It’s not uncommon for individuals or small businesses to try to save money by filing copyright applications themselves. It’s also not uncommon for some of these registrations to include factual or legal errors, jeopardizing the validity of the resulting registrations. But could a simple error upend what would otherwise be a successful copyright lawsuit? In a 6-3 decision, and likely Justice Stephen Breyer’s final copyright opinion, the U.S. Supreme Court ruled on February 24, 2022, that the validity of a copyright registration cannot be challenged for mere inadvertent
legal errors. The decision in Unicolors v. H&M provides a rare instance in U.S. law where ignorance of the law is an excuse.
Unicolors Sues H&M Based on an Erroneous Copyright Registration
The case began in April 2016 when Unicolors, a textile company that owns copyrights in various fabric designs, sued H&M for copyright infringement over one of its fabric patterns. The jury agreed with Unicolors and returned a nearly $800,000 verdict in its favor.
But H&M asked the district court to grant it judgment as a matter of law notwithstanding the verdict, arguing that Unicolors did not have a valid copyright registration because it knowingly provided inaccurate information during the registration process. Specifically, H&M argued that Unicolors filed a single application to register 31 separate works—a registration that ordinarily could only be used if all of the works were published together—but here Unicolors had offered only some of its designs to the general public, while initially restricting the other designs for exclusive customers.
If Unicolors’ registration was invalidated, it would upend the $800,000 verdict. Although an author automatically owns copyright upon creation of a work, registration is a necessary prerequisite to bringing a lawsuit. (There are also a host of benefits that come with a copyright registration, including statutory damages for infringement and a presumption of ownership.)
Recognizing the value and importance of copyright registrations, Congress included in the 2008 PRO-IP Act a safe harbor for copyright registrants: under 17 U.S.C. §411(b), even inaccurate information is permitted on a copyright registration application, unless it was included “with knowledge that it was inaccurate.”
Relying on §411(b), the U.S. District Court for the Central District of California rejected H&M’s argument, holding that because Unicolors did not know it had failed to satisfy the “single unit of publication” requirement, its registration was still valid under the safe harbor. But on appeal, the U.S. Court of Appeals for the Ninth Circuit reversed and held that the safe harbor excuses only good-faith mistakes of fact, not law. Because Unicolors knew that it offered the designs to customers on different dates, its knowledge (or lack thereof) of the law requiring a single unit of publication was irrelevant.
“Knowledge” Means Actual Knowledge—Both of the Facts and the Law
Vacating the Ninth Circuit’s judgment, the U.S. Supreme Court majority held that a “lack of either factual or legal knowledge can excuse an inaccuracy in a copyright registration under §411(b)(1)(A)’s safe harbor.” Writing for the majority, Justice Breyer noted that registration applications “call for information that requires both legal and factual knowledge,” such as determining whether a work was made “for hire” under §409(4), when and where a work was published under §409(8), or whether a work is “a compilation or a derivative work” under §409(9).
In the context of §411(b), “‘knowledge’ means actual, subjective awareness of both the facts and the law,” as Justice Breyer believes that Congress would have explicitly said if it intended to require a different scienter standard. Because many copyright applicants include “novelists, poets, painters, designers, and others without legal training,” the majority concluded that “[n]othing in the statutory language suggests that Congress wanted to forgive those applicants’ factual but not their (often esoteric) legal mistakes,” and that “Congress enacted §411(b) to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations.”
But if ignorance of the law is an excuse, does this mean that anyone can get away with erroneous copyright applications simply by claiming they were unaware of the facts or the law? Not necessarily. In response to H&M’s argument that any copyright holder could simply claim a lack of knowledge and avoid the consequences of an inaccurate application, Justice Breyer noted that “courts need not automatically accept a copyright holder’s claim that it was unaware of the relevant legal requirements,” as “willful blindness may support a finding of actual knowledge.”
To that point, a court could find an applicant was actually aware of, or willfully blind to, legally inaccurate information by looking to “circumstantial evidence, including the significance of the legal error, the complexity of the relevant rule, the applicant’s experience with copyright law, and other such matters[.]” This could result in courts imposing a higher standard for copyright applications filed by lawyers than unrepresented parties.
Justice Clarence Thomas wrote for the dissent, joined by Justices Samuel Alito and Neil Gorsuch, arguing the Court should have dismissed the case altogether on procedural grounds because Unicolors changed its position in its briefing and oral argument and did not address the original question presented to gain certiorari. Unicolors’ petition for certiorari asked the Supreme Court to decide whether §411(b)’s “knowledge” element requires “indicia of fraud,” yet Unicolors pivoted to a different argument proposing a novel “actual knowledge” standard—an issue that had not been addressed by any lower court.
Joined by only Justice Alito, Justice Thomas also cautioned that the majority imposed an actual-knowledge-of-law standard, noting that “[a] requirement to know the law is ordinarily satisfied by constructive knowledge,” and the majority identifies no other provision in the Copyright Act with an actual knowledge standard.
Implications of Unicolors for Plaintiffs and Defendants
One implication of Unicolors
is certain: individuals and small businesses that have previously applied for copyright registrations without assistance from experienced legal professionals may sleep a little bit easier, knowing that their registrations are less likely to be invalidated due to some legal rules that they were unaware of.
Unicolors helps ensure creators’ registered works can enjoy the full protection of the Copyright Act even if inadvertent mistakes are made during the application process. This is especially helpful for independent artists and other copyright holders who may not be able to afford an attorney to register their work with the U.S. Copyright Office and instead do so themselves.
For copyright infringement defendants, the picture is less rosy. As Justice Thomas notes in his dissent, “actual knowledge of illegality” can be “difficult or impossible to prove[.]” However, Unicolors does not entirely shut the door on copyright infringement defendants who identify material errors in opponents’ copyright registrations. The majority noted that in addition to evidence of knowledge (which can be rare), “[c]ircumstantial evidence, including the significance of the legal error, the complexity of the relevant rule, the applicant’s experience with copyright law and other such matters, may also lead a court to find that an applicant was actually aware of, or willfully blind to, legally inaccurate information.”
Although copyright registrants may be expected to feign ignorance following this decision, the facts learned in discovery may suggest otherwise. Unicolors could have turned out very differently if the defense unearthed an email in which a Unicolors employee suggested that they could save time and money if they bent the rules by registering multiple works jointly despite separate publication. And even if a copyright registration is not invalidated for its errors, that registration only provides a rebuttable presumption of ownership and validity, and a defendant may still be able to prove that the plaintiff does not actually own a valid copyright in spite of the registration.
Finally, Unicolors is notable because it follows Justice Breyer’s retirement announcement in January 2022, and this opinion marks what will be one of his last during his more than 27 years on the Supreme Court and almost 42 total years on the federal bench.
Justice Breyer is a luminary who has shaped copyright law, both in his landmark majority opinions such as Google v. Oracle in April 2021, as well as notable dissents such as in Golan v. Holder (2012) and Eldred v. Ashcroft (2003). Often praised for his well-balanced approach to copyright law and ability to explain complicated technical issues through his iconic analogies, his impact on the court—especially in copyright matters—will be missed.