Supreme Court Hands Down Critical Decisions in Fourth Estate Public Benefit Corp. v., LLC and Rimini Street, Inc. v. Oracle USA, Inc.,Resolving Circuit Splits Over Interpretation of Copyright Act Provisions


was an eventful day for copyright law on Monday, March 4, as the Supreme Court
of the United States issued two unanimous opinions, both involving provisions
of the Copyright Act.  The decisions were
fittingly both issued on the 110th anniversary of the 1909 Copyright Act.

In the first case, Fourth Estate Public Benefit Corp. v., LLC,No. 17–571, the Court, in an opinion authored by Justice Ginsburg, resolved a long-standing circuit split over whether a copyright owner can sue in federal court with only a copyright application in hand, or whether a completed registration is necessaryThe Court held that “registration . . . has been made” under Section 411(a) of the Copyright Act—and thus an infringement suit may be instituted—when the Copyright Office grants or denies registration after evaluating the copyright application (coined the “registration approach”) rather than when a copyright owner merely submits the application, materials, and fee required for the registration to begin processing (the “application approach”). 

the second case, Rimini Street, Inc. v. Oracle USA, Inc.,
No. 17-1625,
Justice Kavanaugh delivered the option for the Court, holding that Section 505
of the Copyright Act, which allows a party to recover “full costs,” does not
authorize appellate courts to award litigation costs beyond the categories
enumerated by Congress in the general costs statute codified at 28 U.S.C. § 1821
and § 1920.  Such “costs” are limited to fees
for the clerk and marshal; transcript, copyright, and docketing fees; disbursements
for printing and witnesses; and the compensation of court-appointed experts and
certain special interpretation services. 
The Court rejected Oracle’s position that “full costs” under Section 505
included expert witness fees, electronic discovery expenses, and jury
consultant fees.

of the Court’s determinations are instructive, as they clarify the legal
landscape for copyright litigants who have been grappling with inconsistent
applications of the Copyright Act for years. 

“registration approach” adopted in Fourth
incentivizes copyright owners—more than ever—to register works with
the Copyright Office and will likely incite an uptick in registrations.  While there were many benefits to
registration prior to this decision, now, if a copyright owner fails to
register works prior to discovering an infringement, she will have to wait an
average of seven months to sue (the Copyright Office’s average processing
time), and the work may continue to be infringed without recourse in the
interim.  There is, of course, the option
of invoking the Copyright Office’s Special Handling process, but it comes with
a $800 special handling fee, which may not be an attractive or feasible alternative
for some.  

creators who have yet to register works and are running up against the
three-year statute of limitations for infringement may be out of luck if they
file an application and the Copyright Office does not process it in time.  The best practice for content owners is to
apply for registration as soon as possible, even before infringement is
anticipated or suspected.  Those who have
filed lawsuits based on applications that have not yet been processed should
take advantage of the Special Handling process, if possible, otherwise the
claim may ultimately be dismissed as untimely.   

limitation on recoverable fees fashioned by the Rimini Street decision may
also have far-reaching implications, especially for individual creators and
litigants who cannot bear high litigation costs without the chance for
recovery.  The ruling sounded a death
knell for a copyright litigant’s ability to recover fees for expert witnesses,
electronic discovery platforms, and jury consultants, which have become
increasingly prevalent in copyright cases in the digital age.

example, while music and software cases have almost always involved experts,
matters involving “viral” infringements often call for specialized experts to
address novel copyright issues.  In such
highly technical cases, retention of a knowledgeable expert may make or break
the case, making the choice of whether to hire without the option for recovery
of those fees all the more difficult, especially for those unable to afford the
costs.  Additionally, as the use of
e-discovery platforms has become nearly ubiquitous, payment for such services
has become a necessity for a litigant to maintain an equal footing with their

Rimini Street ruling will certainly force
copyright litigants to face difficult decisions in how they want to proceed
with their case, especially if they are facing an opponent with deep pockets
who can afford to hire numerous experts, pay for e-discovery platforms, and
retain jury consultants.  Clients should discuss
their financial limitations with counsel before deciding to commence a
copyright action or how to defend against a copyright action, as they may have
to bear the burden of certain unrecoverable costs to prevail.

Filed in: Copyright, Legal Blog

March 7, 2019