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IP/Entertainment Case Law Updates

Derek Andrew, Inc. v. Poof Apparel Corporation

Resolving an issue previously unaddressed in the Ninth Circuit, the Ninth Circuit Court of Appeals held that § 412(2) of the Copyright Act bars recovery of statutory damages and attorneys’ fees for acts of infringement occurring even after copyright registration, where the post-registration infringement is a continuation of an infringement that commenced prior to registration. In this case, plaintiff clothing manufacturer owned the copyrights to the “hang-tag” affixed to items in its clothing line. The defendant infringed the plaintiff’s copyrights by affixing nearly identical hang-tags to items in its own clothing line. The defendant’s first act of infringement occurred prior to the effective date of the plaintiff’s copyright registration, but the defendant continued to affix the infringing hang-tags to its clothing past the registration date. The district court entered judgment for the plaintiff on its copyright, trademark and state law claims, and awarded the plaintiff $15,000 in statutory damages under the Copyright Act and $296,090.50 in attorney’s fees.

The Ninth Circuit reversed the award of statutory damages, relying on § 412(2) of the Copyright Act. Section 412(2) bars the recovery of statutory damages and attorneys’ fees “for any infringement of copyright commenced . . . before the effective date of its registration . . . .” Joining the other circuits that have addressed the issue, the Ninth Circuit held that “the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one continuing infringement under § 412.” As applied to the facts, the Ninth Circuit held that because the defendant “began its infringing activity before the effective registration date, and it repeated the same act after that date each time it used the same copyrighted material,” the post-registration infringement was “an ongoing continuation” of the pre-registration infringement and thus did not merit an award of statutory damages under the Copyright Act.

Also relying on § 412, the Ninth Circuit held that the plaintiff was not entitled to attorneys’ fees to the extent that they were based on violations of the Copyright Act, and remanded for a recalculation of the appropriate award of fees under the Lanham Act claims alone.