The Fourth Estate Decision and Copyright Registration

The following is a guest post by Regan A. Smith, General Counsel and Associate Register of Copyrights.

Last week, the Supreme Court issued an important opinion regarding copyright registration. This blog discusses the decision, and some of the current (and future) options available for rights owners looking to register their copyright claims.

What is the Fourth Estate Opinion About?

On March 4, the Court issued a unanimous opinion in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, resolving a long-standing circuit court split over when a copyright claimant may bring suit for copyright infringement. Section 411(a) of the Copyright Act, subject to certain exceptions, states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with [title 17].”  Section 411(a) further provides that “[i]n any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.” The provision also allows the Register to “become a party to the action with respect to the issue of registrability.” Until Fourth Estate, courts were divided on whether a plaintiff needed to just file an application to get into court (the “application approach”), or whether they needed to wait for the Copyright Office to register or refuse the application before bringing a lawsuit (the “registration approach”).

To settle the debate, the Supreme Court took up the case and considered whether “‘registration . . . been made in accordance with [Title 17]’ as soon as the claimant delivers the required application, copies of the work, and fee to the Copyright Office; or has ‘registration . . . been made’ only after the Copyright Office reviews and registers the copyright?”

In an opinion by Justice Ginsburg, the Supreme Court held in favor of the registration approach. She explained that “‘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.” That is when registration occurs, and when “a copyright claimant may commence an infringement suit.” The Court concluded that this is “the only satisfactory reading of §411(a)’s text.”

More specifically, the Court explained that “[r]ead together, §411(a)’s opening sentences focus not on the claimant’s act of applying for registration, but on action by the Copyright Office—namely, its registration or refusal to register a copyright claim.” The Court observed that if application alone were enough to go to court, the second sentence, permitting suit when registration is refused, “would be superfluous,” and that contrary readings “require the implausible assumption that Congress gave ‘registration’ different meanings in consecutive, related sentences within a single statutory provision.” The Court also explained that the allowance the law grants to the Register to become a party to the action “would be negated, and the court conducting an infringement suit would lack the benefit of the Register’s assessment, if an infringement suit could be filed and resolved before the Register acted on an application.”

Looking beyond section 411(a), the Court found further support in other provisions of the Copyright Act, such as sections 410 (describing the Register’s task of examination and acceptance or refusal of copyright claims) and 408(f) (preregistration), as well as the legislative history of section 411(a). The Court noted that multiple times since enactment of section 411(a), “Congress has maintained registration as prerequisite to suit, and rejected proposals that would have eliminated registration or tied it to the copyright claimant’s application instead of the Register’s action.”

As a result, the Court explained that “registration is akin to an administrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights.” The Court was unpersuaded by arguments that awaiting a decision from the Office deprives the claimant of the right to sue during the pendency period, acknowledging that Congress had repeatedly considered that issue and enacted explicit exceptions to alleviate the result of section 411(a) in specific situations. The Court also referenced the Office’s special handling rules, which allow claimants to seek expedited processing of their claims.

In response to arguments that the Office takes too long to process registration applications, and that delay could result in claimants losing their ability to enforce their rights if the three-year statute of limitations runs out before the Office acts, the Court found these fears to be “overstated.” The Court noted that the Office’s current seven-month average processing time for registration applications leaves “ample time to sue after the Register’s decision, even for infringement that began before submission of an application.”

Lastly, the Court observed that any delays in Office processing time appear to be “attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure.”

How long does copyright registration typically take, and what steps are being taken to improve the processing time to obtain a copyright registration?

The Copyright Office updates its public statistics concerning registration processing time twice a year at the midpoint and end of the fiscal year; the next update is scheduled for April. The average time it takes for the Office to process a registration is dependent upon a number of factors, including the type of claim, whether it is submitted in paper or electronic form, and whether the Office has to correspond with the applicant to clarify elements of the application. The Office corresponds on roughly 30 percent of copyright applications, and in FY2016, 8.8 percent of all claims were eventually closed due to the applicant’s failure to respond to correspondence.

In recent years, at the Office’s request, Congress has appropriated additional funds to help the registration process, and those efforts are paying off. The Office has been steadily adding registration specialists who undergo complex training in the legal examination of copyright applications to properly fulfill their job responsibilities, and has also offered overtime for seasoned specialists to process claims. As Justice Ginsburg’s opinion anticipates, this increased staffing and budget has begun to lower processing times. The Office expects to hire 18 additional staff in registration this fiscal year to continue this trend.

The current data show that the average time it takes the Office to process a claim submitted electronically that does not require correspondence—67 percent of all applications—is 6 months, and the average overall processing time for all claims is 7 months. The Office expects the new processing times to show continued improvement, dropping these figures by additional months, when released in April.

The Office is also embarking upon a number of regulatory, practice, and technology changes designed to improve the quality and efficiency of the registration experience now, in advance of a new electronic registration system. In the past few years, the Office has undertaken over a dozen rulemakings aimed at updating the registration process—including clarifying options to register groups of multiple photographs, newspapers, newsletters, and serials with one application, simplifying the “single application” intended for small creators, and reducing the number of physical books or musical works submitted to obtain a copyright registration. The Office is continuing these efforts, including by establishing new group options to register multiple works when registering individual works might be cost-prohibitive or so burdensome that authors would otherwise forgo registration, such as its pending rulemaking for group registration of short online literary works, a category that includes individual online articles, short stories, or blogs. The Office has noted that it intends to commence a rulemaking regarding the meaning of publication for purposes of registration, a statutory question complicated by the digital world. And this week, the Office will release a draft update to its Compendium of Copyright Practices, a living, electronic document that details the Office’s general practices for registration, recordation, and other matters.

Of course, we are also busily focused on modernizing the Office, including its outdated I.T. systems, which are being updated under the technological direction of the Library’s Office of the Chief Information Officer. The Office offers a number of public resources about the ongoing modernization efforts, including its main modernization webpage, a notice of inquiry regarding registration modernization specifically, and other outreach efforts, including bimonthly webinars.

What does this opinion mean for copyright owners, and what options are available to obtain registrations quicker than the standard process?

The Court’s opinion does not affect whether an author holds a copyright in a work she created; copyright subsists upon fixation of the work under section 102(a). For example, copyright interests can be licensed without registration, and takedown requests under section 512 can be made by copyright owners or their agents absent registration. But the opinion clarifies that the Copyright Office must make or refuse registration before litigation may be instituted in federal court, which was already the rule in many but not all federal circuits under the “registration approach.”

The copyright system is geared to incentivize early registration of copyright claims.  Copyright owners who register receive important benefits, including a presumption that their copyright interest is valid before courts. Although copyright owners must receive a decision from the Copyright Office before initiating a copyright infringement suit, after doing so, they can recover damages for past infringement. Processing time by the Copyright Office does not affect the ability to recover statutory damages or attorney’s fees: section 410(d) establishes an “effective date” of registration for such purposes as the day on which an application, deposit and fee, which are later determined to be acceptable for registration, have all been received in the Copyright Office.

In addition to the Office’s efforts to shorten its registration processing times discussed above, we also offer some special options for those looking to expedite registration. In addition to our available public resources, the Office is preparing an FAQ to make sure copyright owners are aware of these options.

First, a copyright owner may consider applying to register a work before it is published, to improve the certainty that registration will be made before an infringement occurs.  This may be a useful option for many authors, if not all.

Second, for classes of works that the Register has determined have a history of pre-release infringement, preregistration may be available. Preregistration is available for the following classes of works:

• motion pictures
• sound recordings
• musical compositions
• literary works being prepared for publication in book form
• computer programs(which may include videogames)
• advertising or marketing photographs

Although preregistration is not a substitute for registration, it is designed to help copyright owners preparing works for commercial distribution from infringement. The fee for preregistration is $140, compared to $55 for standard registration, and the Office will typically process requests for preregistration within five business days.

Third, when facing prospective litigation, contractual deadlines, or otherwise needing expedition of an application, a copyright owner may request special handling. The fee for special handling is $800, and “as a general rule, the Office will issue a certificate of registration or a certificate of recordation within five working days.” For claims requiring correspondence, the Office again expedites that process.

What are some benefits of the registration approach?

Taking a step back, it is helpful to examine the purpose of section 411 and the registration system generally. The registration approach is part of Congress’s considered scheme to filter copyright claims through the Copyright Office, resulting in an improved record for the courts as well as the public at large to rely upon. The United States has noted that early registration of copyright claims furthers a number of important public policy objectives.  First, “[r]egistration . . . enables the Copyright Office to compile a public record of copyright claims, and the deposited copies provide definitive evidence of what the work was at the time of registration.” This record thus “serves as a valuable resource for those seeking to use copyrighted works lawfully.”

Second, registration “gives courts the benefit of the Register’s expertise on issues of registrability, and serves judicial economy by narrowing the issues that must be litigated.”  As noted, the Office must correspond on a number of claims before ultimately registering them, denying the claim, or closing files with incomplete or abandoned claims.  As then-Register of Copyrights Ralph Oman testified before the Senate in 1988 during consideration of the Berne Convention Implementation Act, without section 411(a), “[c]opyright owners with questionable claims will seek to enforce rights by asking the courts—often in the context of shortfused temporary restraining order or a preliminary injunction—to rule directly on their claims without risking the negative implications that would arise from a possible Copyright Office denial of registration.”  The House Judiciary Committee’s report for the Berne Convention Implementation Act echoes Register Oman’s concerns, noting that “[r]egistration narrows the issues that must be litigated and, since it pertains to proof of ownership, assists the courts in resolving the underlying copyright dispute.”  The House noted, too, that the judiciary had contacted them about the issue: “[T]he Judicial Conference of the United States advise[d] the Committee that if the requirement of registration as a prerequisite to suit were eliminated, there would likely be increased difficulty in trying copyright cases.”

Finally, the government has also noted that registration “serves as a major source of the Library’s acquisitions,” since deposit copies are frequently transferred into the Library of Congress’s collections.

Conclusion

This month’s decision resolves a key circuit split regarding the important role of copyright registration before litigation commences. The Copyright Office has long taken the position that the registration approach is the proper interpretation of the current law, and is glad the Court has resolved this question. The Office is also grateful that Congress has steadily increased appropriations aimed at supporting registration functions in recent years and looks forward to continuing to work with Congress going forward.  As always, the Office remains dedicated to delivering quality registration decisions in a timely manner, including by identifying areas where it can improve its operations.