infringement of the single map that was registered in 1968 prior to any copying of that work

. Id. at 144.

1 Section 412 permits the recovery of statutory damages if the effective date of registration was within one month of when the copyright owner learned of the infringement. The grace period is inapplicable here.
2 Sections 412(1) and (2) do not materially di ffer for our purposes. Section 412(1) addresses the availability of statutory damages for unpublished works, while section 412(2) addresses the availability of statutory damages for published works. Both subsections contain the “any infringement . . . co mmenced before the effective date of its registration” language. Case: 18-31160 Document: 00515265620 Page: 7 Date Filed: 01/09/2020No. 18

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8 For the other 232 maps, the preregistration infringement of those maps barred any statutory damages even for the addition al infringements that postdated the 1987 registration. In reaching that conclusion, we emphasized the need for the limit on statutory damages to be read consistent ly with the provision authorizing those damages in the first place. Id . at 143

– 44. That statute, s ection 504 , authorizes “an award of statutory damages for all infringements involved in the action , with respect to any one work, for which any one infringer is liable

. . . . ” 29 U.S.C. § 504(c)(1). The “an award” language means there is a si ngle statutory
award “ for all infringement s ” of a single work. Mason , 967 F.2d at 144. The single

- award

- per
- infringed

- work rule for statutory damages supports reading section 412 bar ’s on statutory damages broadly to prohibit statutory damages for both pre

- and postregistration infringements

. Id. at
143

− 44

. That is because the narrow reading of section 412 would bar statutory damages for one infringement of a work (the infringement occurring preregistrati o n ) yet allow them fo r a different infringement of the same work (one occurring postregistration). That interpretation is at odds with section 504’s rule that there be an award for all infringements of the same work. I n other words, i t would be incongruent to separate infringements of the same work when considering whether the section 412 bar applies when the provision allowing statutory damages requires treating those infringements together.
Id . at 144. S ilo ing infringements when ap plying the bar on statutory damages would also allow a plaintiff to recover actual damages for preregistration infringements (when statutory damages are unavailable) and then statutory damages for later infringements of the same work. Id

. That is also at odds
with the statute ’s allowing a plaintiff to elect a single statutory award for each infringed work in lieu of

— but not in addition to

— actual damages. Id

. Case: 18-31160 Document: 00515265620 Page: 8 Date Filed: 01/09/2020No. 18

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9 Mason also relie d on the Copyright Act’s purpose in limiting statutory damages when infringeme nt occurs before registration: to encourage early registration , thus allow ing potential infringers to determine whether a work is protected. Permitting a plaintiff to register, then collect statutory damages for new infringements of the same work by the s ame defendant that occur after registration, would dull that incentive. Id. Although recognizing Mason ’s general rule, the district court concluded that it did not apply because Hammond’s postregistration infringements were “different in kind” from its preregistration infringements. That difference in
kind exists , according to Southern Credentialing , if the preregistration infringement and the postregistration infringement violate different exclusive rights of a copyright holder. The district court fou nd that to be the case here because Hammond’s preregistration infringement reproduc ed the copyrighted forms (violati ng 17 U.S.C. § 106(1)), whereas its postregistration infringement distributed the forms by making them publicly available on its website (violati ng 17 U.S.C. 106(3)). No court has previously a pplied Southern Credentialing’s approach 3 and one district court in this circuit has persuasively rejected it. Qualey v. Caring Ctr. of Slidell , 942 F. Supp. 1074, 1076−77 (E.D. La. 1996)

. In Qualey , a city
had prepared derivative works of an engineer’s floor plans before the plaintiff registered them (a violation of 17 U.S.C. § 106(2)) , and then later distributed
th e derivative work to contractors (a violation of 17 U.S.C. § 106(3) )

. Id. at

3 Southern Credentialing relies on the Ninth Circuit’s statement that “ the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one cont inuing infringement under § 412.” Derek Andrew, Inc. v. Poof Apparel Corp. , 528 F.3d 696 , 701 (9th Cir. 2008) (emphasis added) . But that defendant distributed garments with the same infringing tag before and after the plaintiff registered its copyright, rendering the “same kind” language unnecessary to the court’s holding. Id. Southern Credentialing points to no court ever awarding statutory damages for postregistration infringement on the ground that it violated a different right than the preregistrati on infringement. Case: 18-31160 Document: 00515265620 Page: 9 Date Filed: 01/09/2020No. 18

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10 107 5

. The court reasoned that Mason ’s rationales applied with equal force when infringement occurring before and after registration violate s different rights protected by copyright law. We agree that section 412 bars statutory damage awards when a defe ndant violates one of the six exclusive rights of a copyright holder preregistration and violates a different right in the same work after registration. 4 Any other conclusion would be inconsistent with the Copyright Act, which does not distinguish between “different” infringements. See Qualey , 942 F. Supp. at 1076−77; 2 N IMMER ON C OPYRIGHT §7.16(c) (2019) (“The bar on awarding heightened damages applies

. . . even if the sole defendant, after registration, engaged in a different type of infringement from its pre

registration conduct.”). Under Southern Credentialing’s theory, statutory damages would not be available when a defendant prepares a derivative work preregistration and then prepares a separate derivative work postregistration

. Y et statutory dama ges would be available when a defendant prepare s a derivative work preregistration and then distribute s copies of that derivative work postregistration. Differential treatment of those scenarios would be at odds with the basic copyright principle that e ach violation of a section 106 right
i s a coequal infringement

. 17 U.S.C. § 501(a) (“Anyone who violates any of the exclusive rights of the copyright owner . . . is an infringer of the copyright . . . .” (emphasis added) ). We s ee no textual, precedential, or logical reason why

4 We do not decide whether section 412 would bar statutory damages and attorney ’ s fees if there w ere a substantial gap in time between preregistration and postregistration infringement, as Hammond’s infringing conduct continued without i nterruption. In dicta, the Second Circuit has suggested this was a possible distinction justifying an award of statutory damages when the defendant ceased infringing for approximately ten years, during which time the plaintiff registered its copyright. Tr oll Co. v. Uneeda Doll Co. , 483 F.3d 150, 158−59 (2d Cir. 2007). The leading copyright treatise also recognizes that such a gap in time could be a basis for permitting statutory damages for a postregistration infringement. 2 N IMMER ON C OPYRIGHT §7.16(c) (2 019). Case: 18-31160 Document: 00515265620 Page: 10 Date Filed: 01/09/2020No. 18

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11 i nfringement s occurring after registration are more worthy of punishment
because they are “different in kind” from those occurring earlier. Harmonizing the Copyright Act provisions authorizing and limitin g statutory damages as we did in Mas on , it remains t he case that Congress prohibit ed statutory damages w hen “any infringement” precedes registration. Maintaining this rule even when the infringements are “different in kind” promotes the incentive for early registration that Congress created. Qualey , 942 F. Supp. at 1077. The unavailability of statutory damages in this situation does not mean
there is nothing to deter postregistration infringements. Actual damages are
available when a plaintiff can prove them

. Although Southern Credentialing
was unable to do so , it obtained another remedy that protects against future infringement : an injunction.

* * * The judgment is AFFIRMED IN PART and REVERSED IN PART. The
case is REMANDED for entry of an amended judgment without statutory damages or attorney ’ s fees. Case: 18-31160 Document: 00515265620 Page: 11 Date Filed: 01/09/2020