Intellectual Property Law

Supreme Court Takes Jurisdiction Over ?Jurisdiction?

By Bruce Boyden

A 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.)

The Supreme Court rejected the large majority of those lower court opinions, however, 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. Instead, the court reiterated a more searching standard for jurisdictional requirements it set forth four years ago in  Arbaugh v. Y & H Corp., 546 U.S. 500 (2006). One of the benefits of this interpretation is that it should remove the “copyright Catch-22″ I identified a year ago in cases like the 11th Circuit’s 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 Marquette University Law Faculty Blog.

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Full post as published by Madisonian.net on March 03, 2010 (boomark / email).