IP Law Daily Plaintiff can bring infringement claims while pursuing reconsideration of Copyright Office denial of registration
Friday, April 16, 2021

Plaintiff can bring infringement claims while pursuing reconsideration of Copyright Office denial of registration

By John W. Scanlan, J.D.

The defendants would not be prejudiced by the court’s finding that the agency’s initial refusal satisfied the pre-suit registration requirement because this decision does not vacate the Copyright Office’s registrability decision but merely allows the suit to commence.

The operator of a home design website could bring a copyright infringement claim against Facebook and Princeton University while its request for reconsideration of the Copyright Office’s denial of registration was pending, the U.S. District Court for the Northern District of California has ruled in denying the defendants’ motion to dismiss. The agency’s initial refusal constituted a final decision of the Copyright Office that satisfied the Copyright Act’s pre-suit registration requirement (UAB "Planner5D" v. Facebook, Inc., April 14, 2021, Orrick, W.).

UAB Planner 5D is the operator of a home design website that allows users to create virtual interior design scenes using virtual 3-D furniture. Planner 5D asserts copyrights in the objects and scenes and int their compilation. Planner 5D brought copyright infringement and trade secret misappropriation claims against Princeton University and Facebook. According to Planner 5D, computer scientists at Princeton downloaded its data collection, used it for research purposes, and publicly displayed it on a Princeton website. Facebook was alleged to have used the dataset in a competition to develop the commercial potential of this technology. The court found that Planner 5D had not properly alleged the copyright infringement claims because it had not alleged that it met the registration requirement of Section 411(a) of the Copyright Act. The company then applied for and received two registrations from the Copyright Office for the works completed and published in 2019. It refiled its copyright infringement claims against Facebook and Princeton, but the court again dismissed them because these registrations did not cover the works at issue as they were from 2016. The court gave leave to Planner 5D to address this problem, and Planner 5D submitted two new applications with the Copyright Office to register all Planner 5D objects created through January 13, 2016, and all public galley scenes created through February 17, 2016.

The Copyright Office refused registration, but it informed Planner 5D that it had delivered the necessary deposit, application, and fee "as required to institute a civil action for infringement" under Section 411(a). The Office also stated that Planner 5D could request timely reconsideration. The reconsideration process involves review by a staff attorney not involved in the initial examination and, if desired, a second reconsideration from the Copyright Office Review Board. Planner 5D then filed the present copyright infringement complaint. It represented to the court that it planned to file for reconsideration by the required deadline, which had not yet arrived. The defendants moved to dismiss, alleging that the lawsuit was premature because the Copyright Office had not yet issued a final decision due to Planner 5D’s decision to seek reconsideration.

Pre-suit registration requirement. The court began by observing that this case was unusual in that the Copyright Office grants most applications (96 percent in 2019, it noted). Neither party identified any precedent for this precise situation, and the court found that the statute did not give any guidance regarding finality. Turning to the Copyright Office’s letter to Planner 5D, the court found that it stated that Planner 5D had done all the things required to bring an infringement suit under Section 411(a) and did not condition this conclusion on whether the company pursued reconsideration.

This action by the Copyright Office was consistent with the agency’s guidance in its Compendium of U.S. Copyright Office practices, which states in Section 1706 of the compendium, "Final Agency Action," that an applicant "does not need to appeal a refusal to register under the APA in order to institute an infringement action in federal district court." The court also cited to the interpretation of this language by William F. Patry, who stated in a treatise on the Compendium that this language requires administrative exhaustion for APA appeal but not to bring suit pursuant to a Section 411(a) rejection, even though the Compendium does not state this explicitly. According to Patry, if a statute does not require exhaustion of administrative remedies, a court "must balance the interest of the individual in retaining prompt access to a federal judicial forum against the countervailing institutional interests favoring exhaustion." In most if not all cases, he said, the need to bring an infringement suit would outweigh institutional interests of the Copyright Office. He found at least three decisions in which the court allowed the suit to proceed based only upon an examiner’s rejection and none suggesting otherwise.

The court considered the Copyright Office’s letter to Planner 5D, its guidance in the Compendium, and Patry’s treatise on the Compendium, and determined that Planner 5D had met the registration requirement of Section 411(a).

Defendants’ arguments. The court declined the defendants’ request to delay consideration of the issue of registrability before the Copyright Office finishes its review, stating that a decision to allow registration would render the issue moot, and that forcing Planner 5D to continue to wait for the suit to begin was not warranted. The court disagreed with their argument that they would be prejudiced because the Office would be forced to decide whether to intervene with respect to registrability before it knew what position it would take, stating that it could not presume prejudice based upon the timing of statutory and regulatory deadlines.

Furthermore, a judicial determination of registrability would not vacate the Office’s decision on registrability but would merely determine it solely for the purpose of beginning the infringement suit. Finally, while the defendants argued that they would have to begin litigating the case before knowing whether Planner 5D would have the presumption of validity resulting from the Office’s approval of its registration, which would shift the burden to them to rebut the facts in the copyright certificate, the court found that this issue could be addressed through proper case management as the Office would respond to the first request within four months of its receipt.

This case is No. 3:19-cv-03132-WHO.

Attorneys: Marc N. Bernstein (Business Litigation Group, PC) for UAB "Planner5D" d/b/a Planner 5D. Dale Cendali (Kirkland Ellis LLP) for Facebook, Inc. and Facebook Technologies, LLC.

Companies: UAB "Planner5D" d/b/a Planner 5D; Facebook, Inc.; Facebook Technologies, LLC

MainStory: TopStory Copyright TechnologyInternet CaliforniaNews GCNNews

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