Addressing for the first time whether §514 of the Uruguay Round Agreements Act violates the freedom of expression of reliance parties, the U.S. Court of Appeals for the Tenth Circuit upheld the constitutionality of §514 under the First Amendment. Golan v. Holder, Case Nos. 09-1234, -1261 (10th Cir., June 21, 2010) (Briscoe, C.J.).
Section 514 of the Uruguay Round Agreements Act (URAA) restores copyrights in foreign works that were previously in the public domain in the United States for three specific reasons: failure to comply with formalities, lack of subject-matter protection or lack of national eligibility. The Act was implemented to comply with the Article 18 of the Berne Convention, which was implemented by TRIPs. Reliance owners, i.e., parties who exploited the works prior to the restoration of the copyrights, were granted some protections under §514. Reliance owners have a 12-month grace period from notice of restoration against liability for copyright infringement. Reliance parties who created derivative works (works based on a restored work) are allowed to continue to exploit the derivative work for the duration of the restored copyright if they paid the owner reasonable compensation.
The plaintiffs, a group that performed, distributed and sold public domain works, brought a lawsuit challenging §514 of URAA under the First Amendment. After the district court found in favor of the plaintiffs, the United States appealed. On appeal, the Tenth Circuit determined the statute was a content-neutral regulation of speech and that therefore intermediate scrutiny should apply. Under intermediate scrutiny, a statute is only sustained under the First Amendment if it advances an important governmental interest and does not burden substantially more speech than is necessary to further those interests.
The government identified three important interests it argued were served by this statute: attaining indisputable compliance with international treaties and multilateral agreements, obtaining legal protections for American copyright holders’ interests abroad and remedying past inequities of foreign authors who lost or never obtained copyrights in the United States. The plaintiffs, on the other hand, maintained that the United States did not have an important interest in a “reallocation of speech interests” between American reliance parties and American copyright holders.
The Tenth Circuit, citing the First Amendment interests of American copyright holders abroad, found that the government had sufficiently demonstrated a substantial interest to support the limited burden on speech the statute imposed. The court also noted its deference to Congress’s decisions regarding foreign affairs and the substantial evidence presented before Congress supporting the statute’s enactment.
Arguing against the statute, the plaintiffs and the district court relied on the availability of alternative approaches to implementing the Berne Convention, specifically the model of the United Kingdom, which provided stronger protections to reliance parties. The court rejected this argument, noting that a statute “need not be the least restrictive or least intrusive means” to serve the government’s interest and found that §514 was sufficiently narrowly tailored to further the government’s interest of beneficiary American copyright holders.
