by Keith Kupferschmid

Court Decision in Unicolors v. H&M a Boon for Individual Creators as Court Closes Administrative Loophole Used by Infringers

It was about this time last year that we all were inundated by the massive hoopla surrounding the Supreme Court’s decision in Google v. Oracle. But, as we learned from the decision itself and its limited applicability in the months that followed, the impact of that decision was, in reality, extremely small and did not live up to the hype.

Now let’s turn the clock forward almost one year to February 24, 2022—the day the Supreme Court handed down a decision in the copyright registration case of Unicolors, Inc. v H&M Hennes & Mauritz, L.P.The Unicolors case hasn’t gotten nearly close to the fanfare of the Google v. Oracle case, but (unlike the Google decision) the Unicolors decision will have a much more lasting and broad impact on the copyright ecosystem, and especially for those individual creators who register their copyrighted works on their own.

Before we discuss the significance of the case, let’s take a step back and look at the facts and issues in the case. Unicolors brought a copyright infringement suit against H&M for allegedly infringing 31 of its designs. After Unicolors won the infringement action against H&M for unauthorized use of its fabric designs, H&M challenged the validity of Unicolors’ copyright registration, claiming that the registration contained known inaccuracies related to when the group of designs were published. H&M argued that Unicolors had no standing to bring the case because a valid copyright registration is needed to bring a copyright infringement suit in federal court and Unicolors’ registration was invalid because of these known inaccuracies.

At issue in this case was the interpretation of Section 411(b) of the Copyright Act, which provides:

(b)(1) A certificate of registration satisfies the requirements of this section and section 412, regardless of whether the certificate contains any inaccurate information, unless—

(A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and

(B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.

Specifically, the language the Court focused on was the interpretation and scope of the phrase “knowledge that it was inaccurate” in paragraph (A), and more particularly whether that knowledge is restricted to knowledge of the facts or also includes knowledge of the law. If it includes knowledge of the law, then a copyright owner’s honest mistake interpreting the law when completing a registration application would not invalidate the registration—which is exactly what the High Court held.

Justice Breyer, who penned the 6-3 decision in favor of Unicolors, began the decision by explaining the issue through a bird-watching analogy—similar to the analogy he raised during oral arguments:

Suppose that John, seeing a flash of red in a tree, says, “There is a cardinal.” But he is wrong. The bird is not a cardinal; it is a scarlet tanager. John’s statement is inaccurate. But what kind of mistake has John made?

John may have failed to see the bird’s black wings. In that case, he has made a mistake about the brute facts. Or John may have seen the bird perfectly well, noting all of its relevant features, but, not being much of a birdwatcher, he may not have known that a tanager (unlike a cardinal) has black wings. In that case, John has made a labeling mistake. He saw the bird correctly, but does not know how to label what he saw. Here, Unicolors’ mistake is a mistake of labeling. But unlike John (who might consult an ornithologist about the birds), Unicolors must look to judges and lawyers as experts regarding the proper scope of the label “single unit of publication.” The labeling problem here is one of law. Does that difference matter here? Cf. United States v. Fifty-Three (53) Eclectus Parrots, 685 F. 2d 1131, 1137 (CA9 1982). We think it does not.

Following this very Breyer-esque description of the issue in the case, the Court then attempted to answer the issue before it by considering the statute itself, relevant case law, the plain meaning of “knowledge,” other provisions in the Copyright Act, and legislative history. The Court concluded that each of these supported the holding that section 411(b) does not distinguish between a mistake of law and a mistake of fact and thus, a copyright registrant’s honest mistake of either law or fact in a copyright registration does not amount to “knowledge” and can be excused under section 411(b)(1)(A).

Basis for the Court’s Decision

In a very organized and methodical fashion, the Court considered all the different aspects that could have an impact on the interpretation of 411(b):

• Text of the Statute: The Court found that the knowledge standard under section 411(b)(1)(A) only requires that an applicant is aware of a mistake made on a registration application and does not distinguish between factual or legal mistakes. 

• The Dictionary Definition: The Court explained that according to Webster’s Seventh New Collegiate Dictionary, Black’s Law Dictionary, and New Oxford American Dictionary, “knowledge” has historically meant and still means “the fact or condition of being aware of something.” Thus, “[i]f Unicolors was not aware of the legal requirement that rendered the information in its application inaccurate, it did not include that information in its application ‘with knowledge that it was inaccurate.’”

• Other Provisions in the Copyright Act: The Court explained that if Congress had intended to subject copyright registrants to a standard other than actual knowledge, it would have done so explicitly in section 411(b). It then cited to several examples where this is the case, including section 512(c)(1)(A), which provides a safe harbor for service providers who are “not aware of facts or circumstances from which infringing activity is apparent” and section 1202(b), which provides for civil remedies for certain acts performed by a person who knows or has “reasonable grounds to know” that he or she was facilitating infringement. In contrast to other provisions throughout the Copyright Act, the absence of similar language in section 411(b) confirmed the conclusion that Congress intended “knowledge” here to be given its ordinary meaning.

• Case Law: The Court referenced several cases that were decided before Congress enacted section 411(b)—many of which involve mistake of law—that overwhelmingly held that inadvertent legal mistakes on copyright registrations did not invalidate the registration and thus did not bar infringement actions.

• Legislative History: After examining the legislative history, the Court concluded that it could find nothing to establish that Congress intended to alter the well-established rule that mistakes in law or fact would not invalidate a copyright registration when it enacted section 411(b). In fact, the legislative history showed that Congress intended for the registration process to be made easier for registrants, who may not have legal expertise, and to eliminate loopholes—like a mis-checked box—that might prevent enforcement of a copyright registration that is otherwise valid.

The Court went on to explain that its decision doesn’t give copyright registrants an automatic free pass to claim that they were unaware of the relevant legal requirements since alleged infringers will still have the opportunity to demonstrate that the registrant had the requisite actual knowledge of the law or was willfully blind to it. The Court also noted that the maxim that “ignorance of the law is no excuse” traditionally applies in the context of criminal law, and that “does not apply in this civil case concerning the scope of a safe harbor that arises from ignorance of collateral legal requirements.”

Significance of the Holding

The Court’s decision in this case represents a significant and decisive victory for all creators and copyright owners, especially individual creators and small businesses who chose to register their copyrights on their own. Copyright law can be very complex and difficult to understand at times. Unfortunately, those complexities and difficulties extend to the copyright registration process. The registration process is intended to be simple enough that a creator should be able to complete and file a registration themselves without hiring an attorney—and many do.  But the truth is that the process is not so simple. It requires the registrant to understand complex legal concepts like:

• what is a work-made for hire;
• whether a work should be registered as a compilation and if so, whether that registration will protect the underlying works within the compilation;
• whether the work is a derivative work or just includes some preexisting material; and
• what type of work is being registering (wait? A computer program is a literary work?)

Most importantly, it requires the registrant to understand the mother of all copyright questions—whether a work is published or unpublished. Knowing whether a work is published or unpublished is an insanely difficult question to answer successfully—arguably it can be much more difficult than determining whether a bird is a cardinal or tanager. Justice Breyer refers to the published/unpublished conundrum and the other legal concepts above as “esoteric”—and that is coming from a Supreme Court Justice (for a little while longer at least) who for the past 42 years has served as a federal judge (the last 27 years as a Justice of the Supreme Court) and who has demonstrated his own difficulties understanding complex copyright concepts, as evidenced by the decision in the Google v Oracle.

You could ask ten seasoned copyright attorneys whether a particular work is published or not and get back ten very different answers. Yes, that’s how convoluted the legal definition of publication is. Even the foremost experts in copyright at the U.S. Copyright Office conceded that the legal definition is extremely difficult to understand, stating in a December 2019 Notice of Inquiry that the distinction between published and unpublished works is ‘‘so complex and divergent from an intuitive and colloquial understanding of the terms that it serves as a barrier to registration.” Yet, non-attorneys—creators who are notoriously right-brain people—are tasked with knowing the difference. And if they got it wrong, we penalized them by invalidating their copyrights.

Well, not anymore! Now, a creator can, in good faith, try to decipher the Gordian Knot that is the definition of publication and if they get it wrong, they will no longer be punished for their mistake. The days of an infringer purposefully stealing someone’s copyrighted work only to be let off Scot-free by a court because of an administrative mistake made by the registrant are over. This is one loophole that has finally closed. Which means that creators are now free as a bird to file their registrations without worry or concerns that they may run “a-fowl” of the law.