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The deepening appellate divide over when copyright owners can sue
May 22, 2017 / 7:50 PM / 6 months ago

The deepening appellate divide over when copyright owners can sue

(Reuters) - The 11th U.S. Circuit Court of Appeals ruled last week in Fourth Estate v. Wall-Street.com that copyright holders can’t sue for infringement until the U.S. Copyright Office has registered their works, deepening a split in the federal circuits over whether the copyright enforceability kicks in when IP owners apply for protection or when the federal government acts on their applications.

The U.S. Supreme Court held in 2010’s Reed Elsevier v. Muchnick that federal courts have jurisdiction over actions involving unregistered copyrights, but reiterated that copyright owners have to register their works in order to sue.

The justices did not specify when the moment of registration occurs. The 10th Circuit, now joined by the 11th, requires copyright holders to have completed the application process and obtained formal registration. The 5th and 9th Circuits have said registrants can sue as long they’ve filed applications to register their works. The 7th Circuit, according to the 11th Circuit’s ruling last week, has gone both ways, and the 1st and 2nd Circuits have so far declined to take sides, even though they’ve both acknowledged the split.

The muddle is not merely a technicality, either. According to the Copyright Office, it takes between six and 10 months for applications to be processed and copyrights to be registered. The statute of limitations for copyright infringement is three years. So as the 11th Circuit noted in the Fourth Estate case, if you want to enforce control over your IP, you don’t have a lot of time to waste in applying to register your copyright.

Florida-based Fourth Estate, which bills itself as “an international, independent nongovernmental journalism public benefit corporation,” argued that such a rule doesn’t make sense. The Copyright Office grants about 98 percent of the applications it receives, according to Fourth Estate. Forcing owners to wait for the bureaucratic machinery to crank to a conclusion serves no “public, private or statutory interest,” wrote the company’s lawyers at Schneider Rothman Intellectual Law Group, citing (among other things) the definitive text Nimmer on Copyright.

“The registration approach makes courts subservient to ministerial requirements and compounds the work of judges by unnecessarily forcing them to dismiss cases without prejudice,” Fourth Estate said.

The 11th Circuit held, however, that the statutory text of the Copyright Act is clear: The registration process requires action by both the copyright owner and the Copyright Office.

The Copyright Act means to encourage authors to register their works, wrote Judge William Pryor for a panel that also included Judge Beverly Martin and 6th Circuit Judge Danny Boggs, sitting by designation, which is consistent with the 11th Circuit’s interpretation of when authors can sue. “True, an owner who files an application late in the statute of limitations period risks losing the right to enforce his copyright in an infringement action because of the time needed to review an application. But this potential loss encourages an owner to register his copyright soon after he obtains the copyright and before infringement occurs.”

Wall-Street.com, which Fourth Estate accused of continuing to publish its content after ending a subscription agreement, was represented by the Geller Law Group, which didn’t return my call. I also reached out to Joel Rothman of the Schneider Rothman firm to see whether Fourth Estate planned to seek review of the 11th Circuit’s decision but didn’t hear back.

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