Supreme Court Takes Jurisdiction Over “Jurisdiction”

Posted on Categories Civil Procedure, Intellectual Property Law

copyrightA bit overshadowed by all the hubbub over the oral argument in McDonald v. City of Chicago, the Supreme Court yesterday handed down an important copyright opinion in Reed Elsevier v. Muchnick. (But see Howard Wasserman, Marcia Coyle.) The court held that Section 411(a) of the Copyright Act, which requires registration of a copyright as a prerequisite to an infringement suit, is not “jurisdictional”—that is, failure to file a registration does not deprive a court of all power to hear a claim.

This might not initially sound significant; after all, a plaintiff who files an infringement claim on an unregistered copyright is still going to have the case dismissed, whether Section 411(a) is deemed a mere prerequisite to filing or jurisdictional. But the distinction matters in three types of cases: class actions where unnamed members of the class would include owners of unregistered works (the Muchnick situation); plaintiffs who seek an injunction against further infringement encompassing all of their works, registered and unregistered; and would-be defendants who file for a declaratory judgement against a copyright owner who hasn’t registered yet. All three of those seem like worthy candidates for a court’s consideration as a policy matter, but all three were impeded by a slew of lower court opinions holding that a failure to register deprived the court of all power to even hear such disputes. (Congratulations for the win are due to lawyers from my old firm: Chuck Sims, who argued the case before the Supreme Court, and Jon Baumgarten.)

A bit of background before I continue: Contrary to what many people think, copyright law no longer requires registration in order to have copyright ownership rights. This is a common misconception, based on the fact that prior to 1978, copyright law did in fact require registration, and on the fact that people just generally assume there must be some formal process for getting property rights of any kind. But in 1976, Congress eliminated the registration requirement as a prerequisite for copyright ownership, in part because most other countries do not require registration. Copyright rights inhere, as I tell my students, the moment your pen leaves the paper, or perhaps nowadays when your fingers stop tapping.

But Congress was hesitant to eliminate registration altogether, since it had long been a feature of the United States copyright system, and it had previously served an important notice function, similar to real property recordation. So Congress put some incentives to register in the 1976 Act: registration is a requirement to sue for infringement; and in addition, registration prior to infringement allows the plaintiff to recover some additional remedies.

Lower courts in what the Supreme Court described as “drive-by jurisdictional rulings”—rulings in which the precise question of whether Section 411(a) was jurisdictional or not was not of critical importance—had mostly held that Section 411(a) was jurisdictional; which would mean that a court simply had no power to act with respect to unregistered copyrights, even when those might be relevant to a dispute that was properly initiated. An example is the “copyright Catch-22” I identified a year ago in the 11th Circuit decision in Stuart Weitzman LLC v. Microcomputer Resources. In Weitzman, Microcomputer Resources sent Weitzman a cease and desist letter alleging that he was infringing on their copyrighted software by continuing to use a copy he had earlier possessed with permission. Weitzman, tired of waiting for the hammer to drop, filed a declaratory judgement action for non-infringement. The dispute sounds an awful lot like the one in Asset Marketing Systems, Inc. v. Gagnon, 542 F.3d 748 (9th Cir. 2008), which wound up being a win for the licensee—and indeed, the district court in Weitzman issued summary judgement in Weitzman’s favor. But the 11th Circuit reversed, saying that the district court had no subject matter jurisdiction over the dispute, because Microcomputer Resources had not registered the copyright in the software program yet. This gave Microcomputer Resources a lopsided advantage in litigating the dispute; it could wait as long as it chose to prolong pre-litigation maneuvering, file for registration at its leisure, and—since only Microcomputer Resources would know precisely when the registration certificate was issued—then file an infringement suit in the court of its choice (assuming proper venue and personal jurisdiction, of course).

Muchnick hopefully puts an end to such shenanigans. The question of when a requirement is “jurisdictional” is one that has been bedeviling the court in a number of different areas; Howard Wasserman has more background over at Prawfsblawg. In general, the court is now trying to clamp down on proliferating jurisdictional requirements. With respect to copyright law, the court held that Section 411(a) is merely a prerequisite to filing an infringement suit, but not jurisdictional, because it is not found in the separate jurisdictional statutes for copyright cases (Sections 1331 and 1338(a)) and there is nothing in the text of Section 411(a) indicating that the infringement filing requirement is jurisdictional. Declaratory judgement suits over unregistered copyrights should be within the court’s power to decide, as long as the prospect of litigation is real; and similarly, courts should have the power to enjoin adjudged infringers from further likely infringement fitting the same pattern, even if that extends to unregistered works.

Cross-posted at Madisonian.

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