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Supreme Court rules copyright claimants must begin later, get less

Mike Nepple March 5, 2019

In two unanimous rulings, the Supreme Court limited when a copyright claimant can file suit and how much a successful claimant can recover in litigation expenses. The decisions interpreted the Copyright Act’s requirements concerning “registration” before suit, and “full costs” recoverable by a successful plaintiff.

In Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, the Court decided a question that had split appellate courts: whether a plaintiff must have a copyright registration certificate in hand to file an infringement lawsuit, or whether a pending application was sufficient.

Fourth Estate sued Wall-Street.com for infringement, but had only filed for, and not yet received, a copyright registration. The Copyright Act states that “no civil action for infringement of the copyright in any United States work shall be instituted until … registration of the copyright claim has been made ….” The appeal turned on the Court’s interpretation of this language about registration having “been made.”

Fourth Estate argued that a registration “has been made” when the copyright owner submits its application, materials, and fee. This is known as the “application approach.” Wall-Street.com countered that “registration” means the Copyright Office has granted the application, known as the “registration approach.”

The Supreme Court found that the “registration approach” best aligns with the Act’s language. The Court rejected Fourth Estate’s argument that the passive voice of the prerequisite – “registration … has been made” – focuses on the actions of the registrant, and not the Copyright Office. The Court also rejected Fourth Estate’s argument that the statute of limitation might expire while the Copyright Office was processing the application. Even the current average processing time of seven months allows claimants substantial remaining time to file. (The Copyright Act’s limitations period is three years.)

In Rimini Street, Inc. v. Oracle USA, Inc., the Court considered what expenses a victorious party could recover. The Act allows trial courts to award a prevailing party its “full costs.” Oracle won its copyright suit against Rimini Street and sought $12.8 million in incurred expenses. But Rimini disputed Oracle’s entitlement to expert witness and jury consultant fees, and costs for the collection and production of electronic documents. Rimini Street claimed these expenses were not recoverable because they fell outside the six categories of allowable costs in the general federal costs statute.

The lower courts agreed with Oracle that “full costs” covers all costs. But the Supreme Court reversed, finding that a party may recover costs falling outside the six identified categories only if the applicable federal statute specifically identifies them. Here, because the Copyright Act was silent on the issue of recovery of these additional costs, the general federal costs statute applied, and Oracle could not recover the $12.8 million sought.

Both cases focused on statutory interpretation, but no simple principle explains both rulings. After all, the Court essentially held that “registration means registration,” but “full costs does not mean full costs.” But don’t despair if you have trouble understanding copyright decisions. As Mark Twain pointed out: “Only one thing is impossible for God: To find any sense in any copyright law on the planet.”

Mike Nepple is a partner in Thompson Coburn's Intellectual Property practice group.