Last week, the Supreme Court issued its highly-anticipated decision in Reed Elsevier v. Muchnick. The decision arose out of a class action settlement between publishers and authors following the Supreme Court’s holding affirming copyright infringement in New York Times, Co. v. Tasini. The Southern District of New York certified the settlement, but the Second Circuit reversed, holding that pursuant to §411(a) of the Copyright Act, the Court lacked subject-matter jurisdiction to approve the settlement because the settlement covered both registered and unregistered works. The Supreme Court reversed, holding that the registration requirement of §411(a) was a claim processing rule and not a jurisdictional requirement. It left open, however, the question of how strictly §411(a) should be applied.
The Second Circuit Decision
During proceedings before the Second Circuit in Reed Elsevier, the court sua sponte asked the parties to brief the issue of whether §411(a) was a jurisdictional requirement. In response, all parties filed briefs asserting that the district court had subject-matter jurisdiction to approve the settlement. The Second Circuit ruled that the district court lacked the subject-matter jurisdiction necessary to certify the settlement because some of the works at issue were unregistered. Certiorari was granted to resolve the question of whether §411(a) restricts the subject-matter jurisdiction of federal courts. Because no party’s brief supported the Second Circuit’s holding that the court lacked subject-matter jurisdiction, the Supreme Court assigned an amicus to draft the brief in support of the Second Circuit’s holding.
The Supreme Court Distinguishes Claim Processing Rules from Jurisdictional Requirements
At the outset, the Supreme Court noted that jurisdictional rules are generally “prescriptions delineating the classes of cases (subject-matter jurisdiction) and the persons (personal jurisdiction) implicating that authority.” The Court recognized the difficulty of distinguishing “jurisdictional” conditions from claim-processing rules, and cited to its 2006 holding in Arbaugh v. Y & H that a statutory requirement is a jurisdictional requirement only if Congress identifies it as such. Because the registration requirement of §411(a) is not identified as a jurisdictional requirement, it is not, and instead works as a claim-processing rule. The Court continued by noting that the registration requirement in §411(a) has qualities of a claim processing rule:
- it imposes a precondition to filing a claim that is not clearly labeled jurisdictional,
- it is not located in a jurisdiction-granting statutory provision, and
- it admits several congressionally authorized exceptions.
Unanswered Questions
The Supreme Court decision confirmed that courts can adjudicate disputes involving unregistered works. Even so, the Court declined to address the question of whether the registration requirement of §411(a) is satisfied by filing an application, or whether the Copyright Office must either grant or reject the application before a claim for infringement may be brought.
Circuit courts are divided on this issue. For example, the Fifth Circuit held in Positive Black Talk v. Cash Money Records that simply filing an application is adequate, as long as all required elements are deposited with the Copyright Office. This view has been called the “Application Approach.” Conversely, the Tenth Circuit in La Resolana Architects, PA v. Clay Realtors Angel Fire held that simply filing all the required elements of an application is not enough to satisfy §411(a), and that either a rejection or an acceptance must be received by applicant in order for a party to bring an infringement claim. This has been called the “Registration Approach.”
While the Second Circuit has yet to address the issue, three recent district court cases in the Southern District of New York have applied the Registration Approach. In Do Denim v. Fried Denim, Judge Swain granted defendant’s motion to dismiss the copyright infringement claim for lack of subject matter jurisdiction under §411. Do Denim had filed its deposit, application, and fee with the Copyright Office prior to filing suit, but it had yet to receive either a grant or refusal. Two other Southern District decisions have followed Do Denim in support of dismissal of the claim of infringement of an unregistered copyright: DMBJ Productions v. TMZ TV, and Lewinson v. Henry Holt and Company, LLC.
Inconsistent application of §411(a) has been a concern of copyright litigators for some time, and other blogs have addressed the split between circuits. In fact, the ABA Section of Intellectual Property Law recently wrote to the Senate suggesting legislation adopting the Application Approach.
While Muchnick abrogates cases describing §411(a) as “jurisdictional,” calling the section a claim-processing rule does not provide instruction on how strictly courts should apply the rule. As such, filing an infringement suit based solely on a pending application may risk dismissal in courts inclined to apply the Registration Approach. Even in a jurisdiction that adopted the Application Approach, obtaining a registration first may be advantageous, particularly in a preliminary injunction case where the presumptions flowing from registration may be important.
