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Questions Remain After Supreme Court’s Fourth Estate Opinion

05/16/2019

--As courts apply Fourth Estate copyright guidelines, concerns may prompt legislative or other activity aimed at moderating the ruling’s impact, William Janicki writes in Law360.com article

A series of concerns stemming from the Supreme Court’s decision in Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC could prompt legislative or other activity aimed at moderating the impact of the ruling, according to a recent Law360.com article written by William D. Janicki, a Sacramento and San Francisco-based member of LeClairRyan.

The decision in Fourth Estate requires that the Copyright Office must complete its review of an application for copyright registration before an infringement lawsuit can be filed. U.S. District Courts — in Malibu Media, LLC v. Doe and Malibu Textiles, Inc. v. Label Lane Int'l, Inc. — have recently applied the case’s guidelines in considering the pleading standards for a copyright infringement action.

In Malibu Media, LLC, the District Court for the Southern District of New York considered whether a plaintiff that improperly filed suit before a copyright was registered — the applications were completed but not yet acted on by the Copyright Office — can cure that defect by amending the complaint after the Register has completed the copyright registration.

The Malibu Media court concluded that the amended complaint could not cure this defect, because that “would make a meaningless formality out of Fourth Estate’s requirement that an application be approved before filing suit,” writes Janicki, a member of the national law firm’s Intellectual Property, Commercial Litigation and Products Liability Practices.

The Ninth Circuit, in Malibu Textiles, Inc., considered the pleading standards for alleging ownership of a valid copyright following Fourth Estate. Allegations of ownership of a registered copyright are enough to state a claim, the Ninth Circuit concluded.

In the Ninth Circuit, and for California district courts, however, a significant issue remains undecided, writes Janicki: whether a plaintiff that improperly filed suit before a copyright was registered can cure that defect by amending the complaint after the Register has completed registration of the copyright.

Both Malibu Media and Malibu Textiles applied the holding of Fourth Estate to copyright infringement actions filed before Fourth Estate was decided, he adds. “It therefore appears that courts may retroactively apply the completed copyright registration requirements set forth by the Supreme Court to pending actions.” Janicki writes. “For those actions that were filed before registrations have been completed, it remains to be seen whether courts will dismiss those actions for failure to state a claim, like in Malibu Media, or permit the complaint to be amended.”

Additionally, he notes, “one of the criticisms of Fourth Estate is that the average processing time for registering copyright applications is currently seven months, and that a copyright owner may be prejudiced while waiting for the Copyright Office to act on an application.”

The Senate Judiciary Committee’s Subcommittee on Intellectual Property sent a letter to the Acting Register of Copyrights 10 days after the decision in Fourth Estate came out, Janicki writes, expressing “concern over the length of time it took the Copyright Office to process registration applications.” The Senators requested that the Acting Register take steps to “mitigate this prejudice to copyright owners and to report back to the Subcommittee.”

Against this background, Janicki advised that owners of creative works should “give careful consideration to early applications for registration or may wish to take advantage of expedited procedures in order to protect their ability to enforce their rights through litigation in federal courts.”

The full column is available to registered subscribers here.

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