Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, Case No. 0:16-cv-60497-RNS (11^th Cir. May 18, 2017)

Copyrights are a unique category of intellectual property law in that the Copyright Act does not require official registration with the Register of Copyrights in order to have a valid copyright. However, despite the seemingly voluntary nature of this regime, there are incentives for a copyright holder to apply for registration of his or her copyright – namely that you cannot file a suit for copyright infringement without doing so. The term “registration,” as it is used in the Copyright Act, is interpreted differently by the Circuit Courts and on May 18, 2017, the Eleventh Circuit weighed in on the circuit split and answered an important question in copyright infringement cases: when does registration of a copyright occur?
Background
In this case, Fourth Estate Public Benefit Corporation, an organization that produces online journalism, brought suit against Wall-Street.com, LLC for copyright infringement. Fourth Estate licenses articles to different websites, but retains the copyrights to those articles. Fourth Estate licensed articles to Wall-Street.com and, pursuant to their licensing agreement, Wall-Street.com was required to remove all content produced by Fourth Estate when the relationship ended; however, Wall-Street.com continued to display the articles after termination of the relationship.
Consequently, Fourth Estate filed a complaint against Wall-Street.com and its owner. Fourth Estate’s Complaint, in an attempt to comply with the pleading requirements for copyright infringement, alleged that “applications to register [the] articles with the Register of Copyrights” had been filed, but pled no facts regarding the Register of Copyrights’ actions on the application. In response, Wall-Street.com filed a motion to dismiss arguing that under the Copyright Act a suit for infringement can only be brought after the Register of Copyrights approves or denies the application to register. As further discussed below, this prompted the Eleventh Circuit to finally address the question that currently splits the circuits: whether registration of a copyright occurs upon the filing of an application or after the Register of Copyrights approves or denies registration of the copyright?
Ruling
In its analysis, the Eleventh Circuit sets forth the two approaches to “registration” under the Copyright Act: (1) the “registration” approach, which “requires a copyright owner to plead that the Register of Copyrights has acted on the application – either by approving or denying it – before a copyright owner can file an infringement action,” and (2) the “application” approach, which “requires a copyright owner to plead that he has filed ‘the deposit, application, and fee required for registration’ before filing a suit for infringement.” Fourth Estate Public Benefit Corporation v. Wall-Street.Com, LLC et al., Docket No. 0:16-cv-60497-RNS at p. 5.
The Eleventh Circuit held that, under the clear language of the Copyright Act, the registration approach is correct – a decision that aligns with the minority approach.[1] In reaching its decision, the Court relied heavily on the statutory language in the Copyright Act. For example, the Court cited to §410(a) of the Copyright Act, which states that “[R]egistration of [a] copyright . . . has [not] been made in accordance with” the Act until the Register “register[s] the claim.” Additionally, the Eleventh found that the Act’s use of the phrase “after examination” in discussing registration indicated that registration occurs subsequent to, and not instantaneously with, the filing of the application.[2] Further, the Eleventh Circuit cited §410(b) to further bolster its analysis, as this section acknowledges that the Register of Copyrights has the power to “refuse registration” if the application does not meet copyrightable standards. Clearly, “if registration occurred as soon as an application was filed, then the Register of Copyrights would have no power to ‘refuse registration.’” Fourth Estate Public Benefit Corporation v. Wall-Street.Com, LLC et al., Docket No. 0:16-cv-60497-RNS at p. 8.
Moreover, Fourth Estate argued that the three-year statute of limitations for infringement suits, established by §507(b) of the Copyright Act, supported the application approach. The Court rejected this argument finding that the Copyright Act’s statutory plan is to encourage early registration, and thus, the three-year statute of limitations and the registration approach taken together align with this statutory scheme. The Court further stated that the statute of limitations functions as an incentive for early registration because the potential of losing the right to protect your copyright against infringement “encourages an owner to register his copyright soon after he obtains the copyright and before infringement occurs.[3]” Fourth Estate Public Benefit Corporation v. Wall-Street.Com, LLC et al., Docket No. 0:16-cv-60497-RNS at p. 10.
Impact
This decision clarifies the pleading standard for copyright infringement in the Eleventh Circuit. After this decision, in order to state a claim for copyright infringement a copyright holder must allege that the Register of Copyrights has approved or denied the application for registration. Additionally, as suggested by the Court’s interpretation of the Act’s statutory scheme, this decision has the potential to prevent copyright holders from sleeping on their rights and motivate prompt registration. However, since the Eleventh Circuit took the minority approach, copyright holders and attorneys practicing in this field should continue to follow this issue as it is likely that Fourth Estate will petition for a writ of certiorari in the Supreme Court.
 
[1] The Eleventh Circuit followed the Tenth Circuit’s registration approach, whereas the Ninth, Fifth, and Eighth Circuits have all elected to follow the more lenient application approach.
[2] Section 410(a) of the Act states “When, after examination, the Register of Copyrights determines that, in accordance with the provisions of this title, the material deposited constitutes copyrightable subject matter and that the other legal and formal requirements of this title have been met, the Register shall register the claim and issue to the applicant a certificate of registration under the deal of the Copyright Office.” 17 U.S.C. §410(a) (emphasis added).
[3] The Court also cited to other provisions in the Copyright Act that reflect a statutory scheme encouraging prompt registration. See e.g., 17 U.S.C. §410(c) (stating that registration made “before or within five years after first publication of the work” will be “prima facie evidence of the validity of the copyright.”)
 
Micayla Mancuso is an associate at Kluger Kaplan, focusing on general and complex commercial litigation. Before joining Kluger Kaplan as a full time associate, she served as a summer associate at the firm. Prior to this, she served as an extern for the City of Boston Law Department and served as a judicial intern in the Boston Municipal Court for Judge Debra A. DelVecchio. She also served as an intern for the Federal Public Defender for the Southern District of Florida.