July 6, 2021
The Supreme Court has granted a petition for writ of certiorari in Unicolors, Inc. v. H&M Hennes & Mauritz, L.P. to determine whether invalidation of copyright registrations under Section 411(b) of the Copyright Act has an intent-to-defraud the Copyright Office requirement.1 A valid copyright registration is a prerequisite to bringing an infringement suit in federal court. Bona fide errors on copyright registration applications are typically little cause for concern of invalidation, however, because sound policy dictates that ‘intellectual property thieves’ be barred from invalidating a registration solely because a checkbox was incorrectly marked on the application.2 Indeed, Section 411(b) prescribes that a registration certificate is valid even with inaccurate information unless (i) the applicant had knowledge of the inaccuracy and (ii) that inaccuracy, if known, would have caused the Register of Copyrights to refuse registration.3 Further, when inaccuracy of a registration is alleged under Section 411(b), the court shall request that the Copyright Office advise on the issue of refusal.4 However, such a defense to invalidate a registration for inaccurate information is rarely brought because the registration certificate alone is usually sufficient to demonstrate validity.5 There is little doubt that Unicolors, fresh off of a victory in the Central District of California, was surprised when the Ninth Circuit reversed and remanded the case back to the district court to determine whether the Copyright Office would have refused its registration application for a collective work of fabric designs had it known of the inaccuracies alleged by H&M.6
Under the Copyright Act, authors of copyrightable works can utilize the collective work registration to save on costs because only one filing fee is paid for the protection of many different works published together. However, Copyright Office regulations prescribe that applicants of published works may only take advantage of a collective work registration for “all copyrightable elements that are otherwise recognizable as self-contained works, that are included in a single unit of publication, and in which the copyright claimant is the same[.]”.7 “Publication” is defined as the initial “distribution” or “offering to distribute” the work to the public by sale or other transfer of ownership.8
In 2011, Unicolors registered the design at issue as part of a single collective work registration consisting of thirty-one separate designs, even though only twenty-two of the works, including the design at issue, were placed in showrooms for public viewing and sale while the other nine were held back for exclusive use by individual customers.9 The dispute with H&M arose four years later when H&M began selling clothing allegedly bearing the one Unicolors’ copyrighted design at issue.10 H&M brought a defense to invalidate Unicolors’ collective work registration for inaccuracies based on the publication information. The district court found that “[b]ecause invalidity due to inaccuracies in a registration requires the copyright claimant to have known its application was inaccurate, a party asserting invalidity must show some indication that the claimant intended to defraud the Copyright Office.”11 The district court found that H&M willfully infringed and that Unicolors’ registration was valid because: (1) Unicolors had not intended to defraud the Copyright Office; and (2) although Unicolors had marketed and sold the works comprising the collective registration separately, this did not mean that they were not published on the same day.12
On appeal, the Ninth Circuit reversed on the issue of whether Unicolors’ registration was valid and remanded finding that Unicolors had not “published” all thirty-one of the works at the same time.13 Importantly, the Ninth Circuit found there was no intent-to-defraud requirement for invalidity.14 On the issue of whether there were inaccuracies, the circuit court interpreted for the first time the statutory language to construe collective works eligible for a single copyright registration as applicable to works that are first published in a “singular, bundled collection.”15 Since some works in the Unicolors’ collective registration were initially available only to specific customers, the court held that the thirty-one works were not published in a “bundled collection” and that was an inaccuracy in the registration.16 Further, the Ninth Circuit found that Unicolors admitted in district court that it had knowledge of this inaccuracy with its registration so under Section 411(b) the district court was required to request the Copyright Office’s advice on remand about whether the Copyright Office would have refused registration had they been aware of the inaccuracies.17
In its petition to the Supreme Court for a writ of certiorari, Unicolors presented the question of whether Section 411(b) required a finding of fraud or bad faith and highlighted a circuit split between the Ninth and Eleventh Circuits.18 In the Eleventh Circuit case Roberts v. Gordy, the court held that a showing of “intentional or purposeful concealment of relevant information” is required to invalidate a copyright registration and is codified in Section 411(b).19 This decision also contrasts with another recent Ninth Circuit case Gold Value Int’l Textile v. Sanctuary Clothing where the court held that providing inaccurate information on a copyright application “with knowledge that it is inaccurate” was sufficient for invalidation.20 H&M argued that no review was needed as there was no meaningful circuit split and Unicolors’ knowledge of the inaccuracies in its registration meant the registration was invalid no matter what the standard.21
Circuit uniformity regarding the requirements for invalidating a copyright registration for inaccuracies is important because copyright registration is a precursor to bring suit against infringers. Without clarity about the level of requisite scienter necessary for invalidation, there will be different outcomes in copyright cases regardless of the merits of actual infringement. On one hand, we do not want valuable copyrights to be invalidated based on trivial mistakes made during the registration process where many registrants are non-attorneys who are just trying to afford their works more protection. On the other hand, copyright registration is a relatively straightforward process that confers significant benefits to an otherwise automatic attribution of rights, and these benefits should not be conferred to applicants who are presenting inaccurate information to, in some cases, circumvent administrative obstacles such as fees or ineligible subject matter. Having granted certiorari, the Supreme Court will hopefully provide guidance on whether mere knowledge of copyright application inaccuracies is sufficient or if there must be an intent-to-defraud the Copyright Office for invalidation.
1Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 959 F.3d 1194 (9th Cir. 2020), cert. granted, 2021 U.S. LEXIS 2770 (June 1, 2021) (No. 20-915).
2See 2 Nimmer on Copyright § 7.20 (2021).
317 U.S.C. § 411(b) (2021).
4Id. at § 411(b)(2).
5See Unicolors, 959 F.3d at 1197.
6Id. at 1200.
737 C.F.R. § 202.3 (2021) (emphasis added).
817. U.S.C. § 101 (emphasis added).
9Unicolors, 949 F.3d at 1196.
11Unicolors, Inc. v. H&M Hennes & Mauritz L.P., 2018 U.S. Dist. LEXIS 233141, at *7-8 (C.D. Cal. 2018).
12Id. at *7-9.
13See Unicolors, 959 F.3d at 1198-99.
15Id. at 1998.
17Id. at 1200.
18Petition for Writ of Certiorari at 10, 14, Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 2021 U.S. LEXIS 2770 (2021) (No. 20-915).
19877 F.3d 1024, 1029 (11th Cir. 2017).
20925 F.3d 1140, 1147 (9th Cir. 2019).
21Brief in Opposition at 17, 24, Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 2021 U.S. LEXIS 2770 (2021) (No. 20-915).