Two Unanimous Supreme Court Opinions Regarding the Copyright Act

It was an eventful day for copyright law on Monday, March 4, as the Supreme Court of the United States issued two unanimous opinions, both involving provisions of the Copyright Act.  The decisions were fittingly both issued on the 110th anniversary of the 1909 Copyright Act. The office of our counsel, Nancy Wolff, Cowan, DeBaets, Abrahams & Sheppard LLC,  wrote a review of these decisions and how they will impact copyright infringement cases going forward.

You can read the review of Public Benefit Corp v Wall Street.com and LLC and Rimini Street , Inc v Oracle USA, Inc. here

Supreme Court Hands Down Critical Decisions in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLCand Rimini Street, Inc. v. Oracle USA, Inc.,Resolving Circuit Splits Over Interpretation of Copyright Act Provisions

It was an eventful day for copyright law on Monday, March 4, as the Supreme Court of the United States issued two unanimous opinions, both involving provisions of the Copyright Act.  The decisions were fittingly both issued on the 110th anniversary of the 1909 Copyright Act.

In the first case, Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC,No. 17–571, the Court, in an opinion authored by Justice Ginsburg, resolved a long-standing circuit split over whether a copyright owner can sue in federal court with only a copyright application in hand, or whether a completed registration is necessary.  The Court held that “registration . . . has been made” under Section 411(a) of the Copyright Act—and thus an infringement suit may be instituted—when the Copyright Office grants or denies registration after evaluating the copyright application (coined the “registration approach”) rather than when a copyright owner merely submits the application, materials, and fee required for the registration to begin processing (the “application approach”).

In the second case, Rimini Street, Inc. v. Oracle USA, Inc., No. 17-1625, Justice Kavanaugh delivered the option for the Court, holding that Section 505 of the Copyright Act, which allows a party to recover “full costs,” does not authorize appellate courts to award litigation costs beyond the categories enumerated by Congress in the general costs statute codified at 28 U.S.C. § 1821 and § 1920.  Such “costs” are limited to fees for the clerk and marshal; transcript, copyright, and docketing fees; disbursements for printing and witnesses; and the compensation of court-appointed experts and certain special interpretation services. The Court rejected Oracle’s position that “full costs” under Section 505 included expert witness fees, electronic discovery expenses, and jury consultant fees.

Both of the Court’s determinations are instructive, as they clarify the legal landscape for copyright litigants who have been grappling with inconsistent applications of the Copyright Act for years.

The “registration approach” adopted in Fourth Estateincentivizes copyright owners—more than ever—to register works with the Copyright Office and will likely incite an uptick in registrations. While there were many benefits to registration prior to this decision, now, if a copyright owner fails to register works prior to discovering an infringement, she will have to wait an average of seven months to sue (the Copyright Office’s average processing time), and the work may continue to be infringed without recourse in the interim.  There is, of course, the option of invoking the Copyright Office’s Special Handling process, but it comes with a $800 special handling fee, which may not be an attractive or feasible alternative for some.

Furthermore, creators who have yet to register works and are running up against the three-year statute of limitations for infringement may be out of luck if they file an application and the Copyright Office does not process it in time.  The best practice for content owners is to apply for registration as soon as possible, even before infringement is anticipated or suspected.  Those who have filed lawsuits based on applications that have not yet been processed should take advantage of the Special Handling process, if possible, otherwise the claim may ultimately be dismissed as untimely.

The limitation on recoverable fees fashioned by the Rimini Street decision may also have far-reaching implications, especially for individual creators and litigants who cannot bear high litigation costs without the chance for recovery.  The ruling sounded a death knell for a copyright litigant’s ability to recover fees for expert witnesses, electronic discovery platforms, and jury consultants, which have become increasingly prevalent in copyright cases in the digital age.

For example, while music and software cases have almost always involved experts, matters involving “viral” infringements often call for specialized experts to address novel copyright issues.  In such highly technical cases, retention of a knowledgeable expert may make or break the case, making the choice of whether to hire without the option for recovery of those fees all the more difficult, especially for those unable to afford the costs.  Additionally, as the use of e-discovery platforms has become nearly ubiquitous, payment for such services has become a necessity for a litigant to maintain an equal footing with their opponent.

The Rimini Street ruling will certainly force copyright litigants to face difficult decisions in how they want to proceed with their case, especially if they are facing an opponent with deep pockets who can afford to hire numerous experts, pay for e-discovery platforms, and retain jury consultants.  Clients should discuss their financial limitations with counsel before deciding to commence a copyright action or how to defend against a copyright action, as they may have to bear the burden of certain unrecoverable costs to prevail.

 

Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC

Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, United States Supreme Court, — U.S. –, 2019 WL 1005829 (March 4, 2019)

** This does not change the practice in many federal districts, such as NY,  that always followed the registration rule

On March 4, the Supreme Court ruled unanimously that a “‘registration … has been made’ within the meaning of 17 U. S. C. § 411(a) not when an application for registration is filed, but when the Register has registered a copyright after examining a properly filed application.”  As a result, suits for copyright infringement cannot be commenced until after the Copyright Office issues (or denies) a registration, but the Court noted that plaintiffs can seek damages for infringement that occurred before and after the registration was granted.

The Supreme Court affirmed the decision in the Eleventh Circuit which ruled in May 2017 that Fourth Estate was barred from bringing an infringement suit because it did not yet have the certificate of registration for its copyright, insisting that a litigant must wait to assert its rights until the registration was issued.  The Eleventh Circuit’s opinion explicitly recognizes the current circuit split between the “application” approach (a copyright owner may sue upon filing a complete application), followed by the Ninth and Fifth Circuits, and the “registration” approach (a copyright owner must wait until the application is processed and registration has been granted or denied), followed by the Tenth Circuit and now the Eleventh.  On June 28, 2018, the Supreme Court granted certiorari.

The Supreme Court based its ruling on its reading of §411(a), noting that the second sentence allows the Register of Copyrights to be sued upon refusal of registration, and adopting the application approach would make this provision “superfluous”.  In addition, Justice Ginsburg noted that Congress has also enacted a provision allowing for “pre-registration” for works, such as movies, which may be subject to infringement before registration is granted; these provisions would also be unnecessary if registration did not have to issue before litigation could commence.  Read in its entirety the statute contemplates that there is affirmative action required by the Copyright Office to effectuate registration, and not simply the submission by the right holder of a complete application.  The Court analogizes waiting for the registration to issue before commencing litigation as similar to having to exhaust administrative remedies.  Lastly, because damages from infringement before registration are available, the copyright holder can be made whole for any infringement that occurs from the creation of the work.

CEPIC Statement on Works of Visual Arts in the Public Domain

CEPIC expresses its extreme disappointment at the EU copyright Directive as we see that last minute compromises were reached that will directly hurt CEPIC members specialised in fine art, history and vintage photography. Some of these libraries are attached to cultural institutions and contribute to their financing – this not only by “selling postcards” as the agreed compromise text implies.

Indeed, the provisions related to works of visual arts in the public domain were agreed behind closed doors, following no impact assessment and no consultation with the various sectors that will be affected.

With no evidence as to the advantage to the larger public, the  compromise provisions will directly hurt the legitimate interests of small private businesses who support cultural heritage and in some European countries the cultural sector institutions who have invested millions in the digitization of  photography and contribute, avoiding tax-payer cost, to the preservation and distribution of cultural heritage and its promotion to the wider public. This provision is discriminatory to photographers working for cultural institutions, and in some cases it discriminates against the interests of those cultural institutions themselves who rely on income generation derived from licensing works of visual arts in their collections. In the long run the larger public will suffer from a lack of investment in digitization, indexation and proper documentation of cultural heritage material.

We regret that these provisions were introduced without proper assessment and that the private heritage sector was used as a “pawn” in a larger negotiation. As a result we see that the EU copyright directive will penalise rather than promote large parts of the visual sector.

We ask for Chapter 3 Art. 10 b) and Recital 30 a) to be removed.


Executive Director (Tel. Mobile + 49 177 2332 514) CEPIC Center of the Picture Industry, Tel. Berlin + 49 30 889 101 60, www.cepic.org/contact

The European Commission Has Reached an Agreement Over New Copyright Rules

The European Commission has reached an agreement over new copyright rules, including the controversial Article 13 that will require platforms like YouTube to tackle copyright infringements at the point of upload.

One of the objectives of the of directive is to “reinforce the position of creators and right holders,” helping them to be remunerated for the online use of their content by user-uploaded-content platforms. Read the article on Digital TV Europe.com  here .

CEPIC also reviews the agreement on their site here 

Our DMLA Counsel and Legal Committee is reviewing the agreement and will have further information on its impact on the industry.  Stay tuned.

VisualSteam Announces the Results of its 6th Annual Survey of Creative Pros on Stock

Image Licensing

“Free” (CC0) images have burst onto the market with as many creatives using free images as those using microstock.

VisualSteam announces the release of its 6th Annual Survey of Creative Pros: Stock Image Licensing. The survey is sent to more than 20,000 art buyers, art directors, art producers, creative directors, photo editors and marketing professionals around the world. Survey results provide valuable information to creators, licensors and marketing professionals and offer a glimpse into what is driving image licensing today.

This year’s report shows a progression but also a continuing change in the market. The importance of visuals to user engagement and retention continues to drive a substantial increase in demand. The volume of images used continues to grow as does social media and communications, in general. Price and budgets impact purchasing in a significant way, as does quality. Once again Getty (gettyimages.com) and Shutterstock (shutterstock.com) are battling it out for the hearts and minds of Creatives. However, 45% of those surveyed say they are using“free” image content. Free image provider Unsplash (unsplash.com) appears in the top ten of “favorite,” top-of-mind resources.

“There are many interesting pieces of data in this year’s report” says Leslie Hughes, VisualSteam’s Founder and Strategic Advisor. “Anyone creating or licensing visual content can learn about shifts in preferences, and the wants and needs of Creative Pros. We are also trying to build in more trend data, comparing results with previous years.”

VisualSteam wants to recognize and thank the sponsors of this year’s survey, Alamy (alamy.com), FootageBank (footagebank.com) and iSPY Visuals (ispyvisuals.com). Their support allows us to continue to produce the survey at an affordable price.

To request a copy of this year’s survey, please email sales@visualsteam.com. For more information about VisualSteam, please go to www.visualsteam.com, or email info(at)visualsteam(dot)com.

About Visual Steam

VisualSteam (www.visualsteam.com) is a marketing services organization that specializes in digital transformation and visual content markets. We work with producers, creators, and distributors to better understand and respond to market needs and define strategies for expansion and execution. We also work with clients/image consumers and content marketers to help them understand, acquire and manage visual content.

Photos in 2019: A Trending Forecast from Scopio


As creatives know, there have been huge shifts in the visual landscape this year, especially due to what is popular and getting the most engagement on Instagram, where 50 million photos are being shared every single day.

At this staggering rate of content growth, at Scopio we have seen these trends get pushed through to the types of photos businesses are looking to use and connect in their storytelling. Scopio wanted to recap what they are and share what we think could add value to these trends. Hopefully, this trend report can help creatives spot unique moments and share them in their storytelling. Dive into Isolation and Solitude, Drone and Aerial, Mystical interpretations, and Activism as growth content areas.

Read the full article here

We are pleased to welcome Scopio back as DMLA Members!

Copyright Office Releases “Copyright and Visual Works: The Legal Landscape of Opportunities and Challenges”

The U.S. Copyright Office has submitted a letter to Congress detailing the results of the Office’s public inquiry on how certain visual works, particularly photographs, graphic artworks, and illustrations, are registered, monetized, and enforced under the Copyright Act of 1976. The Office sought commentary on the marketplace for these visual works, as well as observations regarding the real or potential obstacles that creators and users of visual works face when navigating the digital landscape. A number of stakeholders raised specific issues they face on a regular basis regarding current copyright law and practices that fall within three general categories: (1) difficulties with the registration process; (2) challenges with licensing generally and monetizing visual works online; and (3) general enforcement obstacles.

The Copyright Office takes these concerns seriously and has already taken steps to address them where it can, most notably with the ongoing Office modernization efforts in preparation for a wholesale technological upgrade to the Office’s systems. In other areas, the Office finds that legislative action is the best solution. The Office continues to strongly support the idea of a small copyright claims tribunal, as well as a legislative solution to the orphan works conundrum. Congress’ action in these two areas would go far to alleviate several important concerns raised by visual artists.

The letter, public comments, and background material are available on the Copyright Office website here

DMLA 2019 Conference Returning to Marina del Rey

The DMLA Executive Board is pleased to announce that the 24th Annual DMLA Conference will be returning to Marina del Rey for 2019! Los Angeles was the overwhelming choice of the people surveyed from this year’s event.

We hope you make your plans early to send your representatives to this wonderful venue, The Marriott Marina del Rey. We will be building on the success of this year and will be bringing in even more exciting and inspiring sessions.

Mark your calendar for: October 27th thru October 29th, 2019.

HAPPY NEW YEAR!!