Source: https://www.fenwick.com/Publications/Pages/SCOTUS-Sees-Copyright-Registration-as-Prerequisite-for-Infringement-Claim-in-Fourth-Estate-Case.aspx
Timestamp: 2019-04-18 15:03:04+00:00

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In a unanimous decision this month, the U.S. Supreme Court held that a copyright claimant cannot sue for infringement until the U.S. Copyright Office has granted or rejected the application to register the copyright. In Fourth Estate Public Benefit Corp. v. Wall-Street.com, the high court resolved a long-standing circuit split on the technical question of when a copyright claimant may sue, clarifying that mere application for registration by the claimant is not “registration” within the meaning of §411(a) of the Copyright Act. The case has significant implications for copyright claimants, especially for software companies and any business that places value on its copyright protected works. The case also reinforces the importance and benefits of early copyright registration, including attorneys’ fees and statutory damages.
Fourth Estate Public Benefit Corp. produced online journalism and licensed its works to Wall-Street.com, a news website. Under the license agreement, Wall-Street had to remove any works of Fourth Estate before canceling the agreement. Fourth Estate sued Wall-Street when, after canceling the parties’ license agreement, Wall-Street continued to display Fourth Estate’s works on its website. In the complaint, Fourth Estate alleged only that it had applied to register the works at issue with the Register of Copyrights. Fourth Estate thus lacked registrations to the works at the time it filed suit. The district court granted Wall-Street’s motion to dismiss because the Register of Copyrights had not yet registered Fourth Estate’s works. The Eleventh Circuit affirmed, and the Supreme Court granted certiorari to resolve a circuit split about whether “registration” within §411(a) means actual registration of the copyright or mere application for registration.
Before the Supreme Court’s decision in Fourth Estate, circuit courts were split on the meaning of the phrase “registration… has been made” in §411(a). The Tenth Circuit and the Eleventh Circuit had adopted the actual registration required approach, holding that “registration… is made” only upon registration or refusal of registration by the Copyright Office. The Ninth and Fifth Circuits, on the other hand, had adopted the application approach, holding that “registration… is made” upon receipt by the Copyright Office of an application to register a copyright.
This circuit split left both copyright claimants and defendants in doubt about the prerequisites for filing a copyright infringement lawsuit, with parties encountering inconsistent outcomes around the country.
First, the Court described the limited circumstances in which the Copyright Act allows a claimant to sue for infringement of a work before “registration… has been made”: claims for infringement of a work particularly vulnerable to pre-distribution infringement (e.g. a movie or musical composition); and claims for infringement of a live broadcast. The Court then turned to the first sentence of §411(a), which provides that no infringement action “shall be instituted until preregistration or registration of the copyright claim has been made.” The Court noted that the second sentence of §411(a), “sets out an exception to this rule,” allowing a claimant to file an infringement suit if the Copyright Office has refused registration. The Court concluded that holding an application sufficient to make registration would render the second sentence exception language superfluous and would require an “improbable construction” of §411(a) in which “registration” in the first sentence means filing an application while “registration” in the second sentence concerns the Copyright Office’s decision on an application. The Court went on to cite the use of “registration” elsewhere in the Copyright Act, both within and beyond §411(a), supporting its construction.
Next, the Court rejected Fourth Estate’s contrary reading of §411(a), holding Fourth Estate’s interpretation “misapprehend[ed]” the significance of certain revisions of the Copyright Act and is contrary to Congress’s rejection “time and again” of various proposals to eliminate §411(a) and its registration requirement.
In reaching its decision, the Court also confirmed that the Copyright Act gives claimants exclusive rights upon creation of a work, “irrespective of registration.” While registration is a prerequisite for filing a copyright infringement claim, §411(a) does not stop enforcement of a copyright, once registered, for infringement predating the registration.
Registration (or a refusal of registration) is now a nationwide prerequisite for an infringement suit. The new rule underscores the importance of prompt and regular registrations. This is particularly true for companies in the video game business or for mobile app developers and publishers, where a company’s product can go viral and copycats are frequent, making it more likely that a copyright claimant will need to rush to seek a preliminary injunction or other quick relief to stop infringement. Likewise, while a claimant need not register a work before sending a takedown request under the Digital Millennium Copyright Act, if the claimant receives a counter-notification allowing reinstatement of the work, the claimant will need a registration to file suit within the short period required to avoid reinstatement.
Prompt registration also carries other benefits for claimants to keep in mind. For example, if registration is not made before infringement starts (or within three months of the first publication date), the copyright claimant cannot recover attorneys’ fees or statutory damages. Registration (within five years of publication) can also serve as prima facie evidence of validity and otherwise strengthen and provide leverage in a claimant’s litigation position.
Of course, early registration can sometimes be difficult. With software, for example, companies often release many versions of the work over time, making prompt and consistent registration more burdensome. But the Court’s decision highlights how important it is for companies to register their copyrights. Companies should also consider filing for an expedited copyright registration for any product that could be an immediate hit.
Ultimately, while the Court’s decision does not disturb the long-standing principle that copyrights vest upon creation of a work, it solidifies the importance of registration as a tool to enforce those rights.

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