This Report summarizes an opinion issued on February 24, 2022 (Part I); and cases granted review on February 7, 18, and 22, 2022 (Part II).
Opinion: Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 20-915
Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 20-915. A safe harbor provision in the Copyright Act allows a copyright holder to enforce an otherwise valid copyright despite having included inaccurate information in his copyright registration application so long as he did not have “knowledge that [the information] was inaccurate.” 17 U.S.C. §411(b). The Court held that this provision applies to mistakes of both fact and law. Unicolors brought an action under the Copyright Act against H&M for infringement of fabric designs that Unicolors had registered with the copyright office. In response, H&M moved to dismiss the claim, contending that Unicolors could not maintain an infringement action because Unicolors’ copyright registration application contained inaccurate information. In particular, H&M argued that Unicolors’ registration statement for the fabric designs was inaccurate because Unicolors had improperly filed a single application seeking registration for 31 separate works. H&M relied on a Copyright Office regulation which provides that a single registration can cover multiple works only if those works were “included in the same unit of publication.” H&M asserted that all 31 fabric designs had not been published in the same unit because Unicolors had initially made some of the designs available exclusively to certain customers (while making the others available at that time to the general public). The district court denied the motion to dismiss. The Ninth Circuit reversed, holding that the safe harbor provision excuses only good faith mistakes of fact, not law. Therefore, even though Unicolors claimed that it did not know that the works at issue were not “included in the same unit of publication,” because Unicolors had been aware of the facts underlying that conclusion, Unicolors could not take advantage of the safe harbor provision. In an opinion by Justice Breyer, the Court reversed.
The Court first looked to the text of the statute and the operative term “knowledge.” The Court stated that “knowledge” “has historically meant and still means the fact or condition of being aware of something.” (Cleaned up.) And that broad definition, said the Court, would include knowledge of both facts and law. The Court then observed that there was nothing in the statutory language itself that altered this plain meaning. Applying these principles here, the Court concluded: “If 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.’”
The Court looked to other sources for confirmation. The Court noted that a copyright registration application often requires an applicant to provide information that relates not only to plain facts, but also to legal conclusions, such as whether a work was “for hire” or “derivative.” But given that an applicant may be a layperson, it would be as likely (or perhaps more likely) that inaccurate information in a copyright registration application would take the form of a mistake of law rather than a mistake of fact. In light of the potential for these errors, the Court concluded that there was no indication in the statutory language of §411(b) that Congress sought to forgive certain types of mistakes but not others.
The Court also looked to other safe harbor provisions in the Copyright Act that imposed a scienter requirement other than actual knowledge. See, e.g., 17 U.S.C. §121A(a) (providing safe harbor for an entity that “did not know or have reasonable grounds to know” that exported works would be used by ineligible persons). These provisions, the Court concluded, confirmed that the absence of similar language in §411(b) meant that “knowledge” as used in that provision bore its “ordinary meaning” of “actual, subjective awareness of both the facts and the law.” In addition, the Court relied on cases decided before the enactment of §411(b), which had “overwhelming[ly held] that inadvertent mistakes on registration certificates [did] not invalidate a copyright and thus [did] not bar infringement actions.” Because many of these cases had involved mistakes of law, the Court reasoned that Congress did not “intend to alter this well-established rule when it enacted §411(b).”
The Court also reviewed the legislative history of §411(b) and observed that Congress enacted that provision to “make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations,” and to “eliminat[e] loopholes that might prevent enforcement of otherwise valid copyrights.” The Court concluded that allowing an otherwise valid copyright registration to be invalidated because of a good-faith misunderstanding of the details of copyright law would be inconsistent with these objectives. Finally, the Court rejected H&M’s claim that allowing safe harbor for mistakes of law would make it too easy for a copyright holder to claim lack of knowledge and thus avoid the consequences of an inaccurate application. The Court explained that a claimed lack of knowledge could still be overcome by showing an applicant’s “willful blindness” or actual knowledge through circumstantial evidence such as the significance of the legal error, the complexity of the applicable legal rule, and/or the applicant’s experience with copyright law.
Justice Thomas, joined by Justices Alito and Gorsuch, dissented in an opinion that did not address the merits. Instead, Justice Thomas argued that the case should have been dismissed as improvidently granted because, in his view, the arguments presented to the Court by Unicolors at the merits stage did not reflect the specific issue presented in the lower proceedings and in Unicolors’ petition for writ of certiorari (which, in his view, raised only the issue of whether §411(b)’s “knowledge” element required “indicia of fraud”).
[Editor’s note: Some of the language in the background section of the summary above was taken from the petition for writ of certiorari and brief in opposition.]