17 Jan Amicus Brief: Court Awards an Infringer Legal Fees Based on Technical Defense
The Graphic Artists Guild has joined an amicus brief addressing a ruling which could have wide repercussions for copyright registrants. Gold Value, doing business as Fiesta Fabric, has petitioned the Supreme Court to review the decision of the Ninth Circuit Court of Appeals in Gold Value International Textile, Inc vs. Sanctuary Clothing, LLC. In that opinion, the Ninth Circuit upheld a district court decision that invalidated Fiesta’s copyright registration, terminated its copyright infringement case against Sanctuary, and awarded over $121,000 in attorney’s fees to the copyright infringer – all because of an error in Fiesta’s copyright registration. The opinion could set a dangerous precedent for copyright holders.
What isn’t at issue in the case is that Sanctuary infringed Fiesta’s copyright. Fiesta created a textile pattern and sold a limited sample of 190 yards of fabric bearing the design to a small number of prospective clients for the purposes of securing contracts. The textile pattern was registered with 32 other designs as part of an unpublished collection.
One of the recipients of the textile samples, Sanctuary Clothing, sent the sample to China, where the textile design was copied onto fabric and made into a blouse that was sent to major retailers such as Amazon, Macy’s, Bloomingdales, Dillards, and Zappos. Fiesta sued Sanctuary in district court for copyright infringement. In response, Sanctuary filed a summary judgement motion to have the case dismissed. The defendant contended that the copyright registration should be declared invalid, since the limited sale of the textile sample constituted publication and the copyright registration was for an unpublished collection.
The district court asked the Copyright Office to weigh in on whether the Office would have rejected the registration, had it known that incorrect information had been knowingly included in the registration application. The Office affirmed that the registration would have been rejected. That led the district court to grant the defendant’s summary judgement motion, dismissing the case. Sanctuary had also issued a motion to have their attorney’s fees awarded, which the court also granted.
Fiesta appealed the decision in the Ninth Circuit, arguing among other things that even if the statement of publication status on the copyright registration was inaccurate, that error was not made knowingly, and the copyright registration should not have been invalidated – the Copyright Office permits errors in publication status on electronically filed registrations to be corrected with a supplementary registration. The Ninth Circuit rejected Fiesta’s appeal, leading to the petition to the Supreme Court.
The amicus brief filed in support of Fiesta outlines the gravity of the Ninth Court decision. Because of that decision, a copyright infringer avoided judgement based on a technical defense, and the infringed party was saddled with steep legal fees. This all occurred because of a good faith error in one of the most confusing determinations in registering a work: whether or not the work is published. The amicus also points out that the Gold Value opinion departed from decades of prior decisions that require a showing of bad faith or fraud in order to invalidate a copyright registration.