2 High Court Decisions Highlight Copyright Act Complexities
By Alain Villeneuve and Evan Muller
March 20, 2019
Patent litigation is known to hold inherent complexities and unpredictability linked with a claim under the Patent Act. Few understand obstacles linked with a claim under the U.S. Copyright Act. On March 4, 2019, via two unanimous decisions from the U.S. Supreme Court, the first delivered by Justice Brett Kavanaugh and the second delivered by Justice Ruth Bader Ginsburg, practitioners were reminded of the unique problems linked with the interpretation of the U.S. Copyright Act.
Rimini Street Inc. v. Oracle USA Inc.
Designed with built-in fee-shifting provisions, the Copyright Act often rewards holders against infringers. The Copyright Act states “the court in its discretion may allow the recovery of full costs by or against any party.”
The U.S. District Court for the District of Nevada ordered Rimini to pay $28.5 million in attorneys' fees and $4.95 million in costs (the $4.95 million was later reduced by the U.S. Court of Appeals for the Ninth Circuit to $3.4 million). In addition, the district court also ordered Rimini to pay $12.8 million in “litigation expenses” which included, among other things, (1) expert witness costs, (2) e-discovery costs and (3) jury consulting expenses. The Ninth Circuit interpreted the words “full costs” to give broad discretion to a court to grant the above three costs linked with the litigation.
In a unanimous decision, the Supreme Court reversed and remanded — an unsurprising result to those familiar with copyright law. It agreed with Rimini and explained that two federal statutes, 28 U.S.C. §§ 1821 and 1920, define the scope of the word “costs” as being limited to six specific and defined categories.
The court explained that “‘full’ is a term of quantity or amount. It is an adjective that means the complete measure of the noun it modifies.” Looking back on almost 200 years of legislative history, the court explained that, “In light of the commonly understood meaning of the term ‘full costs’ as of 1831 and the case law since 1831, Oracle’s historical argument falls short. The best interpretation is that the term ‘full costs’ meant in 1831 what it means now: the full amount of the costs specified by the applicable costs schedule.”
Rimini Street is a perfect example of the complexities of litigation involving the Copyright Act. Wording like: “the court in its discretion may allow the recovery of full costs by or against any party” means the court cannot award costs outside of the statute and cannot give fees linked with e-discovery, expert witnesses or jury consulting as defined in 28 U.S.C. §§ 1821 and 1920, not referred to in the Copyright Act.
Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC
International law is clear: Congress may not impose any copyright formalities on a foreign copyright owner before enforcement, but Congress has historically not been so generous imposing some level of formalities on U.S. copyright owners. Securing copyright registration of a work can take months, if not years. The Supreme Court acknowledged this issue as it concluded: “True, the statutory scheme has not worked as Congress likely envisioned. Registration processing times have increased from one or two weeks in 1956 to many months today.” Database registrations can require years before actual registration.
The formalities limitations found in the Copyright Act provide: “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 in accordance with this title.” Once again, the word “made” having historical significance resulted in a split between circuits. Different courts of appeals have taken radically different positions. On one hand, some the filing of a pending application meets the standard. On the other hand, a cause of action must wait until issuance of the registration.
The Supreme Court agreed with the latter, forcing actual registration prior to initiation of a suit. As Justice Ginsburg concluded: “Unfortunate as the current administrative lag may be, that factor does not allow us to revise § 411(a)’s congressionally composed text.” While registration might not have been a problem when books were only in paper format, in the digital age of publication administrative delays are an important problem. For example, desperately needed injunctions are part of a “remedy for infringement” and arguably now cannot be granted preregistration.
The Complexities of the Copyright Act
In both of the above cases, multiple litigants, judges and even appeals jurisdictions misconstrued part of the Copyright Act. Words such as “full costs” and “registration of the copyright claim has been made” have been, for decades, misconstrued. The Supreme Court has unanimously clarified these terms.
Truth be told, many terms in the Copyright Act have been, over the years, given very unique interpretations based on historical constructions or precedents. Litigants, when plainly reading “the court in its discretion may allow the recovery of full costs by or against any party,” must know in fact only a very small portion of incurred costs will be granted.
Litigants also must know that Chapter 4 of the Copyright Act, listed as “Copyright Notice, Deposit, and Registration,” includes a limitation applicable to Chapter 5 of the Copyright Act titled “Copyright Infringement and Remedies.” Many more cases on the horizon should construe additional portions.
This month, the Supreme Court reminded us that the U.S. Copyright Act requires careful analysis and a deep understanding of precedents.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
- Rimini Street, Inc. v. Oracle USA, Inc., 586 U. S. ____ (2019).
- Fourth Estate Public Benefit Corporation v. Wall-Street.com, 586 U. S. ____ (2019).
- 17 U.S.C. §505.
- The six categories that a federal court may award as costs are: “(1) Fees of the clerk and marshal; (2) Fees for printed or electronically recorded transcripts necessarily obtained for use in the case; (3) Fees and disbursements for printing and witnesses; (4) Fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case; (5) Docket fees under section 1923 of this title; and (6) Compensation of court appointed experts, compensation of interpreters, and salaries, fees, expenses, and costs of special interpretation services under section 1828 of this title.” 28 U.S.C. §1920.
- Rimini Street, 586 U. S. ____ (2019) (slip op., at 6).
- Rimini Street, 586 U. S. ____ (2019) (slip op., at 10).
- 17 U.S.C. § 411(a) (emphasis added).
- Cosmetic Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 621 (9th Cir. 2010)
- Fourth Estate Public Benefit Corporation v. Wall-Street.com, 856 F.3d 1338, 1341 (11th Cir. 2017).
- Fourth Estate, 586 U. S. ____ (2019) (slip op., at 12).
- 17 U.S.C. § 502(a)-(b)
- VHT, Inc. v. Zillow Group, Inc., et al, Case No. 17-35588 (9th Cir. July 19, 2017).
Reprinted with permission of Law360.