Publications

In a February 24, 2022 decision in Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., the United States Supreme Court resolved the important issue of whether an unintentional mistake relating to applicable law, as opposed to a factual mistake, will invalidate a copyright registration and cause the copyright owner to lose an otherwise meritorious infringement action. Construing a “safe harbor” provision in the Copyright Act (§ 411(b)(1)), the Court held that a mistake in a copyright registration application will not invalidate the resulting registration, regardless of whether it stems from a failure to understand the law or a failure to understand the facts. The decision likely salvaged a victory for a copyright owner that a lower court decision had wiped out and clarified the circumstances under which an unintentional mistake can invalidate a copyright registration. The Court’s interpretation of the relevant provision of the Copyright Act makes copyrights easier to enforce by making it more difficult for infringers to avoid liability based on technical defects in the copyright registration application.

The Underlying Dispute—Defendant Infringed Plaintiff’s Fabric Design, but did Plaintiff have the Valid Copyright Registration Necessary to Enforce its Copyright?

The plaintiff, Unicolors, designs fabrics and owns the copyrights in those designs. Although, under U.S. law, a copyright is protected from the moment a creative work is fixed in a tangible medium, a copyright cannot be enforced against an infringer in a lawsuit unless and until the copyright owner registers the copyright with the U.S. Copyright Office. In addition, in copyright infringement cases, the remedies of statutory damages (i.e., a damage award the court determines without regard to whether the plaintiff has proved actual damage) and an award of attorneys’ fees to the plaintiff are (with limited exceptions) available only if the copyright has has been registered before the infringement began.

In this case, Unicolors registered the relevant fabric design copyrights and sued H&M Hennes & Mauritz, L.P. (“H&M”) for infringement in the United States District Court. The jury found that H&M had infringed Unicolors’ designs. However, in an attempt to avoid liability H&M attacked the validity of Unicolors’ copyright registration, asking the court to grant it judgment as a matter of law for failure to meet the valid registration prerequisite for a copyright infringement suit.

H&M argued that the copyright registration was invalid because it was based on inaccurate information. Unicolors had registered 31 separate fabric designs in a single application. The relevant Copyright Office regulations allow a group registration for multiple works but only if all of the works were “included in the same unit of publication.” H&M argued that because Unicolors had initially made some of the designs available for sale exclusively to certain customers but made other designs immediately available to the general public the requirements for a group registration were not met and the registration was invalid. The trial court rejected that argument, finding that the inaccuracy was based on an unintentional misunderstanding of the relevant regulation and therefore the “safe harbor” provision of § 411(b)(1) of the Copyright Act saved the registration.

Specifically, § 411(b)(1) provides that a certificate of copyright registration is valid “regardless of whether the certificate contains any inaccurate information, unless (A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and (B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.” H&M urged that Unicolors knew of the inaccuracy because it knew the facts that some of the designs were exclusive and some were not. However, the trial court focused on Unicolors’ knowledge concerning the relevant group registration regulation and held that the inaccuracy did not invalidate the registration because Unicolors did not know that it had failed to satisfy the “single unit of publication” requirement when it applied for registration. In other words, the court found that any inaccuracy stemmed from an unintentional mistake concerning the law even though Unicolors knew the relevant facts.

Unicolors Loses on Appeal

H&M appealed to the United States Court of Appeals for the Ninth Circuit. That court reversed the lower court’s decision that Unicolors’ Certificate of Registration was valid, held that the Certificate contained knowing inaccuracies, and remanded the case for the trial court to have the Register of Copyrights advise it on whether the inaccuracy, if known, would have caused the Register to refuse registration. In the appellate court’s view the “safe harbor” provision excused only good faith mistakes of fact, not mistakes concerning the regulations. Because Unicolors did know the facts, its mistake of law concerning the “single unit of publication” requirement could not save its registration under the appellate court’s decision.

Unicolors successfully sought review of the Ninth Circuit’s decision in the United States Supreme Court.

The Supreme Court Holds That the “Safe Harbor” Applies to a Mistake of Law as well as a Mistake of Fact

In the 6-3 majority decision, Justice Stephen Breyer, joined by Chief Justice Roberts and Justices Sotomayor, Kagan, Kavanaugh and Barrett, disagreed with the Ninth Circuit’s decision and vacated it. In the Court’s view, “§ 411(b) does not distinguish between a mistake of law and a mistake of fact. Lack of knowledge of either fact or law can excuse an inaccuracy in a copyright registration.”

To reach that conclusion, the Court first relied on the text of the statute, specifically its use of the term “knowledge” with no qualification concerning facts or law. Since having knowledge simply means being aware of something the Court found nothing in the statutory language to justify making a distinction between a mistake of fact and a mistake of law. The Court bolstered that conclusion by reference to other statutory provisions relating to the registration process which require the applicant to supply information based on both legal and factual knowledge, for example, whether a work was “made for hire” (a defined term under the Copyright Act), when and where a work was “published” within the meaning of the Copyright Act, and whether a work is a “compilation” or a “derivative work,” both also defined terms. The decision further relied on other provisions of the Copyright not relating to registration that make clear that “knowledge” means “actual, subjective awareness of both the facts and the law.”

The Court also noted that cases decided before Congress enacted § 411(b) held that inadvertent mistakes in registration applications, some of which involved facts and some law, did not invalidate the registration or bar an infringement action. Absent any indication that Congress intended to change that state of the law, the Court reasoned that Congress intended to codify it. In addition, the Court relied on legislative history that “indicates that Congress enacted § 411(b) to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations,” and to eliminate “’loopholes that might prevent enforcement of otherwise validly registered copyrights.’” Accepting the Ninth Circuit’s view of § 411(b) would be entirely inconsistent with those goals.

Nevertheless, a Claimed Lack of Knowledge of Law or Fact Will not Always be Excused

H&M’s primary argument on the merits was that the Court’s interpretation of § 411(b) would make it too easy for copyright owners to avoid the consequences of their mistakes in registrations by claiming lack of knowledge. The Court disposed of that argument by noting that “courts need not automatically accept a copyright holder’s claim that it was unaware of the relevant legal requirements of copyright law.” Willful blindness, for example, might support a finding of actual knowledge. Further, the court made clear that a court could look to circumstantial evidence, “including the significance of the legal error, the complexity of the relevant rule, the applicant’s experience with copyright law, and other such matters” that may undercut a copyright owner’s claim of inadvertent mistake.

Based on its decision that Unicolors’ registration is valid notwithstanding the inaccurate information, the Supreme Court vacated the Ninth Circuit’s decision and remanded the case for further proceedings. Unfortunately, Unicolors is not yet assured of victory on its infringement claims. The Ninth Circuit reserved decision on other issues briefed and argued before it, but not decided. That court will now have to address those issues.

The Dissenting Justices Disagreed on Procedural Grounds, Not the Merits

Justice Thomas, joined by Justices Alito and Gorsuch, dissented from the majority decision. However, their disagreement concerned a procedural point rather than the merits.

Conclusion

Unicolors, Inc. v. H&M Hennes & Mauritz, L.P favors enforcement of the copyright laws, and copyright owners, by making it more difficult for an infringer to exploit an honest mistake in the registration process to avoid liability. Nevertheless, the decision makes clear that not all claimed mistakes will necessarily be excused. Circumstantial evidence, or a finding of willful blindness, can defeat an attempt to excuse a material inaccuracy as a “mistake.” Notwithstanding the Unicolors result, copyright owners should recognize that accuracy in registration applications is important and mistakes of fact or law can complicate the enforcement process and make it more expensive, even if the mistake is ultimately excused. Although a lawyer is not always required for routine copyright registrations, it is advisable to seek advice of experienced counsel in connection with any registration issues or questions that seem at all confusing or unclear. This is particularly true when attempting to register multiple works at one time using the various group registration opportunities.

For more information on the topic discussed, contact:

• L. Donald Prutzman  |  prutzman@thsh.com  |  212-508-6739
• Andre R. Jaglom  |  jaglom@thsh.com  |  212-508-6740