On March 2, 2010, the Supreme Court issued a decision holding that the Copyright Act's requirement that copyright owners must register their works before suing for copyright infringement is not jurisdictional, such that federal district courts have subject-matter jurisdiction over infringement claims involving unregistered works.

On March 2, 2010, the Supreme Court of the United States issued a unanimous 8–0 decision (Justice Sonia Sotomayor, formerly of the U.S. Court of Appeals for the Second Circuit, was recused) holding that although the Copyright Act’s registration requirement, 14 U.S.C. § 411(a), is a precondition to filing a copyright infringement claim, a copyright holder’s failure to comply with that requirement does not restrict a federal court’s subject-matter jurisdiction over infringement claims involving unregistered works. Reed Elsevier, Inc. v. Muchnick, Case No. 08-103. The case involved multiple class action lawsuits filed by freelance authors alleging copyright infringement based on electronic publication of their works when the works had only been licensed to be published in print form. In an earlier decision, New York Times Co. v. Tasini, (2001), the Supreme Court had held that the Copyright Act requires specific permission from authors to print works electronically in addition to print form. The class actions were stayed pending the result in Tasini. After the Tasini decision was issued, the class actions were consolidated and referred to mediation.

During mediation, the defendants argued that the court lacked jurisdiction because § 411(a) requires registration of a copyright prior to instituting an infringement suit. Eventually the parties reached a settlement allowing payment to all authors, including authors whose works had not been registered with the U.S. Copyright Office, in exchange for permission to publish the works electronically. Under the settlement, authors with registered works were given priority in payment and higher compensation, whereas authors of unregistered works received less compensation, which could be reduced to nothing depending on the availability of funds. Ten individual authors of unregistered works objected to the terms as unfair. The parties supporting the settlement explained that the claims of authors with unregistered works were nearly worthless under § 411(a), which requires registration prior to instituting an infringement suit. After the court approved the settlement and certified the class, the objecting class members appealed.

Subsequently, the Second Circuit invalidated the settlement. Raising the jurisdictional issue sua sponte, the Second Circuit found that under § 411(a) the district court lacked subject-matter jurisdiction over the claims concerning unregistered works. The court held that every member of the class must meet the jurisdictional requirement of § 411(a) for the district court to possess subject-matter jurisdiction over the case. Finally, the Second Circuit considered whether the lack of subject-matter jurisdiction could be cured by supplemental jurisdiction. Noting that 28 U.S.C. § 1367(a) “excepts from its reach those cases in which another federal statute denies jurisdiction,” the court found against supplemental jurisdiction because § 411(a) denies federal courts jurisdiction over claims involving unregistered copyrights. Accordingly, the Second Circuit vacated the settlement and remanded the case based upon its holding that the district court lacked jurisdiction to certify the class and approve the settlement. A dissent argued that the district court did possess subject-matter jurisdiction, and that it would have held that § 411(a) was merely a “claim processing” requirement and not a jurisdictional one.

The Supreme Court granted certiorari limited to the jurisdictional issue and reversed the Second Circuit’s decision. The Supreme Court held that the registration requirement of § 411(a) did not prevent a federal district court from entering an order affecting unregistered copyrights. Justice Clarence Thomas, writing for the Supreme Court, explained:

Subject to certain exceptions, the Copyright Act (Act) requires copyright holders to register their works before suing for copyright infringement. In this case, the Court of Appeals for the Second Circuit held that a copyright holder's failure to comply with § 411(a)’s registration requirement deprives a federal court of jurisdiction to adjudicate his copyright infringement claim. We disagree. Section 411(a)’s registration requirement is a precondition to filing a claim that does not restrict a federal court’s subject-matter jurisdiction.

The Supreme Court began its analysis by applying the rule it announced in Arbaugh v. Y & H Corp. (2006), declaring that a statutory requirement is only jurisdictional if Congress “clearly states that [it] count[s] as jurisdictional” and that a condition “not rank[ed]” as such should be treated “as nonjurisdictional in character.” Like the statutory requirement involved in Arbaugh, the Supreme Court found that § 411(a) does not “clearly state” that its registration requirement is jurisdictional. The Supreme Court then analyzed the statutory language of the Copyright Act and its legislative history, finding that both weighed against finding the requirement jurisdictional. The Supreme Court noted that the registration requirement is located in a provision separate from those granting federal courts subject-matter jurisdiction over copyright claims, and moreover reasoned that finding § 411(a) to be a jurisdictional requirement would be inconsistent with the act’s provisions explicitly permitting claims involving unregistered works in certain circumstances.

Reed Elsevier reaffirms that Arbaugh’s “clear statement” rule controls whether a particular statutory requirement is jurisdictional. The decision also clarifies the scope of Bowles v. Russell, (2007), a post-Arbaugh decision in which the Supreme Court held that the deadline to file a notice of appeal in a civil case was jurisdictional based on the historical treatment of that particular requirement as jurisdictional, despite the lack of clear statement in the relevant statute.

Although the Supreme Court thus found that the district court had jurisdictional authority to approve the settlement agreement, it declined to express an opinion on the settlement’s merits. The Supreme Court also declined to address whether the registration requirement is a mandatory precondition to a copyright infringement suit such that district courts may or should enforce sua sponte by dismissing infringement claims involving unregistered works. Consequently, and to the disappointment of many, the Reed Elsevier decision does not provide guidance concerning the existing split among the various federal circuits as to how “registration” should be defined under the Copyright Act for the purposes of initiating an infringement suit. Courts following the narrow approach require a plaintiff to possess an actual copyright registration at the time of filing suit. Courts following the broader approach generally consider the registration requirement to be satisfied upon the plaintiff’s submission of a complete application to the Copyright Office.