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A Prerequisite to Invalidate a Copyright Registration Based on Misrepresentation

On October 9, 2013, in Copyrights, by Brian A. Hall

UnIntellectual Property (UnIP): Copyright Registration for Logo Based Upon a Knowing Misrepresentation

This is a rather strange decision out of the United States Court of Appeals for the Seventh Circuit. It involves review of a the District Court’s invalidation of a copyright registration with the US Copyright office based upon a knowing misrepresentation in the application. While agreeing with the District Court’s finding of fact and opinion, it remanded the decision to invalidate the copyright registration because of a rather new procedure included in the recent amendments to the Copyright Act. In particular, courts confronted with a registration allegedly obtained by knowing misstatements in an application “shall request the Register of Copyrights to advise the court whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.” See generally Prioritizing Resources and Organization for Intellectual Property Act of 2008 (“PRO IP Act”), Pub.L. No. 110–403, § 101, 122 Stat. 4256, 4257–58; see also 17 U.S.C. § 411(b)(2). Recall that the Copyright Act provides for the invalidation of registrations where the registrant knowingly misrepresented information in his application and “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.” 17 U.S.C. § 411(b)(1)(A)-(B). Instead of relying solely on the court’s own assessment of the Register’s response to an inaccuracy, the statute obligates courts to obtain an opinion from the Register on the matter.

Since the parties did not ask the District Court to consult the Register before invalidating the copyright registration, and instead relied upon its own reasoning, albeit consistent with that of the Register, the District Court decision was remanded. The Seventh Circuit held: “By granting a declaratory judgment invalidating DeliverMed’s copyright registration without following the statutorily mandated procedure, the district court made a legal error.” Thus, it is clear from this decision that a court still must request a response from the Register before coming to a conclusion as to the materiality of a particular misrepresentation. The Court did go on to give the following guidance/caution:

“Given its obvious potential for abuse, we must strongly caution both courts and litigants to be wary of using this device in the future. See, e.g., Olem Shoe Corp. v. Wash. Shoe Co., No. 09–cv–23494, 2010 U.S. Dist. LEXIS 143590, at *6 n. 4 (S.D.Fla. Sep. 3, 2010) (noting section 411(b)(2)’s potential as a “weapon to delay the proceedings in district court”). Although the statute appears to mandate that the Register get involved “[i]n any case in which inaccurate information [in an application for copyright registration] is alleged,” 17 U.S.C. § 411(b)(2), input need not be sought immediately after a party makes such a claim. Instead, courts can demand that the party seeking invalidation first establish that the other preconditions to invalidity are satisfied before obtaining the Register’s advice on materiality. In other words, a litigant should demonstrate that (1) the registration application included inaccurate information; and (2) the registrant knowingly included the inaccuracy in his submission to the Copyright Office. 17 U.S.C. § 411(b)(1)(A). Once these requirements are met, a court may question the Register as to whether the inaccuracy would have resulted in the application’s refusal. Aside from minimizing the risk that parties would use this provision as a delay tactic, this approach has the added benefit of an endorsement from the Register. See Response of the Register of Copyrights to Request Pursuant to 17 U.S.C. § 411(b)(2) at 12, Olem Shoe, No. 1:09–cv–23494 (“[B]efore asking the Register whether she would have refused to register a copyright … a court should feel free to determine whether there is in fact a misstatement of fact.”). When faced with this situation in the future, courts should tread carefully and employ this mechanism only when necessary.”

DeliverMed Holdings, LLC v. Schaltenbrand, 12-3773, 2013 WL 5524862 (7th Cir. Oct. 7, 2013).