On Monday, the Supreme Court heard oral arguments for a case involving a major clothing brand and copyright allegations.
As reported by Reuters:
Unicolors sued Sweden-based H&M in 2016 over a jacket that it said copied its fabric-design copyright. H&M, which has said that Unicolors has sued “virtually every major clothing retailer in America,” argued that the company had obtained its copyright registration through fraud on the U.S. Copyright Office.
A jury found for Unicolors, and a Los Angeles federal judge later awarded it over $750,000 in damages and attorneys’ fees.
Last year, the 9th Circuit reversed this due to issues in Unicolors’ federal copyright application, saying that it didn’t hold up to the necessary conditions of the U.S. Copyright Office, and that the group was aware of this when it put in the application. It reportedly found that whether or not it was attempting to “defraud the copyright office” was not important, per Reuters.
Ballotpedia explained the case:
In 2011, fabric design corporation Unicolors, Inc. (“Unicolors”) registered copyrights for a group of 31 designs, nine of which were “confined” designs, reserved for specific customers’ exclusive use. In 2015, clothing retailer and designer H&M sold apparel using a design that Unicolors later alleged in U.S. district court infringed on Unicolors’ copyrighted designs. A jury found H&M liable for willful infringement. H&M appealed to the 9th Circuit, claiming that Unicolors’ copyright registration included false information. The 9th Circuit concluded that Unicolors’ copyright application had known inaccuracies, reversed the district court’s judgment, and remanded the case for further proceedings.
Joshua Rosenkranz of Orrick Herrington & Sutcliffe, arguing on behalf of Unicolors, said it had truly not understood the law, and that the ruling ought to be reversed because Congress “considered it more important to give authors and artists an effective remedy against IP thieves” than “demand perfect compliance with complex legal requirements.”
Some of the justices were not easily convinced to look upon the company with pity.
“I understand you want to make this about lay people, artists and poets,” Justice Sonia Sotomayor told Rosenkranz. “But there’s an argument here that your client is not an artist or poet,” but instead a “troll.”
Melissa Patterson of the U.S. Solicitor General’s office sided with Unicolors that the ruling would “jeopardize many thousands of copyright registrations” based on standards “never before thought to give rise to a risk of invalidation.”
As reported by Bloomberg Law:
The dispute involves when 31 different Unicolor fabric designs were published and whether, under copyright law, they could be lumped into a single group registration. [H&M representation Peter K. Stris] said that a mistake or ignorance of law is not a defense unless a statute says otherwise.
Requiring actual knowledge or evidence of willful blindness would give plaintiffs a “powerful argument” that prevents scrutiny of their registration, Stris said. That would disincentivize exercising diligence in application and hurt the registration’s quality. It would also help copyright “trolls,” or those who systemically use copyright litigation as a revenue driver, pursue weak infringement cases, he said.
But justices pushed back on the distinction between misrepresentation and deception.
“There might be a difference between knowledge and intent to defraud in other contexts. But, in this context, I mean, how is it that a registrant knowingly misrepresents information on the application and does not intend to defraud?” Justice Elena Kagan reportedly questioned during the arguments.
The question presented was reportedly, “Did the Ninth Circuit err in breaking with its own prior precedent and the findings of other circuits and the Copyright Office in holding that 17 U.S.C. § 411 requires referral to the Copyright Office where there is no indicia of fraud or material error as to the work at issue in the subject copyright registration?”
According to Ballotpedia, “The Supreme Court began hearing cases for the term on October 4, 2021. The court’s yearly term begins on the first Monday in October and lasts until the first Monday in October the following year. The court generally releases the majority of its decisions in mid-June.”
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