Copyright home
Copyright background
Copyright contact
Copyright articles
Copyright links
Copyright disclaimer

A Look Into the 2019 Copyright Crystal Ball
How can we read the tea leaves?

Copyright © 2019 Mark H. Barinholtz.

Introduction

              As we start off the New Year, two copyright cases are being taken up for decision by the U.S. Supreme Court. Although there were many other cases filed and resolved this past year by federal courts interpreting copyright jurisprudence, this article examines two that have now made it to our nation’s highest court. Join me, as we gaze into the future.

              From a copyright case law standpoint, these two cases will likely have a significant impact. During the years I’ve been practicing in this area, there have been few times when the implications of U.S. Supreme Court authority is not cited. Over the years, the Supreme Court has weighed in on such fundamental concepts as what constitutes infringement, how do we analyze the doctrine of fair use, and what is the meaning of authorship.

              One procedurally interesting Supreme Court decision from 1998 arose from the issue of whether there is a right to a jury trial in copyright cases seeking statutory damages. In Feltner v. Columbia Pictures TV, the Court ruled “yes.” The opinion is noteworthy for reasons, including that it reversed both the District Court and Court of Appeals decisions -- a rare occasion on a writ for cert. That also meant Justices Scalia and Thomas voted in line with Justices Ginsburg and Breyer. And, Justice Thomas wrote the Court’s opinion! So how will the Court divide itself, or seek unanimity, now? What will Notorious RBG say? Whose side will Justices Neil Gorsuch and Brett Kavanaugh be on? Or will the Court’s diverse members split on some other meta- political ground?

              The time is right for the Supreme Court to come to grips with several copyright issues dividing the circuits. First, must a copyright plaintiff have an “acted upon” copyright registration in order to pursue her claim in federal court, or will an “application only” suffice? And second, just how risky is the downside of cases where a prevailing party may be entitled to its costs? Some circuits say they’re limited to certain basic “taxable” costs, while other circuits say they include “non-taxable” costs, such as expert witness’ and attorneys’ fees. Thiese disparities need to be reconciled.

Why Does the Supreme Court Get to Rule?

              One of the ways in which our Supreme Court obtains jurisdiction in order to rule occurs when there is a “split in the circuits.” In our federal system there are basically eleven judicial circuits, dividing the 50 states into 11 groups. Two other federal Courts of Appeals are constituted for more specific reasons, i.e., District of Columbia for cases within the District, and the Federal Circuit for certain subject matters, such as patent cases.

              Here in the Seventh Circuit, the federal district courts sitting in Illinois, Indiana and Wisconsin, comprise the circuit. But if different circuits resolve cases in different ways, as they can, the result is inconsistency in federal law. That’s not desirable.

              The manner in which such inconsistencies are brought to the Court’s attention is via a petition for certiorari (“cert”) -- from the Latin “to be made certain.” In the two cases discussed below, both matters were accepted after the respective petitioning parties’ petitions for cert were granted. It’s a very tough statistic which determines how many such petitions will be heard each year. Very few are. It’s an even tougher statistic which, with hindsight, determines how many copyright cases come before the Court. The two cases reviewed below made it through the gauntlet this past year.

              The Supreme Court’s 2019 rulings in these two cases will likely impact copyright jurisprudence for years to come. So what will the future bring? Let’s peek into the crystal ball, see if we can read the tea leaves, and otherwise just plain try to get it right.

1. Fourth Estate Public Benefit Corp. v. Wall-Street.com

              The issue raised by Fourth Estate comes into play when a copyright holder decides to bring her claim into a court. In most cases, particularly involving infringement, the copyright registration will be the claimant’s ticket into the courthouse. However, since the law is unclear as between the various federal circuits, it’s not always a simple question whether and how to accomplish such registration. The decision as to what is needed in a particular circuit may become important for various reasons. There may be more than one work at issue. There may be published works and unpublished works at issue simultaneously. The expense of requesting expedited processing by the Copyright Office may be at issue. All of these factors can have an effect on the copyright claimant’s actions in getting the case ready for filing in a court.

              Section 411(a) of the Copyright Act provides that no civil action for infringement may be filed until “registration of the copyright claim has been made” in accordance with the Act. 17 U.S.C. § 411(a). In its petition for certiorari, Fourth Estate articulated the question to be presented as: “Whether ‘registration of [a] copyright claim has been ‘made’ within the meaning of § 411(a) when the copyright holder delivers the required application, deposit, and fee to the Copyright Office, as the Fifth and Ninth Circuits have held, or only once the Copyright Office has acted upon that application, as the Tenth Circuit and, in the decision below, the Eleventh Circuit have held.”

              Petitioner Fourth Estate argued this split in the circuits has caused confusion, and is an issue in need of Supreme Court resolution. If federal law pertaining to the right to maintain an action in federal court is unclear, particularly on the threshold issue of just how to get ready to file suit, much time and effort could be spent by litigants unnecessarily. In our own Seventh Circuit, the answer is even more hazy, since several key decisions by our now retired Judge Posner, a recognized scholar in the area, have left us with somewhat confusing -- if not conflicting -- views in non-related cases within our own circuit, without explaining how such inconsistency should be reconciled.  

              When the Supreme Court rules on this point, litigants should have an additional measure of certainty as to whether to file suit on an application only, or to wait (or pay) for an application to be acted upon. That will be a good thing.

2. Rimini Street, Inc. v. Oracle USA, Inc.

              The issue here is to what extent may the parties, namely a prevailing party, claim expert witness fees and/or attorney’s fees as part of an award of “full costs” under Section 505 of the U.S. Copyright Act -- particularly in light of the more restrictive list of allowable costs under other general provisions of the U.S. Judiciary Code. As noted below, allocation of attorney fees can be a significant factor in copyright litigation. Likewise, expert witness fees as costs (other than mere per diems and travel expenses) can rack up considerable dollars.

              In a recent 2016 Supreme Court case, Kirtsaeng v. Wiley, the Supreme Court harmonized basic attorney fee jurisprudence which had become confusing, or even unfairly tilted in favor of prevailing defendants. Particularly here in the Seventh Circuit in recent years, our local Court of Appeals has allowed prevailing defendants a bit of a potential advantage, creating a thumb-on-the-scale presumption in favor of prevailing defendants. Kirtsaeng corrected that injustice. But now, there is a true “split in the circuits” over just how to interpret the apparent lack of clarity in reconciling a potentially broader interpretation of the “full costs” provision of the Copyright Act with the narrower list of allowable “taxable costs” enumerated in the the U.S. Judiciary Code.

              Section 505 of the Copyright Act states, a court may allow recovery of “full costs” as part of final relief in the action. The court may also award reasonable attorney fees as part of those costs. But Sections 1920 and 1821 of the U.S. Judiciary Code, which address the awarding of costs in more traditionally limited terms, provide that only “taxable” costs are to be allowed, e.g., basic per diem and travel expenses, not full-blown expert witness fees and attorney fees.

              In its petition for certiorari, Rimini Street articulated the question to be presented in its controversy, as: “Whether the Copyright Act’s allowance of ‘full costs’ (17 U.S.C. § 505) to a prevailing party is limited to [specifically enumerated] taxable costs under 28 U.S.C. §§ 1920 and 1821, as the Eighth and Eleventh Circuits have held, or also authorizes non-taxable costs [e.g., retained expert witness fees and/or attorney fees], as the Ninth Circuit holds.” 

              In plain English, the difference boils down to how federal courts should provide for the allowance of attorney’s fees and retained expert witness expenses. Those can be considerable in copyright cases. Therefore, how those factors may be allocated or shifted among the litigants depending on the outcome of the case, can be an important consideration. This issue is a bit technical, but can have great impact.

Conclusion

              The Court’s ruling on these fine points of (i) when is copyright registration “made,” and, (ii) how to allocate fees and costs once a case has been concluded with finality, will hopefully provide needed clarity. In the Feltner case mentioned above, the difference in statutory damages interpretation, from before the case was reversed by the Supreme Court ($8.8 million in non-jury statutory damages, versus $31.7 million awarded by a trial court jury after the case was remanded to the District Court), accounted for an approximately $23 million higher award. When real dollars are at stake, it’s an exciting time for such important issues to come before the highest court in the land. As we approach 2020, we’ll have an answer.


Copyright © 2019 Mark H. Barinholtz.
All rights reserved.