Unlike the United States Patent Act, the Copyright Act of 1976 does not contain any provisions for the arbitration of copyright validity or infringement claims. As a result, it has only been recently that courts have made it clear that federal law does not explicitly forbid the arbitration of the validity or infringement of a copyright when it is the subject of a contract dispute. Nonetheless, arbitration is a viable option for attorneys in the field of copyright and intellectual property law. Arbitration’s inherent flexibility provides large advantages over traditional litigation including but not limited to the freedom to select an arbitrator with an appropriate degree of practical experience, the ability to keep the dispute and resolution to be kept confidential, and the general enjoyment of lower costs and a speedier process.
In the recent ruling of Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, the United States Supreme Court held that bringing a suit for copyright infringement requires that the infringed work be registered with the U.S. Copyright Office, and that a mere application for registration will not be sufficient. Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, (2019) 586 U.S. ___, 139 S.Ct. 881. This ruling is statutorily enforced in 17 U.S.C. § 411 which provides that “no civil action for infringement of the copyright of any United States work shall be instituted until…registration of the copyright claim has been made in accordance with this title.” As straightforward as this ruling may seem, this is not the case with copyright infringement claims in the realm of arbitration as it raises the issue of whether this copyright registration requirement is applied to such adjudicative processes as well. So what if you have been brought to arbitration for copyright infringement – if the copyright owner bringing forth the dispute and cannot provide proof of registration for his or her work, does this have any implications on the process as a whole?
In short, the answer is unclear as case law is sparse on the issue; however, as the alleged infringer, it would be wise to bring it up thereby preventing a potential waiver of a jurisdictional defense. In copyright law, only the federal government, not the states, can register copyrights. Therefore, a federal court generally has exclusive jurisdiction in a dispute concerning a copyright infringement. Specifically with respect to the registration requirement, the court in Reed Elsevier, Inc. states that copyright registration is a precondition but not a jurisdictional requirement. Reed Elsevier, Inc. v. Muchnick, (2010) 559 U.S. 154. So it seems as though if you do not raise the defense of the registration requirement, the arbitrator may or may not have the obligation to bring it up him or herself, so it is imperative that you raise your jurisdictional defense.
In the event that is raised, it is unresolved how an arbitrator must proceed. Perhaps the dispute would inevitably escalate to litigation, as the question of arbitrability of claim is for the court and it is up to the court to determine if a plaintiff’s copyright claim depends on reference to an agreement containing an arbitration clause. See NCR Corp. v. Korala Associates, Ltd., (2008) 512 F.3d 807. Considering that arbitration usually arises out of a contract between two parties of goods and services where both parties agree to arbitrate any dispute arising out of the contract, such an issue may be one for state court since the issue of contract is one covered by state law.
Either way, it seems as though if the copyright owner does not offer proof of registration, this will also affect the burden of proof and available damages. Without registration of one’s copyright, for instance, a copyright owner would not be eligible for statutory damages or attorney’s fees. See 17 U.S.C. § 412. Moreover, such registration made before the first publication of a work would constitute prima facie evidence of the validity of the copyright, meaning the burden of proof would initially fall on the alleged infringer to show that the copyright is not valid. See 17 U.S.C. § 410. Essentially, it would be in the best interest of the copyright owner to get his or her work registered with the Copyright Office anyway.
As the late Supreme Court Justice Ginsburg wrote in Fourth Estate Public Benefit Corp., “registration is…akin to an administrative exhaustion requirement that the owner must satisfy before suing to enforce ownership rights.” One could possibly infer that the copyright registration requirement applies to arbitration and so in order to err on the side of caution, do not forget to raise your jurisdictional defense. Should you have any questions regarding any of the above-mentioned issues, please do not hesitate to contact our office. We are your Orange County trademark and business attorneys here to help.