In Cosmetic Ideas Inc. v. IAC/InteractiveCorp & Home Shopping Network Inc. & HSN LP & HSN General Partner LLC, 2010 U.S. App. LEXIS 10555;94 U.S.P.Q.2D 1735 (9th 2010), appellant Cosmetic Ideas Inc. (Cosmetic) created a piece of costume jewelry named “Lady Caroline Lorgnette” (Carol) and began selling copies of Carol in 1999. Cosmetic claims sometime between 2005 and 2008, appellees IAC/InteractiveCorp, Home Shopping Network Inc., HSN LP, and HSN General Partner LLC (collectively, “HSN”) began selling copies of a virtually identical Carol.
Cosmetic submitted an application to the Copyright Office for registration of a copyright for Carol. Confirmation of receipt of application was received. Cosmetic then filed a complaint for infringement of Carol before the Copyright Office issued Cosmetic a registration certificate for its copyrighted Carol.
The District Court dismissed the claim for lack of subject matter jurisdiction and for failure to state a claim (12b6 motion). The court reasoned that since Cosmetic didn’t possess a valid copyright registration when it commenced action, the court lack subject matter jurisdiction over the copyright infringement claim.
On appeal, the court focused on two issues. First, must a copyrighted work be registered to satisfy subject matter jurisdiction. The court noted in Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010), that “although section §411(a)’s registration requirement is a precondition to filing a claim, it does not restrict a federal court’s subject-matter jurisdiction.” Thus, the district court’s dismissal for lack of subject matter jurisdiction was an error.
The second issue the court focused on was whether a copyright is considered registered at the time the copyright application is received (application approach), or at the time the Office issues a registration certificate (registration approach). The court noted other circuits have split both ways with regards to this issue.
The court noted that the plain meaning of U.S.C. § 410a and part of §411a appeared to support the registration approach. However, the plain meaning of 17 U.S.C. §408a and §410d appeared to support the application approach. Because of this ambiguity, the court then turned to looking at the purpose of the statute.
First, the statute created in 1976 is a reformation of the 1909 Act. The Act of 1976 eliminated many formalities of copyright law, relaxed notice requirement, and eliminated mandatory registration. See Pub. L. No. 94-553, §§301, 401-412 (codified at 17 U.S.C. §§301, 401-412), see also H.R. Rep. No. 94-1476, at 147, 150. The changes of 1976 greatly increased the scope of works subject to copyright protection to provide incentives to novel works. Chicago Bd. of Education. 354 F.3d at 631. Thus, the application approach better fits Congress’s goal of stronger copyright protections and eliminating red tape.
Another reason can be found in Section 411a. Section 411a allows a party, after applying for registration, to litigate the claim whether the Copyright Office accepts or rejects the registration. See 17 U.S.C. §411a.
The court reasoned that under the registration approach, a plaintiff must wait for the Copyright Office’s affirmative acceptance or rejection, despite knowing he could proceed in either event. The court considered this a needless delay and red tape. The application approach avoids this red tape and support’s Congress’s goal in the Act of 1976. Furthermore, the Act of 1976 has a three year statute of limitations for copyright infringement. Following the registration approach could cause a party to lose the ability to sue in some cases. This would be a serious breach of justice.
Significance for Copyright Owner
Cosmetic Ideas represents an important clarification for copyright owners in the digital age. Copyright registration, while fast in comparison to patent prosecution, still can take upwards of 9 to 22 months to obtain. Yet copyrightable content is often distributed far more quickly than this, and infringement can occur just as quickly. Thus, Cosmetic Ideas presents a more sensible solution that allows the copyright owner to protect the work against infringers prior to the official registration certificate being received.