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U.S. Supreme Court Reverses Ninth Circuit, Holding that a Mistake of Law Can Excuse an Inaccurate Copyright Registration

March 15, 2022

Author: Leia Leitner

On February 24, 2022, the Supreme Court of the United States in Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 211 L.Ed.2d 586 (U.S. 2022) examined the “knowledge” element in 17 U.S.C. section 411(b) for copyright registrations. In a 6–3 decision, reversing the Ninth Circuit Court of Appeals, the high court held that the “knowledge” requirement in section 411(b) does not distinguish between a mistake of law and a mistake of fact, ultimately finding that a good-faith mistake of law or fact can excuse an inaccuracy in a copyright registration under section 411(b)(1)(A)’s safe harbor, and thus does not preclude a copyright holder from asserting a valid copyright infringement claim. 

Background and Issues
Unicolors, Inc. creates artwork, copyrights it, prints the artwork on fabric and markets the designed fabrics to garment manufacturers. In some instances, however, Unicolors designs “confined” works created for a specific customer. This customer is granted the right of exclusive use of the confined work for at least a few months, during which time Unicolors does not offer to sell the work to other customers. In February 2011, Unicolors registered certain artworks with the U.S. Copyright Office, including a two-dimensional geometric design, U.S. Registration No. VA 1-770-400 (the 400 Registration). The 400 Registration is a “single unit registration” of 31 separate designs in a single copyright registration, including geometric design EH101. 

H&M Hennes & Mauritz, L.P. (H&M) owns and operates hundreds of clothing retail stores in the United States. In late 2015, H&M stores began selling a jacket and skirt made of fabric bearing an artwork design named “Xue Xu.” When H&M was selling garments bearing the Xue Xu artwork, Unicolors filed an action for copyright infringement, alleging that H&M sales infringed Unicolors’s copyrighted EH101 design. Unicolor claimed that the works were “row, by row, layer by layer” identical. 

In 2016, Unicolors sued H&M for copyright infringement for the EH101 work. At trial, the jury found in Unicolors’s favor and awarded Unicolors almost $800,000 in damages and attorneys’ fees and costs. H&M filed, and re-filed, a motion for judgment as a matter of law, attacking the validity of Unicolors’s copyright registration because it had improperly filed a single application seeking registration for 31 separate works. H&M argued that the underlying application was improper because the 31 designs had not been published in the same unit of publication and that Unicolors’s registration was therefore invalid. Generally, to enforce copyright protection, the author of a work must have obtained a valid copyright registration before filing a copyright infringement claim. If H&M were able to invalidate Unicolors’s registration, Unicolors’s claims would fail. 

The District Court for the Central District of California rejected H&M’s arguments, holding that although the registration included inaccurate representations, Unicolors submitted the application without “knowledge that it was inaccurate” with respect to the “unit of publication registration.” See Unicolors, Inc. v. Hennes, No. 2:16-cv-02322-AB (SKx), 2018 U.S. Dist. LEXIS 230412, at 2 (C.D. Cal. Sep. 25, 2018). 

H&M appealed to the Ninth Circuit, which disagreed with the district court, clarifying that the “unit of publication” for registration purposes must have been first available to the public as a “singular, bundled collection.” See Unicolors, Inc. v. H&M Hennes & Mauritz, Ltd. Partnership, 959 F.3d 1194, 1196 (9th Cir. 2020). Thus, the inaccurate statement in Unicolors’s application reflected a mistake of law, not a mistake of fact. The Ninth Circuit held that the statute excused only good-faith mistakes of fact, not law, and that the inaccuracy in Unicolors’s application was enough to invalidate the registration. Unicolors sought certiorari to review the Ninth Circuit’s interpretation of section 411(b)(1)(A), and the U.S. Supreme Court granted the petition. 

The Supreme Court’s Opinion
Justice Breyer, writing for the majority, began interpretation of the “knowledge” requirement of section 411(b)(1)(A) by looking to the text of the statute to determine the plain meaning. Section 411(b)(1) states that a registration is valid: “regardless whether the [registration] certificate contains any inaccurate information unless … the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate.” 17 U.S.C. section 411 (b)(1)(emphasis added). The majority argued that both case law and the dictionary historically have defined “knowledge” as ‘the fact or condition of being aware of something.” Unicolors claims that it did not know that applying for 31 designs does not satisfy the “unit of publication” requirement when it registered its copyright. Thus, applying the “knowledge” definition, the Court found no difference in Unicolors’s mistake of law, as opposed to a mistake of fact, in registering 31 designs for a copyright registration.

 Next, the Court looked to the legislative intent, specifically other areas of the Copyright Act, to confirm that “knowledge” means actual, subjective awareness of both fact and law. Justice Breyer asserted that Congress would have imposed a “scienter” element in section 411 (b)(1), beyond an actual knowledge, requirement in the statute – but, did not. He also referred to decisions handed down prior to the enactment of section 411(b)(1), which held “overwhelming[ly] that inadvertent mistakes on registration certificates [did] not invalidate a copyright and thus [did] not bar infringement actions.” Thus, Justice Breyer found that Congress intended to apply the ordinary meaning of “knowledge” in defining the requirement in the statute. 

Lastly, the majority opinion considered legislative history in interpreting section 411(b)(1). The Court found that Congress enacted section 411(b)(1) to make it easier, not more difficult, for non-lawyers to obtain valid copyright registrations. H.R. Rep. No. 110–617, p. 20 (2008). The House Report stated in part that “history shows that Congress enacted the safe harbor to make it easier to obtain and enforce copyrights and to eliminate loopholes that might prevent the enforcement of otherwise valid copyright registrations.” Based on the plain meaning, the legislative intent and legislative history, the Court recognized that it would make no sense if section 411(b)(1) left copyright registrations exposed to invalidation based on applicants’ good faith misunderstandings of the details of copyright law. Thus, the Supreme Court vacated the Ninth Circuit’s ruling, holding that Unicolors’s certificate of registration containing inaccuracies – both factual and law – were excusable under section 411(b)(1) of the Copyright Act. 

The Impact
The majority opinion in Unicolors thus clarified the scope of section 411(b)(1)(A) under the “knowledge” requirement to mean both facts and law for copyright registrants. The Supreme Court’s ruling expanded interpretation of section 411(b)(1)(A) to provide non-lawyers with confidence in enforcing copyright protection and increase the bar for copyright defendants to assess the claims under the section 411(b) safe-harbor provision. 

In some cases, a copyright holder may simply claim “lack of knowledge” to avoid the consequences of an inaccurate copyright registration application. This does not always mean that all alleged mistakes will be forgiven without being challenged. Whether an applicant acted with or without “knowledge” of an inaccuracy, however, is still a question of fact. Further, lack of knowledge is only excusable if it is in “good faith,” meaning willful blindness will not be excused. Accordingly, in planning its defense, a copyright defendant seeking to challenge the validity of a registration should attempt to develop evidence, both direct and circumstantial, to show that a copyright holder was “willfully blind” to the applicable law or fact when applying a certain work for copyright registration.

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