On March 2, 2010, the Supreme Court issued its decision in Reed Elsevier, Inc. v Muchnick, holding that Section 411(a) of the United States Copyright Act, which mandates registration as a prerequisite to suing for copyright infringement, is not a jurisdictional requirement, meaning a copyright owner's failure to register its work does not restrict a federal court's subject-matter jurisdiction over claims involving the unregistered work. While the decision is meaningful for class-action suits and claims for declaratory or equitable relief, the impact of the decision, if any, on the standard copyright-infringement claim for damages remains to be seen.
The case follows the Court's decision in New York Times Co. v Tasini, 533 U.S. 483 (2001), in which the Court affirmed the Second Circuit ruling that several online databases and publishers, including Google Books, infringed the rights of six freelance authors by electronically publishing their works without permission. The case was consolidated with several other suits by other freelance authors in the United States District Court for the Southern District of New York, which due to the complexity of the case ultimately referred the parties to mediation. Three years later, the freelance authors, databases and publishers reached a settlement agreement, dubbed the "Google Books Settlement" and moved the District Court to certify a class and approve the settlement. Over the objections of several freelance authors, including Irvin Muchnick, the District Court approved the Class, consisting of authors owning both registered and unregistered copyrights in their works, and approved the settlement.
Muchnick respondents appealed the decision on both procedural and substantive grounds. The Court of Appeals for the Second Circuit sua sponte ordered a briefing on the question of whether Section 411(a) of the Copyright Act deprives federal courts of subject-matter jurisdiction over infringement claims involving unregistered works.
Section 411(a) provides:
"Except for an action brought for a violation of the rights of the author under section 106(A), and subject to the provisions of subsection (b), no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made…The Register may, at his or her option, become a party to the action with respect to the issue of registrability of the copyright claim by entering an appearance within sixty days after such service, but the Register's failure to become a party shall not deprive the court of jurisdiction to determine that issue."
Although all parties asserted in their briefs that the District Court did have subject-matter jurisdiction to approve the Class, the Court of Appeals held that it lacked subject-matter jurisdiction to approve both the Class and the Settlement. Judge Walker dissented, arguing that Section 411(a) is more like a non-jurisdictional claim-processing rule.
The Supreme Court granted the copyright owners and publishers' petition for writ of certiorari to answer whether Section 411(a) restricts the subject matter jurisdiction of federal courts, appointing amicus curiae to defend the Court of Appeal's judgment, since neither party supported its holding.
The Supreme Court began its analysis by looking to the general approach to distinguishing jurisdictional conditions from claim-processing rules or elements of a claim as laid out in Arbaugh v Y & H Corp., 546 US 500 (2006), which states that if the legislature does not "clearly state" that a statutory limitation is jurisdictional, and does not rank it as such, then the courts should treat it as non-jurisdictional in character.
Applying this test to Section 411(a), the Court found that the provision does not "clearly state" that its registration requirement is jurisdictional. The Court rejected the argument from amicus, that the use of the word "jurisdiction" in the last sentence of the provision indicates that the first sentence of the provision is meant to be read with a jurisdictional cast as well. Rather, the Court explained that the last sentence in 411(a) was added to the Act in 1976 to clarify that federal courts can decide an issue of registrability even if the Register does not appear in the relevant infringement suit, and that as used, it says nothing with regard to the federal court's subject-matter jurisdiction over claims involving unregistered works.
Further, the Court found that the provision also does not rank the registration requirement as jurisdictional. Section 411(a)'s registration requirement is located in a provision wholly separate from those provisions in the Act covering jurisdiction, namely Sections 1331 and 1338, and neither of these provisions conditions jurisdiction on whether the relevant copyright owners have registered their works. The Court pointed to the fact that Section 411(a) expressly grants courts jurisdiction to adjudicate claims involving unregistered works in three instances: 1) where the work is not a U.S. work, 2) where the claim also concerns moral rights under 106A, or 3) where the author attempted to register his work but registration was refused. The Court reasoned that if Section 411(a) was meant to be read in a jurisdictional light, it would be odd for the provision to contain these exceptions.
The Court then considered the amicus argument, relying on Bowles v Russell, 551 US 205 (2007), that it is improper to characterize a statutory condition as non-jurisdictional if doing so would override a "century's worth of precedent." Amicus argued that Bowles stands for the proposition that if a provision is silent as to whether its condition is to be considered jurisdictional, then a court should treat it as jurisdictional if that is how the condition has been consistently interpreted over the years. The Court rejected this interpretation of Bowles, concluding that it instead stands for the proposition that context is relevant, albeit not dispositive, of the question. The Court further rejected the amicus argument that the Court should nonetheless affirm the Court of Appeals decision on estoppel grounds because the circumstances required for application of the doctrine simply did not exist in this case.
Ultimately, the Court held that Section 411(a)'s registration requirement is simply a precondition to filing a copyright infringement claim, and nothing more. A copyright owner's failure to register his or her work does not restrict a federal court's subject-matter jurisdiction over infringement claims involving unregistered works.
The decision clarifies that class actions for copyright infringement can be filed on behalf of owners of both registered and unregistered works. The Google Books Settlement, however, was amended following the Second Circuit's now reversed 2007 Muchnick decision to specifically exclude owners of unregistered works to avoid this issue. While it is unlikely that they will be added back as a result of the decision, it now raises the question of whether the settlement will be approved as it stands. The Court could ask the litigants to renegotiate the settlement again, to include authors of unregistered works, or the authors themselves could request reconsideration of the settlement along these terms.
Although it is clear that a claim for damages based on an unregistered work will fail, the Court left unanswered whether a district court should sua sponte dismiss copyright cases where the Plaintiff is asserting rights based on an unregistered copyright. As a result of the decision, courts may become more lenient in allowing actions to proceed even if filed while an application for registration of the involved work is still pending. Courts are currently divided on this issue, with some taking the "registration approach" and dismissing those claims where the application is still pending, and others following the "application approach."
Now, it will likely be easier for an alleged infringer to bring a declaratory-judgment action against a claim involving an unregistered work. In addition, it could be less risky for an author to file suit for immediate equitable relief, rather than for damages, based on an unregistered work.
Vol. 53, June 2010