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After Supreme Court Remand, Copyright Infringement Claims Upheld in View of Registrant’s Unknown Inaccuracies

By Sarah Bro on Nov 17, 2022
Posted In Copyrights

In February 2022, the Supreme Court of the United States held in Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., that lack of either factual or legal knowledge on the part of a copyright holder can excuse an inaccuracy in the holder’s registration under the Copyright Act’s safe-harbor provision, 17 U.S.C. §411(b)(1), which governs the effect of inaccurate information in a copyright application. In light of this decision, the Supreme Court remanded the copyright dispute between textile design company Unicolors and global fast-fashion retail giant H&M Hennes & Mauritz to the US Court of Appeals for the Ninth Circuit for further proceedings on the issue of whether Unicolors held a valid copyright in a 2011 textile design asserted in its copyright infringement claim against H&M. On remand, the Ninth Circuit concluded that under the correct standard confirmed by the Supreme Court, Unicolors held a valid copyright registration because the factual inaccuracies in its application were excused by the safe-harbor provision. The Ninth Circuit affirmed the prior jury verdict against H&M for copyright infringement and remanded with respect to the issue of damages only. Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., Case Nos. 18-56253; -56548 (9th Cir. Nov. 10, 2022) (Bea, Bade, McCalla, JJ.)

The Copyright Act safe-harbor provision saves a copyright registration from invalidity when the application contains errors, except when the copyright registrant knowingly transmitted inaccurate material facts to the US Copyright Office. After the Supreme Court made it clear that “[l]ack of knowledge of either fact or law can excuse an inaccuracy in a copyright registration,” the Ninth Circuit was charged with determining whether Unicolors submitted its copyright application with knowledge that the information therein was factually inaccurate and with knowledge that the application failed to comply with the specific governing legal requirements. The Court first analyzed the validity of Unicolors’s asserted copyright registration, then addressed the remaining issues raised by H&M on appeal.

The Ninth Circuit’s first step in the validity assessment was to determine whether Unicolors’s application did, in fact, contain an inaccuracy. As in its prior decision, the Court concluded that the application was inaccurate because Unicolors registered a collection of 31 separate fabric designs as a single-unit publication when those 31 works were not initially published as a singular bundled collection, as required under the Copyright Act.

The second step of the Ninth Circuit’s inquiry looked at whether Unicolors submitted its copyright application knowing that it contained errors. This is where the Court departed from its prior decision and affirmed the district court’s decision regarding the validity of the registration. Specifically, the Court found that the single-unit registration issue was an unsettled question of law at the time of Unicolors’s application, such that Unicolors did not know that it submitted an application containing false information because it lacked the requisite knowledge of inaccuracy and lacked an intent to defraud the Copyright Office. Finding Unicolors’s copyright registration valid, the Court determined that Unicolors could maintain its copyright infringement claim against H&M.

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When Pictures Aren’t Pictures: Real Estate Agent-Generated Floor Plans Are Outside Copyright Infringement Exception for Pictorial Representations

By Christopher M. Bruno on Aug 26, 2021
Posted In Copyrights

Examining whether the Architectural Works Copyright Protection Act enacted in 1990 protects the creation of floor plans, the US Court of Appeals for the Eighth Circuit held that such technical drawings generated for practical, rather than artistic, purposes are not covered by a statutory exception that removes the right to control pictures, paintings, photographs or other pictorial representations of their work from architects. Designworks Homes, Inc. et al. v. Columbia House of Brokers Realty, Inc. et al., Case Nos. 19-3608, 20-1099, -3104, 20-3107 (8th Cir. Aug. 16, 2021) (Arnold, J.)

The facts of the case are relatively simple: In the course of selling designed homes, homebuilders hired real estate agents to generate floor plans for use in their listings. The designers of the homes registered copyrights in the homes themselves, then sued the homebuilders and their real estate agents for copyright infringement.

The issue for the Court was whether 17 U.S.C. § 120(a), a statute designed to limit the scope of copyright protection for architectural works, applied to the floor plans that the real estate agents developed. Section 120(a) excludes from the scope of a copyright in an architectural work “the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work.” The district court held that the floor plans fell within Section 120(a)’s exclusion and, thus, were not covered by the copyright.

The Eighth Circuit disagreed. Employing numerous canons of statutory construction, the Court held that the functional floor plans were neither pictures nor “other pictorial representations” within the meaning of the statute. Drawing from 1990s dictionaries, the Court reasoned that although a floor plan could conceivably be a picture, context showed otherwise. For example, Congress used the phrase “technical drawings” elsewhere in the copyright statute; thus, had Congress intended to exclude them here, it knew how to do so. Moreover, the types of floor plans at issue here were—in the Court’s view—not similar to the other listed categories of items for which copyright protection had been curtailed as the plans did not have any artistic expression.

Practice Note: Not all hope is lost for the homebuilder or developer. Although the Eighth Circuit declined to expressly consider other defenses, it explained that there were others that very readily could apply, including the doctrine of fair use.

Blueprint Blooper: Floor Plan Copyright Infringement Requires Virtually Identical Copying

By Paul Devinsky on May 6, 2021
Posted In Copyrights

Addressing whether a home builder’s floor plans infringed the plaintiff’s architectural copyrights, the US Court of Appeals for the Seventh Circuit affirmed a lower court’s entry of summary judgment against the plaintiff, finding that only a virtually identical design would infringe the plaintiff’s “thin copyright” in its floor plans. Design Basics, LLC v. Signature Construction, Inc., Case No. 19-2716 (7th Cir. Apr. 23, 2021) (Sykes, J.)

Design Basics, described bluntly by the Seventh Circuit as a “copyright troll,” holds copyrights in thousands of floor plans for suburban single-family homes. Design Basics sued Signature Construction (Signature) for infringement of 10 of its designs. Discovery showed that Signature held copies of four of Design Basics’ designs, one of which had been marked up by a Signature employee. Signature moved for summary judgment, relying on a 2017 Seventh Circuit opinion in Basic Designs v. Lexington Homes in which the Court found that Design Basics’ copyright protection in its floor plans was “thin.” The district court granted summary judgment against Design Basics, and this appeal followed.

Relying heavily on Lexington Homes, the Seventh Circuit took the opportunity to clarify the elements of a prima facie case of copyright infringement for works with “thin” copyright protection. The Court explained that to establish infringement, the plaintiff must prove (1) ownership of a valid copyright and (2) copying of original elements of the work. Because ownership was not contested in this case, the Court focused on the copying element. The Court explained that “copying” constitutes two separate questions: Whether the defendant actually copied the plaintiff’s protected work (as opposed to creating it independently) and whether the copying constituted wrongful copying, also known as unlawful appropriation.

Because there is rarely direct evidence of copying, circumstantial evidence may be used to infer actual copying, the Seventh Circuit explained. Proving actual copying by circumstantial evidence requires evidence of access to the plaintiff’s work and evidence of substantial similarity between the two works. The analysis of substantial similarity is not limited to the protected elements of the plaintiff’s work; any similarities may be probative of actual copying. However, the unlawful appropriation prong requires substantial similarities to the protected elements of the copyrighted work. The Court noted that the use of the same term for two different tests has caused confusion, and therefore implemented the term “probative similarity” when referring to actual copying, and “substantial similarity” in the case of unlawful appropriation. The Court went on to explain that in the case of thin copyright protection such as this, proving unlawful appropriation requires more than a substantial similarity; only a “virtually identical” plan will infringe.

The Seventh Circuit then turned to the issues of scènes à faire and merger. Citing its detailed analysis in Lexington Homes, the Court noted that arrangements of rooms in Design Basics’ floor plans were largely scènes à faire, deserving no copyright protection. For example, placement of the dining room near the kitchen and a bathroom near the bedrooms is rudimentary, commonplace and standard, and [...]

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Fourth Estate Registration Requirement Defeats Pro Se Copyright Infringement Plaintiff

By Paul Devinsky on Apr 29, 2021
Posted In Copyrights

The US Court of Appeals for the First Circuit affirmed dismissal of a copyright infringement claim for failure to register the copyright, and affirmed summary judgment against plaintiff on related state law claims where the plaintiff was deemed to have admitted statements that undermined its claims. Foss v. Marvic Inc., Case No. 20-1008 (1st Cir. Apr. 12, 2021) (Lynch, J.)

In 2006, sunroom purveyor Marvic contracted with graphic designer Foss to create a marketing brochure. Foss presented a $3,000 estimate, which Marvic paid, and Marvic began using the brochure soon after. In 2018, Foss (pro se) filed suit, demanding $264,000 for alleged copyright infringement on the basis that in 2016, she discovered that Marvic had been using a modified version of the brochure in print and online without asking for or receiving her permission. Foss alleged inaccurately that she had “applied for official U.S. Copyright Registrations” for the brochure.

Marvic moved to dismiss, and Foss filed an amended complaint stating six causes of action, including copyright infringement and five state-law claims. Foss alleged that she had registered the brochure with the US Copyright Office, but in fact she had only applied (after filing the original complaint) for registration. Marvic moved to dismiss the copyright and breach of contract claims. Foss did not oppose, and the district court dismissed the case. Foss then moved to reopen the case, a motion that the district court granted. Foss filed an opposition to Marvic’s earlier motion to dismiss and retained counsel, who first appeared on the day the district court heard Marvic’s motions.

In support of dismissal, Marvic argued that Foss had not established registration of her copyright, noting the then-existing circuit split as to whether mere application or successful registration was required to support a claim of infringement in federal court. The First Circuit stayed the case pending the Supreme Court’s decision in Fourth Estate. After the Supreme Court held that successful registration is required, the district court lifted the stay and dismissed the copyright claim but not the breach of contract claim.

Later, Marvic served a request for admissions, to which Foss’s counsel failed to respond. Marvic moved that the statements in its request be deemed admitted. The district court granted the motion. Two weeks later, Foss’s counsel moved to withdraw, having been suspended from the practice of law.

Foss, pro se again, moved for reconsideration and for more time to respond to the request for admissions, but the district court denied the motions. Marvic moved for summary judgment on the state law claims, which the district court granted, largely relying on Foss’s deemed admissions. Foss appealed.

The First Circuit held that it was not error to dismiss Foss’s copyright claim under Fourth Estate. The Court rejected as waived Foss’s argument that the district court should have stayed the case pending registration since Foss had not sought such relief below. The Court also rejected Foss’s argument that dismissal became improper when the failure to register was cured since the [...]

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Two Turntables, No Microphone: Using Technical Diagram Is Not Copyright Infringement

By Jodi Benassi on Dec 10, 2020
Posted In Copyrights

The US Court of Appeals for the Sixth Circuit affirmed a district court’s summary judgment grant with respect to a copyright infringement claim related to technical drawings, and reversed the court’s summary judgment grant related to software source code. RJ Control Consultants, Inc. et al. v. Multiject, LLC, et al., Case No. 20-1009 (6th Cir. Nov. 23, 2020) (Donald, J.)

In 2008, Paul Rogers, through his company RJ Control Consultants (RJC), entered into an oral agreement with his friend Jack Elder, through Elder’s company Multiject. Rogers agreed to develop a rotary turntable control system (not for music, but to control a molding system) for Elder, calling the product “Design 3.”

In 2014, Elder asked Rogers for copies of Design 3’s technical diagrams as well as the software source code “in case something happened” to Rogers. Rogers provided the information to Elder, believing that Elder would not improperly use or disclose the information to others. Three days later, Elder informed Roger that he no longer needed Roger’s services and would instead use RSW Technologies for the assembly and wiring of the system. Elder claimed that he was increasingly concerned with Roger’s pricing and decided to switch out Rogers and RJC for RSW. Multiject and RSW used Design 3, both the technical drawings and the source code, in the assembly and wiring of identical new systems.

In 2016, Rogers obtained two copyright registrations, one for the technical diagrams and one for the source code. RJC filed a complaint for several federal and state law claims, including copyright infringement. Multiject and RSW filed motions for summary judgment on all claims, including dismissal of the copyright claims, which the district court granted. RJC appealed.

Multiject and RSW argued that copyright protection did not extend to the software at issue because the software embodied a procedure, a system and a method of operating an injection molding machine, and that is not eligible for copyright protection. They also argued that the use of copyrighted technical drawings to produce a control system did not constitute copyright infringement of the technical drawings for the same reasons that making a recipe out of a copyrighted cookbook does not constitute copyright infringement of the cookbook. Multiject and RSW asserted that to the extent Rogers sought to protect the “use” of his technical drawings to create something else, he should have sought protection under patent law—not copyright law.

The Sixth Circuit agreed. Because the source code and technical diagrams were registered, the validity of the copyrights was not contested. The Court first considered whether physical copying to reproduce the system contained in the drawings was copyright infringement. The Court noted that whether the drawings were themselves reproduced was a separate question from whether the drawings were used to create the system portrayed in that drawing. The Court found that the “manufacture of the control system from the copyrighted technical drawing was not copyright infringement because the recreation of a control system by using a copyrighted technical drawing is not ‘copying’ for [...]

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Liability for Copyright Infringement Attaches if Conduct Exceeds Scope of License

By Jodi Benassi on Sep 2, 2020
Posted In Copyrights

The US Court of Appeals for the Ninth Circuit revived a software owner’s copyright infringement suit because the district court erred in granting summary judgment of no infringement by failing to analyze whether the accused infringer exceeded the scope of a copyright license. Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company, Case No. 19-15506 (9th Cir. Aug. 20, 2020) (Smith, J.).

Oracle owns registered copyrights for Solaris software, including copyrighted software patches. Oracle requires its customers have a prepaid annual support contract, for each server they desire to be under support, to access the software patches. Customers under a support plan can access patches through an Oracle support website.

Hewlett Packard Enterprise (HPE) provides a “one-stop-shop” for support to its customers, including HPE servers running Solaris. HPE provides this support directly and through its partners. One of HPE’s partners is Terix Computer Company. Terix arranged for joint HPE-Terix customers to have Oracle support for all of their servers through a single server support plan. Terix accomplished this by downloading Solaris software patches, using the customer’s credentials (created using a Terix-supplied credit card), to make copies for servers that were not part of the support contract.

In 2013, Oracle sued Terix for copyright infringement. The court granted Oracle summary judgment, and Terix stipulated to a judgment on the claims without admitting liability. Oracle and HPE entered into an agreement, effective May 6, 2015, to toll the statute of limitations for any claims Oracle might assert against HPE.

In 2016, Oracle sued HPE for direct copyright infringement concerning HPE’s direct support customers, and for indirect infringement concerning joint HPE-Terix customers. Oracle also sued for claims of intentional interference and unfair competition under California state law. The parties did not dispute that the tolling agreement applied, so the court considered whether the copyright infringement claims were barred for conduct before May 6, 2012. The Copyright Act provides that a copyright infringement claim is subject to a three-year statute of limitations, which runs separately for each violation. Under Ninth Circuit law, a copyright infringement claim begins to accrue “when a when a party discovers, or reasonably should have discovered, the alleged infringement.” Importantly, actual or constructive knowledge triggers the statute of limitations. The Ninth Circuit has explained that suspicion of copyright infringement places a duty on the copyright holder to investigate further into possible infringement or lose the claim.

Oracle conceded that it had concerns about Terix and suspicions about HPE as early as 2010, but argued that HPE used fraudulent means to keep Oracle unaware of its actions, so it had no duty to inquire. The district court disagreed, finding that once Oracle had constructive knowledge, the doctrine of fraudulent concealment was no longer an option to toll the limitations. Because Oracle failed to investigate HPE, the court determined that HPE was entitled to summary judgment on the infringement claims for pre-May 6, 2012, conduct. Oracle appealed.

The Ninth Circuit explained that to prove indirect infringement, Oracle had to show that [...]

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“Salacious” Content Doesn’t Bar Discovery in Copyright Infringement Suit

By Sarah Bro on Jul 30, 2020
Posted In Copyrights

The US Court of Appeals for the District of Columbia Circuit preserved discovery options for copyright owners fighting online piracy when it reversed the district court’s refusal to allow a subpoena of an alleged online infringer’s internet service provider. The DC Circuit found that the district court abused its discretion by relying heavily on the copyright owner’s litigation history and the nature of its films rather than the relevant legal standards under the Federal Rules of Civil Procedure. Strike 3 Holdings, LLC v. John Doe, Subscriber Assigned IP Address 73.180.154.14 (DC Cir. July 14, 2020) (Rao, J.).

Strike 3 is a producer and online distributor of adult films. Like most of its industry peers, the company faces significant online piracy that is often facilitated by peer-to-peer file sharing. To combat this infringement, Strike 3 regularly files copyright infringement lawsuits against “John Doe” defendants based on the internet protocol (IP) address (and the associated physical address) tied to an online infringer’s illegal file sharing and downloads.

In 2018, Strike 3 filed a copyright infringement lawsuit against the IP address 73.180.154.14 John Doe subscriber located in the District of Columbia after the IP address was associated with 22 instances of infringement in the course of one year. To properly identify the defendant and serve the complaint, Strike 3 also filed a Rule 26(d)(1) motion seeking leave to subpoena Comcast, the subscriber’s internet service provider, for records identifying the John Doe IP address subscriber. But, in applying a multifactor balancing test adopted by the US Court of Appeals for the Second Circuit in Arista Records v. Doe, the district court denied Strike 3’s discovery motion on grounds that Strike 3’s need for the subpoenaed information was outweighed by defendant’s right to be anonymous, which the court found to be notably relevant given the risk of defendant misidentification and the “particularly prurient pornography” at issue.

On appeal, the DC Circuit acknowledged the district court’s broad discretion over the structure, timing and scope of discovery. In Strike 3’s case, however, the DC Circuit found that three aspects of the lower court’s analysis were an abuse of this broad discretion.

First, it was improper and “not supported by the relevant legal standards” for the district court to treat the pornographic content of Strike 3’s copyrighted works as relevant to its entitlement to early discovery. None of the supporting case law suggests that a potentially non-infringing defendant’s privacy interests vary depending on the content of the copyrighted work at issue. The Court warned that a plaintiff’s ability to defend its copyrights cannot turn on a court’s subjective view of the copyrighted material, and held that the content of a copyrighted work is per se irrelevant to a Rule 26(d)(1) motion seeking discovery to identify an anonymous infringer.

The district court’s second abuse of discretion was in its conclusion that, even if the discovery request was granted, Strike 3 could not “identify a copyright infringer who can be sued” for purposes of stating a plausible claim against the [...]

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A Mixed Bag on New Rules – Juggling Copyright Preclusion and Patent Infringement

By McDermott Will & Emery on Jan 15, 2020
Posted In Copyrights, Patents

Addressing issues of copyright and patent infringement, the US Court of Appeals for the Federal Circuit found that the Federal Insecticide, Fungicide, and Rodenticide Act did not preempt copyright protection and that patent infringement under 35 U.S.C. § 271(g) does not require that the claimed process be performed by a single entity. Syngenta Crop Protection, LLC v. Willowood, LLC, Case Nos.18-1614, -2044 (Fed. Cir., Dec. 18, 2019) (Reyna, J.).

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Standard Practice: The Public Has Right to Copyrighted Material Incorporated Into Law

By Jake B. Vallen on Sep 28, 2023
Posted In Copyrights

In a case that attracted a slew of amicus curiae participation and was the most recent in the series of American Society for Testing and Materials (ASTM) copyright cases, the US Court of Appeals for the District of Columbia Circuit affirmed the district court’s holding that the noncommercial dissemination of standards, as incorporated by reference into law, constitutes fair use and thus does not support liability for copyright infringement. Am. Soc’y for Testing & Materials v. Public.Resource.Org, Case No. 22-7063 (DC Cir. Sept. 12, 2023) (Henderson, Pillard, Katsas, JJ.)

The ASTM and the other plaintiffs are private organizations that develop and promulgate standards for establishing best practices for their respective industries or products. In 2013, they brought an action for copyright infringement against Public.Resource.Org for posting their copyrighted standards (as they were referenced in agency rulemaking and incorporated into law) on its website, thereby making these materials available to the public at no cost. After the district court initially granted ASTM’s motion for summary judgment of copyright infringement and rejected Public Resource’s fair use defense, the DC Circuit reversed and remanded for further consideration the issue of whether posting the incorporated standards constituted fair use. Subsequently, the district court “found fair use as to the posting of standards incorporated into law and infringement as to the standards not so incorporated.” The plaintiffs appealed.

On appeal, the DC Circuit analyzed the following fact-intensive fair use factors:

The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
The nature of the copyrighted work
The amount and substantiality of the portion used in relation to the copyrighted work as a whole
The effect of the use upon the potential market for or value of the copyrighted work.

The DC Circuit concluded that the first three factors strongly favored holding that Public Resource’s posting of the incorporated standards constituted fair use. As to the first factor, the Court explained that in a manner similar to the one discussed by the Supreme Court of the United States in its 2021 Google v. Oracle Am. case, Public Resource’s use was for nonprofit, noncommercial educational purposes. The DC Circuit further found Public Resource’s use transformative in that it served different purposes than ASTM’s use (“provide[ing] the public with a free and comprehensive repository of the law” versus “producing standards reflecting industry or engineering best practices.”)

As to the second factor, the DC Circuit reasoned that the “nature of the copyrighted work” heavily favored fair use because the standards “fall at the factual end of the fact-fiction spectrum” and “have legal force, [such that] they . . . fall ‘at best, at the outer edge of copyright’s protective purposes.’” As to the third factor, the Court found that it strongly supported fair use because the standards had been incorporated and thus had “the force of law.”

With respect to the fourth factor, the DC Circuit recognized that Public Resource’s [...]

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Copyright Office Seeks Comments on Artificial Intelligence

By Amol Parikh on Sep 21, 2023
Posted In Copyrights

The US Copyright Office (CO) issued a notice, seeking comments on copyright law and policy issues raised by artificial intelligence (AI) systems. Artificial Intelligence and Copyright, 88 Fed. Reg. 59942 (Aug. 30, 2023).

The purpose of the notice is to collect factual information and views relevant to the copyright law and policy issues raised by recent advances in generative AI. The CO intends to use this information to advise Congress by providing analyses on the current state of the law, identifying unresolved issues and evaluating potential areas for congressional action. The CO will also use this information to inform its regulatory work and to offer resources to the public, courts and other government entities considering these issues. The questions presented in the notice are grouped into the following categories:

General high-level questions
AI training, including questions of transparency and accountability
Generative AI outputs, including questions of copyrightability, infringement and labeling or identification of such outputs
Other issues related to copyrights.

The specific questions can be found in the notice. Given the importance of using shared language when discussing AI, a glossary of terms is also provided, on which commentators can provide feedback. The CO indicated that it does not expect every party choosing to respond to the notice to address every question raised. Instead, the questions are designed to gather views from a broad range of stakeholders.

Written comments are due no later than 11:59 pm (EDT) on October 18, 2023. Written reply comments are due no later than 11:59 pm (EST) on November 15, 2023.

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