The mantra of copyright lawyers is that "copyright subsists from the moment of creation." While that is true, its not the whole story. A recent New Jersey District Court has decided a case of first impression as to whether a copyright holder must have a registration in hand in (as opposed to having merely filed an application) order to bring an infringement claim. As a result, registering your copyright early (before you need to assert an infringement claim) could result in substantial savings.
Here’s the rub. Under §411(a) of the Copyright Act, "no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made." However, because the effective date of registration under 17 U.S.C. § 410(d) is the date on which the application, deposit, and fee have all been received in the Copyright Office, regardless of the date on which the application is subsequently determined acceptable for registration, lower federal courts are split on the issue of whether the registration requirement is satisfied when a party submits the completed registration application (the "application approach") or when the Copyright Office has issued a certificate of registration and affirmatively granted a registration (the "registration approach"). The Fifth, Seventh and Ninth Circuits have adopted the application approach and the Tenth and Eleventh Circuits have adopted the registration approach.
The Third Circuit has not expressly addressed this issue. In a 2011 decision from the Eastern District of Pennsylvania, the court considered both the application and registration approaches and adopted the registration approach. Patrick Collins, Inc. v. Does 1-26, 2011 WL 6934105 (E.D.Pa. 2011). However, the court acknowledged that the Third Circuit has not specifically resolved this issue.
On a January 4th, however, the New Jersey District Court chimed in with its conclusion and adopted the registration approach. North Jersey Media Group Inc. v. Sasson, Civ. No. 2:12-3568 (WJM), 2013 BL 2113 (D.N.J. Jan. 04, 2013). Prior to this recent decision, it may have been possible to hold out hope that a copyright owner could assert an infringement claim in New Jersey based solely on having filed an application without a registration in hand. After this decision, it is clear that in New Jersey, a copyright holder must have a registration in hand before asserting a copyright infringement claim.
While this may not come as a complete surprise to those of us who watch such (arguably mundane) things, it is of particular importance to copyright owners who have a need for multiple registrations. The filing fee for a copyright registration filed in the ordinary course is only $35, but will take months to process. If you are faced with litigation, however, the Copyright Office does offer an expediting option which will get your application processed in about a week or so. The bad news is that the extra expedited fee is $760 per application (this is on top of the $35 ordinary application fee). For companies that may need to file multiple applications on an expedited basis, the cumulative cost can be astronomical.
Take software companies for example. Software companies typically have multiple releases each year. Depending on their content, each such release may constitute a derivative work which may need to be separately registered. The issue is the cost and the timing. Now imagine a software company that has not registered the copyright in its software and has had four releases per year for 5 years. This amounts to 21 copyrightable works which may require separate registration. The filing fees for registering these works in the ordinary course would be $735. However, faced with the need to assert a copyright claim in litigation, the cost for registering the same 21 works on an expedited basis would be $16,695. With this economic difference at stake, registering your copyright early can result in very real savings.© 2014 Giordano, Halleran & Ciesla, P.C. All Rights Reserved