A federal copyright registration is a perquisite to filing a lawsuit against an alleged infringer.[1] However in a recent Court of Appeals for the Ninth Circuit case, Cosmetic Ideas, Inc. v. IAC/InteractiveCorp, decided on May 25, 2010, the issue was raised as to what qualifies as a copyright “registration.”[2] Specifically, is a copyright “registered” at the time it is filed or at the time the U.S. Copyright Office actually issues the registration certificate? Considering a number of factors including the literal language of the Copyright Act, the intent of the Act, and the practicality of both positions, the Court held that, for purposes of civil litigation, a copyright is registered when a complete application is submitted to the Copyright Office.

In 1999, Cosmetic Ideas, Inc. (“Cosmetic”) began manufacturing and selling a necklace they named “Lady Caroline Lorgnette.” This piece of costume jewelry was of an original design that had been created by them two years earlier. During the following years, in an effort to profit from their design, they sold the necklaces to various retail stores and on the Internet. After marketing their design, Cosmetic alleges that sometime between the years of 2005 and 2008, the Home Shopping Network (“HSN”) began to create and sell a “virtually identical” necklace.[3]

In response to the actions of HSN and in preparation for litigation against them, Cosmetic filed a copyright application for the design of their necklaces. Six days after submission, Cosmetic was notified by the Copyright Office confirming receipt of the application. Fifteen days after that, but before any action on the application had been taken, Cosmetic filed a complaint against HSN alleging copyright infringement with regards to their “Lady Caroline Lorgnette” necklace design.[4]

After the complaint was filed with the U.S. District Court for the Central District of California, HSN answered with a motion to dismiss based on lack of subject-matter jurisdiction[5] and Cosmetic’s failure to state a claim in their complaint. The argument advancing lack of subject-matter jurisdiction was based on the assertion that Cosmetic had not registered a copyright on the necklace design, which was required according to U.S. copyright law.[6] The District Court agreed with HSN and granted the motion to dismiss based on its lack of subject-matter jurisdiction. Cosmetic appealed that decision to the U.S. Court of Appeals for the Ninth Circuit.[7]

The first issue that the Appeals Court needed to resolve was whether the District Court lacked subject-matter jurisdiction. Citing the case Reed Elsevier v. Muchnick,[8] which had been decided by the U.S Supreme Court during litigation of the present case, the Appeals Court found that while copyright registration is a prerequisite to filing an infringement claim, absence of a registration does not restrict a federal court’s subject matter jurisdiction.[9] Therefore, the District Court’s dismissal was erroneous.[10]

With the question of subject matter jurisdiction resolved, the Appeals Court was left to determine whether a work is registered at the time the application is received by the Copyright Office or at the time that a certificate issues.[11],[12] The Court found only ambiguity in the plain language of the statute, therefore endeavored to elucidate the intent of congress in drafting the statute to resolve the issue at hand.[13]

The Appeals Court noted that in 1976, Congress revised the Copyright Act to include “federal copyright protection to all works… at the time of their creation.”[14] Additionally, the revision made copyright registration optional, but gave incentives for registration such as on-its-face validity of the copyright, additional remedies such as statutory damages and attorney’s fees, and requiring registration to file an infringement action.[15] The Appeals Court further noted that due to the fact that registration is no longer mandatory, copyright registration is often made specifically for the purpose of filing suit. With this in mind, the Appeals Court held that the Congressional intent of broad copyright protection was better served by adopting the submission of an application as the point in time when it is “registered.”[16] Notably, this result represents a split among the circuits, which is likely to eventually be resolved by the US Supreme Court.

The Appeals Court continued by explaining practical reasons why this result is the best approach. First, since a party can file suit for copyright infringement regardless of the outcome of the application to the Copyright Office,[17] this approach reduces delays in litigation that permit an infringer from profiting from their infringement.[18] Second, copyright infringement actions are subject to a three year statute of limitations. This approach permits plaintiffs nearing the end of those three years to file suit before the statute of limitations expires, instead of waiting for a Copyright Office decision.[19]

In the end, the verdict of the District Court was held to be erroneous, and the previously granted dismissal was vacated. The case was remanded back to the District Court for a determination on copyright infringement.

[1] 17 U.S.C. § 411(a) (2006).

[2] Cosmetic Ideas, Inc. v. IAC/InteractiveCorp, No. 08-56079 (9th Cir. May 25, 2010).

[3] Cosmetic Ideas, Inc., No. 08-56079, slip op. at 7473.

[4] Id.

[5] Subject-matter jurisdiction refers to a court’s ability to adjudicate a case of a particular topic or issue. In this particular case, the District Court, under 28 U.S.C. § 1338 (2006), could only hear the case if permitted by the Copyright Act, which required registration of the copyright prior to civil action.

[6] “[N]o action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a) (2006).

[7] Cosmetic Ideas, Inc., No. 08-56079, slip op. at 7473.

[8] Reed Elsevier, Inc. v. Muchnick, ___ U.S. ___, 130 S. Ct. 1237 (2010).

[9] Cosmetic Ideas, Inc., No. 08-56079, slip op. at 7474.

[10] Id.

[11] Id. at 7475.

[12] Other Circuit Courts are split on this issue. The Fifth and Seventh Circuits embrace the application methodology, while the Tenth and Eleventh Circuits use the issuance methodology.

[13] Id. at 7478.

[14] Id. at 7481.

[15] Id. at 7482.

[16] Id. at 7483.

[17] “In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute an action for infringement” 17 U.S.C. § 411(a) (2006).

[18] Cosmetic Ideas, Inc., No. 08-56079, slip op. at 7483.

[19] Id. at 7484.