Is that Bird A Cardinal or a Scarlet Tanager? Who Cares. The U.S. Supreme Court Weighs in on Copyright Infringement and the Issue of Mistake

This column previously addressed the case of Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., when it was decided by the Ninth Circuit about two years ago. Unicolors is the owner of copyrights in various fabric designs, including a 2011 copyright registration that consisted of 31 separate designs. Unicolors sued H&M for copyright infringement when H&M stores began selling a jacket and skirt that contained artwork that Unicolors claimed to be identical to one of the designs in its 2011 registration. The jury found in Unicolors favor and H&M moved the court for judgment as a matter of law, which the trial court denied. On appeal, the Ninth Circuit disagreed with the district court and ruled that because Unicolors had made a mistake of law in connection with the registration (i.e. it registered it as a single publication when some of the designs were apparently not put on sale to the public all at once), the registration should have been found to be invalid. Unicolors appealed this decision to the U.S. Supreme Court, which heard the case last November.

In what may be one of the last opinions written by Justice Breyer before his retirement from the Court, he and five other Justices found that the Ninth Circuit had erred and that its ruling should be vacated. In his quirky style, Justice Breyer began by posting a hypothetical concerning birds. He proposed a scenario where “John” sees a flash of red in a tree and says that must be a cardinal but is wrong because, in fact, it is a scarlet tanager.  Justice Breyer posed the question, what kind of mistake did John make? In essence, Justice Breyer concludes that it is really a mistake of labeling, similar to the one that Unicolors made in this case. If so, Justice Breyer continued, does that mistake even matter for purposes of determining whether Unicolor should prevail on its copyright infringement claim. A six-justice majority of the Court agreed that it should not.

First, the Court looked to the text of 17 U.S.C. §411(a), which provides that a registration should be held valid regardless of whether it has inaccurate information unless “the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate.” Unicolors claimed, and the Ninth Circuit agreed, that it was not aware that when it filed a registration for the 31 separate designs they did not necessarily satisfy the “single unit of publication” requirement. The Supreme Court, in disagreeing with the Ninth Circuit, concluded that if Unicolors was not aware of this legal requirement, then section 411 makes clear that the registration should not be held invalid.

The Court continued by looking at similar copyright statutes that imposed both a knowledge requirement as to law and fact unlike section 411. The Court concluded that there was nothing in the statutory language of section 411 “that Congress wanted to forgive those applicants’ factual but not their (often esoteric) legal mistakes.”

The Court then observed that prior to Congress enacting section 411, there had been numerous cases that had upheld the validity of a copyright registration despite the existence of a mistake of law. Justice Breyer and his colleagues concluded that there was “no indication that Congress intended to alter this well-established rule” in enacting section 411.

The Court next continued by recognizing the purpose of section 411 was to make it easier, not harder, for nonlawyers to obtain valid copyright registrations. Given this history, the Court found that this purpose would be undermined by exposing a layperson to possible invalidation of his/her/its copyright simply because of “good faith misunderstandings of the details of copyright law.”

H&M argued that ruling in Unicolors’ favor would reward copyright holders who do not taking adequate steps to determine whether information in their copyright registration applications is accurate.  The Supreme Court rejected this argument by noting that “courts need not automatically accept a copyright holder’s claim that it was unaware of the relevant legal requirements of copyright law.”  The Court reasoned that willful blindness may support a finding of actual knowledge and that courts can consider circumstantial evidence such as “the significance of the legal error, the complexity of the relevant rule, the applicant’s experience with copyright law and other such matters.”

Finally, H&M argued the well-known legal maxim that “ignorance of the law is no excuse.”  The Ninth Circuit found that this maxim was not necessarily applicable here in a civil case “concerning the scope of a safe harbor that arises from ignorance of collateral legal requirements.”

Three Supreme Court Justices dissented in an opinion written by Justice Thomas.  They noted that when Unicolor had filed its petition for certiorari to the U.S. Supreme Court, it asked the Court to decide the issue of “whether [section 411]’s ‘knowledge’ element requires ‘indicia of fraud.’”   The dissenting Justices found that Unicolor had engaged in “legerdemain” by apparently jettisoning this issue in its briefing and argument and focused instead on the “actual knowledge” issue. The dissenting justices held that the Court should have rejected the petition and refuse to reward what they saw as improper gamesmanship.

By imposing an actual knowledge requirement, the Court’s Unicolors decision will make it harder for copyright defendants to defeat an infringement claim on the ground of copyright invalidity.