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Limited protection: Inaccurate statement forfeits copyright infringement claim

Dec 12, 2019 | Copyright Law, Newsletter, Patterson Thuente News

Creative works are generally subject to copyright protection even without registration with the U.S. Copyright Office. But there are a number of important advantages to securing Copyright Registration — including the ability to file suit for copyright infringement.

Normally, a registration certificate provides sufficient evidence of a valid registered copyright. However, inaccurate information in the certificate can invalidate the registration. In a recent case, the holder of one such certificate not only lost out on its ability to pursue an infringement claim, but also ended up on the hook for the would-be defendants’ attorneys’ fees and costs.

The fact pattern

Gold Value (doing business as Fiesta Fabric) creates textile designs and sells fabric to customers that use it to make clothing. Sanctuary Clothing, LLC, is a clothing manufacturer. Fiesta sued Sanctuary and several retailers, alleging they’d infringed a copyright it held for one textile design.

Fiesta had registered the design as part of its Spring/Summer 2014 collection, which also included 33 other fabric designs. Fiesta’s president certified in the copyright application that none of the works in the collection had been published as of October 23, 2013. The designs were registered as an unpublished collection.

Before registration, though, Fiesta had sold samples of fabric with the design to a limited group of customers. In total, it sold about 190 yards of the fabric. The company president knew of the sales but mistakenly believed they didn’t qualify as “publication” for copyright purposes.

The trial court found the copyright registration invalid because of the inaccurate information in the application. It dismissed the case before trial and granted the defendants more than $121,000 in attorneys’ fees and costs. Fiesta appealed the dismissal and the fees and costs award.

The court’s clothes call

The Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO IP Act) amended the Copyright Act to include a new provision. Under the provision, a certificate of registration allows a holder to sue for infringement regardless of whether it contains any inaccurate information unless:

  • The inaccurate information was included with knowledge that it was inaccurate, and
  • The inaccuracy, if known, would have caused the Register of Copyrights to refuse registration.

The Copyright Office doesn’t accept a group of published and unpublished works in a single registration. Fiesta admittedly knew that the design had been sold (and was therefore published). By including the design in an unpublished collection, the U.S. Court of Appeals for the Ninth Circuit found, Fiesta had included inaccurate information on its application for registration.

Fiesta argued that it hadn’t known that the sale of samples to its customers constituted publication under the Copyright Act, so it lacked the requisite knowledge or fraudulent intent. But the court noted that Fiesta had provided no reasonable basis for this belief.

Moreover, the Ninth Circuit said, the “knowledge” requirement doesn’t necessarily refer to a culpable state of mind or knowledge of the law. Factual knowledge sufficiently satisfies this prong of the PRO IP Act test. The plain language of the law doesn’t require fraud, just knowledge of inaccurate information — here, that the design was unpublished.

As to the second prong of the test, the court found that the Register has indicated it won’t register a single group of published and unpublished works. Fiesta couldn’t remedy the problem simply by removing the published design, because the registration for only unpublished designs couldn’t serve as a basis for the infringement claim over the published design.

The Register itself specifically said it wouldn’t have registered the design as part of an unpublished collection if it had been aware the design had previously been published. The Ninth Circuit found that the trial court had therefore properly declared the registration invalid as to the design. Because a valid registration is a prerequisite for an infringement claim, it affirmed the lower court’s dismissal.

Sew up your protection

Applicants for copyright registration should take the time to closely review their applications for any inaccurate information. Failing to do so could prove costly, as well as undermine the primary purpose of obtaining registration.

Gold Value Int’l Textile, Inc. v. Sanctuary Clothing, LLC, No. 17-55818, June 4, 2019, 9th Cir.

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