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New U.S. Supreme Court Decision Explained: Unicolors v. H&M

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Last week, in Unicolors v. H&M, the Supreme Court held that the Copyright Act’s safe harbor provision, found at 17 U.S.C. § 411(b)(1)(A), did not distinguish between a mistake of law and a mistake of fact.  Thus, the lack of either factual or legal knowledge by a copyright applicant can excuse inaccurate information in a copyright registration under the safe harbor provision.  Pursuant to this holding, the Court vacated the Ninth Circuit’s ruling, which held that a copyright applicant could not benefit from the safe harbor provision if the lack of knowledge stemmed from failure to understand the law rather than the facts.  The nation’s high court then vacated the Ninth Circuit’s ruling and remanded the case for further proceedings consistent with its decision.

What is the Safe Harbor Provision?

To commence a copyright infringement lawsuit, a plaintiff must possess a valid copyright registration.  To obtain a registration, the author of the work has to submit an application and a “deposit copy” of the work to the Register of Copyrights.

If the application contains mistakes or inaccurate information, the Copyright Act provides a safe harbor under 17 U.S.C. § 411(b)(1).  This provision states that a certificate of registration is valid regardless of whether the certificate contains any inaccurate information, unless (1) there was knowledge that the information was inaccurate, and (2) the inaccurate information, if known, would have caused the Copyright Register to refuse registration.

The exception at issue in Unicolors v. H&M regards the term “knowledge that it was inaccurate.”  H&M principally argued that Unicolors’ lack of knowledge of the law, opposed to Unicolors’ lack of knowledge of the facts, invalidated the copyright registration.  Thus, H&M argued, the Court should move to the second requirement of the safe harbor exception, whether the Register of Copyrights would have refused Unicolors’ registration had it known of the inaccurate information.

Factual and Procedural Background

In 2017, Unicolors sued H&M for copyright infringement concerning several of its fabric designs.  The designs in question related to a single application that Unicolors had filed for 31 separate designs.  H&M argued that Unicolors’ application for these works was invalid because Unicolors violated U.S. Copyright Office regulations that govern the registration of multiple works in one application.  These regulations provide that a single application for multiple works may cover multiple works only if they were “in the same unit of publication.” See 37 CFR §202.3(b)(4) (2020).

H&M argued that Unicolors knowingly included inaccurate information in its copyright application for the works that were the focus on the lawsuit.  Thus, H&M argued that Unicolors could not succeed in its infringement action because its application was invalid because Unicolors failed to meet the “same unit of publication” requirement.

The Lower Court’s Decision

After a jury trial before the U.S. District Court for the Central District of California, the jury returned a judgment in favor of Unicolors.  The jury found that Unicolors was unaware of its failure to satisfy the “single unit of publication” requirement.  Thus, Unicolors’ copyright registration remained valid under the safe harbor provision. Unicolors’ lack of knowledge concerning the regulations did not invalidate its copyright registration.

The First Appeal

The Ninth Circuit reversed the District Court’s decision, holding that it did not matter whether Unicolors was aware of its failure to satisfy the requirement because the safe harbor provision excuses only good-faith mistakes of fact, not law.  Thus, the Ninth Circuit sided with H&M regarding its argument to move to the second requirement of the safe harbor provision and remanded to the District Court with instructions to submit an inquiry to the Register of Copyrights asking whether the Register would have refused Unicolors’ copyright registration had it known of the inaccuracies.

The U.S. Supreme Court’s Decision

In an opinion written by Justice Breyer, the Court ruled that both mistakes of law and facts were protected by the safe harbor provision.  The majority provided three bases for its holding:

  1. Relevant Precedent & Statutory Language. The Court held that nothing in the text of the statute suggested that it should be interpreted to have different meanings for mistake of law as opposed to mistake of fact.  The Court relied on prior case law (see Intel Corp. Inv. Pol’y Comm. v. Sulyma, 140 S. Ct. 768 (2020) and dictionary definitions of the word “knowledge.”)
  1. Statutory Interpretation and Congressional Intent. The Court referred to several other provisions in the Copyright Act (see e.g. 17 U.S.C. §§ 409(4), 409(8), 409(9)), demonstrating that “knowledge” refers to both legal and factual knowledge.  The Court ruled that the issue of inaccurate information in a copyright registration is equally, if not more, likely to arise from a mistake of law than of fact, as many applicants are creative individuals with no legal training.  Thus, nothing in the Copyright Act suggests that Congress intended to only forgive factual mistakes.  If Congress had intended so, a number of other provisions in the statute would have explicitly said so.  (See e.g. 17 U.S.C. §§ 121A(a), 512(c)(1)(A), 901(a)(8), 1202(b)).  Cases that had been decided prior to Congress’ enactment of the safe harbor provision “overwhelmingly held” that inadvertent mistakes on a copyright registration did not invalidate a copyright.  In fact, several of these cases involved mistakes of law (See Urantia Foundation v. Maaherra, 114 F.3d 955, 963 (9th Cir. 1997); Billy-Bob Teeth, Inc. v. Novelty, Inc., 329 F.3d 586, 591 (7th Cir. 2003)).
  1. Legislative History. The Court determined that Congress intended to enact the safe harbor provision to make it easier, not more difficult, for nonlawyers to obtain copyright registrations.  The House Report stated the purpose of the provision was to “improve IP enforcement,” to “eliminate any loopholes” that might prevent enforcement and to deny infringers the opportunity to “exploit this loophole.”  Thus, the Court ruled that it would “make no sense” if the provision left copyright registrations vulnerable to invalidation simply based on a good faith misunderstanding of copyright law.

What Does this Mean for Copyright Law?

The Supreme Court’s decision is good news for copyright registrants, especially non-lawyers.  While applicants should always take extra care in filing for registration to avoid inaccuracies, good faith mistakes and misunderstandings are now unlikely to lead to consequences as serious as copyright invalidation.  Nonetheless, seeking out an experienced attorney in the area of copyright law is still advisable so you can avoid costly legal disputes concerning the validity of your copyright registration.

Photo by Nguyen Dang Hoang Nhu on Unsplash
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