It has been a big week for copyright cases, and it’s only Wednesday. This Monday, the Supreme Court issued opinions on two copyright cases pending before it from the October 2018 term. Both decisions are impactful and have helped to clarify frequently contested provisions of the Copyright Act. Specifically, the holdings of these cases (1) limit the cost awards available to the prevailing party in copyright cases to only statutory costs; and (2) require that copyright holders wait until the Copyright Office registers their copyright before bringing suit for copyright infringement, absent a provision allowing pre-registration litigation such as in 17 U.S.C. §411(c).
A costly decision: The Supreme Court limits the award of “full costs” to prevailing parties to statutory costs
At issue in Rimini Street, Inc. v. Oracle USA, Inc., No. 17-1625, was the proper construction of the Copyright Act’s provision giving federal courts the discretion to award “full costs” to the victorious party in copyright litigation. Some courts interpreted the statutory language awarding “full costs” to mean that the party seeking costs was entitled to all costs incurred in the case. And in Rimini Street, that culminated in an order requiring defendants, “to pay Oracle $12.8 million for litigation expenses such as expert witnesses, e-discovery, and jury consulting.” Defendants appealed this first to the Ninth Circuit—who affirmed the award—and then to the Supreme Court, arguing that “full costs” merely meant “full statutory costs.” The Supreme Court unanimously agreed with the defendants, and held that, “[t]he term “full costs” in §505 of the Copyright Act means the costs specified in the general costs statute codified at §§1821 and 1920.” The Court further clarified that, “courts may not award litigation expenses that are not specified in §§1821 and 1920 absent specific authority,” language that expands the case’s applicability to all cases, whether originally brought under the Copyright Act or not.
As anyone who has filed a Bill of Costs knows, the costs permissible under these statutes are relatively limited. Such permissible costs include witness fees ($40 per day, travel costs (including mileage and/or common carrier costs), and a subsistence allowance (if an overnight stay is required), fees of the clerk and marshal, fees for transcripts (which are subject to a set rate cap), the cost of copies and printing, docket fees, and compensation of court appointed experts or interpreters. It is expected, therefore, that this decision will drastically reduce the costs sought and awarded in copyright cases going forward.
The registration requirement of the Copyright Act requires that the Copyright Office register the copyright before litigation is proper
Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC, No. 17-571 addressed the circuit split on the correct interpretation of the word “registration” in the Copyright Act. Specifically, 17 U.S.C. §411(a) provides that no party can bring a civil action for copyright infringement until “registration of the copyright claim has been made in accordance with this title.” The circuits split as to whether the registration requirement permitted a party to bring suit after merely submitting an application to register a copyright, or if it mandated that a party must have a copyright registration from the Copyright Office in hand in order to bring suit. Based on the statutory language of the Copyright Act, the Supreme Court unanimously held that, “registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration.” In support of this position, the Court noted that this interpretation is consistent with the remainder of the statute; specifically, the first two sentences of §411(a) focus on action taken by the Copyright Office, and the third sentence permits a party to file suit if registration is refused. Contextually, therefore, it is logical that “registration” requires action by the Copyright Office, and that suit can only follow a decision by the Copyright Office to grant or deny the application.
This decision is likely to have two immediate effects. First, it is likely that copyright holders may be motivated to register their copyrighted works upon creation so that they have the ability to litigate without delay. And second, it is likely that the Copyright Office will have an influx of registrants seeking to take advantage of its “special handling” option for registration, which expedites registration in the face of pending litigation. Special handling registrations take only around five business days, but come with a premium price tag of $800. For a litigant hoping to stop an infringer, however, that is a small price to pay to obtain the necessary registration to enforce one’s copyrights.