Tag: Featured

Unicolors v. H&M Raises Some Thorny Issues for Copyright Owners

On June 1, the U.S. Supreme Court agreed to hear a case of a highly clerical nature, but one of particular interest to photographers and other visual artists who typically register multiple works in Group registrations with the Copyright Office. To reduce filing fees and provide some organizational structure to certain applications, the Copyright Office offers various types of Group registrations. In Unicolors’s case, it registered 31 designs in 2011 under a Group registration that allows individually copyrightable, “unpublished” works to be combined in a single application in instances where they will eventually be made publicly available on a specific date (i.e. “published”) as a unit.

An example of this type of “unit” registration presented by the Copyright Office is a board game, which may have pictorial, literary, and sculptural works that could be individually registered but which will be sold to the public as a bundle of works comprising a single unit as a game. But just to keep things lively, there are other Group registration options, some of which have been adopted since 2011, when Unicolors first registered its designs.

For instance, photographs (and only photographs) may be registered in Groups of up to 750 images under a single title (e.g. “Safari 2021”).* All photos in a Group registration must either be “published” or “unpublished,” but there is no requirement that the “unpublished” photographs anticipate a simultaneous publication date, and the “published” photographs are only required to share the same publication year. Confused yet? Stay tuned.

Enter Unicolors, Inc. v. H&M Hennes & Mauritz, L.P.

Unicolors makes original designs for use in textiles, and in 2015, a jury found that retailer H&M copied one of its designs and, thus, awarded Unicolors damages and legal fees for copyright infringement. On appeal to the Ninth Circuit, however, H&M argued that the relevant Group copyright registration should be invalidated because the Group comprising 31 designs, included 9 designs that Unicolors had “confined,” meaning that they were temporarily exclusive to certain customers. H&M argues, therefore, that Unicolors registered these 9 works in the Group knowing that they would not be “published” simultaneously with the other 22 designs.

The Ninth Circuit agreed with H&M. It reversed the jury decision and remanded with an order that the Register of Copyrights be consulted as to whether Unicolors’s error, if known at the time of application, would have caused the Copyright Office to deny registration for the Group filing. As a reminder to readers, under U.S. law, obtaining a timely response to an application from the USCO is a prerequisite for U.S. works in order for the copyright owner to bring an infringement action against a defendant.[1]

The Issues

Naturally, neither the Copyright Office nor the courts seek to invalidate copyright registrations for applicants who make honest mistakes or trivial errors. And in 2008, the ProIP Act reinforced this principle by amending the copyright law such that Section 411 now states that a certificate of registration may be valid, even if it contains inaccuracies, unless:

(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and

(B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.

On that basis, and with concern for its constituencies, the American Society of Media Photographers (ASMP), joined by five other creators rights groups, filed a brief supporting the petition for a writ of certiorari with the Supreme Court, arguing that even though Unicolors knowingly filed a Group registration for “confined” and “unconfined” designs, this does not meet the standard intended by the statute. Here, the petitioners assert that an applicant must provide inaccurate information with the intent to deceive the Copyright Office in order for a court to invalidate a registration pursuant to a lawsuit.

Petitioners cite a circuit split (between the 9th and 11th Circuits) on this exact question and further argue that if the Court disagrees with the intent to deceive standard, this would disturb case law sounding in trademarks and patents. Thus, the Court granted cert on this one question, and it is a big bouncing ball to watch for copyright owners in this case. Even if the facts could ultimately show that Unicolors provided false information with the intent to deceive, the important issue is whether SCOTUS will agree that such intent must be demonstrated in order for a court to invalidate a copyright registration.

H&M argues that the intent to deceive (i.e. commit fraud) does not exist in a plain reading of Section 411 and, therefore, Unicolors’s conduct meets the standard for invalidating the registration (i.e. that it knowingly provided inaccurate information that would have caused the application to be rejected had the examiner been aware of the inaccuracy). But because that inaccuracy is alleged to be that the 9 “confined” works did not share the publication date with the other 22 works registered in the Group, there is an underlying complication afoot in this case—one that irritates a sore spot in copyright law—which is that we lack a unifying definition of “published” as a matter of law.

Although the 9 “confined” designs were apparently made available to exclusive customers on the same date that the 22 “unconfined” designs were made public, the Court could find that the “confined” designs constitute a “limited publication,” which would be synonymous with a finding that they are “unpublished” based on the relevant case law. That would satisfy H&M’s proposed standard for invalidating the effective date of protection, but it presumably would not meet the bar of intent to deceive, if the Court agrees that such intent must be present.

I will say that it seems farfetched to assume that Unicolors intentionally sought to deceive the Copyright Office in this instance just to save itself the $35 fee for filing a separate registration application for the 9 “confined” designs. More generally, if this type of error can invalidate the registration on all 31 designs, this implies a lot of uncertainty for other rightsholders. For instance, although the Group photograph registrations mentioned above are less restrictive than “unit” registrations with regard to publication dates, the photographer is barred from mixing “published” and “unpublished” works in a Group. And as mentioned, the meaning of “published” is not exactly a settled doctrine.

With independent creators like photographers so often filing Group applications by themselves, and inevitably making mistakes, one can see why the petitioners representing those constituencies want the Court to find that the standard for invalidation must meet the high bar of an intent to deceive. But more specifically, creators would be hard-pressed to find ten practitioners, legal scholars, or courts to agree upon a straightforward definition of “published” as a matter of law. If that’s the case for legal experts, how are authors filing their own registrations supposed to be sure whether a Group registration comprising a few hundred photos might contain a mix of published and unpublished works?

In a follow-up post, I will delve a little further into the specific challenges for photographers in particular, the policy implications of this case, the unsettled meaning of “published,” and some of the proposals being discussed to resolve these matters for rightsholders.

*NOTE: Thanks to attorney Leslie Burns for clarifying via Twitter: “…the old system for unpub photos was virtually unlimited number in a single reg and no titles for individual photos were required; the new GRUPH has the 750 limit but it does require titles for each photo.”

[1] In order to comply with the terms of the Berne Convention, foreign works need not be registered with the USCO in order for the rightsholder to file suit in U.S. courts.

Censorship in the ALI Restatement of Copyright Project?

Justice O’Connor, in Harper & Row v. Nation Enterprises (1985), called copyright “the engine of free expression.” This was not a novel idea. The Justice was merely summarizing a well-established relationship between an author’s copyrights and the freedom to express herself as she wishes. Freedom in artistic expression requires that the author have a degree of personal economic liberty, which obviates the need to appeal solely to state-run cultural institutions or to wealthy patrons, either of which may seek to censor or otherwise control creative expression. The American system, which grants any author a copyright and lets the market decide whether the work is desirable, has, in general, yielded a diverse bounty of creative works in which we see the speech right and copyright working in tandem.

Yet, despite the volume of empirical evidence that O’Connor’s summary is axiomatic, copyright skeptics, including the individuals who launched, and are leading, the ALI Restatement of Copyright Law, have grounded their skepticism partly on the belief that copyright is fundamentally at odds with the speech right. I have written enough posts taking issue with that assertion and will not repeat those arguments here. Instead, the purpose of this post is to call attention to hypocrisy. Because while the Reporters comprise those who so often claim to rescue speech from copyright, they are silencing dissent, even pretending it does not exist, among their own colleagues who’ve been working on the Copyright Restatement project.

On May 21, Register of Copyrights Shira Perlmutter wrote a letter to the ALI, announcing her resignation as an Adviser to the Restatement project, stating that in her new role as Register (since September 2020), it is no longer appropriate for her to be active in the project. But more importantly, Perlmutter reiterates key areas of concern that the Copyright Office has expressed with the Restatement since before her tenure as Register of Copyrights began. These are: 1) a lack of deference to the statutory text; 2) a lack of deference to the Copyright Office as the expert agency; and 3) a lack of transparency about the drafting and decision-making process. In short, the USCO questions the propriety, methodology, and process of the ALI’s first statutory Restatement project in its history. On the subject of the statutory text, Register Perlmutter states:

In the latest Tentative Draft, as in prior drafts, the “black letter” statement of the law at the beginning of each section sometimes quotes the applicable statutory provisions, but at other times rephrases them. In statutory interpretation, there is no substitute for the words of the statute itself. Rephrasing, however well-intentioned, inevitably introduces imprecision and interpretive choices. This is particularly true where the Restatement presents these statements as the law itself, not as interpretations of the law.

In essence, the Register of Copyrights is suggesting that the ALI is usurping and mislabeling the true “black letter” law—the Copyright Act. As I have described previously, the concept of “black letter” in Restatements developed as a method for restating common law. The ALI’s founders recognized the folly, indeed impropriety, of restating statutory text under the rubric of  “black letter” drafted by Reporters.[1]

A variation on this precise concern—the Restatement’s “failure to treat the text of the Copyright Act as blackletter rules”—was submitted as a proposed amendment to the Restatement, co-authored by Professors Shyamkrishna Balganesh, Jane Ginsburg, Peter S. Menell, and David Nimmer. (See full amendment text here.) For those not immersed in copyright law, these are some of the heaviest hitters in the game; they are scholars open to debate, but who should not be ignored. Nevertheless, the ALI intends to disregard their amendment, stating in an email to its authors that it will not even be considered because, “The ALI does not add to the drafts what various advisers or members think about different sections or the draft as a whole.”

In plain terms, key Advisers to the project—and the four named above are not the only ones—have repeatedly tried to emphasize the premise that embarking on a Restatement of a comprehensive federal statute requires a different approach than every other Restatement in ALI’s nearly one-hundred-year history. That approach should begin with the language in the statute and the legislative significance of every negotiated word in it. Not only has the ALI elected to ignore this advice, but it has apparently censored Advisers’ views on these fundamental questions, thereby confirming Register Perlmutter’s concerns about transparency.

ALI and the Reporters are not merely overriding dissent, they seem to want to pretend it doesn’t exist. For example, Professor Samuelson, who initiated the Restatement project, tweeted on 12/4/2019, “Five well respected scholars are the reporters and everything they say is closely reviewed by other experts, including judges.” This comment is consistent with what the scholars named above describe as ALI creating the appearance that a collective of high-octane experts is negotiating in good faith, while eliding the fact that many of those experts are dissenters.

In fact, I am told by the authors of the proposed amendment that one of the primary reasons for seeking its adoption is to stave off the perception that the mere presence of a diverse body of scholars, experts, and industry representatives (who serve as Advisers) means that the Restatement is being produced through a collaborative effort. On the contrary, their criticisms and others are apparently not being revealed to the full membership of the ALI, let alone to the public.

So, for those keeping score at home, follow the logic:  the folks who started the Copyright Restatement project are among those academics who assert that copyright must be weakened in deference to the speech right. Yet, in a process that is already dubious at inception and obfuscated for the general public by its arcane nature, the ALI and the Reporters seek to avoid acknowledging even the existence of opposition from many of the same colleagues whose credentials give the project the color of validity. Whether that meets the legal standard for compelled speech is for someone else to say, but it must feel that way to some of the Advisers.

[1] Am. Law Institute Report on Business Associations, 1924: “…it is obvious that the Restatement, if it deals with the subject [of statutory law] at all, must set forth the statutory provisions as Principles of Law or Comment.”

ALI Proceeds Toward Vote on Restatement of Copyright, Critics Ignored

On June 7 and 8, the membership of the American Law Institute will vote on several sections of the Restatement of Copyright, covering a range of topics, including categories of works, scope of protection, ownership, and transfers of rights. Restatements of Law are the primary work product of the ALI, and the century-old institution has never before embarked on a project to restate any area of law controlled primarily by federal statute.

Historically, Restatements have been written to clarify common law in subject areas like torts or contracts that lack uniformity from state to state. The purpose of a Restatement is to provide jurists and practitioners with a formal articulation on matters where the ALI project “Reporters”—these are the authors and managers of the Restatement—find judicial consensus on key doctrinal questions. As such, ALI Restatements can be highly influential, as they may be cited in briefs or in court opinions almost as if they were statutory (i.e. “black letter”) law.

So, the first conflict with the proposal to write a Restatement of Copyright is the fact that IP law already is primarily statutory law—constitutionally mandated, written by Congress, and adjudicated in federal courts. And as the Restatement project gained momentum in 2018, Members of Congress, the Copyright Office, and the Patent and Trade Office all wrote letters to ALI, all echoing very similar concerns, which then acting Register of Copyrights Karyn Temple summed up when she wrote:

Even if the [Restatement] drafters sought to remain entirely faithful to the statute or regulations, any departure from the words used in the positive law will lead to confusion and misinterpretation. Substituting words, condensing text, and otherwise tinkering with complex statutory and regulatory provisions, and the manner in which they relate to each other, will inevitably alter sense and meaning.

Nevertheless, because IP does encompass a substantial amount of judge-made law, academics like Professors Shaymkrishna Balganesh of Columbia Law School and Peter Menell of Berkeley School of Law joined the Restatement project as Advisers, believing that there are common law aspects of copyright which could benefit from a well-crafted Restatement. But once they engaged with the process, Professors Menell and Balganesh became disillusioned with both its undisciplined methodologies and its lack of transparency. For a detailed discussion about their concerns, listen to my podcast interview. But in a paper the professors published on this matter, they state:

“The ALI initially indicated that the Copyright Restatement Project would focus on common law features, but soon expanded its focus toward comprehensive restating of the copyright regime. The reporters took the common law restatement template and started to rewrite statutory text as “black letter” law. The project was soon mired in the political wrangling that has long dogged copyright reform.”[1]

Although the Reporters should take input from Advisers et al, they are not obligated to do so, and according to Balganesh and Menell, their own critiques and suggestions have fallen on deaf ears, indicating that the “process” is little more than a formality in which a very small group of individuals are writing this alternate “black letter” as they see fit. This raises a serious matter of concern for copyright owners …

Who’s Leading the Restatement Project and Why?

“In a September 2013 letter to then-ALI Director Lance Liebman, Professor [Pamela] Samuelson advocated that the ALI launch a Copyright Principles Project. Her letter held out the CPP as a model and offered to assist the ALI with fund-raising and identification of reporters and advisers.”[2]

Professor Samuelson is a copyright skeptic, and so is lead Reporter Christopher Sprigman. I am not going to attribute their views on copyright to malice, but it is a matter of record that their positions (and those of fellow Reporters) are unquestionably directed at limiting—many would say weakening—copyright law for rightsholders. Sprigman, in particular, represented Spotify in a high-profile case in which he advocated positions that would weaken copyright protection for songwriters—a conflict of interest which the ALI has been unwilling to address.[3]

Further, as the quote above states, this ball started rolling as a Principles project, which is a different kind of undertaking by the ALI, one that does not have the “black letter” influence of a Restatement. So, the fact that the scope of the proposal expanded—first from the kind of project it would be, and then to encompass more than common law areas of copyright—indicates that the agenda is to effectively amend federal law without a legislative process.

Given the Reporters’ views, they naturally have allies in the technology and internet industry, so we can hardly be blamed for assuming that Silicon Valley has something to do with seeking a tailor-made, weaker copyright law and, therefore, has its fingers in what Professor Menell describes as “the worst sausage factory ever” for its lack of transparency. More broadly, Menell warns that this Restatement project raises concerns that go beyond copyright because (and I am paraphrasing) it could become a blueprint for the next industry that wants to “support” its own “black letter” law without Congress involved.

How might the ALI Restatement influence copyright jurisprudence?

Because the ALI has never issued a Restatement in any subject of primarily statutory law, it is hard to say how much deference courts will show to the final product. We could predict, for instance, that in circuits with substantial volumes of copyright case law—namely the Second and Ninth—that these courts may give little weight to the Restatement over their own precedents. (In fact, if courts are generally dismissive of the Restatement on the grounds that it is incompatible with both statute and their own case law, this whole venture could prove to be a stain on ALI’s reputation.)

But in other circuits, or in cases that are novel to the court (called cases of “first impression”), the Restatement may be cited as the guiding interpretation of the statute. While we cannot predict this future with any certainty, there should be no doubt that the intent of this alternate “black letter” seeks to limit the efficacy of copyright for authors of works in some significant ways. The details are a bit arcane but suffice to say that the Reporters introduce unfounded legal standards related to the subjects of fixation, joint works, and copyrightable authorship. These invented standards have no basis in the Copyright Act, legislative history, or case law, and they attempt to chip away at the exclusive rights guaranteed to copyright owners.

Not Just Unprecedented, Ahistorical

Throughout the history of American copyright, Congress has amended the law in response to technological developments—not with an aim to either advance or stifle those technologies, but to ensure that new technologies do not undermine the purpose and efficacy of copyright. Today, despite overwhelming evidence that digital technology companies continue to do greater harm to authors of works than any inventors of the past, it is ironically the “digital age” that, in the minds of the Reporters, justifies weakening copyright law. As Sprigman wrote in his 2014 memo to the ALI, proposing a rationale for a Restatement instead of a Principles project, “… it falls to the federal courts to attempt to improve the fit between a mid-20th century copyright law and 21st century digital technologies.”[4]

That statement may be true, but it’s cagey as hell. Because Sprigman and Co. do not mean “improve the fit” in any way that balances the interests of rightsholders and technology developers. I say this because I’ve read their papers and their social media comments, and because I’ve read earlier draft sections of the Restatement. To say nothing of the fact that so many rightsholders are visibly being clobbered by Big Tech in the digital marketplace. So, it appears that because a small group of ideologues have not succeeded in weakening copyright law to their satisfaction via the courts or the legislature, they hope to achieve this end with the ALI Restatement project. As such, it may be difficult to commit to what I said above about malice.

[1] “Restatements of Statutory Law: The Curious Case of the Restatement of Copyright,” Columbia Journal of Law & the Arts. https://journals.library.columbia.edu/index.php/lawandarts/article/view/8096

[2] “Curious Case”

[3] Bluewater Music Services Co. v. Spotify USA Inc., in which Spotify/Sprigman argued that interactive streaming did not require a mechanical license. The court rejected this argument.

[4] Cited in “Curious Case”