Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC et al.
Supreme Court of the United States
On January 8th, 2019, the Supreme Court of the United States heard oral arguments in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, Case number 17-571. The court was asked to consider what “registration” means in “no civil action for infringement of [a] copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made . . . .” 17 U.S.C. § 411(a). Fourth Estate, the petitioner, argued registration means an author of a work only needs to submit a registration application. Wall-Street.com, the respondent, believes registration means that the U.S. Copyright Office makes a final determination on the application, either to register or refuse registration of a work.
The case originated when Fourth Estate Public Benefit Corporation filed a copyright infringement claim against Wall-Street.com in the Southern District of Florida. Fourth Estate had licensed news articles to Wall-Street.com, but, according to the complaint, the website broke the terms of the agreement. At the time the complaint was filed, Fourth Estate had submitted applications to register the articles with the Copyright Office, but the Office had not made a final determination. Wall-Street.com moved to dismiss for failure to state a claim because the Copyright Act requires the work to be registered to initiate an infringement claim. 17 U.S.C. § 411(a). Both the Southern District of Florida and the Eleventh Circuit agreed with Wall-Street.com and dismissed the complaint. Fourth Estate then appealed to the Supreme Court of the United States.
Part of the reason the Supreme Court took this case is that there is a circuit split regarding the definition of “registration” in the Copyright Act. The Ninth and Fifth Circuits only require a plaintiff to apply for registration to have standing, while the Tenth and Eleventh Circuits require that the Copyright Office make a final determination before there is standing. The Supreme Court’s decision in this case should resolve the split by defining the term “registration” in the Copyright Act and what is required of a copyright owner prior to filing a lawsuit.
During Oral Arguments, both sides focused heavily on the text of the Copyright Act. The debate centered on whom the active actor is doing the registration in section 411(a). Fourth Estate maintained it is the author who must register by submitting the application. Wall-Street.com countered by arguing the Copyright Act as a whole only makes sense if “registration” means the Copyright Office makes a final determination. Generally, the justices seemed to agree with Wall-Street.com but acknowledged there was room for interpretation.
At one point Justice Sotomayor did ask the attorney for Wall-Steet.com to explain the difference between pre-registration and registration. Pre-registration is a special process to give protection to a copyrighted work which falls within a category of work that historically has been stolen before first commercial publication, such as movies, television shows, or books. See 15 U.S.C. § 408(f)(2). However, a pre-registered work must still apply for registration either within one month after receiving notice of infringement or three months after publication. See 15 U.S.C. § 408(f)(3). During oral arguments, the lawyer for Wall-Street.com used the language of section 408(f) to demonstrate “Congress knew how to make clear that they wanted to peg something to an application.” Due to the limited circumstances where pre-registration applies, both sides were quick to redirect the Court’s attention back to the main arguments surrounding the term “registration.”
Fourth Estate did raise the practical implications of the final determination approach. Currently, it takes about six to seven months for the Copyright Office to complete an application, which Fourth Estate argues puts smaller artists at a disadvantage when trying to initiate litigation quickly. The justices recognized some copyright owners might be at a disadvantage under the final determination approach, especially Justice Kavanaugh, who asked several times if the delays were a problem. Nonetheless, the argument kept returning to the statutory language of section 411(a).
At one point Justice Kagan said to the Fourth Estate attorney, “I understand some of the policy arguments that you have on your side, but, I mean, the question is whether the text can be looked at that way . . . . [I]t seems . . . the only way to read [411(a)] is that the ‘registration has been made’ is by the Registrar . . . .”
This case dives into weeds of the Copyright Act, but there are many parties who are interested in the outcome of this case, including large and small video game developers alike. The Copyright Office provides an option for special handling of copyright applications, through which a copyright applicant can receive a registration in less than 1 week, but at a cost of about $800 (normal registration is presently ~$55). We recognize that this increased cost could be considered a burden on small copyright owners. However, if that small copyright owner intends to litigate, then this increased cost is insignificant compared to the total cost of litigation that a small copyright owner (or its attorneys) would incur.
Reading the tea leaves of the Court, we believe it likely that Wall-Street.com will prevail, but we will provide an update once the Court has issued its opinion.