Category Archives: Registration

C.D. Cal. denies motion for summary judgment for invalidity of copyrights (fraud on the copyright office)

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Shourin Sen - 18 February 2009 – 8:45 am
Filed under Registration

Crew Knitwear, Inc. sought a finding that U.S. Textile Printing’s copyrights in designs were invalid.  Crew alleged that U.S. Textile engaged in a broad pattern of fraud in which they routinely registered design patterns created by others.  Crew argued that U.S. Textile fraudulently secured the copyright registration in the designs at issue by intentionally misrepresenting to the Copyright Office that the designs were works made for hire.  Judge Wright II of the Central District of California denied the motion for summary judgment, finding that the issue of how the designs were created was better determined by a trier of fact:

A party seeking to establish such fraud, and thereby rebut the presumption of copyright validity . . . bears a heavy burden. Absent intent to defraud and prejudice, inaccuracies in copyright registration do not bar actions for infringement.” S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1086 (9th Cir.1989). On the record before it, the Court is of the opinion that disputed issues of material fact preclude summary judgment. Equally competing evidence has been presented, for example, as to whether the designs at issue were works made for hire, and therefore as to whether Defendants intended to defraud the Copyright Office by registering the subject designs as such.

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The three-month window for statutory damages for infringement that commences pre-registration

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Shourin Sen - 10 February 2009 – 2:18 am
Filed under Damages, News, Registration

Shade v. Gorman, 08-3471 SI, 2009 WL 196400 (N.D.Cal. Jan. 28, 2009).

Shade took photographs and video in Central Asia immediately following September 11, 2001.  In 2003, the parties entered into a preliminary agreement for Gorman to produce a documentary using Shade’s video footage.  Gorman proposed ideas, but the parties were unable to come to an agreement. Shade alleged that in January of 2008 he learned that Gorman had used his photos and video footage without his permission in the creation of a documentary titled “American Hero,” which was shown at the San Francisco Indie Film Festival in February of 2008.

Gorman moved to dismiss Shade’s claims for statutory damages and attorneys’ fees, arguing that they aren’t available for infringement that commences before registration. See 17 U.S.C. § 412. Shade argued that while he couldn’t recover statutory damages and attorneys’ fees for any pre-registration infringement, the relief was available to him for post-registration infringement.

Judge Illston of the Northern District of California held that “Section 412(2) mandates that, in order to recover statutory damages [and attorneys' fees], the copyrighted work must have been registered prior to commencement of the infringement, unless the registration is made within three months after first publication of the work.” Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696, 699 (9th Cir.2008).  The Court granted Gorman’s motion because the alleged infringement began on February 17, 2008, which was more than three months before Shade obtained registration of the copyrights.

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What happens when a dissolved corporation attempts to register a copyright?

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Shourin Sen - 28 January 2009 – 1:14 am
Filed under Registration

Embassy Software Corporation v. Ecopy, Inc., Civil No. 06-cv-00391-JL, 2009 WL 74350 (D. N.H. Jan. 13, 2009).

I’ve been meaning to write about this case from the District of New Hampshire for a little while.  I think the suit would make a good movie if, you know, people who watched movies were copyright and corporations law dorks, and stuff.  The facts are a little tough on the first go through, so hang wif’ ‘em.

Ecopy hired Embassy Software Corporation to build a software program named G1.  Shortly thereafter, unbeknownst to everyone, Embassy was administratively dissolved for failing to file routine paperwork with the New Hampshire Secretary of State’s office.  Three years later, Embassy registered software (called G2) with its principal listed as author, and Embassy listed as the claimant.  The G2 registration  didn’t make Ecopy happy.   They viewed G2 merely as a derivative of G1.  Hullabaloo ensued, and Embassy eventually filed suit.  image

Ecopy claimed that Embassy’s registration of G2 was invalid because the corporation was dissolved at the time it filed the registration.  The principal of Embassy tried to reinstate his corporation but was foiled because (oh noes!) Ecopy had filed a counterclaim.  Under the New Hampshire Business Corporation Act, a filing for reinstate must “[c]ontain a statement asserting that no lawsuits are pending against the corporation.” N.H.Rev.Stat. Ann. § 293-A:14.22-a(a)(5).  Oh, what to do?

ECopy moved to dismiss (which the court turned into a motion for summary judgment on this narrow issue under 12(d)) on the grounds that the allegedly defective registration rendered the court without jurisdiction.

As the Court outlined:

The predominant rule is that an invalid registration (involving material errors, fraud, or an incomplete application) nullifies the federal court’s subject matter jurisdiction.” Torres-Negron, 504 F.3d at 160. “[M]ost errors or mistakes in a copyright registration application will be inadvertent or immaterial, and thus will not invalidate the application (or any resulting certificate).” Id. at 162 (citing Data Gen. Corp., 36 F.3d at 1161). “In general, an error is immaterial if its discovery is not likely to have led the Copyright Office to refuse the application.” Data Gen. Corp., 36 F.3d at 1161.

Now’s where the fun begins.

The Court found that Embassy did in fact exist at the time it registered G2, although there were limitations on its conduct.  “A corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under [a separate provision] and notify claimants under [other provisions].” N.H.Rev.Stat. Ann. § 293-A:14.21(b) (Supp.2008).

Thus, the question was not so much whether Embassy existed at the time of registration, but whether the fact that Embassy was acting outside of its statutory limitations invalidated the registration.  The Court found that, according to N.H. law, no ultra vires act of a corporation “shall be invalid because the corporation was without capacity or power to do the act . . .”  The Court further found no compelling argument for why the Copyright Office would reject Embassy’s copyright registration, even if the Office was aware that the filing constituted an ultra vires act.

But, alas, there are potentially storm clouds on the horizon for Embassy.   The principal of Embassy claimed that he had assigned the copyright in G2 to his corporation via quitclaim, which he rescinded when he learned of the dissolution.  And that he had later assigned the copyright to a new corporation he founded (also called Embassy), which was the entity that brought suit in this dispute.  The court found that the amended complaint contained “inconclusive and arguably inconsistent factual assertions” about which party actually held the copyright, the first version of Embassy or Embassy 2.0.

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