Valancourt Books, LLC v. Garland

Holding that U.S. Copyright Office’s demand that book publisher submit physical copies of works under Section 407’s mandatory deposit requirement violated Takings Clause of U.S. Constitution, D.C. Circuit Court reverses district court’s grant of summary judgment in government’s favor.

Valancourt Books LLC, an independent publisher, brought suit against the U.S. Attorney General and the Register of Copyrights, alleging that the Copyright Office’s application of Section 407 of the Copyright Act—which requires owners to deposit physical copies of published works in the Copyright Office for use or disposition of the Library of Congress or else submit to statutory fines—amounts to an unconstitutional taking of its property in violation of the Fifth Amendment and an invalid burden on its speech in violation of the First Amendment. The district court granted summary judgment in favor of the government, but on Valancourt’s appeal, the D.C. Circuit reversed, holding that as applied by the Copyright Office in this case, Section 407’s mandatory deposit requirement violated the Takings Clause of the Fifth Amendment. 

Valancourt publishes rare and out-of-print fiction and prints copies of its books for customers “on demand,” i.e., in response to a specific order or request. Having never deposited copies of its works with the Copyright Office, Valancourt received a letter from the office in June 2018 demanding physical copies of 341 of its published works under Section 407 of the Copyright Act. The letter explained that failure to comply would make Valancourt liable for a fine of up to $250 per work and the total retail price of the copies demanded as well as an additional fine of $2,500 for a willful and repeated failure to comply, consistent with Section 407. Valancourt explained that it could not afford to comply with the demand, and it later filed suit, in August 2018, seeking a declaration that the application of Section 407 was unconstitutional under the First and Fifth amendments. 

Several months after Valancourt filed suit, the Copyright Office offered to accept electronic copies of the works at issue, but Valancourt rejected the offer, explaining that the offer would afford it special treatment while still subjecting other small publishers to the onerous requirements of Section 407 and that it likely could not comply with the offer because it had lost electronic copies of some of its works.

On appeal, the court first addressed the issue of whether the dispute encompassed the Copyright Office’s offer to accept electronic copies. The court concluded that the office has not withdrawn its demand for physical copies and offered to accept electronic copies only as an alternative to its continuing demand for physical copies. Therefore, the court clarified that it would only evaluate the office’s demand for physical copies. 

Although the government argued that a demand for personal property is not an unconstitutional taking if it involves a voluntary exchange for a governmental benefit, the court concluded that here, copyright owners receive no additional benefit in exchange for submitting copies of published works because copyright is instant and automatic in that it vests at the moment a work is fixed in a tangible medium of expression. 

The court noted that amendments to the Copyright Act over time underscored how the deposit requirement was untethered from the benefits of copyright protection. The court explained that under the nation’s first copyright legislation, authors were required to deposit a printed copy of their work to gain the benefit of copyright protection. The Copyright Act of 1909 eliminated that requirement and instead conferred copyright upon publication of a work with a copyright notice. Under the 1909 Act, however, mandatory deposit was nonetheless required to maintain copyright protection, because if an author failed to promptly deposit two copies of a work after receiving a demand from the Copyright Office, the copyright would become void and the author would incur a fine. The Copyright Act of 1976 made copyright automatic upon fixation and removed the loss of copyright as a sanction for failure to deposit the work, meaning that mandatory deposit became unnecessary to maintain copyright. (As the court noted, no works copyrighted before 1976 were at issue in this case.)

The government argued that Section 407’s mandatory deposit requirement could not constitute a taking because authors can simply abandon their copyright in the works in lieu of submitting the requisite copies. The court acknowledged that a known and costless option by which to abandon a copyright could be argued to provide copyright owners with a way to avoid having their property unlawfully taken. But, as the court observed, no statute, regulation or guidance from the Copyright Office suggests that an author can readily disavow copyright protection and avoid the deposit requirement. To the contrary, the Copyright Act gives no indication of any abandonment option or how to effectuate it. Nor, as the court said, is there any indication in practice that the Copyright Office informs owners of such an option when issuing demands to enforce Section 407. Valancourt, for example, was never informed of such an option. Furthermore, the Copyright Office’s own guidance requires copyright owners to pay a $125 fee to register a notice of abandonment, which, in the court’s view, diminished any possibility of an owner’s gaining the impression that there might be a costless abandonment option readily realizable through a simple communication to the office.

The court also rejected the government’s argument that Valancourt consented to Section 407’s deposit requirement by choosing to place copyright notices on its works, noting that nothing in the statute or the accompanying regulations suggest that a copyright owner agrees to deposit copies by using copyright notices. Instead, Section 407 states that the deposit requirement is triggered by mere “publication” of the work.

Having decided the case on the Takings Clause, the court declined to consider Valancourt’s First Amendment challenge. 

Summary prepared by Frank D’Angelo and Jennifer Kahn.