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Supreme Court Issues Two Unanimous Decisions in Copyright Litigation Cases

March 11, 2019

by Shawn Leppo and Emily Doan

On March 4, 2019, the U.S. Supreme Court issued two unanimous opinions interpreting provisions of the Copyright Act. In the first case, the Court decided that the Copyright Office must register a copyright before a copyright owner can file suit. In the second case, the Court clarified what costs are available to a party in copyright litigation.

Fourth Estate Public Benefit Corp. v., LLC
Under the Copyright Act, “[N]o civil action for infringement of the copyright in any United States work shall be instituted until…registration of the copyright claim has been made….” Two competing approaches developed to determine when a work is “registered.” Under the first approach, a copyright owner could file a copyright infringement lawsuit after the Copyright Office received a completed application and the owner paid the required fee and deposited the work. Under the second approach, a copyright owner could only file a copyright infringement lawsuit after the Copyright Office either approved or rejected the application.

Fourth Estate sued for making available Fourth Estate’s news articles after the parties’ license agreement ended. When Fourth Estate commenced the case, it had only filed applications to register its articles. The district court dismissed the case, and the Eleventh Circuit affirmed, because Fourth Estate failed to register its articles before filing suit.

In resolving the two approaches applied by different courts around the country, the Supreme Court held the registration approach “reflects the only satisfactory reading” of the Copyright Act’s registration requirement.  According to the Court, adopting the application approach would create different meanings of the same word, “registration,” within the same statute.

The Court’s decision highlights the importance of registering copyrights and registering them early. On average, the Copyright Office takes 7 months to issue registrations, so copyright owners should file applications promptly to avoid any waiting period before commencing litigation. Applicants can request the Copyright Office examine their applications within five working days, but the fee to expedite each application is $800. This may be expensive for some applicants, especially those who file multiple applications. Early registration also allows copyright owners the advantage of the Copyright Act’s statutory damages and attorneys’ fees provisions for a work registered either within three months of publication or prior to its infringement. We advise copyright owners to register their works promptly, particularly if the work is of a type that is likely to be infringed and if the copyright owner would be harmed and sue if the work were infringed.

Rimini Street, Inc. v. Oracle USA, Inc.
In its second case of Copyright Act interpretation, the Supreme Court held parties cannot recover certain costs under the Copyright Act. The Court clarified that the phrase “full costs” only refers to the costs already outlined elsewhere in the law for awarding costs in federal litigation.

After a jury awarded Oracle damages for Rimini Street’s infringement of its copyrights, the district court also awarded Oracle $12.8 million in costs. This award, which included costs of expert witnesses, e-discovery, and jury consulting, was affirmed by the Ninth Circuit.

The Supreme Court reversed, holding that “full costs” under the Copyright Act only refers to six categories of recoverable costs outlined in the general costs statute, 28 U.S.C. §§ 1821, 1920. The term “full costs” in the Copyright Act means the costs recoverable under the general costs statute, and the word “full” grants no further authority to a court to award costs beyond those generally available. These generally available costs include clerk fees, transcript fees, and compensation of interpreters, among others.

The Court’s decision increases the predictability of a party’s liability for, or recovery of, costs and will lead to better estimates of the financial consequences of copyright litigation. We may see parties with limited resources more seriously consider incurring certain expenses like expert witnesses and jury consulting if the expenses are not covered under the general costs statute.

With a few other intellectual property cases still pending before the Supreme Court in 2019, we look forward to further developments in intellectual property law.