As we enter 2022, there are a couple of important developments every copyright owner should be aware of. One is based on a new Supreme Court decision and the other is the imminent implementation of the Alternative Copyright in Small-Claims Enforcement Act (CASE Act). These developments aim to make law enforcement actions against copyright infringers more accessible and effective. As a result, these new advances offer designers additional legal tools they can use in their intellectual property protection arsenal. The key points of Unicolors v. H&M and the upcoming CASE Act.
The Supreme Court of the United States determines that incorrect copyright registrations based on legal errors do not invalidate registrations or prevent enforcement actions.
On Thursday, February 24, 2022, the US Supreme Court heard the long-running copyright infringement dispute between Los Angeles-based fabric designer, Unicolors Inc., and fast fashion giant, H&M Hennes & Mauritz LP.
Unicolors’ lawsuit against H&M began in 2016 in the Central District of California. Unicolors claimed that H&M was incorporating one of its copyrighted fabric designs, a geometric pattern, without its permission in relation to jackets and skirts. After a jury trial that found a violation, H&M was ordered to pay nearly $ 800,000 in damages and legal fees and expenses. Following this verdict, H&M appealed to the Ninth Circuit, which overturned the decision. The Ninth Circuit felt that Unicolors’ copyright registration could be canceled for failing to meet the “single publishing unit” requirement. The appellate court referred back to the district court, instructing it to refer to the Copyright Registry to determine whether this inaccuracy would cause the registration to be denied. Before the action was postponed, Unicolors filed an appeal with the US Supreme Court.
In its 6-3 decision, the Supreme Court overturned the Ninth Circuit ruling and found that inadvertent inaccuracies in a copyright registration do not void that registration, nor preclude the right holder from making a valid infringement claim. Essential to the Supreme Court question was determining the scope of the phrase “with the knowledge that it was inaccurate”, as postulated in Section 411 (b) (1) (A), the Safe Harbor provision of the statute. Breaking from the Ninth Circuit, the Supreme Court found that Section 411 (b) does not distinguish between error of law and error of fact – in other words, both errors are justified grounds to excuse the inaccuracy of a copyright registration.
In reaching this decision, the Supreme Court cited extensive statutory references and jurisprudence consistent with the idea that forgiveness of copyright applicant’s legal errors should be included as much as errors of fact. Perhaps most central to the Supreme Court’s position was the fact that, based on the commentary accounts of the Congressional reports, the intention of Congress in enacting Section 411 (b) was primarily to benefit the non advocate for making copyright registration and enforcement easier, not harder. Therefore, canceling a copyright registration due to legal errors, especially copyright law which is “often esoteric,” would undermine the intentions of Congress.
CASE Act Small Claims Court
In December 2020, Congress passed the Copyright Alternative in Small-Claims Enforcement Act of 2020 (the “CASE Act”) which established what is colloquially known as a small claims court for claims disputes. for violation. As an alternative to appealing to a federal court, often prohibitive given the lengthy process and high legal costs, the CASE Act established the Copyright Claims Board (the “CCB”) as a quicker and cheaper alternative to federal litigation. with a monetary value not exceeding $ 30,000. Through the BCC, litigants must adhere to each other, which means that if a defendant does not wish to participate in the CCB process, the claim will not proceed. In this case, the plaintiff can still go to federal court.
The CCB court, which is expected to begin operating as soon as spring 2022, will limit legal damages to $ 15,000 and actual damages to $ 30,000 (excluding attorneys’ fees and expenses, which in bad faith circumstances are available up to an amount limited of $ 5,000). It will also offer a declaratory remedy which may include infringement / non-infringement statements.
Unlike traditional copyright litigation in the federal district court, the CCB’s rulings will be decided by a three-judge court (requiring consent between two of the three judges). Furthermore, the decisions of the BCC will not create a new law or any form of precedent and will operate only in compliance with existing statutes and the case law of the applicable federal jurisdiction.
Although the CCB is intended to reduce the entry burden for plaintiffs to sue for copyright infringement, paving the way for a new outlet for the resolution of minor disputes, the mutual consent procedure will likely involve the hearing of cases. of CCB between small parts. Given that larger defendants have a disproportionate amount of resources than smaller plaintiffs, these defendants will likely refuse to participate in CCB matters, knowing that plaintiffs will not have the resources to bring a federal lawsuit. Therefore, we suspect that the BCC will primarily serve as an alternative dispute forum for relatively small companies. However, it is a new and viable option for designers to use to assert their copyright interests.