Tag: Unicolors v. H&M Hennes & Mauritz

To Err is Human: Unicolors v. H&M at the Supreme Court

The Supreme Court on Monday heard oral arguments in the copyright case Unicolors v. H&M Hennes & Mauritz, L.P., a lawsuit bogged down in tiresome and tangential details, but which is important for independent creators. And speaking of tangential details, I noticed that Justice Sotomayor inadvertently used the term “patent trolls” during her brief interaction with counsel, and the reason I mention this minor gaffe is to say that if a Justice of the Supreme Court can make an honest mistake while speaking about the law, so can legal laymen. And that point is at the heart of this case.

The administrative and legal factors underlying this case are as follows: 1) timely and valid registration with the Copyright Office is required to fully enforce an infringement claim in federal court; 2) copyrights claimed in Group registrations may not comprise both published and unpublished works in the same Group; and 3) a registration may be invalidated at trial if the registration applicant knowingly provided inaccurate information and the inaccuracy, if known by the Office, would have caused the registration application to be denied. With that, I will restate the summary of the case from an earlier post.

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.

So, the big to do here is not Unicolors’s fate per se, but the independent creator who is likely to use Group registrations at the Copyright Office and file her own applications without the aid of counsel. As discussed in this post and this podcast with Steven Tepp, the possibility that a photographer, for example, will inadvertently mix published and unpublished works in a Group registration—and not know about it until some defendant in a claim seeks to invalidate the registration—is actually rather high. This exact circumstance is further aggravated by the fact that the legal meaning of “published” is not entirely settled for legal experts, let alone authors of works, and as Tepp points out, is not something the Copyright Office really needs to know at the time of registration.

“Ignorance of the law is no defense is an old principle,” stated Justice Kavanaugh at one point in response to H&M counsel, Peter Stris. “It’s got a lot less force in regulatory areas, number one. But it especially has less force when the statute itself…folds the legal portion in.” [citation omitted]. If I can summarize almost 90 pages of transcript down to a key point, that would be it. The important question in this case is whether the statutory intent of Section 411 of the Copyright Act allows for errors in law but not errors in fact when submitting information to the Copyright Office.

Misstatements of fact (e.g. author’s identity) are grounds for invalidating a copyright, while misstatements of law (e.g. whether a work is published or is a derivative work) do not automatically meet the standard of “knowingly” providing false information. Not just in copyright, but throughout many areas of law, the distinction between innocent error and fraud is an essential matter of justice. To Justice Kavanaugh’s point, none of us can lay claim to a defense that we don’t know that grand theft is illegal, but ignorance about the arcane and administrative practices of government agencies is not only forgivable but would be downright suspicious if it were not common among nearly all of us. Or to quote Justice Gorsuch, “….no human alive can probably understand the whole of this chapter.”

Although there was some discussion as to whether Unicolors itself, having ample resources, ought to have known better at the time it submitted its registration application, it sounded like the Court was not terribly persuaded by this line of argument. Justice Alito did ask Unicolors’s counsel Joshua Rosencranz what benefit his client gains by the Group registration, and the answer underscores the absurdity of the unforgiving standard for which H&M is arguing. “…under the Ninth Circuit’s theory, we saved $65,” Rosencranz replied. And there you have it. What company knowingly files incorrect information and knowingly risks invalidating its copyrights in order to save $65? It’s prima facie silliness.

The Alleged “Troll Problem” in this Story

A group of 12 legal scholars filed an amicus brief in support of H&M on the grounds that if Unicolors were to prevail, the precedent set would exacerbate the “copyright troll problem.” But the brief stumbles over reality right out of gate, when it declares, “The copyright registration process underpins the modern copyright system. Maintaining the integrity of the registration process, particularly in light of the emerging threat posed by copyright trolls, requires adherence to the registration requirements.”

Aside from the fact that there is no clear evidence that we face an “emerging threat posed by copyright trolls,” abusive litigation in any area of law does not necessarily inform the construction or application of the law itself but is properly addressed through rules of civil procedure and/or bar ethics rules. Nevertheless, the professors’ brief argues that the Court should apply H&M’s legal standard for “knowing error” as a precedent that would mitigate against trolling in general.

The brief asserts two reasons for its position:  1) that the stricter standard for accuracy makes more work for putative copyright trolls; and 2) the possibility of invalidating registrations based on application filing error provides respondents with a defense against trolls. On the second point, I will note that the cost of discovery to arrive at that defense is likely higher than any settlement (just or unjust) the alleged troll is seeking. On the first point, even copyright skeptic Justice Breyer stated empathy for the legit author beavering away at his work and committing a filing error in contrast to alleged trolls about whom he said, “If there is one group of people that it’s going to be tough to make out a claim that they didn’t really know the law, it will be the real copyright trolls because they stay abreast of everything.” In other words, trolls don’t amend the scope of copyright law, but those complaining about them appear to be doing just that.

More broadly, let’s not overstate the registration process as the “underpinning of the system.” As it stands, the U.S. registration process is confusing, bureaucratic, and as we see emphasized in this case, bogged down in certain formal requirements that are not strictly necessary to the process. No other democratic nation with rich copyright systems maintains formalities akin to ours, and many of our formalities are relics of history, serve the purposes of the collection at the Library of Congress, and are testaments to our legislative stodginess.

Compliance with registration formalities is a bargain made by the copyright owner in exchange for the ability to fully enforce her rights, but we should not heap too much praise upon what amounts to a clerical process which is at least as bureaucratic as obtaining a driver’s license and, arguably, less necessary to the purpose at hand. As such, to the extent that Unicolors in this case stands in the shoes of all creators of works, the Court must find as a matter of justice that the statutory interpretation advanced by Unicolors maintains the consequences of lying without disturbing the principle that error is still human.

Photo by: colinn

U.S. Copyright Formalities: Old Ideas in a Modern Age

In my post about Unicolors v. H&M, I tried to summarize a broader scope of issues than that the Supreme Court is likely to weigh in the case. The Court has agreed to resolve a narrow question: whether the Ninth Circuit erred by holding that the lower court was required to seek guidance from the Copyright Office “where there is no indicia of fraud or material error as to the work at issue….” And while it may be difficult for the Court to write that opinion without referring to the publication status of the works at issue, it seems unlikely that SCOTUS will say anything instructive about the underlying problem that we lack a unifying definition (or even a clear understanding) of “published” as a matter of copyright law.

Regardless of the eventual outcome in Unicolors, the difficulties this case highlights persist for many rightsholders—namely that the formalities required of American authors to secure enforceable protection of their copyrights are mired in a bog of historical precedent peculiar to the U.S. relative to comparable, copyright-rich nations. Although the United States is the leading producer of creative works by volume worldwide, it has often been a follower when it comes to modernizing copyright law and practice.

For instance, one of the most hotly contested aspects of the law—the duration of protection—is still portrayed in the blogosphere and corners of academia as an ever-expanding tide caused by major American media companies. But in truth, proposals that copyrights should last several decades after the author’s death was extant in European copyright doctrines, as a question of justice, no later than the mid-nineteenth century. The sixteen countries that first adopted the Berne Convention treaty in 1887 settled on a voluntary term of life of the author plus fifty years, which became mandatory under the terms of the convention in 1948, and was then extended by twenty years with formation of the European Union in the early 1990s.

Meanwhile, the reasons why the U.S. did not become a signatory to Berne for more than a century, finally joining in 1989, had little to do with philosophical opposition to its term lengths (the U.S. moved to the life plus fifty term in the 1976 Copyright Act) or certainly any reluctance to achieve parity in the trade of copyrighted works. It was American formalities which stood in the way and, so, abolishing or amending many of those formalities, in order to comport with Berne, was one of the major rationales for rewriting the copyright law beginning in the1960s and concluding with the Copyright Act of 1976.

Duration of protection was one subject that had to be addressed because the U.S. terms between 1790 and the current law—a fixed period with one optional renewal—was incompatible with Berne, which is why we now have a life-of-the-author-plus regime. Likewise, America’s original mandate to register a work and display a notice of copyright in order for the rights to vest in the author at all were unworkable formalities with Berne signatories who had no such rules.

To an extent, the current law embodies an incomplete break with formalities, which is why, for instance, American authors today are left to ponder the paradox that copyright attaches automatically to any U.S. work fixed after January 1, 1978 but that the rights are not enforceable through litigation without the formality of registration with the Copyright Office. And per the ruling in the Fourth Estate case (2019), legal action can only proceed after the Copyright Office has responded to the relevant application.

Registration is Something of an Anachronism

But as the Unicolors case emphasizes, it is the various rules and restrictions within the often-confusing registration process where history, statute, case law, and administrative practice have converged and calcified into a regime in need of further modernization. In fact, registration itself, while it may serve some useful purposes, actually derives from archaic practice in Anglo/American law whereby proto-copyright regimes of the sixteenth century in the London trade guild called The Stationers’ Company left traces of DNA in the U.S. Copyright Act of 1790.

Rather than register works with a trade organization—let alone one operated by the publishing industry—new American authors registered their works directly with the district courts in their home states until the Act of 1870 consolidated registration at the Library of Congress, a change instituted for the express purpose of growing the Library’s collection through the acquisition of deposit copies. But even the first Register of Copyrights, Thorvald Solberg, proposed abolishing mandatory registration during the drafting of the copyright act of 1909, arguing for a bill that, in his words:

… distinctly affirms that copyright is secured for all the writings of authors from the time of the making of their works and that copyright shall vest in the author of the work immediately upon its making and shall not depend upon the accomplishment of any conditions or formalities whatever.

So, the idea that copyright attaches at the moment of fixation, and that the law’s purpose is to secure a right that is held to exist absent formalities, hardly began with the drafting of the 1976 statutes. That quote of Solberg’s comes from a white paper written by Steven Tepp, (consultant and former senior counsel at the Copyright Office), which proposes abolishing the publication status from the registration process altogether. Written on behalf of the Professional Photographers Association (PPA), Tepp’s paper explains that although publication status is relevant in several ways in a lawsuit, it is not necessary for the Copyright Office to know or record that information at the time of registration. Tepp writes:

 From 1790 through 1977, first publication of a work was the signal act that extinguished state law (also known as common law) copyright and triggered the federal Copyright Act. Publication represented the author’s choice to distribute their work to the public: to forsake the privacy and absolute control over their work, as well as potentially perpetual copyright protection in exchange for the opportunity to exploit the work for economic gain.

The 1976 Act altered the bargain. State copyright protection was pre-empted and all works created since the 1976 Act took effect on January 1, 1978 are protected at the federal level from the moment of their creation by operation of law. Overnight, the copyright significance of publication diminished immeasurably.

Unpublished works were protected by common law copyright, and once an author chose to publish and avail himself of the federal protection, he was also required to meet all the formalities of registration, notice, etc. or risk losing protection under state and federal law. But as the categories of creative works grew well beyond the maps, charts, and books protected by the 1790 law, and the various ways to make works available expanded with technological development, the meaning of “published” naturally became detached from classical paradigms based on printing reproductions of works on paper. And the digital age has only further confused matters due to the myriad ways in which multiple parties might make works available, often without the original author’s knowledge.

Precedent That Used to Help Now a Difficulty

Most importantly, perhaps, is the uncertainty in the case law for creators—especially photographers who often register hundreds of images in group registrations—where the registration’s integrity depends upon a declaration that works in a group are either all published or all unpublished. Relevant in Unicolors is the allegation that the rightsholder registered published and unpublished works in the same group registration. And the argument that some works were unpublished turns on the likelihood that they fit the definition of “limited publication,” a judge-made doctrine originally intended to sustain justice for rightsholders. As Tepp writes:

The doctrine of limited publication has long been understood as a judicial attempt to mitigate the absolute loss of rights that could occur under the old formalities. Historically, distribution to a defined group for a limited purpose has been held to be limited publication, while distribution destined for the general public is a general publication.

So, here’s the nature of the problem revealed in Unicolors:  judicial precedent which originally prevented authors from losing their copyrights due to administrative technicalities could now serve to void Unicolors’s registration pursuant to its enforcement against H&M due to what amounts to administrative technicalities. And this despite the fact that H&M infringed one of the published works in the first place.

Hence, a central reason for a proposal like Tepp’s is that authors should not have to risk this kind of uncertainty for the sole purpose of providing the Copyright Office with information that is not germane to the registration of a work. As a follow up to this post, I am going to schedule a podcast interview with Steven Tepp for a more in-depth discussion about copyright formalities in U.S. law and how they create legal pitfalls, especially for independent and small creators.

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.