Troy & Schwartz Attorneys-At-Law

The Moral of the Blog.  Choreographic works are copyrightable under the 1976 Copyright Act.  However, just how far that protection reaches under the jurisprudence of the various circuits may well depend on whether the circuit adopts the U.S. Copyright Compendium’s definition of choreography which is favorable to choreographers.  As with any copyright infringement case, the trier of fact is tasked with determining whether the copyrighted work and the alleged infringing work are substantially similar wherein the analysis involves both a quantitative (how much?) and qualitative (how significant?) analysis.  District courts are generally the gate keeper in determining if a work qualifies for copyright protection.  Although choreographic works are among the least copyrighted works, the decision discussed below is instructive because of its focus on quantitative vs qualitative analyses of infringement.

A Word of Caution.  It is not clear just how the plaintiff in the case discussed below became aware of potential copyright infringement of his registered work.  It must be emphasized that today numerous AI programs exist which can search the Internet to find infringing works.  Such software is now being routinely used by photographers.  Generative AI also has huge implications in the arena of copyright infringement which the Copyright Office is well aware of and attempting to address.

Discussion.  When it comes to copyrightable works, we generally think of books, musical compositions, sound recordings, paintings, and software.   The Ninth Circuit’s Nov. 1, 2023 decision in Hanagami v. Epic Games, Inc., et al. is a reminder that choreography is a protectable work under U.S. copyright law since the enactment of the 1976 Copyright Act, the first federal copyright statute to provide express protection for “choreographic works” which are “original works of authorship.”  17 U.S.C. § 102(a)(4).

In Hanagami, a choreographer commenced a copyright infringement lawsuit against the creator of a videogame having virtual animation known as “emote” which the choreographer claimed depicted portions of his registered choreography.  The dance routine had first appeared on YouTube in 2017, and Hanagami obtained a copyright registration in 2021.  Epic Games argued that the choreographer had failed to state a claim because the allegedly copied dance steps were not protectable elements of the copyrightable work and thus not substantially similar to Epic’s remote.  The district court agreed by focusing on the choreography’s individual poses rather than the “whole” work, concluding that the copied portion of the work was closer to a uncopyrightable “short routine” and comprised a “small component” of the choreographer’s work.  As such, there was no substantial similarity between the copyrighted work and the emote and the case was dismissed.

The Ninth Circuit disagreed.   In doing so, the Court noted that the Act does not specifically define choreographic works and that there is little case law pertinent to infringement of choreographic works.  The Hanagami Court adopted the Copyright Office’s definition of choreography stated in the Compendium of U.S. Copyright Office Practices. The Compendium is not legally binding on any court, and was drafted by the Copyright Office to provide guidance and interpretation of various aspects of copyright law.  Here, the Court relied on the definition as persuasive authority.  Slip opinion, FN 10.  It concluded that the district court’s approach of reducing the choreography to “poses” was at odds with the Ninth Circuit’s way of analyzing copyright claims for other art forms, like musical compositions.

The Compendium defines choreography as “the composition and arrangement of a related series of dance movements and patterns into a coherent whole.”  Although related, dance and choreography are not synonymous.  Dance is defined by the Compendium as the “static and kinetic succession of bodily movement in certain rhythmic and spatial relationships.  The Court was careful to point out that the Compendium does not draw a bright line distinction between copyrightable choreography and uncopyrightable dance.   However, to be copyrightable, the choreography must not be simply based on common dance themes such as a basic foxtrot step or a common ballet position.  As with book themes (e.g., political satire) or song themes (e.g., a breakup), choreographers should be able to use certain “building” blocks of dance and choreography at will.   “The uncopyrightable elements of a dance instead function as the building clocks for a choreographer’s expression in such the same way that words and short phrases provide the basic material for writers.”  Slip opinion at 20.

The Court held that the district court incorrectly found that the choreographic work was not protectable by focusing on the individual, unprotectable elements.  Indeed, “reducing choreography to “poses” would be akin to deducing music to just “notes.”  Slip opinion at 22.  Instead, the Court agreed with the choreographer that his protectable elements include not only the dancer’s poses but also their body potion, body shape, body actions, transitions [between poses], use of space, pauses, timing, energy, canon, motif, contrast, and repetition.   Slip opinion at 21.  Accordingly, what defines choreographic works is the relationship between these movements and patterns and the Hanagami alleged that the copied segment is the most recognizable and distinctive portion of his work, similar to the chorus of song which is repeated more than once.  Hence, a jury may well find the copied portion to be qualitatively significant Slip opinion at 27.   Slip opinion at 22.

A good part of the Hanagami decision focuses on the challenges juries face when determining whether an alleged infringing work such as a choreographic work is substantially similar to a copyrighted work.   Generally, de minimis copying is not actionable.  In Hanagami, the alleged copying included a two-second combination of eight bodily movements, set to four beats of music performed ten times throughout the five-minute registered mark which at first blush may seem de minimis.   The district court had additionally dismissed the case by finding that the allegedly copied choreography was “short” and a “small component” of Hanagami’s overall five-minute routine.  Interestingly, Epic Games did not argue at the district court level that the alleged copying was de minimis.

The Ninth Circuit held that the district court had also erred in its de minimis analysis.  As the Court stated, the proper inquiry is not merely based on the mere length of the copied material.  “The question in each case is whether similarity relates to matter that constitutes a substantial portion of the plaintiff’s work which is an “evaluation [that]must occur in the context of each case, both qualitatively and quantitatively.  Slip opinion at 26 quoting Nimmer on Copyright § 13.03 (2023).   Accordingly, what matters is whether the copied portion is deemed significant.  The usage of a relatively small portion of an entire work may still be infringing if that portion is qualitatively important.  Indeed, Hanagami alleged that the copied segment is the most recognizable and distinctive portion of his choreographed work, similar to the chorus of song which is repeated more than once.

By way of a musical composition example, consider the iconic theme song for the movie “Jaws.”  The first few stanzas are the most recognizable portion of the score.  Those of us who have seen Jaws are reminded of the movie whenever those stanzas are heard.  Qualitatively, these few stanzas would be of immense qualitative importance in any copyright infringement lawsuit involving the score.

The determination of substantial similarity is generally made by the trier of fact.  In the Ninth Circuit, the standard is the “intrinsic test” which focuses on “the similarity of expression from the standpoint of the ordinarily reasonable observer with no expert assistance.”   Slip opinion at 17.  The commentator emphasizes that jury outcomes are difficult to predict in a copyright infringement case because of the subjectivity of the substantial similarity analysis even under the “reasonable observer” test.

Not surprisingly, the Court reversed the district court’s dismissal of Hanagami’s copyright infringement claims and remanded the case for further proceedings on two grounds:  1) its failure to focus on the choreographed work as a whole to determine its eligibility for protection rather than on the unprotectable individual elements; and 2) its failure to assess the qualitative significance of the allegedly copied portion of the work.  Apparently, the district court would only have “accepted” the work as being protectable if Epic Games had used the copyrighted work in its entirety.

The commentator notes that the work had been registered by the U.S. Copyright Office several years after the work had appeared on You Tube or was published.   Accordingly, the choreographer will most likely need to prove damages (a challenging endeavor) since statutory damages will not be available.  This is why it is important to seek copyright registration within 90 days of publication so that that any copyright infringement can seek statutory damages.  Apparently, the district court would only have “accepted” the work as being protectable if Epic Games had used the copyrighted work in its entirety.

Take Home Points.  The Hanagami decision drives home the point that copyright infringement cases are complex.    Even where issues of copyrightability do not arise, substantial similarity determinations are often not predictable and may vary from jury to jury for all but the most obvious cases of blatant copyright infringement.   Nevertheless, copyright protection is intended to protect creators from the unauthorized use of their creations.  It is highly recommended that copyright registration applications be filed within 90 days of the work’s publication to reap the benefits of statutory damages and shifted attorneys’ fees and costs in a copyright infringement lawsuit if infringement is proven.

In Need of Legal Counsel on Copyright Matters? Contact Susan at 305-279-4740 for all matters related to copyright law from registration to copyright infringement lawsuits.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL, THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

© 2023 by Troy & Schwartz, LLC

The Moral of the Blog:   Perhaps one of the most misunderstood requirements for obtaining and maintaining the registration of a service or trademark is that the mark’s recited services/goods must be being offered in commerce to maintain a viable registration.  Otherwise, the registered mark is subject to cancellation by the USPTO as this blog discusses.

A Little Personal Background.  Wolfie Cohen’s Rascal House, once located in Sunny Isles, Florida, was one of my late mother-in-law’s favorite restaurants.  Despite her background as a famous dress designer in the 1950s and 1960s who introduced petite-sizing to the fashion world, she never stopped enjoying the food she grew up with in New York City where her stellar career was launched.   The commentator still has fond memories of family lunches at this restaurant last century where the tween kids would try and outdo each other with grossness much to the chagrin of their elegant grandmother.

Introduction. Rascal House (located in Boca Raton, Florida) and Wolfie Cohen’s Rascal House (both word marks) and Wolfie Cohen’s Rascal House (design mark) are registered service marks owned by Jerry’s Famous Deli, Inc.  All three Registrations recite services for “restaurants and carry-our restaurant services.”   All three registrations were renewed by the 6th, 10th, and the 20th year of registration.   The renewals were based on the Registrant’s submission of specimens ostensibly showing use of the marks in commerce consistent with the Registration’s recited services.

A critical tenant of trademark law is that a registered trademark must be used in commerce.  Once registration is granted, the submission of renewal documents known as declarations 8 are periodically required to establish continued usage.  Registered trademarks will be cancelled by the USPTO for failure of the Registrant to renew the registration by the timely submission of these declarations.

Registered trademarks may also be cancelled as the result of cancellation proceedings brought by third parties before the Trademark Trial & Appeal Board (“Board”).  One of the grounds for cancellation is non-use/abandonment of the registered mark as discussed in the Sept. 30, 2023 opinion by the Board in Rascal House, Inc. v. Jerry’s Famous Deli, Inc.   Here, Rascal House, Inc. (“Petitioner”) filed petitions to cancel all three of the registered “Rascal House” marks alleging abandonment of the marks when the last of the two Rascal House restaurants closed its doors in 2008.  The TTAB consolidated the proceedings and bifurcated the case into two stages.  This first stage, which this blog discusses, addressed the issue as to whether the Respondent (Jerry’s Famous Deli, Inc.) had abandoned the marks.

Registrations are presumed valid under the law, and a party seeking cancellation bears the burden of providing abandonment.  The cancellation standard is preponderance of the evidence.  For cancellation on the basis of abandonment, Section 45 of the Lanham Act requires that “usage of the mark has been discontinued with intent not to resume such use.  Non-use for 3 consecutive years shall be prima facia evidence of abandonment.”   The Act defines “use” of the mark as bona fide use of the mark in the ordinary course of trade, and not merely to reserve a right in the mark. For service marks, a mark is used in commerce on services when (1) when it is used or displayed in the sale or advertising of services; and (2) the services are rendered in commerce.  Accordingly, mere display of the mark is insufficient to establish use unless the associated services, in this case, restaurant services, are actually being rendered.

In Rascal House, the Respondent relied on its on-going usage of specimens showing the marks after the two Rascal House restaurants  closed in 2008.  The problem with this argument is that the Respondent merely displayed the specimens at its other establishments including Miami’s Epicure Market and at a California restaurant bearing the name Jerry’s.  According to the Respondent’s own corporate representative, the usage of the marks was intended to cause customers to associate the Respondent’s non-Rascal House businesses with the Rascal House restaurants.   That is, to take advantage of Rascal House’s iconic brand to “associate what they are getting [at the Respondent’s businesses] with the Rascal House.”

As the Board pointed out, such a display would have constituted legitimate advertising of the Rascal House restaurants had the restaurants still been open. The restaurants could have been located anywhere.  However, the Respondent’s display of the registered marks did not constitute rendering of the services recited in the Registrations.  At most the usage “constituted an attempt to take advantage of residual good will in a past [local] iconic brand with services rendered under other brands such as JERRY’S or EPICURE.   Residual goodwill will does not negate a finding of abandonment based on non-use.”

Not surprisingly, the Board found that the RASCAL HOUSE marks were abandoned and emphasized what the Federal Circuit had stated in Imperial Tobacco Ltd. v. Phillip Morris: “The Lanham Act was not intended to provide a warehouse for used marks.”

The Board will next determine if the Respondent had an intent to actually use the marks.  Based on the testimony of the corporate representative in stage 1 of the proceedings and the facts of the case, the commentator believes that the marks will be cancelled.  This is because the restaurants have been closed since 2008 or far beyond the three (3) years which the law implies may be a reasonable period of non-use to prevent cancellation, e.g., where the business had supply chain issues or was confronted with events that affected its business operations such as a fire.

Discussion.  The commentator is a stickler for ensuring that a registration’s recited services/goods are indeed being offered in interstate commerce at the time of registration and when renewal declarations are filed. The USPTO cannot verify that every piece of information provided to it is true and accurate.  It depends on the forthrightness of the filing attorney and registrant to be truthful.  Moreover, when working with clients who are considering purchasing a registered mark as part of an asset acquisition, the commentator always reviews the prosecution and renewal history of the registered mark(s) to ensure there are no red flags concerning the registration status of the mark which could make it susceptible to cancellation.

With the “Rascal House” marks’ renewal documentation, the documentation filer was representing that the marks were still being used in commerce (i.e., the restaurant services were being provided) when in fact they were not after 2008.  Although the marks were renewed by the USPTO, the situation caught up with the Registrant when a cancellation proceeding was filed in 2020.

It should be noted that defendants in a trademark infringement lawsuit involving a registered mark may also seek cancellation of the registered trademark by the court.

Take Home Point:  A registered mark is only as “good” as its usage status in commerce.  Use it or lose it so to speak.

In Need of Legal Counsel on Trademark Matters? Trademark law is a complex area of the law.  Contact Susan at 305-279-4740 for all matters related to trademark law from registration to proceedings before the Trademark Trial & Appeal Board and courts of law.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL, THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT LEGAL ADVICE.

© 2023 by Troy & Schwartz, LLC

Introduction

Intellectual property assets (patents, copyrights, trade secrets, and trademarks) can be sold, assigned, or licensed by the IP’s owner.   For companies, IP ownership issues may arise where steps are not taken to ensure that any IP created by or developed by an employee or independent contractor will belong to the company or hiring party.   Such issues could have a devastating effect on the company under a variety of scenarios as discussed below.  As such, every employee of a company should be required to sign a confidentiality and IP assignment agreement as a condition for employment.  Such an agreement obligates the employee to keep confidential the proprietary information of the business, both during employment and after the employment ends.  The agreement also ensures that any inventions, ideas, creations, business plans, logos, brands, trade secrets, copyrightable works, or services developed within the scope of his/her employment during the term of employment belong to the company and not the employee.

Similarly, all independent contractors should be required to sign a confidentiality/non-disclosure agreement.  If their efforts on the company’s behalf could result in an IP asset(s), the independent contractor should also be required to sign an IP assignment of rights agreement.   Examples  of IP-related works often developed by independent contractors are: APPs, software programs, prototypes, formulations, websites and logos.

Of all the four types of IP, ownership issues involving copyrights are arguably the most misunderstood as the result of the copyright law’s work made for hire doctrine as defined in 17 U.S.C. § 101.

Copyright Ownership as the Result of a Work Made For Hire

Copyright law may seem deceptively simple compared to patent and trademark law especially with regards to the registration process.  Where copyright law can get particularly complicated for the unwary, however, is in the area of copyright ownership.  Under U.S. law, the creator or author of the work is the owner of the copyright.  But what happens if the work was created by and employee in the scope of his/her employment or by an independent contractor who was hired or commissioned to create the work?

Regarding an employer-employee relationship, the work is generally treated as a work made for hire wherein the employer (and not the employee) is deemed the author and owner of the work.  The forms for federal registration of a copyrightable work include a section addressing ownership secured on the basis of a work made for hire.

Regarding an independent contractor relationship, the work may qualify as a work made for hire providing two conditions are met pursuant to the Copyright Act (Act).  First, the work must fall into one of the nine enumerated types of works specified in the Act.  Second, the independent contractor and the hiring party must have also both signed an agreement agreeing that the work to be created is a work made for hire.  If both of these two requirements are met, the hiring party is deemed as the owner of the work created by the independent contractor.

Note the difference between works made for hire by an employee versus those made by an independent contractor.  In the latter case, the type of works qualifying as work made for hire are limited by statute and a written assignment agreement is required for all such “statutorily” defined works made for hire.

What happens if the work created by the independent contractor does not fall into one of the nine enumerated types of works in the Act?  An assignment of rights agreement executed by the independent contractor will be required for the hiring party to “honestly” claim copyright ownership as the claimant in a copyright registration application.

Why the Distinction Between and Employee and an Independent Contractor Is Important

Take the scenario of software developers who are often hired as independent contractors by startup companies.   Software can be copyrighted, but software is not one of the enumerated types of works qualifying as a work made for hire work by Independent Contractors.  Therefore, even with a written agreement stating that the software is a work made for hire, the hiring company will not actually own the copyright to the developed software under the Act even though the software developer (independent contractor) was paid to create the software.   That is, the software developer may well still be the owner of the software despite the work made for hire agreement.   On the other hand software development companies such as Microsoft Corporation that have employees dedicated to developing software are the owners/authors of any copyright-related rights in the software under the work made for hire doctrine.   See the U.S. Copyright Office Records for Microsoft Corporation’s registered copyrights where Microsoft is listed as the author of the work as the result of an employer work made for hire.

Copyright ownership issues as they relate to independent contractors may remain hidden and then arise: 1) when a business is being sold and the sale involves intellectual property (IP) assets such as copyrights; 2) in a copyright infringement lawsuit; 3) or a business is being evaluated by venture capitalists or other investors or is involved in an M&A transaction.    The buyer of IP assets will want assurance that the IP assets are indeed owned by the seller so that they may be effectively assigned to the buyer by a written instrument signed by the seller and the buyer.   A deal could fall through if the seller cannot prove to the buyer’s satisfaction that it – the seller – is the owner of the copyrights and therefore has the right to transfer ownership to the buyer.

As for a copyright infringement lawsuit, standing is a requirement for bringing a lawsuit, namely that the plaintiff is the true copyright owner.   A defendant in a copyright infringement lawsuit may be able to use “lack of ownership” as a defense if the work was created by an independent contractor and the work does not qualify as a work made for hire under the Copyright Act.  That is, ownership remains vested in the independent contractor and plaintiff does not own the copyright it claims is being infringed under the law.  The author of this blog has successfully used lack of ownership of the registered work as grounds for dismissing a copyright infringement lawsuit.

As for scenario #3, the buyer’s due diligence team will also be looking for these agreements with employees and/or independent contractors to ensure that the copyrights (and all of the company’s IP) is owned by the company.

Ensuring the Legally Sufficient Transfer of a Copyright by an Independent Contractor

What steps can be taken to ensure the proper transfer of copyright-related rights from an independent contractor?  Where the work(s) to be created clearly fall into one of the nine enumerated classifications specified within the copyright statute, the  hiring company should require the independent contractor to sign an agreement wherein the work(s) to be created is designated as a work made for hire with all associated copyright-related rights belonging to the hiring party.  This agreement should be executed by both the company and the independent contractor before work on the project commences.

Copyright ownership can also be transferred by an assignment of rights.  For her clients, the author includes an assignment of rights provision within all work made for hire agreements with independent contractors as a precaution to cover the situation where the created work may be found to not qualify as a work made for hire after all.  Thus, if for whatever reason the work should not qualify as a work made for hire because, e.g., it does not fall into one of the nine enumerated categories, the hiring party would still own the copyright as the result of the independent contractor’s assignment of rights to the hiring party.   17 U.S.C. § 201(d)(1).  Any such assignment needs to be clear as to the rights being conveyed and the nature of the underlying works.     For a good discussion of how important an assignment of rights provision may be where the work made for hire conveyance by an independent contractor fails, see Capital Concepts, Inc. v. Mountain Technology Corp., et al., WL 6761880 (W.D. Va. 2012).  In our software development example, the assignment agreement should also state that the independent contractor is assigning any and all patent and trade secret rights to the company since software may also qualify for these types of IP protection.  That is, the company/individual hiring an independent contractor needs to ensure that it is the owner of all potential IP rights emanating from the independent contractor’s work.

We are proud of the legal services we provide to our business and entrepreneurial clients on all matters related to intellectual property law including trademark law.  Contact us at 305-279-4740 to discuss any questions related to IP including ownership questions.   

Troy & Schwartz, LLC

Attorneys-at-Law

Miami, Florida  (305) 279-4740

Where Legal Meets Entrepreneurship™

This blog is for informational purposes only and does not constitute legal advice.

© 2023 by Troy & Schwartz, LLC

On June 6, 2022 a copyright infringement lawsuit was filed in the U.S. District Court for the Central District of California over the new blockbuster film Top Gun Maverick by the heirs of deceased Israeli author Ehud Yonay.  The lawsuit involves a relatively unknown area of copyright law – the recapture doctrine – codified in § 203 of the Copyright Act.  This law gives authors and their heirs the right to recapture ownership of valuable copyrights by “terminating” past assignments and licenses of copyrighted works starting at the end of the 35th year from the date of the grant and for five years thereafter.  The process is complex and requires a notice to the copyright holder as well as the filing of documents with the U.S. Copyright Office.   Recapture is available even if the original grant was for the entire life of the copyright.  The doctrine is attended to provide the copyright owner and heirs with the right to seek new opportunities to receive financial compensation for their copyrighted works.  Such an option is particularly desirable where the copyrighted work’s value has increased over time as is the case here.  The Top Gun Maverick plaintiffs are seeking an injunction and compensation.

Paramount, the movie’s producer and distributor, allegedly secured the exclusive motion picture rights to the author’s copyrighted story which resulted in the release of the first Top Gun film in 1986.  The plaintiffs assert that Paramount knowingly failed to re-acquire the rights to the requisite film and ancillary rights to the author’s copyrighted story prior to the completion and release of the 2022 sequel as a derivative work.  That is, Paramount knew it didn’t have the rights to the sequel but moved ahead with production and distribution anyway.

Mr. Yonay owned the original copyright in the story “Top Guns” which was published in a 1983 issue of California magazine.   The magazine piece described the high-adrenaline world of jet pilots at the US Navy’s “Top Gun” fighter training school. Yonay also later wrote a book, “NO MARGIN FOR ERROR: The Making of the Israeli Air Force.”

Paramount acquired the copyright to Yonay’s story immediately following its 1983 publication which resulted in the release of the 1986 film.  The copyright’s termination of the copyright became effective on January 24, 2020 or within the 5-year window from 2018, the 35^th year following the story’s publication.  The copyright claimant for Yonay’s story was not, however, the author himself but “California Magazine.”  The registration listed in the complaint is for a copyright in a “serial publication,” with California Magazine seemingly claiming authorship under the work-made-for-hire doctrine according to the registration.  See copyright registration no. TX0001213463.

It is unclear whether this underlying registration helps the plaintiffs.  Copyright laws are applied according to the territory in which the lawsuit is filed.  Registration of a work in the U.S. is a prerequisite for the commencement of a copyright infringement lawsuit since the U.S. Supreme’s decision in Fourth Estate Pub. Ben. Corp. v. Wall-Street.com.  Plaintiffs, who are not U.S citizens, may argue that U.S. registration of Mr. Yonay’s underlying story which resulted in the California article is not necessary for foreign nationals and the lawsuit should proceed.  Even if this assertion is found to be a valid basis for proceeding with the lawsuit without registration, the Plaintiff’s will likely need to allege as such under U.S. law.

Also, many of the complaint’s allegations appear to involve the expression of ideas that would fully be expect to be present in any story or film about combat military pilots, in this case navy pilots.  Copyright law does not protect common themes which appear across different works, e.g., romantic themes, works involving detectives, love songs, impressionism in art, etc.  Thus, even if the Plaintiffs pass the “copyright registration” threshold issue, they may have a very difficult time proving actual copyright infringement.

One of the more interesting allegations in the Complaint suggests that the famous scene in the original Top Gun movie where Maverick and Goose’s F14 plane is inverted over a Russian MiG was the author’s original expression. The 1983 California magazine article does reportedly show a photograph with one F-14 plane inverted atop another plane but the article credits a C.J. Heatley as the photographer.  The Complaint makes no mention of Heatley or the photograph and it is not clear from the story whether the “inverted plane orientation” is the author’s original expression and the photograph is a secondary expression which captures the literary expression to add “color” to the story.

This case will either be thrown out early on due to the registration issue without addressing “copying” issues or it will be drawn out.   Dates will be critical since Paramount is maintaining that the sequel was “sufficiently completed” prior to the copyright termination date of January 24, 2020.  Work on the sequel began in 2018.  The plaintiffs allege that the movie was completed in 2021 or well after the copyright’s 2020 termination date. “Big screen” release was postponed until May 27, 2022 after the movie was completed in 2021 because of the pandemic. Mr. Yonay passed away in 2021 or after termination of the copyright.

Plaintiffs contend that they originally sent Paramount a “termination of rights notice” in 2018 based on the 1983 magazine’s publication date.  However, Paramount allegedly ignored the letter apparently believing that the termination was ineffective because they had acquired the rights from the California magazine and not Mr. Yonay himself.  Instead, Paramount moved ahead with the very lucrative sequel.  It’s not clear who advised Paramount on the potential seriousness of this matter in 2018 but that this lawsuit has now been filed should have come as no big surprise.  The heirs now surprisingly are seeking to share in the financial bounty of a terrific movie which may owe its existence to a story written by their loved one almost 40 years ago under a legal doctrine that allows such redress.  Whether or not their claim of copyright infringement will pass muster remains to be seen.

The lawsuit will also likely call into question the underlying contracts between Paramount and California Magazine and California Magazine and Mr. Yonay.  It is noted that if a contract includes a waiver of termination rights by the copyright owner, such a waiver is generally unenforceable.

Stay tuned for periodic updates as the case progresses.

THANK YOU FOR YOUR INTEREST IN THIS BLOG.  AS USUAL THE CONTENT IS FOR INFORMATIONAL PURPOSES ONLY                    AND IS NOT LEGAL ADVICE.

Intellectual property law is a complex area of the law.  Contact us at 305-279-4740 for a complimentary consultation on protecting your inventions, creative works, brands, and proprietary information through patents, copyrights, trademarks and trade secrets or our litigation services involving intellectual property disputes.   We represent both individuals and business entities.  Our mission is to serve innovators and creators in protecting the fruits of their hard work and ingenuity through our Client Services Creed:  Conscientious, Rigorous, Energic, Empathetic, and Diligent legal services. 

© 2022 by Troy & Schwartz, LLC

On Feb. 24, 2022 in a 6 to 3 decision, the U.S. Supreme Court held that mistakes of law – and not only mistakes of fact – could protect copyright infringement lawsuit plaintiffs from losing their copyrights on grounds of inaccurate registrations.  The decision is a win for creators who own registered copyrights.  Remember, since 2019, copyright registration is an absolute requirement for commencing a copyright infringement lawsuit as the result of the Supreme Court’s decision in Fourth Estate Public Benefit Corp. v Wall-Street.com, LLC.

Background of the Lawsuit

In 2020 Unicolor, a fabric design company, sued fashion giant Hennes & Mauritz, LP (H&M) for copyright infringement of Unicolor’ copyrighted 2-dimensional fabric designs.  Unicolor’ registered copyright stemmed from its copyright registration for 31 separate designs allegedly included in the same unit of publication.  The Copyright Office’s regulations governing the submission of applications provides that a single application may cover multiple works only if they were “included in the same unit of publication.” The opportunity to submit multiple works in one application can save the applicant considerable filing fees.  H&M argued that Unicolor had failed this requirement by making some of the designs exclusively available to certain customers while offering the rest to the general public.  That is, the designs were not included in the same unit of publication.

The Relevant Statute

The Copyright Act includes the following statements under section § 411(b):

(1)  A certificate of registration satisfies the requirements of this section and section 412, regardless of whether the certificate contains any inaccurate information, unless—

(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and

(B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.

(2) In any case in which inaccurate information described under paragraph (1) is alleged, the court 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.

The Decision

The Unicolor case involves interpretation of § 411(b)(1)(A), commonly referred to as a safe harbor provision.  The District Court determined that because Unicolor did not know when it filed its application that it had failed to satisfy the “single unit of publication” requirement, Unicolor copyright registration remained valid by operation of the safe harbor provision.  The Ninth Circuit disagreed and instead opined that the safe harbor provision only applied to good-faith mistakes of fact, not law.  Unicolor had known the relevant facts surrounding publication of the designs; its knowledge of the law (or lack   thereof) was irrelevant

The U.S. Supreme Court sided with the District Court by holding that 411(b)(1)(A) is applicable to both mistake of law and mistake of fact.  As such, lack of either factual or legal knowledge can be the basis for the application of the statute’s safe harbor provision.

In finding for Unicolor, the Court found that cases decided before § 411(b) was enacted “overwhelmingly” found that inadvertent mistakes in copyright registration did not invalidate copyrights.  The court also referred to the legislative history which suggested that § 411(b) was enacted to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations.  One of the goals behind the new section was to “improve intellectual property enforcement in the United States and abroad.” H. R. Rep. No. 110–617, p. 20 (2008).  Section 411(b) did so in part by “eliminating loopholes” that could be exploited to block otherwise valid copyrights.

H&R had argued that copyright owners would be allowed to avoid the consequences of an inaccurate application by claiming lack of knowledge.   The Court emphasized that courts need not accept the copyright owner’s claim that it was unaware of the relevant legal requirements.  For example, willful blindness may support a finding of actual knowledge on either the issue of law or fact, triggering the application of 411(b)(1)(B).

The Court’s opinion did not address section 411(b)(1)(B) which states: “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.  Section 411(b)(2) makes it clear that any decision concerning the validity of a registered copyright is not made by the court but by the Register of Copyrights.  This step is generally commenced upon the court’s grant of a defendant’s motion to Submit the Matter to the Register of Copyright and then submitting the matter to the Register of Copyrights. Based on Unicolor, the Register of Copyrights should only be involved if the court finds that the copyright registrant had knowledge of the facts and/or law associated with registration’s error(s).    In contrast to registered trademarks and patents, a federal court has no right to invalidate a registered copyright.  It’s up to the Register of Copyrights to determine what impact, if any, the misinformation had on the Copyright Office’s decision to register the copyright to the designated owner in the first place.

Take-Home Points

The decision helps bolster the validity of copyright registrations involving errors made by the applicant.  In the commentator’s opinion, applicants should not automatically assume that all errors are “excusable.”  Nevertheless, it’s still a good idea to ensure that all information presented in copyright registration applications is accurate to start with to prevent a situation where the defendant draws out the case by asserting the registration is invalid.  Also, where an attorney files the application on behalf of the applicant, will the attorney’s error be “excused” for errors of law?

On the other hand, defendants who think they can get away with infringement by trying to invalidate the plaintiff’s registered copyright in a future infringement lawsuit should think twice.  This approach is akin to a shoplifter blaming the retailer for not having shoplifting preventive measures in place.

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