Written by Rebecca Benyamin
On February 24, 2022, the U.S. Supreme Court issued Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 595 U.S. ___ (2022), holding that where a copyright holder lacks either factual or legal knowledge as to an inaccuracy in a copyright application (and registration certificate), the Copyright Act’s safe harbor provision excuses such inadvertent error.
A valid copyright registration carries significant advantages for a copyright holder, one of which is the right to bring an infringement action for the copyrighted work. 17 U.S.C. § 411(a). The Copyright Act, 17 U.S.C. § 411(b)(1)(A), provides that a certificate of registration is valid, even though it contains inaccurate information, as long as the copyright holder lacked “knowledge that [the information] was inaccurate.” The key issue in Unicolors was whether the phrase “with knowledge that it was inaccurate” under section 411(b)(1)(A) distinguishes between a mistake of law and a mistake of fact such that an inadvertent factual error would excuse an inaccuracy in a copyright registration, but an inadvertent legal error would not.
By way of background, plaintiff Unicolors, Inc. (“Unicolors”), a fabric designer, sued H&M Hennes & Mauritz, L.P. (“H&M”) for infringing Unicolors’ copyrighted designs. After a jury found in favor of Unicolors, H&M sought judgment as a matter of law, arguing that Unicolors could not sue for copyright infringement because its registration certificate contained inaccurate information, which rendered the registration invalid.
The Copyright Office’s regulations provide that a single copyright registration can cover multiple works, but only if the works were “included in the same unit of production.” 37 CFR § 202.3(b)(4). The facts of the case were relatively straightforward and undisputed. Unicolors filed a single copyright application seeking registration for 31 different fabric designs, some of which had been made available exclusively for specific customers’ use. Unbeknownst to Unicolors, this meant that, as a legal matter, the 31 designs had not been published as a “single unit of publication.”
The district court held that because Unicolors lacked knowledge that it had failed to satisfy the “single unit of publication” requirement when it filed its application, Unicolors’ registration remained valid despite the inaccuracy. The Ninth Circuit reversed, reasoning that the safe harbor provision of section 411(b) “excuses only good-faith mistakes of fact, not law.” Therefore, because Unicolors knew the relevant facts, its knowledge of the law (or lack thereof) was irrelevant.
The U.S. Supreme Court disagreed with the Ninth Circuit’s interpretation of section 411(b). In a 6-3 decision, written by Justice Breyer, the Court held that section 411(b) does not distinguish between a mistake of fact and a mistake of law. The Court held that lack of knowledge of either fact or law can excuse an inaccuracy in a copyright registration. The Court therefore reversed the Ninth Circuit’s holding.
First, the Court looked to the text of the statute and concluded that lack of knowledge includes lack of knowledge of the law as well as the facts. According to the majority, both case law and the dictionary definition of “knowledge” support this conclusion.
Second, the Court identified other provisions of the Copyright Act in which Congress had—unlike in section 411(b)—explicitly defined the meaning of the word “knowledge.” The Court reasoned that if Congress had intended to include a particular scienter requirement in section 411(b), it would have done so explicitly, as it had in other sections.
Third, the Court considered legislative history, stating that Congress enacted section 411(b) to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations. Given this history, it would make no sense to forgive an applicant’s factual errors but not their legal errors.
Fourth, the Court noted that there was no indication that Congress intended to disrupt well-established case law, which had overwhelmingly held that inadvertent mistakes on copyright registration certificates did not invalidate a copyright, when it enacted section 411(b).
The Court dismissed H&M’s argument that the Court’s interpretation would make it too easy for copyright holders to claim lack of knowledge and thus avoid the consequences of an inaccurate application. The Court stated that courts do not need to simply accept a copyright holder’s claim of lack of knowledge. Rather, circumstantial evidence can determine whether a copyright holder has knowledge. Such circumstantial evidence includes the significance of the legal error, the complexity of the relevant rule, and the applicant’s experience with copyright law. The court also noted that willful blindness regarding a legal error in an application would likely constitute actual knowledge.
Justice Thomas filed a dissenting opinion, joined by Justice Alito and Justice Gorsuch. According to the dissent, the writ of certiorari had been improvidently granted because Unicolors changed the issue it had asked the Court to review in its cert. petition. Specifically, the dissent noted that Unicolors had framed the issue as whether section 411(b) required “fraud” on the Copyright Office, an issue that differed from a determination of the scope of actual knowledge. The majority rejoined that the “actual knowledge” issue was subsidiary to the fraud issue and therefore was the proper subject of review.