Copyright Law | Expert Legal Commentary
August 27, 2010
Cosmetic Ideas v. IAC Interactive: Adopting the “Application Approach” to Copyright Registration
Cosmetic Ideas, Inc. v. IAC/Interactivecorp
Tom Zuber and Ryan Smith of Zuber Lawler & Del Duca
The Ninth Circuit U.S. Court of Appeals joined the Fifth and Seventh Circuits in holding that a completed application filed with the U.S. Copyright Office suffices for “registration” for litigation purposes. In Cosmetic Ideas, Inc. v. IAC/Interactivecorp. 606 F.3d 612 (9th Cir. 2010), the Ninth Circuit determined that although the plain language of the Copyright Act does not appear to particularly favor either approach, the “application approach” better comports with the purpose of the Copyright Act. Moreover, the Court noted problems resulting from application of the “registration approach” adopted by the Tenth and Eleventh Circuits.
In 1997, Plaintiff-Appellant Cosmetic Ideas, Inc. (“Cosmetic”) created a necklace called the “Lady Caroline Lorgnette.” It began manufacturing and selling copies of the necklace in 1999. Cosmetic asserts that sometime between 2005 and 2008, Defendant-Appellees IAC/ Interactive Corp., Home Shopping Network Inc., HSN LP, and HSN General Partner LLC (collectively, “Defendants”), began making and distributing “virtually identical” necklaces.
On March 6, 2008, Cosmetic submitted a complete copyright registration with the U.S. Copyright Office, which confirmed receipt of the application on March 12. On March 27, Cosmetic filed a copyright infringement action against Defendants in the U.S. District Court for the Central District of California. At that time, the Copyright Office had not yet issued Cosmetic a registration certificate for the necklace, though it later did issue the certificate.
Defendants filed a motion to dismiss for lack of subject matter jurisdiction pursuant to 17 U.S.C. section 411(a), which states: “[N]o 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 in accordance with this title.” Defendants argued that since Cosmetic did not have a valid copyright registration certificate when it filed the lawsuit, the federal court did not have subject matter jurisdiction to hear the case. The district court agreed and dismissed the case; Cosmetic appealed.
The “Application Approach” Best Meets the Goals of the Copyright Act
The question of when a copyright is “registered” for litigation purposes has arisen in two different contexts. Section 411(a) of the Copyright Act requires the litigating party to hold a copyright registration before initiating an action, which speaks to the subject matter jurisdiction of the federal court to hear the claim. But this same statutory language also makes copyright registration a required element for bringing a copyright infringement claim under this section, so a lack of registration means that the plaintiff has failed to state a claim upon which relief may be granted.
As to the subject matter jurisdiction question – the grounds upon which the district court had dismissed the case—the Ninth Circuit deferred to the Supreme Court’s recent ruling in Reed Elsevier, Inc. v. Muchnick, 130 S.Ct. 1237 (2010) To read LawUpdates.com’s full commentary on the Reed Elsevier v. Muchnick opinion, go to Reed Elsevier v. Muchnick: Section 411(a) Does Not Limit Subject Matter Jurisdiction.
Consistent with Reed Elsevier, the Ninth Circuit found that even though the registration requirement is a precondition to filing a copyright infringement claim, that requirement does not bar federal court subject matter jurisdiction over an infringement claim. Cosmetic Ideas, Inc. v. IAC/Interactivecorp. 606 F.3d 612, 614-615. (9th Cir. 2010). Accordingly, the district court had subject matter jurisdiction to hear the case, whether the plaintiff had completed the registration requirement or not. Id.
However, even though it was not the grounds upon which the district court dismissed the case, the Ninth Circuit addressed the registration requirement as it relates to the plaintiff’s ability to state a viable claim. 606 F.3d at 615. Federal courts have split in determining what constitutes “copyright registration” for this purpose. The Fifth and Seventh Circuits have adopted the “application approach,” finding that the registration requirement is satisfied once a plaintiff has delivered a complete application to the Copyright Office. The Tenth and Eleventh Circuits, however, use the “registration approach,” stating that the plaintiff must have a certificate of registration in order to meet the requirement of Section 411(a).
The Ninth Circuit chose to align with the Fifth and Seventh Circuits and adopt the “application approach.” The Court reviewed the plain language of the Copyright Act to see if it offered some clue as to the preferred or intended approach, but the Court found that the plain language did not clearly support either approach. Id. at 618. So the Court looked at the big picture and determined that only the application approach “better fulfills Congress’ purpose of providing broad copyright protection while maintaining a robust federal register” of copyrighted works. Id. at 619. The application approach, explained the Court, had the benefit of avoiding unnecessary delay in filing an infringement action; that delay might “permit an infringing party to continue to profit from its wrongful acts” while the plaintiff awaits action by the Copyright Office. Id.
The Court found that, along with enabling delay, the registration approach did not seem consistent with the overall purpose of the Copyright Act. First, it is feasible that the plaintiff’s three-year statute of limitation might expire before the Copyright Office could take action and send a certificate of registration, thus preventing a plaintiff from obtaining a remedy for infringement. Id. at 620. Second, a claimant is able to file an infringement action even if the Copyright Office rejects his or her application, so long as the claimant notifies the Copyright Office. As a result, the registration approach makes no sense, as it requires a plaintiff to wait for a certificate of registration, even though the plaintiff can legally file suit whether it receives one or not. Id. at 619-620.
In the end, the Ninth Circuit held that Cosmetic had timely filed its infringement action because it had submitted a complete application to the Copyright Action at the time it filed the lawsuit. In rendering this decision, the Ninth Circuit opened the doors just a bit wider for those seeking to bring infringement suits.
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