By Shane Wax
During the Supreme Court’s Fall 2021 term, the Court took up the matter of Unicolors v H&M to interpret Section 411 of the Copyright Act, which was amended in 2008 to codify a judicially created defense known as “Fraud on the Copyright Office.”
Under Section 411(b) of the Copyright Act, a copyright registration certificate “satisfies the requirements of” Sections 411(a) and 412, “regardless of whether the certificate contains any inaccurate information.”[1] In turn, Section 411(a) requires a copyright owner to register their copyright before filing an infringement suit,[2] while Section 412 permits a copyright owner to elect statutory damages instead of actual damages in an action for copyright infringement of a published work provided that the published work was registered before the first act of infringement.[3]
However, Section 411(b) also provides an exception to this rule. If an alleged infringer can establish that the plaintiff’s copyright application included inaccurate information that was included “with knowledge that it was inaccurate,” then the court must refer the matter to Copyright Office for an opinion as to whether registration would have been refused had inaccuracy been known.[4] The question in this case centered on the first prong: “the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate,” and particularly whether “information” included legal conclusions as well as factual mistakes.
As discussed in our reporting of this case following oral argument, Chief Justice John Roberts and Justices Stephen Breyer, Sonia Sotomayor and Brett Kavanaugh conveyed similar attitudes at oral argument, predicting an outcome in favor of Unicolors that would broadly favor copyright registrants naïve to their mistakes of law. This prediction was proven accurate as the Supreme Court released its opinions on February 24, 2022, with Justice Breyer writing a 6-3 majority opinion joined by these Justices as well as Justice Elana Kagan.[5]
To explain the dilemma before the Court, Justice Breyer employed an analogy about bird-watching: a novice bird-watcher might see a bird with red feathers and mistakenly conclude that the bird is a cardinal rather than a tanager – perhaps a mistake of fact because the bird-watcher did not notice that the red bird had black wings, a feature of tanagers, or perhaps a mistake of law because the bird-watcher simply is naïve and cannot properly label birds that appear similar in some ways. As he explains for a majority of the Court, a copyright registrant is not to be punished for labeling errors arising out of mistakes of law.
This is because, first and foremost, Section 411 refers to “information” and the “information” required to be included in a copyright application under Section 409 includes legal conclusions, such as whether the work sought to be registered is a compilation, a derivative work or a work made for hire, and when and where the work was published. Thus, from a statutory interpretation standpoint, “information” must be read to include legal conclusions. This conclusion is buttressed by the fact that other provisions in the Copyright Act confirm that “knowledge” means “actual, subjective awareness of both the fact and the law,” and in the absence of explicit wording imposing a different standard, it must be inferred that Congress intended to incorporate the existing standard. Indeed, the Court acknowledges that “applicants include novelists, poets, painters, designers, and others without legal training” and “[n]othing in the statutory language suggests that Congress wanted to forgive those applicants’ factual but not their (often esoteric) legal mistakes.”[6]
Likewise, the Court found no evidence that the Congress intended to alter the well-established application of the judicial doctrine of Fraud on the Copyright Office, which was never applied by courts as strictly as sought by H&M. In fact, according to Justice Breyer, the legislative history behind Section 411(b) indicates that Congress enacted it with the intent of “eliminating loopholes that might prevent enforcement of otherwise validly registered copyrights,” and that Congress specifically “intended to deny infringers the ability to exploit” mistakes in the registration documents, “such as checking the wrong box on the registration form.”[7]
In response to the concerns raised by H&M that this interpretation is too lenient on copyright holders, the Supreme Court noted that lower courts “need not automatically accept a copyright holder’s claim that it was unaware of the relevant legal requirements of copyright law.” An infringer can point to circumstantial evidence of willful blindness, which may include “the significance of the legal error, the complexity of the relevant rule, the applicant’s experience with copyright law, and other such matters” to persuade a judge or jury “to find that an applicant was actually aware of, or willfully blind to, legally inaccurate information.”[8]
Therefore, we now have clarity that Section 411(b) requires that an alleged infringer must first establish that a copyright registrant had actual, subjective knowledge of mistakes of fact and law when filing their copyright application before a Court can proceed a referral to the Registrar of Copyrights for an opinion on materiality and before a Court can invalidate a U.S. Copyright Registration for the purposes of Section 411(a) and 412.
[1] 17 U.S.C. § 411(b).
[2] Id. § 411(a).
[3] Id. § 412(2).
[4] Id. § 411.
[5] See Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., No. 20-915, 595 U.S. — (Feb. 24, 2022), available at https://www.supremecourt.gov/opinions/21pdf/20-915_pol1.pdf.
[6] Id. pp. 5-6 (citing 17 U.S.C. §§ 409(4), 409(8), 409(9) and comparing to language found in 17 U.S.C. §§ 121A(a), 512(c)(1)(A), 901(a)(8), 1202(b) and 1401(c)(6)(C)(ii)).
[7] Id., p.7.
[8] Id., p.8.