8th Circuit Rules Against Copyright Owner on Registration Errors

August 30, 2006. The U.S. Court of Appeals (8thCir) issued its opinion [6 pages in PDF] in Action Tapes v. Mattson, a copyright infringement case. The Court of Appeals affirmed the District Court's summary judgment for the defendant/infringer.

The Court of Appeals held while the copyright owner had first obtained certificates of registration from the Copyright Office (CO), it could not maintain a suit for copyright infringement because it did not comply with registration and deposit requirements. Moreover, the Court of Appeals held that the plaintiff had not complied with requirements that are not contained in either the statute or regulations.

The opinion is notable for two reasons. First, it stands as authority for the proposition that the creator of a work, who has registered that work, and received a certificate of registration, can nevertheless loose a civil action against an infringer, on the basis of registration technicalities. This is significant, not only because many registrations are made by layman without legal expertise, but also because for some types of works, and particularly web based works, there are no clear rules for how to register works with the CO.

Second, this case is notable because the Court of Appeals ruled, in part, on the basis that the copyright owner did not comply with a CO circular. The CO publishes circulars to provide guidance to those who register works, and to the CO's examiners. However, they are not law. The CO does not adhere to the Administrative Procedure Act (APA) in writing them. There is no advance public notice, no opportunity for comment, no judicial review, and no codification. Yet, the Court of Appeals treated a circular as though it were law.

The circular relied upon by the Court of Appeals in this case is Circular 61 [PDF], titled "Copyright Registration for Computer Programs".

Copyright Act and CO Regulations. The Copyright Act establishes the fundamentals of copyright registration. See, 17 U.S.C. §§ 408, § 409, § 410, § 411, and § 412.

§ 411 provides that obtaining a certificate of registration is a prerequisite for bringing an infringement action.

The Congress has delegated authority to the CO to promulgate regulations regarding registration. Specifically, § 408 provides that "The Register of Copyrights is authorized to specify by regulation the administrative classes into which works are to be placed for purposes of deposit and registration, and the nature of the copies or phonorecords to be deposited in the various classes specified. The regulations may require or permit, for particular classes, the deposit of identifying material instead of copies or phonorecords, the deposit of only one copy or phonorecord where two would normally be required, or a single registration for a group of related works."

Finally, § 408 adds that "This administrative classification of works has no significance with respect to the subject matter of copyright or the exclusive rights provided by this title."

The CO has written rules that provide for five methods for registering five categories of copyrightable works. These are nondramatic literary works, works of the visual arts, works of the performing arts, sound recordings, and periodicals. The CO has also provided different forms for registering different categories of works. For example, it has created a Form TX [PDF] for nondramatic literary works, or NDLW, and a Form VA [PDF] for works of visual arts.

The CO's regulations regarding registration are codified at 37 C.F.R. §§ 202.1 - 202.23.

§ 202.3(b)(1) establishes the five types of registrations, and enumerate types of works that should be registered by each method. None of these either include, or exclude, "computer program".

In addition, 17 U.S.C. § 101, the definitional section of the Copyright Act, provides that "A ``computer program´´ is a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result."

It also defines "work of visual art" both in terms of items that are included, and items that are excludes. The definition neither includes, nor excludes, "computer program". It does however, exclude a "data base, electronic information service, electronic publication", without also excluding a "computer program".

Facts of the Case. The plaintiff in this case is Action Tapes, a company based in Dallas, Texas. Its copyright portfolio involves visual works -- embroidery designs. It sells its designs in digital media -- memory cards that are read by computer controlled sewing machines.

The defendant in this case Kelly Mattson. It bought memory cards from Action Tapes, and rented them to its customers, without obtaining authorization from Action Tapes.

Ordinarily, under the first sale doctrine, which is codified at 17 U.S.C. § 109(a), the purchaser of a copy of a copyrighted work can resell or lease that copy of the work. However, there is an exception for short term rentals of copyrighted computer software, which is codified at 17 U.S.C. § 109(b)(1)(A). This exception was enacted by the Computer Software Rental Amendments Act of 1990.

Action Tapes registered its works as visual works, not as NDLW. It used Form VA for these registrations. The Court of Appeals did not identify which certificates of registration are at issue, either by title of the work, number, or date of issuance. However, TLJ obtained copies of eight Action Tapes registrations from the CO. One of these identifies the title of the work as "NL 1 Northern Lights 1", and the nature of the work as "text of computer programs". However, the others identify either "illustration" or "embroidery design". The CO issued certificates of registration.

District Court. Action Tapes filed a complaint in U.S. District Court (DMinn) against Kelly Mattson alleging copyright infringement in violation of 17. U.S.C. § 501.

The District Court granted summary judgment to Kelly Mattson on the grounds that the memory cards contained data, not computer programs. Action Tapes brought the present appeal.

Court of Appeals. The Court of Appeals affirmed on different grounds. It did not address the copyrightable subject matter issue. Rather, it affirmed the summary judgment on the grounds that "Action Tapes failed to prove it applied for registration of the computer program copyrights before commencing this infringement action."

The reasoning of the Court of Appeals rests on the Court's assumption that the statute, regulations, and pamphlets such as "Circular 61" specify how to register copyrights, in all types of copyrightable works. It also rests on the assumption that a pamphlet drafted outside of the Administrative Procedure Act (APA) has the force of law, and that failure to comply with such a pamphlet can deprive someone of a right provided for by statute and the Constitution.

The Court of Appeals then concluded that these authorities provide that Action Tapes' works are NDLW that can only be registered pursuant to the process designated by the CO for NDLW that are also computer software. Then, it concluded that since Actions Tapes had not done so, it had not registered its copyrights. And, since it had not registered its copyrights, it could not maintain an action for infringement of its copyrights.

The Court of Appeals wrote that "The Copyright Office classifies computer programs as nondramatic literary works because they can be expressed in words and numbers. Therefore, the Office's Circular 61, entitled Copyright Registration for Computer Programs, instructs those applying to register a computer program to complete application Form TX, the form prescribed for nondramatic literary works."

Actually, this statement by the Court is incorrect. Circular 61 states that a Form TX is "typically" used to register computer programs, but does not require the use of Form TX.

The Court of Appeals continued that "The applicant must also deposit with the Copyright Office ``one copy of identifying portions of the program (first 25 and last 25 pages of source code) reproduced in a form visually perceptible without the aid of a machine or device, either on paper or in microform.´´ Circular 61, Deposit Requirements, Part I; see also 37 C.F.R. § 202.20(c)(vii)(A)(1)." (Parentheses in original.)

The subsection of the regulations cited by the Court does address the deposit requirements for computer programs. It does not, however, identity which registration form to use.

The Court continued that "Action Tapes identified six ``visual arts´´ copyright registrations for the copyrights allegedly infringed. Action Tapes submitted no evidence that it complied with Circular 61 in applying for these registrations, and no evidence that it deposited the source codes ``in a form visually perceptible without the aid of a machine or device.´´"

The Court added that Action Tapes' visual arts registrations do not suffice to satisfy the requirement of 17 U.S.C. § 411.

It may also be significant that the Court of Appeals added the statement, "Action Tapes seeks the benefit of a statute that confers extra protection on the owners of a limited category of copyrights." The Court did not elaborate. However, this statement may be cited by litigants in future cases for the proposition that the holding of this opinion only applies in cases involving the Computer Software Rental Amendments Act.

Commentary. Arguably, Action Tapes sought to enforce a copyright in something that it had not registered. That is, it claimed and sought protection for visual works, but sought to enforce a copyright in computer programs. And, had it employed legal counsel with expertise in copyright registrations, it would not have made this error in the registration process. Legal counsel might have registered both visual works, with paper copies of the embroidery designs as the deposits, and computer programs, with source code as the deposit.

But then, if authors must employ counsel at all stages of the creation, registration, and litigation process, then few authors would be able to avail themselves of the protections afforded by the copyright regime.

Also, while one might conclude that Action Tapes should have employed counsel, and handled its registrations differently, in some other areas, and particularly those related to web based works, there are no clear rules, even for expert legal counsel.

For some works, copyright owners, and their attorneys, must guess about what to register, when to register, which registration form to use, what materials to submit, and in what format. The risk that they then face is not that the CO will reject the application, but that the CO will issue a certificate of registration, and that when the copyright owner attempts to enforce its copyright through litigation, the courts will follow an approach similar to that in Action Tapes v. Mattson, and determine that the owner lacks a cause of action because it picked the wrong registration procedures. For certain types of works in new media, there is no way to eliminate risk.

TLJ spoke with two attorneys in the CO's Office of General Council. Neither is aware of court opinions that suggest that there is a problem in the registration process that is preventing authors from enforcing their copyrights.

Moreover, David Carson, the General Counsel, stated that the CO plans to initiate a proceeding regarding registration of copyrights in web based works. He added that there is not yet a timetable, and that it has not yet been determined whether the CO will issue a notice of inquiry (NOI) or a notice of proposed rulemaking (NPRM).

Also, the person who has been studying the issue of registration of web based works at the CO, Rob Kasunic, has just begun a one year leave of absence to teach copyright law at American University's Washington College of Law. See also, Kasunic's web site with copyright law resources.

This case is Action Tapes v. Kelly Mattson, U.S. Court of Appeals for the 8th Circuit, App. Ct. Nos. 05-3309 and 05-3520, appeals from the U.S. District Court for the District of Minnesota, D.C. No. 04-CV-00935-JNE, Judge Joann Erickson presiding. Judge Loken wrote the opinion of the Court of Appeals, in which Judges Gibson and Bye joined.