Troy & Schwartz Attorneys-At-Law

On May 19, 2014 in the case of Petrella v. Metro-Goldwyn-Mayer, Inc., et al., the U.S. Supreme Court, in a 6 to 3 decision, held that laches cannot be invoked as a bar to the plaintiff’s pursuit of a claim for damages brought under the U.S. Copyright Act.  The opinion is instructive for its discussion on the intersection between the equitable doctrine of laches and statutes of limitations.   The case is also a reminder that copyright infringement lawsuits may be brought by the heir(s) of a deceased person’s copyrighted works and that these lawsuits may be brought decades after the death of the work’s creator.

Millions of individuals have seen the movie Raging Bull (the allegedly infringing work) which depicts the life of boxing champion Jake LaMotta.  The plaintiff in the case is the daughter of Frank Petrella, who, along with LaMotta, developed a screenplay and copyrighted it with the U.S. Copyright Office in 1963.  Under U.S. Copyright Law at the time, copyrighted works were protected for an initial period of 28 years.  Longer protection for up to a period of 67 years was obtainable by renewing the copyright.  It is noted that the Copyright Act of 1978 eliminated the renewal requirement for works copyrighted since January 1, 1978 wherein works are now generally protected from the date of creation until 70 years after the author’s death.

Frank Petrella died during the initial copyright term, and his renewal rights reverted to his heirs under the then in-effect copyright law.  The daughter renewed the 1963 copyright in 1991, becoming its sole owner.  The movie itself was released by Metro-Goldwyn-Mayer (MGM) in 1980.   She advised MGM in 1998 that its exploitation of the movie Raging Bull violated her copyright and threatened a lawsuit. The lawsuit was not, however, commenced until January 6, 2009.   See Slip Opinion at 2.   

Those who have been involved in lawsuits may wonder who such a “late date” lawsuit could even be maintained.   Most readers will be aware of statutes of limitations established by each state for most causes of action that require a lawsuit to be filed within a certain number of years.   For example, the statute of limitations for bringing a personal injury lawsuit in Florida is four years from the date of the incident. 

Prior to 1957, federal copyright law did not include a statute of limitations for civil suits.  Federal courts, when faced with a copyright infringement lawsuit, “therefore used analogous state statutes of limitation to determine the timeliness of infringement claims and they sometimes invoked laches to abridge the state-law prescription.”   See Slip Opinion at 3.   In 1957, Congress prescribed a three-year look-back limitations period for all civil claims arising under the Copyright Act.   That is, any civil action under the Copyright Act had to be commenced within three years after the claim for copyright infringement accrued.  This three year look-back period remained in effect with the enactment of the 1978 Copyright Act.

So far so good.  So why should the daughter have been able to maintain her lawsuit in 2009 when the alleged infringing move was made in 1980?  Because the copyright statute of limitations involves the separate-accrual rule wherein in when a defendant commits successive violations, the statute of limitations runs separately from each violation.  Each time an infringing work is reproduced or distributed, the infringer commits a new copyright violation, and the statute of limitations runs separately from each violation.  See Slip Opinion at 5.    

The Petrella plaintiff waited about eleven years to file her lawsuit after first notifying MGM that its exploitation of the screenplay infringed on the copyright now vested in her.   By the time she filed the lawsuit, MGM had released a special edition celebrating the 25^th anniversary within the three-year look-back period.  

The district court dismissed the case at the summary judgment stage even though there were disputed issues of material fact related to the plaintiff’s infringement claim which should have precluded summary judgment.   The district court nevertheless granted summary judgment by finding that laches barred Petralla’s complaint because “[she] had unreasonably delayed suit by not filing until 2009 . . ., and further determining that MGM was prejudiced by the delay.”  See Slip Opinion at 9.   

The Ninth Circuit affirmed the laches-based dismissal.  In reaching its decision, the Ninth Circuit opined that the true reason for deferring her suit was because the film had not made money for years and she hoped the 25^th anniversary release would increase the amount of any potential damages.   One of the concurring judges noted that he was only concurring on the basis of Circuit precedent but that the doctrine of laches was in tension with Congress’ provision for a three-year statute of limitations.  See Slip Opinion at 10.   

In reversing the Ninth Circuit, the U.S. Supreme Court, stated that the Ninth Circuit had disregarded the parameters of the Copyright Statute under 17 U.S.C. § 507(b) and the separate-accrual attending §507(b) to find that “infringing acts occurring before January 6, 2006 barred all relief, monetary and injunctive fore infringement occurring on or after that date.”  See Slip Opinion at 11.  The High Court went on to emphasize that laches is a defense developed by courts of equity and its principal application was and remains for those situation where the Legislature has not provided a fixed time limitation for bringing a lawsuit (i.e. a statute of limitations).

MGM’s strongest argument was that it would be prejudiced in defending itself because that “evidence needed or useful to defend against liability will be lost during a copyright’s owner inaction.”  The High Court disposed of this argument in several ways.   First Congress provided for reversionary rights by the author’s heirs.  These rights can be exercised at the earliest 28 years after a work was written and copyrighted for pre-1978 copyrights.  As the Court pointed out, by then the authors and perhaps other witnesses to the work will be dead.   The purpose of reversionary rights was to give the author’s family a second chance to obtain fair remuneration, and Congress must have been well aware of the impact of the passage of time and the author’s death on evidence.    See Slip Opinion at 18.

Second, the copyright registration process itself reduces the need for extrinsic evidence.   See Slip Opinion at 18.   To bring a copyright infringement lawsuit in federal court, the copyrighted material must be registered with the U.S. Copyright Office.  Registration requires that a copy of the work be filed with the Copyright Office.  Here, the screenplay had been copyrighted in 1963 and MGM’s Raging Bull movie had also been later copyrighted.  The U.S. Copyright Office thus serves as repository of copyrighted works.   As the High Court said, the key evidence in the lawsuit will be the registration certificates, the original work, and the allegedly infringing work.   Indeed, the registration mechanism thus helps to protect the interests of the heirs of an author’s work who may not have a copy of the original work.   

Third, the Court acknowledged that laches is listed among affirmative defenses along with, but separate from, the statute of limitations in the Federal Rules of Civil Procedure.  See Slip Opinion at 14.   In particular, the Court noted that MGM stated at oral argument that laches could apply in an ordinary six-year state of limitations even if the lawsuit was brought in five years.  In response, the opinion stated that the laches defense has no application to bar a claims in their entirety for discrete wrongs occurring within a federally prescribed limitations period.  Here, that statute of limitations is three (3) years from the date of accrual.  Any damages resulting from infringement before the three-year period of statute of limitations cut-off do not count towards the calculus of determining damages.     

Fourth, the Court noted the plaintiff’s delay in filing the lawsuit for suspect reasons as argued by MGM had probably contributed to both lower courts’ disposal of her case.   The doctrine of laches was not, however, a proper defense presented by MGM to try and entirely override the statute of limitations Congress prescribed.  The Court pointed out that the doctrine of estoppel is available to address the situation where a “copyright owner engages in intentionally misleading representations concerning his abstention from suit and the alleged infringer detrimentally relies on the copyright owner’s deception.”  Under a different theory not related to the timeliness of bringing a lawsuit, the doctrine of estoppel may bar the copyright owner’s claims completely, thereby eliminating all potential remedies.   See Slip Opinion at 19.

The Court’s opinion concludes with a summary of various steps that may be taken by the court including taking into account the plaintiff’s delay in commencing the suit but at the same time, closely examining MGM’s alleged reliance on her delay.   For example, why didn’t MGM pursue a declaratory judgment action when it became aware of claims as early as 1998? The Court also pointed out that in fashioning equitable remedies, the court has considerable leeway.  It could, for example, “allow MGM to continue using Raging Bull as a derivative work upon payment of a reasonable royalty to the plaintiff.”   See Slip Opinion at 21.

In conclusion, the case is a thorough study of copyright law involving lawsuits brought by heirs and associated civil procedure matters and may well end up in a case book for law school students.   The take home points are as follows: 

1.    The application of the doctrine of laches is inappropriate where there is a governing statute of limitations established by an elective legislative body and cannot be used to bar a claim for damages with the 17 U.S.C. §507(b)’s three-year window.   See Slip Opinion at 2.

2.    Copyright protection extends for a long period of time into the future (today, 70 years following the death of the author) and therefore may well inure to the benefits of the copyright owner’s heirs or statutory successors as the Petralla case demonstrates.    The Copyright Act of 1978 even provides for recapture of a copyright by the author (or, if deceased, his/her heirs and/or statutory successors) who will assume ownership of the copyright for the remainder of the copyright term.

3.  Registration with the U.S. Copyright Office reduces the need for extrinsic evidence in the event the copyright owner or his/her heirs file a copyright infringement lawsuit. See Slip Opinion at 18.  As discussed in another one of our blogs, there are also other good reasons for formally registering a copyright with the U.S. Copyright Office.

4.  Where the plaintiff intentionally engaged in misleading representations concerning his/her abstention from initiating a lawsuit and the alleged infringer detrimentally relies on such deception, the doctrine of estoppel may bar a copyright owner’s claims completely, eliminating all potential remedies. The doctrine of estoppel does not undermine the statute of limitations as does the doctrine of laches.  See Slip Opinion at 3.

THE FOREGOING IS FOR INFORMATIONAL PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE.  IF YOU ARE CONTEMPLATING AN ACTION WHICH MAY HAVE LEGAL CONSEQUENCES, YOU SHOULD CONSULT WITH AN ATTORNEY OF YOUR CHOOSING.

© Troy and Schwartz, LLC. All rights reserved.

             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.

A work of authorship is in the “public domain” if it is no longer under copyright protection (e.g., because the term for protection has expired) or if it fails to meet the requirements for copyright protection.  Works in the public domain may be used freely without the permission of the former copyright owner.

Prior to 1994, foreign works which had not been separately registered for copyright protection through the U.S. Copyright Office were often relied on as “public domain works.”   Thus orchestras, musicians, recording artists, publishers, etc. enjoyed the right to freely exploit these works within the U.S. The landscape changed in 1994 when Congress granted foreign works, which had previously enjoyed copyright protection abroad but not in the United States, the same full protection available to U.S. works through of the Uruguay Round Agreements Act (URAA).  Now, foreign works which had previously been “free for the using” all of a sudden were protected under U.S. copyright law.   See  §514 of the URAA, 108 stat. 4976 (codified in 17 U.S.C. § 104A, 109(a)).  For a brief history of the events leading to the URAA, see note 1.  

In 2001 during the Bush administration, several plaintiffs brought a lawsuit claiming that §514 was violative of the U.S. Constitution’s Copyright Clause and First Amendment.  The case eventually reached the U.S. Supreme Court, and on January 18, 2012, the U.S. Supreme Court, in a 6 to 2 decision (Justice Kagan did not participate), affirmed the holding of the Tenth Circuit that §514 was constitutional on both fronts.   See Golan, et al., v. Holder, Attorney General, et al., 565 U.S.            (2012).

The following discusses the arguments set forth by the petitioners and the Golan Court’s response. Citations to the Golan case provide the page numbers for the Slip Opinion.

 The Copyright Clause and §514

The Copyright Clause of the U.S. Constitution states that “Congress shall have power . . . [t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.  Art. I, §8, cl. 8.  

The petitioners relied on a two-pronged approach to try and persuade the Golan Court that §514 was unconstitutional under the Copyright Clause.   The petitioners first argued that the “limited Times” phrase prevented Congress from: 1) ever changing any previously prescribed statutory limited time period for copyright protection; and/or 2) “converting” a work previously in the public domain to a protected copyrighted work.” Golan at 14.   As the argument went, Congress’ interference with any in-effect statutorily limited copyright term caused unfair unpredictability in the “public domain” works category.  The U.S. Supreme Court disagreed with this position on the basis of its decision in Eldred v. Ashcroft, 537 U.S. 186 (2003).

In Eldred, the U.S. Supreme Court had held that Congress acted within its constitutional bounds under the Copyright Clause when it extended the terms of existing copyrights by 20 years under the Copyright Term Extension Act (CTEA). See note 2.   As the Eldred Court noted, the Copyright Clause does not specify a specific, fixed period.  Instead, ‘ “ the term [limited] is best understood to mean “confined[d] within certain bounds,” “restrained[ed],” or ‘circumscribed.” Golan at 14 quoting Eldred at 192-193.  

The Golan petitioners argued that Eldred was distinguishable because §514 implemented a limited time that had “already passed for works in the public domain.” Golan at 14.  First, such authority on the part of Congress would allow it to institute a “second “limited” term, after the first expires, a third after that, and so on” to achieve perpetual copyright terms.  Golan at 15.  Second, prior to §514, Congress had not extended copyright protection to public domain works; the CTEA merely granted pre-expiration term extensions.

The Golan Court found the “perpetual copyright” argument untenable.  The Court first pointed out that prior to §514, the limited term for foreign works once excluded from U.S. Copyright protection as “zero.”  As the Court stated, a “limited time” of exclusivity must begin before it may end. Thus, a work which never had copyright protection cannot be as a “copyrighted” work. Instead, §514 was recognizing copyright protection for works enjoying copyright protection in a foreign jurisdiction(s) but not in the United States. Golan at 15.

Furthermore, in support of its holding that Congress did have the right to affect works in the public domain under the Copyright Clause, the Golan Court considered legislative history and case law as far back as 1790.  For example, the Copyright Act of 1790 granted protection to many “maps, charts, books, or books already printed within these United States” which had previously been in the public domain.  This Act “launched a uniform national system” for copyright protection so that copyright decisions would no longer be at the discretion of the individual States and result in situations where a work may enjoy copyright protection in one state but not another.  Golan at 16.  The Court also cited several private bills between 1849 and 1898 which restored the copyrights of works that previously had been in the public domain as evidence to support its position that “Congress has not understood the Copyright Clause to preclude protection for existing works.” Golan at 17.

In siding with Congress, the Golan Court several times pointed out that the foreign works which are now protected by U.S. Copyright Law through §514 “got there after a term of zero or a term cut short by failure to observe U.S. formalities.”  See, e.g., Golan at 30, note 35.  This is not a situation where the copyrights of the works had already expired and entered the public domain to due to the lapse of time under the copyright terms of the originating country.  The foreign works subject to §514 are being accorded the same copyright protection as if they had been created in the United States and still within the period of copyright protection under the law.

The petitioners next attempted to justify their position as the correct one by arguing that the Copyright Clause’s purpose was to spur the creation of new works as a way to meet the purpose articulated in the Copyright Clause of “promoting the Progress of Science and the Useful Arts.” Golan at 20. As the argument went, §514, by dealing solely with works already created, ‘ “provides no plausible incentive to create new works” ’ and is therefore invalid.  Golan at 20 (quoting “Progress of Science” petitioners’ brief). 

Again the Golan Court found this “reaching argument” non-persuasive based on its holding in Eldred.  The Court explained that the permissible ends of the Copyright Clause extended beyond the creation of new works and rejected the notion that the only way Congress can provide incentives to promote the progress of science is to provide incentives to create new works. Golan at 21.  In fact, the U.S. Supreme Court had previously recognized that ‘ “copyright supplies the economic incentive to create and disseminate ideas.” ’ Golan at 22 quoting Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 558 (1985); and Eldred 537 U.S. at 206. The Golan Court further pointed out that until 1976, federal copyright protection was contingent on publication and that at that time, the law provided “Copyright” incentives not just for creation but also dissemination through publication”  Golan at 21-22. 

Quite apart from the legal acrobatics relied on by the Golan petitioners, common sense would also suggest that incentives for creation and dissemination of copyrighted works go hand-in-hand.  For example, most authors write a book in hopes that the book will be published.    Similarly, most composers hope that their composition will be played by an orchestra and/or recorded.  Most creators are not creating the copyrighted work with the intent to lock it away in a safety deposit box.  And disseminated copyrighted works can help pave the way for the creation and publication of new works and derivative works via income from existing works.  See Golan at 20, note 25. Therefore the right to enjoy copyright protection throughout the world under the URAA involves both the creation of copyrightable works as well as their dissemination.  See Golan at 21-22.

In reaching its conclusion that “§514 falls comfortably within Congress’ authority under the Copyright Clause,” the Golan Court noted that the congressional record shows that [f]ull compliance with Berne [via §514 of the URAA] was expected to expand foreign markets available to U.S. authors and invigorate protection against piracy of U.S. works abroad “thereby benefitting copyright-intensive industries [in the U.S.] and inducing greater investment in the creative process.”  Golan at 22 referring to S. Rep. No. 103-412.  The Copyright Clause operates to “empower Congress to determine the intellectual property regimes, that overall, in that body’s judgment, will service the ends of the clause.”  Golan at 21 quoting Eldred at 222. And in the Court’s judgment, §514 therefore does not violate the Copyright Clause. 

The First Amendment and  §514

The petitioners also mounted an odd First Amendment (freedom of expression) violation charge by arguing that §514, by restoring previously “freely accessible works” to copyright status violated the First Amendment. Under our First Amendment jurisprudence, any law which is deemed to interfere with an individual’s freedom of speech is subjected to a heightened judicial scrutiny standard.  The Tenth Circuit had held that even though it did have some impact on the petitioners’ freedom of expression, §514 withstood heightened scrutiny because the “constriction of public domain was narrowly tailored to fit an important government objective, namely the aim of protecting U.S. copyright holders’ interests abroad.  See Golan at 13 citing Tenth Circuit’s decision on the matter.   Thus, §514 does not violate the First Amendment.

Not surprisingly, the U.S. Supreme Court also found the First Amendment arguments non-persuasive.  In contrast to the Tenth Circuit, however, the U.S. Supreme Court concluded that §514 did not even required the heightened review sought by the petitioners because it does not interfere with the “built in” protections (i.e., idea/expression dichotomy and the fair use doctrine) which strike a balance between the First Amendment and the Copyright Act.  In addition, “Congress adopted several measures to ease the transition from a national scheme to an international copyright regime.”  See Golan at 25.

Furthermore, the petitioners did not allege a First Amendment issue situation where actual copyright protection actually “hinged on the author’s viewpoint.”  Theirs was not a situation where the freedom of expression rights of an actual works creator were at issue.  Indeed copyright law by its very nature is restrictive of expression and could be perceived as having a First Amendment implication because it does prevent the right to freely use/express copyrighted works by others.  Yet, as the Golan Court pointed out, “[i]f Congress could grant protection to copyrighted works without hazarding heightened First Amendment scrutiny, then what free speech principle disarms it from protecting works prematurely cast into the public domain for reasons antiethical to the Berne Convention?” Golan at 28.  

Indeed, the Golan Court seemed offended by the petitioners’ stated contention that the foreign works affected by §514 “belonged to them” or were vested in them. See Golan at 27.  The Golan decision was very clear that once a copyrighted work enters the public domain, it belongs to no one.  That is, the rights do not reinvest in anybody, and the foreign works at issue in Golan surely had never belonged to the petitioners. The Golan petitioners merely ‘ “ possess unfettered [free] access to any of the works at issue.” ’ Golan at 27 quoting Tenth Circuit’s opinion.

The Golan majority did acknowledge that the dissent had touched on an issue that was never raised by the Golan petitioners: that §514 will result in a “flood” of orphan works.  An orphan work is a copyrighted work for which the copyright owner cannot be contacted/located.  Users of orphan works risk the possibility that a previously non-locatable copyright owner may come forward and sue infringement.   That copyrighted works often become orphans is not surprising given the long protection period afforded by copyright law.  See note 3.  Reasons for a copyrighted work becoming an orphan are that the copyright owner (an individual) has died or gone out of business (business entity was the owner) before the term of copyright protection has expired and it is not possible to establish to whom ownership of the copyright has passed.  

The orphan copyright problem has been recognized as a major issue for many years, and in 2009 the U.S. Senate passed the Shawn Bentley Orphan Works Act which would have helped libraries with mass digitization projects, among others, by limiting damages in any infringement lawsuit later brought by the copyright owner of what was thought to have been an orphan work.  The bill died in the House, and as the date of this blog, no further legislation has been introduced.

There is no doubt that orphan copyrights are a major issue, but that the problem existed long before the enactment of §514, in large part due to the passage of the 1976 Copyright Act where Congress eliminated the formalities required for obtaining copyright protection. See note 2.  But as the Golan majority opinion rightly pointed out, the issue of orphan works is within the province Congress to address the “host of policy and logistical questions identified by the dissent.” Golan at 31. 

An orphan copyright is basically an “in limbo” copyright. By this, the author means that no one is benefitting from the copyrighted work.  Because the copyright owner cannot be located, the copyright owner is losing out on potential financial benefits.  The public is losing out on an opportunity to enjoy the work through the purchase, e.g., of a symphonic recording of a composition. Potential copyright licensees and assignees are losing out an opportunity to make the work available to the public.  And in limbo copyrights, by being unavailable, are arguably even interfering with the objectives of the Copyright Clause: “to promote the progress . . . of the arts.” 

From the author’s perspective, legislation to limit any future damages to statutory damages particularly where the user of is non-profit institution is a reasonable accommodation to addressing the tension between orphan copyrights and “known” copyrights providing that the non-profit institution took reasonable, ascertainable steps to contact the copyright owner of what is believed in good faith to be an orphan copyright.  Currently, Congress seems to have no interest in passing any relief related to orphan copyrights.

As an aside, it is recommended that whenever a decedent’s copyrighted works, are to be transferred to an heir(s) of the decedent’s estate either via a will (or trust) or under the intestate laws of the governing state law, that a formal assignment of rights or equivalent document be prepared by the personal representative of the estate or executor showing the transfer of ownership and recorded with the U.S. Copyright Office. If the work had not been previously registered with the U.S. Copyright Office, the heir should register it as the copyright claimant.  Such steps will help ensure continuity of ownership documentation and provide a record of ownership to potential copyright users.  Recordation with the U.S. Copyright Office should be considered whether or not the copyrighted work is associated with royalties at the time of the decedent’s death.  Many copyrighted works have been published posthumously and earned royalties for the heirs of the decedent’s estate.  See note 4. And any copyright licensing agreement should include provisions for addressing situations where the copyright owner (an individual) dies, or the copyright owner (a business entity) enters into a joint venture, merges with another business entity, etc.  

In summary, the Golan majority decision that §514 is constitutional is appropriate because it is based on legislative history, past precedent, current world economic and trade considerations, and the Court’s understanding that “Congress had determined that U.S. interests were best served by our full participation in the dominant system of international copyright protection [the Berne Convention].” Although there is perhaps no perfect international IP law scheme for totally preventing the unauthorized usage of copyrighted works, the Golan Court noted that §514, by remedying unequal treatment of foreign authors in this country, was intended to secure greater protection for U.S. authors abroad.  Indeed, around the time of the Uruguay agreements, there was a “widespread perception that the U.S.’s noncompliance with Article 18 was undermining our leverage in copyright negotiations.”  See Golan at 8, note 8.  Also, several countries had balked “at protecting U.S. works copyrighted in the U.S., but in those countries’ public domains, until the U.S. reciprocated with respect to their authors’ works.”  Golan at 6. Logic tells us that for its authors to be the recipient of “copyright” legal protection abroad, the United States, must, as a first step, offer analogous copyright protection to foreign copyrights.   

Notes.

1. In 1989, the United States became a party to the Berne Convention for Protection of Literary and Artistic Works (Berne Convention).  Under Article 18, member countries to the Convention are to protect foreign copyrights which had been copyrighted in the country of origin.  Despite the wording of Article 18, member countries were not truly bound to protect said copyrighted works. The Berne Convention merely provided for a dispute resolution process (DRP) before the International Court of Justice, and there was no requirement that the parties to the convention even had to “follow” the Convention’s DRP.  In 1994, the World Trade Organization (WTO) was formed through the Uruguay round of multinational trade negotiations.  The Uruguay negotiations resulted in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).  The United States was a signatory to both TRIPS and the URAA.  TRIPS requires that all parties must enforce the Berne Convention’s first 21 articles and be subject to the authority of the WTO. The WTO has the authority to rule on any alleged violations of Berne or TRIPS concerning inter alia, failure to protect foreign copyrights.  Possible consequences of any violation include sanctions.    See also Golan  at 8.   Furthermore, Congress has extended copyright protection over the years to works which at first blush are not the typical work associated with “the arts.”  This protection was obviously in keeping with the times.  An excellent example is the WIPO Copyright Treaty of 1996 which provides that computer programs are protected literary works under the Berne Convention.  The United States became a signatory to the WIPO Treaty in March 2002.

2.   See 17 U.S.C. § 302(a).  The Copyright Term Extension Act, enacted after the Unites States’ ascension to the Berne Convention, increased the copyright term to the lifetimes of the authors plus 70 years for works created after 1978.  One of the stated rationales was to make the U.S. copyright term consistent with European copyright terms.   The U.S. Copyright Office has numerous publications available on-line which explain copyright terms for works created before and after 1978.

 3.    Copyright protection begins when the idea is reduced to a tangible medium of expression.  Actual registration with the U.S. Copyright Office is not required except where the copyright owner plans to file a lawsuit for copyright infringement.  There are certain benefits associated with formally registering a copyright within 90 days of publication, and formal copyright registration does have the benefit putting others on notice of the actual copyright. 

 4.    For example, the Confederacy of Dunces and the Neon Bible, both by John Kennedy Toole, were published posthumously through the efforts of  Toole’s mother.   She is listed as the copyright claimant in copyright registration records maintained by the U.S. Copyright Office.

The foregoing is not legal advice and is for informational purposes only.