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IP/Entertainment Case Law Updates

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

U.S. Supreme Court, after granting certiorari from appeal before Ninth Circuit, holds that safe harbor under Section 411(b)(2) of Copyright Act precludes invalidity of copyright registration containing inaccurate information so long as copyright holder lacks knowledge—whether factual or legal—that such information was inaccurate. 

 Unicolors Inc., which creates designs for use on textiles and garments, sued H&M Hennes & Mauritz L.P. for selling garments that infringe the copyright of one of Unicolors’ designs. After a jury verdict in favor of Unicolors, Unicolors Inc., which owns copyrights in various fabric designs, sued H&M Hennes & Mauritz L.P. for copyright infringement. The jury returned a verdict in favor of Unicolors, after which H&M sought judgment as a matter of law, arguing that Unicolors did not have a valid copyright registration for the design, which is a prerequisite for filing an infringement action, because it knowingly included false or inaccurate information on its registration application. The knowingly false information (according to H&M) stemmed from Unicolors’ filing of a single application seeking registration of 31 separate works in order to avoid paying multiple filing fees, even though some of those designs were published at different times to different customers, in contravention of the U.S. Copyright Office regulation providing that a single application may cover multiple works only if they were “included in the same unit of publication.” 

The district court denied H&M’s motion, finding that Unicolors had not known at the time it filed its application that it had failed to comply with the single unit of publication requirement and that Unicolors’ registration was valid under the safe harbor provision of Section 411(b)(1)(A) of the Copyright Act. On H&M’s appeal, the Ninth Circuit agreed that Unicolors had failed to satisfy the single unit of publication requirement (because it had offered some of the 31 designs exclusively to some customers at a different time than the rest of the designs were offered to the public). The appellate court also held that for purposes of the safe harbor, Unicolors’ lack of knowledge that it failed to satisfy the single unit of publication requirement was irrelevant because the Copyright Act only shields good faith mistakes of fact, not of law. Because the evidence at trial established that Unicolors had known that some of its designs had initially been offered only to certain customers, the safe harbor did not apply. The Ninth Circuit reversed the district court’s ruling and remanded the case with instructions to the district court to ask the Register of Copyrights to advise whether known inaccurate information in Unicolors’ copyright application would have precluded registration. (Read our summary of the appeal before the Ninth Circuit Court of Appeals here).

After granting Unicolors’ petition for certiorari, the U.S. Supreme Court held that Section 411(b) does not distinguish between a mistake of law and a mistake of fact with respect to the information included in copyright registration applications. The Ninth Circuit had incorrectly held that a copyright holder cannot benefit from the safe harbor provision if its lack of knowledge is based upon a failure to understand the law, as opposed to a failure to understand the facts. 

Under Section 411(b)(1)(A), a certificate of registration is valid despite containing inaccurate information, as long as the copyright holder lacked “knowledge that it was inaccurate.” Examining the text of the statute, case law and the plain meaning of the term “knowledge,” the Court found nothing in Section 411(b)(1)(A) suggesting that the safe harbor applies differently if the applicant makes a mistake of law versus a mistake of fact. The Court also considered other statutory provisions in the U.S. Copyright Act in reaching its conclusion that “knowledge” in Section 411(b)(1)(A) refers to knowledge of the law and knowledge of the facts. Indeed, if Congress intended to impose a greater requirement than actual knowledge, it would have done so (just as it did in other aspects of the U.S. Copyright Act). In addition, the Supreme Court found the legislative history of Section 411(b) to be persuasive and indicative of the fact that Congress wanted to make it easier for nonlawyers to obtain valid copyright registrations. Thus, the Court reasoned, “[I]t would make no sense if §411(b) left copyright registrations exposed to invalidation based on applicants’ good-faith misunderstandings of the details of copyright law.”

The Court also found H&M’s remaining arguments unavailing, vacated the judgment of the Ninth Circuit and remanded for further proceedings consistent with its decision.

Summary prepared by Melanie Howard and Mary Jean Kim

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