The Eleventh Circuit’s decision in Kernel Records Oy v Mosley, et al., published on September 14, 2012, drives home the following point: failure to register a work with the U.S. Copyright Office prior to commencing a copyright infringement suit may well cause the case to be “thrown out” of court. Under the law, as we will see below, the owner of a bona fide foreign work may commence a lawsuit in the United States without first registering the work with the U.S. Copyright Office. The decision is timely because it includes a detailed analysis of the problems which may encountered in reconciling copyright law with current online “publication” technology to determine whether or not a work is truly a foreign work and therefore exempt from the registration requirement.
Case page numbers cited below are for the slip opinion.
The case involved a software musical file originally created by Janne Suni. With Suni’s permission, Glenn Gallefoss modified Suni’s original software to make it playable on a type of computer system which did not recognize Suni’s file. In August 2002, with Gallefoss’s permission, the modified tract appeared in an Australian disk magazine. Kernal at 2-3.
In 2006, the release of the song entitled “Do It” by well-known pop artist Nelly Furtado triggered the instant copyright infringement action brought by Kernal Records Oy in the U.S. District Court for the Southern District of Florida. Gallefoss was not, however, the plaintiff in the action because by then he had assigned his rights in his work to Kernal Records Oy. Kernal Records was the plaintiff and in its complaint named Defendant Timothy Mosley and his Production Company Mosley Music Group, LLC (collectively Mosley) as defendants in the lawsuit because they had produced Furtado’s song.
In its complaint, Kernal Records alleged that “Do It” contained elements from Gallefoss’s modified version of Suni’s original composition.
On May 28, 2010 both Mosley and Kernal Records moved for summary judgment. Mosley argued that the case must be dismissed because the “disk publication” constituted an Internet publication and therefore simultaneous worldwide distribution had occurred. Therefore, Kernal Records had not complied with the statutory requirements (i.e., copyright registration with the U.S. Copyright Office) before commencing its copyright infringement lawsuit in the United States. Kernal Records argued that the work was exempt from the registration requirements because the work had first been published on a physical computer disk in Australia and was not uploaded to the Internet until months later. Kernal at 8.
The case continued on with the filing of various responses in oppositions by all the parties. Several months after May 10, 2010 Kernal Records registered the work and received a certificate of registration from the Copyright Office effective April 29, 2011.
In June 2011, the district court granted Mosley’s motion by finding that Kernal Records had not provided sufficient evidence establishing that it had complied with the copyright registration requirements for commencing a copyright infringement lawsuit in a U.S. federal court. According to the district court, the “disk publication” of the work in Australia in 2002 amounted to simultaneous worldwide publication of the work. As such, the work was a United States work, which required registration of the work with the U.S. Copyright Office prior to initiation of copyright infringement lawsuit in the United States.
The district court was not swayed by Kernal Records “late” registration of the work with the U.S. Copyright Office and stated that Kernal Records “had made a ‘ “calculated decision” ’ not to seek registration, and that its tardy efforts to “hedge its bet” prevented a finding of good cause to allow [further proceedings].” Kernal Records appealed the decision. Kernal at 11.
The Eleventh Circuit affirmed the lower court, but on different grounds. Even though the case ultimately involves the rather “dry” topic of summary judgment, the Kernal Court’s opinion is nevertheless instructive because it discusses copyright issues associated with Internet and World Wide Web postings of copyrighted works in addition to driving home the point that copyright registration, subject to defined exceptions, with the U.S. Copyright Office is a pre-requisite for commencing a lawsuit in a U.S. federal court. This is so even though in the Copyright Act of 1976 (17 U.S.C. § 101 et seq.), Congress eliminated all statutory prerequisites to obtaining copyright protection. See 17 U.S.C. § 408(a) which provides that “[r]egistration is not a condition of copyright protection.” and Kernal at 14.
The Kernal case was complicated by the fact that the allegedly infringed work did not originate in the United States (i.e., was a foreign work) and that the publication of the work involved a “computer-related” publication in Australia. Furthermore, the U.S. is a member of the international copyright treaty known as the Berne Convention. Some background on U.S. Copyright Law and its nexis with the Berne Convention is in order to understand the “registration prerequisite” issue confronting the Kernal Court.
The United States became a signatory to the Berne Convention in 1988. This treaty provides minimum standards of copyright protection for the creators of copyrightable works in all member countries. Prior to becoming a member of the Berne Convention, the author of a copyrighted work was required to apply for formal registration of a copyrighted work with the U.S. Copyright Office before commencing a copyright infringement lawsuit in the United States no matter where the work was created. Upon ratification of the Berne Convention Treaty, Congress did not negate this requirement for copyrighted works originating in the United States. Thus, under the Convention and U.S. law, the United States generally requires registration of a work by U.S. authors (i.e., the U.S. is the country of origin), but not by foreign authors, as a pre-requisite for commencing a copyright infringement lawsuit in the United States.
This dichotomy concerning the accessibility to the courts can clearly present a legal dilemma where the distinction between a U.S.work and a foreign work is not clear-cut. Clearly, if the work has only been published in a foreign country, then registration of the work with the U.S. Copyright Office should not be a prerequisite for commencing a copyright infringement lawsuit in theU.S.
But what if publication occurs simultaneously in the U.S. and in a foreign country? Under such a scenario, the Berne Convention provides that “[t]he country of origin shall be considered to be: … in the case of works published simultaneously in several countries of the Union which grant different terms of protection, the country whose legislation grants the shortest term of protection” and “in the case of works published simultaneously in a country outside the Union and in a country of the Union, the latter country.”
The US Copyright Act, consistent with the foregoing Berne Convention statement provides:
For purposes of 17 U.S.C. s. 411, a work is a “United Stateswork” as defined in 17 U.S.C. s. 101 only if—
(1) in the case of a published work, the work is first published—
(A) in the United States;
(B) simultaneously in the United States and another treaty party or parties, whose law grants a term of copyright protection that is the same as or longer than the term provided in the United States;
(C) simultaneously in the United States and a foreign nation that is not a treaty party; or
(D) in a foreign nation that is not a treaty party, and all of the authors of the work are nationals, domiciliaries, or habitual residents of, or in the case of an audiovisual work legal entities with headquarters in, theUnited States.
It must be emphasized that the Berne Convention and the U.S. Copyright Act became effective long before Internet age where Internet publications may be accessible to anybody anywhere in the world at any time upon posting on the World Wide Web. Thus, the simple push of a button may result in simultaneous publication under at least certain circumstances as we will see below. In the “old” days, simultaneous publication (e.g., same day) in different countries was less likely due to logistical considerations.
Kernel Records had not registered the work as the assignee in the United States Copyright Office before commencing its copyright infringement lawsuit. Because the work at issue did not involve a “per se” work originating in the United States, under 411 (1)(A), the Eleventh Circuit was faced with determining whether permitting the case to continue was consistent within the complex framework of the Berne Convention and U.S. Copyright Law when viewed against Internet postings. That is, was the copyrighted work at issue in Kernal a foreign work by definition where pre-registration of the work was not a prerequisite for commencing the copyright infringement lawsuit in a U.S. federal court?
The Kernal Court’s decision addresses the complexities of distinguishing a “hard copy” publication from an Internet publication in the confines of the U.S. Copyright Act and the Berne Convention for determining whether a work was first published in the U.S. (and subject to the pre-registration requirements) or abroad (and not subject to pre-registration requirements).
The Kernal Court noted that
[d]etermining whether a work was first published domestically or abroad adds an additional level of complexity. Because the statutory definition of “United States work” contains strict temporal and geographic requirements (e.g., “first,” “simultaneously,” “in the United States,” “foreign nation,” and “treaty party”), a determination that a work was first published abroad requires both: (1) an examination of the method, extent, and purpose of the alleged distribution to determine whether that distribution was sufficient for publication, and (2) an examination of both the timing and geographic extent of the first publication to determine whether the work was published abroad. Kernal at 20.
The Kernal Court’s opinion includes a nice hypothetical for illustrating the factual inquiry required for determining whether a “snail mailed” free pamphlet was first published abroad or in the U.S. for copyright purposes. In the hypothetical, the free pamphlet was to be distributed by mail to every household North American continent. Such a factual inquiry would include evidence on the exact timing and geographic extent of the first publication. For example, was the pamphlet first mailed to every household in Mexico, followed a week later by a separate mailing to the rest of the continent? If so, the pamphlet is a foreign work, first published abroad, and is not subject to the registration requirement.
Or was the pamphlet first mailed to households in the United States and Mexico, followed a week later by a separate mailing to the rest of the continent? If so, the pamphlet was first published in the United States and a treaty party [Mexico] whose law grants a term of copyright protection longer than the United States, making the work a United Stateswork that is subject to the registration requirement because Mexican law provides for a longer copyright protection term relative to the United States. See 17 U.S.C. 101 and 411 (1)(B) and Kernal at 21.
The Kernal Court emphasized that “[w]ithout evidence of the exact timing and geographic extent of first publication, it would be impossible to determine whether the pamphlet met the statutory definition of a “United States work” or was instead a foreign work.” Kernal at 21. In addition, the type of distribution may define whether or not the work qualifies as a publication. For example, if the publication was limited to only certain recipients and not disseminated to the general public, the limited distribution was not a publication. Kernal at 22.
As the Kernal case illustrates, things can become even murkier with online publications. The pamphlet example involves a situation where publication/distribution of the pamphlet is controlled (e.g., by taking the pamphlets to the post office wherein the pamphlets must contain a geographical address). Online publication generally involves a few clicks of a computer keyboard and the Internet publications need not be directed to a specific addressee. Anybody anywhere in the world may have unfettered access to an online publication.
The issue facing the Kernal Court was whether the “disk” publication of the allegedly infringed work in Australia in 2002 constituted a foreign work, thereby exempting the published work from the registration requirements of 17 U.S.C. 411. Kernal Records had the burden of proving that publication occurred abroad, “that it was in fact the first publication, and that the geographic extent of this first publication diverges from the statutory definition of a United States work.” Kernal at 22-23.
The parties agreed that the work had been published abroad (via the Australian “disk” magazine in 2002) and from a summary judgment perspective, there was no disputed material issue of fact as to whether publication had occurred. Thus summary judgment was appropriate on those grounds as the lower court found. The closer call was whether the publication had been simultaneously published.
The Eleventh Circuit deviated from the lower court’s finding that the the “disk” publication constituted simultaneous publication in the U.S. Recall that simultaneous publication would cause the work to be a “United States work” s Australia’s copyright term meets the requirements for a simultaneously published work under 17 U.S.C. s. 411.
In particular, the Kernal Court was unhappy with the district court’s “confounding of “the Internet” and “online” with the World Wide Web.” Kernal at 26. Applying the logic of its “pamphlet” hypothetical, the Kernal Court emphasized that the district court, by conflating these terms, had failed to properly assess the nature of the publication within the confines of the “strict temporal and geographic requirements contained in statutory definition of “United States work.” Kernal at 26.
The Eleventh Circuit declined to make a blanket determination that an online publication is synonymous with simultaneous world-wide publication. Instead, the Kernal Court emphasized that the question of whether or not a work qualifies as a U.S. work under sections 101 and 411 requires a close look at the facts of a specific case. The Court’s analysis is instructive because it emphasizes that “online activity” via the Internet involves a variety of public distribution methods from private e-mails to restricted websites, to peer-to-peer networks. “Unlike public websites on the World Wide Web, each of these other methods of online distribution would be inconsistent with a presumption of simultaneous worldwide availability. Kernal at 25. See also Part V. of the Kernal decision entitled “Technology Overview” for the Court’s nice distillation of the nuances between “online”, “Internet”, and “World Wide Web.” The district court had thus “erroneously assumed all “Internet publication” results in simultaneous, worldwide distribution” and a “proper separation of the terms [would have resulted] in a very different analysis.” Kernal at 26.
Obviously Kernal Records argued that the Australian publication was not a simultaneous publication and, as such, the lawsuit should continue. After a thorough review of all the evidence, including deposition testimony, the Kernal Court concluded that defendant Moseley’s motion for final summary judgment was improperly granted because Moseley had failed to demonstrate the absence of a genuine dispute as to material fact. Kernal at 33 and 39. Furthermore, [a] reasonable fact-finder could not find that a simultaneous, worldwide publication occurred in August 2002. This strongly worded conclusion, however, did not benefit Kernal Records because the Kernal Court relied on its previous case law precedent which allows the Eleventh Circuit to “affirm a decision of the district court on any ground supported by the record.” Kernal at 33.
Citing its holding in Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1233 (11th Cir. 2012), the Kernal Court concluded that Kernal Records bore “the burden of proving compliance with statutory formalities, including the registration prerequisite.” In very strong language, the Court further stated that “[w]ithout sufficiently probative evidence of [allegedly infringed work] being a foreign work exempt from registration, and without certificate of registration, Kernal’s infringement suite was over before it began.” Kernal at 34.
Is the decision fair? The Kernal Court was careful to point out that “Kernal cannot persuasively claim any prejudice from [the Court’s] affirming summary judgment on a ground not expressly considered by the district court . . . . because Kernal had sufficient notice of the issue’s import and had multiple opportunities to respond.” See Kernal at 34, n. 16.
On a side note, the Kernal Court’s opinion certainly implies that it was “miffed” because “Kernal, despite being a determined plaintiff, nevertheless failed to apply for registration prior to calling on the district court to issue final judgment.” Although Kernal Records had gone ahead and obtained a certificate of registration in April 2011, recall the district court had been asked by Kernal in May 2010 to render a final judgment on Kernal’s own motion for summary judgment that the work was a foreign publication! See Kernal at 7. Had Kernal Records simply taken the step of submitting the necessary elements for the U.S. Copyright Office to issue a registration shortly after the lawsuit had been commenced, the action may not have been dismissed. Kernal at 16.
It must me noted that the Kernal decision emphasizes that any foreign work can be registered with the U.S. Copyright Office. That is, the U.S. Copyright Office is open for business in registering works originating anywhere in the world. Foreign applicants also enjoy the substantial litigation benefits Congress has granted to owners of registered works. As the Kernal Court states, the basic registration is only $35.00 and the benefits of registration far outweighs the costs of registration. Kernal at 16-17. And, such a registration will allow a case to proceed on its merits without getting into arguments over whether or not the work is a “U.S. work” requiring registration as a prerequisite for commencing and maintaining a lawsuit.
The holding from this case is an important lesson for anybody who creates a work entitled to copyright protection under the law. U.S. companies that earn their bread and butter by and through copyrighted works are generally well aware that a copyright needs to be applied for before a copyright infringement lawsuit is initiated in the United States. Moreover, copyright registration with the U.S. Copyright Office is a simple, very cost effective process for anybody, and works’ creators/owners can go ahead and simply register the copyrighted works on their own. Copyright registration also serves as notice that a work is copyright. In a copyright infringement lawsuit, registration can help defeat the infringer’s claim that any awarded damages should be reduced because the infringement was innocent.
Finally, where a foreign work may be “sent” or otherwise provided via the Internet, the work’s owner should be very careful to document the nature of the transmission (e.g., an e-mail type of transmission) to avoid any future allegation that the transmission was a simultaneous publication of a protected work. As the Kernal decision emphasizes, not all “Internet” transmissions will necessarily meet the definition of simultaneous publication under the law. Nevertheless, the plaintiff who has not registered the work with the U.S. Copyright Office prior to initiating a lawsuit will have the burden of overcoming any allegation that the work was a U.S. publication as the result of worldwide simultaneous publication.
THE FOREGOING IS NOT LEGAL ADVICE NOR SHOULD YOU CONSIDER IT AS SUCH. YOU SHOULD CONSIDER CONSULTING WITH AN ATTORNEY OF YOUR CHOOSING IF YOU ARE CONTEMPLATING AN ACTION WHICH MAY HAVE LEGAL CONSEQUENCES.
© Troy & Schwartz, LLC, All Rights Reserved.
