Innocent Copyright Infringers: The Importance of an Adequate Copyright Notice to Defeat Them

In a previous blog entry we discussed the importance for photographers (and other artists) to digitally watermark their photographs. By digitally watermarking their work, photographers could seek additional damages in some situations in a copyright infringement lawsuit for the removal or alteration of such watermark under section 1203 of the Digital Millennium Copyright Act (DMCA). This is far from the only reason why artists of any variety should place an indication of ownership on their work. For copyright holders, an adequate copyright notice, whether digital watermark or standard imprint, may be even more important than the ability to potentially seek additional damages with respect to section 1203 of the DMCA.

When a work is federally registered and published, a copyright holder will often place a copyright notice on the work (i.e., © Year Published, Name of Owner) as prescribed under sections 401 and 402 of the Copyright Act. The purpose of copyright notice, as highlighted by section 405(b) of the Copyright Act, is to protect innocent infringers. Koontz v. Jaffarian, 617 F. Supp. 1108, 1112 (E.D. Va. 1985) aff’d, 787 F.2d 906 (4th Cir. 1986). An innocent infringer is one or more parties who innocently violate an exclusive right under section 106 of the Copyright Act of a copyright holder in a valid copyright without knowledge of a copyright. Works in the public domain are primary examples of artistic expression that usually bear little or no copyright protection.

Prior to the effective date of the Berne Convention Implementation Act of 1988 (BCIA), the owner of the copyright was required to comply with notice formalities when a work was published or with one of the savings clauses, or forfeit the copyright. Morgan v. Hawthorne Homes, Inc., CIV.A. 04-1809, 2009 WL 1010476 (W.D. Pa. Apr. 14, 2009). For works published before March 1, 1989, the effective date of the BCIA, that do not bear an adequate copyright notice, section 405(b) of the Copyright Act in some cases essentially restricts any liability for actual or statutory damages under section 504 of the Copyright Act provided that the work was publicly distributed under the authority of the copyright owner. This restriction on liability applies to any person who innocently infringes a copyright for any infringing acts committed before receiving actual notice that the work has been federally registered so long as he or she proves that he or she was misled by the omission of notice.

While the defense of innocent infringement can impact the remedies available against a defendant for copyright infringement, it “will not constitute a defense to a finding of liability.” 4-13 Nimmer on Copyright § 13.08. Phoenix Renovation Corp. v. Rodriguez, 439 F. Supp. 2d 510, 517 (E.D. Va. 2006). Consequently, a copyright holder may still be able to recover actual profits obtained by the innocent infringer and may prevent future infringement now that the innocent infringer is on actual notice or require the innocent infringer to pay a license fee to continue exploitation of the work.

An adequate copyright notice, with some specific exceptions, essentially nullifies the defense of innocent infringement in a copyright infringement action insofar as the defendant had access to published cop(ies) that bore an adequate copyright notice. Consequently, it is extremely important to provide an adequate copyright notice on any work being published in order to adequately defend against an innocent infringer defense. Such good practice will likely allow the copyright holder or rights holder, in many circumstances, to seek actual or statutory damages under section 504 of the Copyright Act in an action for copyright infringement.

Copyright Registration and Copyright Claimant: What Happens If a Publisher, Studio, or Producer Mistakenly Puts Itself as Claimant?

Under Section 201 of the Copyright Act, copyright in a work vests initially in the author or authors of the work. The author, however, is not always the party who claims ownership of the copyright when federal registration of the work is sought. Section 409 of the Copyright Act requires a copyright claimant to provide in an application for copyright registration the claimant’s name and address, and if claimant is not the author, a brief statement of how the claimant obtained ownership of the copyright.

What is a Copyright Claimant?

Unfortunately, the Copyright Act does not expressly define “copyright claimant.” Shortly after the Copyright Act was enacted, the Copyright Office published interim regulations that included a definition of “copyright claimant” for purposes of copyright registration. Under Chapter 37 of the Code of Federal Regulations, a copyright claimant is either: (i) the author of a work; or (ii) a person or organization that has obtained ownership of all rights under the copyright initially belonging to the author. The latter category, offered as a footnote in the Federal Regulations, which may soon be removed, includes a person or organization that has obtained, from the author or from an entity that has obtained ownership of all rights under the copyright initially belonging to the author, the contractual right to claim legal title to the copyright in an application for copyright registration. See 37 C.F.R. § 202.3(a)(3).

As the definition indicates, in the circumstance that the copyright claimant is not the author of the work, the party claiming ownership must have obtained all rights in the work that originally belonged to the author. Further, as case law suggests, a ‘copyright “claimant’ in whose name registration is made “must be either the author of the work or one who obtained ownership of the copyright, not merely one who obtained ownership of certain exclusive rights under the copyright.” Morris v. Business Concepts, Inc., 259 F.3d 65, 72 (2nd Cir.2001); see also Bean v. McDougal Littell, 669 F. Supp. 2d 1031, 1035 (D. Ariz. 2008) (further quoting Morris in that “the copyright ‘claimant’ for purposes of copyright registration is the author of the work for which registration is sought or a person or organization that has obtained ownership of all rights under the copyright initially belonging to the author”).

We discussed in a previous blog post that publishers, studios, and producers, will often incorporate language into a written agreement by way of assignment or license to obtain ownership in the copyright of a work. However, in some agreements, the assignment or license does not effectively transfer all rights under the copyright from the author to the organization. Consequently, when the publisher, studio, or producer, applies for copyright registration on behalf of the author, it incorrectly marks itself as the copyright claimant, believing that all rights have been transferred, when that simply is not the case.

What happens if the publisher, studio, or producer, puts down the wrong claimant on the application for copyright registration?

The fear is that if there is ever a dispute regarding the work (i.e., claim for copyright infringement against a third party), the copyright registration will be held invalid, which could have drastic implications for the copyright holder, including the author as well as the publisher, studio, or producer. In many circumstances, a valid copyright registration, or certificate of registration, is evidence that both the copyright is valid and that the copyright claimant owns the copyright. Courts may find a registration invalid if the copyright claimant willfully misstated or failed to state a fact that, if known, might have caused the Copyright Office to reject the application for copyright registration.

However, Courts have held that an innocent misstatement or error, absent of fraud, does not invalidate the copyright. In Wales Industrial Inc. v. Hasbro Bradley, Inc., 612 F.Supp. 510, 515 (S.D.N.Y.1985), the Court held that where an exclusive licensee erroneously identified itself on the copyright registration as the ‘copyright claimant,’ that the alleged error didn’t invalidate the registration. Once a Court determines that an error was innocent, it will look to see if the error was immaterial. An error is immaterial if its discovery is not likely to have resulted in the Copyright Office’s rejection of the application for copyright registration. Consequently, in most cases, innocently identifying the wrong copyright claimant on an application for copyright registration will not invalidate the copyright registration or certificate of registration.

In any case, it is important for the publisher, studio, or producer to make sure that if it intends to transfer all rights in a copyright from an author to itself that it has a written agreement between the author and itself which includes the necessary language to confer all rights in the copyright. Such a written agreement is required as set forth under Section 204 of the Copyright Act to constitute a valid transfer and will allow the publisher, studio, or producer to mark itself as claimant in the application for copyright registration. This will help avoid unnecessary litigation and its associated expenses arising out of the validity of the copyright registration and whether the misstatement of identify to the copyright claimant was fraudulent and material or simply an innocent and immaterial error.