Recent SCOTUS Decisions Likely to Have Impact on Copyright Owner’s Decisions to Register Copyright and Institute Infringement Action
Copyright litigation can be lengthy and expensive. And, in light of two recent United States Supreme Court decisions, the delays and costs associated with copyright litigation are likely to increase. Understanding how these decisions affect copyright owners as potential litigants can help to mitigate unexpected delays and unanticipated expenses—or at least forewarn clients of the possible risks of infringement litigation.
In March 2019, the Supreme Court held, in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC1, that a claimant may not commence a copyright infringement suit until the Copyright Office examines an application for registration and issues a registration certificate. Prior to this decision, some courts held that simply applying to register a copyright was sufficient to permit a copyright holder to commence an infringement lawsuit for purposes of 17 U.S.C. § 411. Here, the Supreme Court held that registration occurs upon issuance of a registration certificate. This means that a copyright owner may not sue for infringement unless and until the Copyright Office has issued a registration certificate.
Practically speaking, the Fourth Estate holding means that copyright owners that anticipate using infringement litigation to defend their rights should file an application to register the copyright as early as permitted by law. The registration process may take several months (the average processing time of a registration application, according to the Copyright Office, is five months), and, while a copyright owner may later be able to recover for an infringement that occurred during the pendency of a registration application that eventually proceeds to issuance, a preliminary injunction against the infringement may be unavailable until registration.
The Court’s holding in another case, Rimini Street, Inc. v. Oracle USA, Inc.2, published on the same day as Fourth Estate, raises important considerations regarding a copyright owner’s decision to commence an infringement action. Prior to Rimini Street, a court sitting in an infringement action was permitted to award “full costs” to the prevailing party. However, in Rimini Street, the Court definitively narrowed the scope of “full costs” to the six categories enumerated by Congress in 28 U.S.C. § 1920, a general statute governing awards of costs. The six categories of litigation expenses enumerated in § 1920 are: (1) fees of the clerk; (2) fees for printed or electronically recorded transcripts necessarily obtained for use in the case; (3) fees and disbursements for printing and witnesses (which has been interpreted to exclude fees paid for expert witnesses); (4) fees for and related to exemplification; (5) docket fees; and (6) compensation, fees, expenses, and costs of court-appointed experts and interpreters.
Notably absent from the six enumerated categories of qualifying costs are expenses involving expert witness fees, e-discovery, and jury consulting. A court may not award a prevailing party, under Rimini Street, these types of costs. For Oracle, this meant paying $12.8 million of its own litigation expenses. In light of Rimini Street, it is even more important for copyright owners to carefully consider the risks of infringement litigation and to weigh such risks against the potentially significant costs that may arise from the litigation.
Fourth Estate and Rimini Street are likely to change the landscape of copyright infringement litigation in that copyright owners will need to carefully assess the likelihood of commencing a lawsuit to defend their copyright, as well as the likelihood of success in any such lawsuit, so that they may anticipate and prevent unnecessary delay and expense.
Sarah M. Gorsche, Summer Associate
Patrick M. Kennedy
1 Fourth Estate v. Pub. Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881 (2019).
2 Rimini St., Inc. v. Oracle USA, Inc., 139 S. Ct. 873 (2019).