Filing of a Copyright Case Requires Registration and Not a Mere Application

Following the passage of the country's first copyright statute in 1790, and continuing with numerous revisions to the present day, one would assume that the precondition for filing a copyright infringement lawsuit would be settled. It is not. Whether or not a lawsuit can be filed if the copyright Register has not first granted or refused registration remains in considerable dispute.

Last week, a federal court in Michigan (E.D. Mich., Case No. 14cv12933) determined that a plaintiff that had not yet obtained registration, but was awaiting a registration decision from the Register, was not able to bring a copyright infringement claim because there was not yet a registration. In determining that it is not enough to merely apply for a copyright registration, the Michigan court joins the Tenth and Eleventh Circuit in holding that "registration" means registration and not mere application. By contrast, the Fifth, Seventh and Ninth Circuits have determined that mere application, without any final decision on registration by the Register, is adequate to permit the filing of an infringement lawsuit.

As mentioned, one would think that this very basic precondition to filing a lawsuit would have become settled by now. Indeed, the 1909 Copyright act, in Sec. 12, required registration as a precondition to filing a lawsuit (" No action or proceeding shall be maintained for infringement of copyright in any work until the provisions of this Act with respect to the deposit of copies and registration of such work shall have been complied with."). And the 1909 Act, in Sec. 6 added in 1939, provided that the Register "is charged with the registration of claims." In other words, the Register had to do something in order to effect registration under the 1909 law. It was not enough that an application was filed in order to complete an act of registration. The Register was charged with registration, not the applicant.

In its 2010 decision in Reed Elsevier v. Muchnick, the Supreme Court confirmed that standard practice under the 1909 copyright law required the Register to grant registration as a precondition to filing an infringement lawsuit. And if the Register refused, then the applicant would need to seek mandamus. Indeed, the Reed Elsevier court cited with approval the 1958 decision of Learned Hand in Vacheron & Constantin-Le Coultre Watches, Inc. v. Benrus Watch Co., emphasizing that "we can think of no other added condition for 'registration' but acceptance by the Register."

Section 411 of the present 1976 Copyright Act is the focus of the discord between the "application means registration" courts and the "registration means registration" courts. This section emphasizes that the Register must do something in order to effect registration. Section 411(a) requires as a precondition for filing a lawsuit that "preregistration or registration of the copyright claim has been made." Only if registration has been refused by the Register can the applicant file a lawsuit.

* * * no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title. In any case, however, where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights. 

17 U.S.C. Sec. 411(a).

Section 410(a) allows the Register to refuse registration if the applicant's deposit material does not constitute copyrightable subject matter or the copyright claim is otherwise determined by the Register to be invalid. As such, mere delivery of the application to the Register does not constitute registration. The Register must affirmatively allow registration. 

While the "registration means registration" approach may be inefficient, particularly when one considers that the denied applicant can sue anyway following rejection of registration, the obligation of a court to apply the statute as written remains important. Indeed, a court's adherence to the restrictions contained in Congressional enactments respects the role of Congress in ascribing the benefit and the burden imposed by statutes. 

As observed by the Michigan court last week, the language of the statute should be the starting point in determining its meaning, and should also be the ending point when the meaning is clear. It is tragic that after 224 years into this country's copyright regimen there exists a core dispute as to what condition must exist permitting the filing of a copyright lawsuit.

The Patenting of a Design Trademark

It appears that the U.S. Patent Office used to issue design patents for graphical trademarks. Portland patent attorney James Walters reports his astonishing find of a U.S. design patent, D3444, issued in 1869 for this trademark:

 The "inventor" set out the following "claim":

What I claim as my invention, and design to secure by Letters Patent, is--

The design for a trade-mark, herein set forth and shown.

Exactly how the Patent Office came to issue Letters Patent in a trademark is more than interesting. The Patent Act of 1836 was designed to improve patent quality by removing the then-authority for the issuance of patents from the U.S. Secretary of State to a new official, a Commissioner of Patents. The 1836 Act established a formal criteria for issuing patents, allowing a patent to an inventor who "discovered or invented any new and useful art, machine, manufacture, or composition of matter, or any new and useful improvement on any art, machine, manufacture, or composition of matter, not known or used by others before his or their discovery or invention thereof, and not, at the time of his application for a patent, in public use or on sale ..."

It is unclear why the Patent Office viewed the design of a trademark as a new or useful discovery, invention or improvement of useful art, machine, manufacture or composition of matter. A trademark is a source identifier, not an invention, and is not authorized under the patent clause of the U.S. Constitution, Art I, Section 8, cl.8. In any event, since the 1836 Act limited a patent's term to 14 years, this "inventor" may have outwitted himself by obtaining limited patent protection when a trademark, in theory, can last as long as it is used to perform its source identifier function -- perhaps forever.

It would be interesting to learn whether the Patent Office's issuance of Letters Patent was a common practice for design marks at any point in time, or whether this one presently known example is an aberration. If any reader has additional examples, kindly share.

Negotiation in the U.S. for the Sale of a Patent-Infringing Product Is Not Necessarily Infringement Under U.S. Law

Section 271(a) of the U.S. patent law permits an infringement claim against anyone who "without authority makes, uses, offers to sell, or sells any patented invention, within the United States..." A question exists as to whether a U.S. company is subject to a patent infringement claim when it negotiates in the U.S. for the sale of a patent infringing product, including the setting of price and sales terms. That is, is mere negotiation sufficient to constitute a "sale" or an "offer to sell"?

The Federal Circuit answered this question in the negative in the last week's Halo Electronics case. The mere negotiation in the U.S. by a U.S. seller for the sale of a product that infringes a U.S. patent, including negotiation in the U.S. over price and projected demand, is insufficient to constitute a sale or offer to sell in the U.S. This was so when the actual sales transaction, including the final formation of the contract, as well as all delivery and performance under the contract, occurred outside of the U.S.

The Federal Court noted that the final formation of the contract occurred outside of the U.S., and the performance under the contract including final product delivery occurred outside of the U.S. The Court determined that there is a strong presumption "against extraterritorial application of United States laws." As such, the Court ruled that "pricing and contracting negotiations alone are insufficient to constitute a 'sale' within the United States."

The Court further ruled that there is no "offer to sell" in the U.S. if the actual sale transaction occurs outside of the U.S. "In order for a offer to sell to constitute infringement, the offer must be to sell a patented invention within the United States."

 So, the negotiation within the U.S. for the sale of a patent-infringing product is neither a sale nor an offer to sell when the final contract formation, as well as performance and delivery, occur outside of the United States.

As the Federal Circuit noted, "if one desires to prevent the selling of its patented invention in foreign countries, its proper remedy lies in obtaining and enforcing foreign patents." In other words, a U.S. patent is not necessarily worth the paper its printed on outside of the U.S.

Lawyer Receives Accolades From Judge -- And Is Then Sanctioned

Stop me if you've heard this one.

A lawyer presented oral argument to a panel of the Federal Circuit concerning a patent issue. Apparently, the lawyer did very well. A judge on the Federal Circuit, who was not on the panel and who is presently retired from the court, happened to attend a judges-only luncheon held following oral argument. At the luncheon, the panel judges informed the now-retired judge that the lawyer performed exceptionally well. The retired judge was proud to hear this good news, as he was a friend of the lawyer. The retired judge sent a laudatory e-mail to the lawyer. The e-mail stated:

Note that the retired judge was not on the panel that heard oral argument. And note further that the retired judge specifically invited the lawyer to "let others see this message."

So, what happened? The lawyer sent copies of the retired judge's e-mail to clients and prospective clients. And what happened next? Once the Federal Circuit learned that this e--mail of accolades was circulated by the lawyer, the court en banc issued an order publicly sanctioning the lawyer for distributing the e-mail. A copy of the court's order is here. The court determined that the lawyer's distribution of the e-mail constituted unprofessional conduct in that it inferred the lawyer's ability to improperly influence the court.

Note, finally, that the retired judge was not a part of the en banc court, but apparently the three judges, who gave the high accolades to the retired judge, were.

PTO To Provide Courtesy Reminders of Maintenance Filings

The U.S. trademark office recently announced that, beginning in late January 2015, it will begin providing courtesy reminders of upcoming Sections 8 and 71 declaration deadlines, and of upcoming Section 9 renewal deadlines. The PTO announcement is here. Reminders will be sent at the beginning of the filing period, but only to registrations (1) that are "live" on the date of sending, (2) that have valid e-mail addresses, and (3) that have granted permission to the PTO for e-mail communication. Reminders will be sent only by e-mail, not by regular mail, and there will be no follow-up reminders in the event the first attempted reminder fails.