Written by Aaron D. Johnston and Orly Ravid

SUMMARY

The Ninth Circuit recently decided a copyright infringement case that pitted fabric designer Unicolors against clothing retail giant H&M regarding an artwork design that H&M used on a jacket and skirt in its fall 2015 collection.  The dispute involved one fabric design in a copyright registration containing 31 designs as a “single-unit registration.”  In Unicolors, Inc. vs. H&M Hennes & Mauritz, L.P., No. 18-56253, 2020 WL 2781317 (9th Cir. May 29, 2020), the Ninth Circuit reversed the denial of H&M’s renewed motion for judgment as a matter of law after a jury trial for Unicolors and remanded to the district court with instructions to submit a request to the Register of Copyrights to determine the validity of Unicolors’ copyright registration in light of known inaccuracies.  The Ninth Circuit reaffirmed or newly held three significant rules regarding the threshold issue of a copyright registration’s validity:

1. if a copyright holder knowingly submits inaccurate information and the copyright certificate contains those inaccuracies, the district court cannot by itself determine whether the Register of Copyrights would have refused registration, but must first submit a request to the Register to advise the court on whether the inaccurate information, if known by the Office, would have caused it to refuse a copyright registration;
   
2. copyright registration invalidation does not require a showing that the plaintiff/registrant intended to defraud the Copyright Office; and
   
3. “a collection of works does not qualify as a ‘single unit of publication’ unless all individual works of the collection were first published as a singular, bundled unit” (i.e. sold or available to the public at the same time) – in keeping with longstanding Office practices.

BACKGROUND

The threshold issue before the Court was whether Unicolors had a valid copyright registration for its 2011 design, a precondition for standing to bring a copyright infringement action. 17 U.S.C § 411. Moreover, a plaintiff in an infringement case must prove ownership of a valid copyright and copying of original elements of the work.  Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).  A “registration certificate issued by the U.S. Register of Copyrights constitutes evidence of validity of a plaintiff’s copyright.” See 17 U.S.C § 410(c).

Unicolors alleged that in 2015, H&M infringed on a design Unicolors had registered on a single application along with 30 other separate designs treating them all as a “single-unit registration” (in order to reduce the registration costs).  The district court held that for a court to invalidate a registration, the registrant must intend to “defraud the Copyright Office” (no evidence of such intent was found at trial) and the registered works might have been available on the same date even if marketed and sold separately. 

After trial, the jury found copyright infringement and awarded Unicolors lost profits damages and disgorgement of H&M’s profits.  H&M moved for judgment as a matter of law or, in the alternative, for a new trial.  The district court denied the motion for judgment as a matter of law but conditionally granted H&M’s new trial motion and also awarded Unicolors attorneys’ fees and costs.

H&M argued on appeal that “single-unit registration” requires all works under that copyright registration to be made available (or sold) to the public, i.e., “published” at the same time.  Here, nine of the works under Unicolors’ single-unit of publication registration were sold separately and exclusively to individual customers as part of Unicolors’ business strategy offering some clients exclusive designs for a period of time.  H&M further argued that because Unicolors incorrectly and knowingly filed as a single registration for all of the works, the copyright registration was invalid and thus the infringement action was barred.

The Ninth Circuit reversed, first on the “fraud” claim noting that “we recently clarified that there is no such intent-to-defraud requirement.”  See Gold Value Int’l Textile, Inc. v. Sanctuary Clothing, LLC, 925 F.3d 1140, 1147 (9th Cir. 2019), cert. denied, 140 S.Ct. 1294 (2020).  Then, in addressing the “single-unit of publication” issue, the Court acknowledged that the Copyright Act permits the registration of a collection of published works “as a single work.”  However, the Court relied on the dictionary and statutory construction in holding that the “plain meaning of ‘single unit’ . . . requires that the registrant first published the collection of works in a singular, bundled collection.”  Therefore, “a collection of works does not qualify as a ‘single unit of publication’ unless all individual works of the collection were first published as a singular, bundled unit.”  The Court ultimately held that Unicolors’ nine confined works (held back from the public) violated the statutory language for a single unit registration.  This created inaccuracies in the registration because the confined works were offered to individual customers exclusively (not at the same time as the other works in the registration)—leading to questions regarding the registration’s validity.

The Court stated that “once a defendant alleges that (1) a plaintiff’s certificate of registration contains inaccurate information; (2) ‘the inaccurate information was included on the application for copyright registration’; and (3) the inaccurate information was included on the application ‘with knowledge that it was inaccurate,’ a district court must submit a request to the Register of Copyrights ‘to advise the court whether the inaccurate information, if known, would have caused [it] to refuse registration’” in accordance with 17 U.S.C. 411(b). The Ninth Circuit reversed and remanded to the trial court to make the statutorily required request of the Register of Copyrights to advise as to whether the inaccurate information, if known, would have caused it to refuse registration of Unicolors’ copyright.