Unicolors, Inc. creates and markets artistic design fabrics to various garment manufacturers.  Some of these designs are marketed to the public and placed in its showroom while other designs are considered “confined” works that Unicolor sells to certain customers. Unicolors withholds marketing them to the general public for a set period of time. In order to save money, Unicolors often times groups various designs into a “single work” when filing with the U.S. Copyright office for copyright registration.  The Ninth Circuit in Unicolors v. H&M Hennes & Mauritz (May 29, 2020), recently addressed whether this practice, grouping both public and “confined” works into a single registration application, creates a valid copyright that Unicolors could enforce.

The specific design at issue in the case was part of a “single unit registration” of 31 different designs that Unicolor registered with the copyright office in 2011.  In 2015, H&M stores began selling a jacket and skirt that contained art work that Unicolors alleged was identical to its 2011 design and thus infringed on Unicolors’ 2011 copyright.

Although Unicolors’ 2011 registration consisted of 31 separate designs, a number of these designs were designated as “confined” designs that were made for specific customers and withheld from the public for a couple of months. At the expiration of that waiting period, Unicolors would then place the “confined” works in its show room and/or market them to other customers.  Although Unicolors engaged in this practice with respect to the 2011 registration, it represented in that registration application that the first publication date of the 31 designs was January 15, 2011 which testimony established was the date when Unicolors presented the designs to its employee-sales people and not to the general public.

The trial court allowed Unicolors claim to go to a jury, which returned a verdict in Unicolors favor and awarded it nearly $850,000 in damages.  After denying H&M’s renewed motion for judgment as a matter of law or for new trial (and after Unicolors accepted a reduction of damages to $266,000), the trial court awarded Unicolors more than $500,000 in attorneys’ fees.  H&M appealed these decisions to the Ninth Circuit.

The two elements that a plaintiff must prove to establish copyright infringement are: “(1) ownership of a valid copyright; and (2) copying of constituent elements of the work that are original.”  The Ninth Circuit’s analysis in Unicolors focused only on the first prong – ownership of a valid copyright.  As to this issue, the Ninth Circuit recognized that “a registration certificate issued by the U.S. Register of Copyrights constitutes prima facie evidence of the validity of a plaintiff’s copyright.”

The Ninth Circuit continued by recognizing that the issue of copyright ownership is rarely contested given that “the mere receipt of a registration certificate issued by the Register of Copyrights ordinarily satisfies” this element.  However, the Ninth Circuit cautioned that a registration certificate cannot confer ownership “if the registrant secured the registration by knowingly including inaccurate information in the application for copyright registration that, if known by the Register of Copyrights, would have caused it to deny registration.”  Normally, once a defendant claims that a plaintiff has included inaccurate information in its registration application with knowledge that it was inaccurate, the district court is required to submit this evidence to the Register of Copyrights “to advise whether the inaccurate information, if known, would have caused [it] to refuse registration.”

H&M contended that the district court erred because H&M’s renewed motion had established that while Unicolors had used a single copyright registration for the 31 separate works, they did not offer or sell these works “in some integrated manner.”  In fact, the evidence showed that at least nine of the works were considered “confined” and were sold separately and exclusively to individual customers separate from the other 22 works that comprised the registration.  The district court rejected H&M’s arguments because: (1) it believed that invalidation required that H&M establish that Unicolors intended to defraud the Copyright Office; and (2) although Unicolors may have marketed and sold the various works separately, “that did not mean all of the works were not first made available to the public – i.e., published – on the same day.”

The Ninth Circuit disagreed with both of these findings.  It began by recognizing that it had previously suggested that intent-to-defraud was a requirement for registration validation; however, it noted that it had clarified last year that no such intent-to-defraud requirement existed.

In turning to the next factor, i.e., the issue of “a single unit of publication,” the Court recognized that this was an issue of first impression.  It decided, however, that in looking at the clear language in the Copyright Act, “the plain meaning of `single unit’ … requires that the registrant first publish the collection of works in a singular, bundled collection.”  That is, in looking to the common definitions of the words in the phrase “a single unit of publication,” the Court interpreted these to mean “some singular, bundled item that contains all works identified in the registration.”

The Court reached this interpretation by applying the principle noscitur a sociis, or “birds of a feather flock together,” that requires “that words in statutes are given more precise content by neighboring words.” In applying this to the issue before it, the Ninth Circuit held that “a collection of works does not qualify as a `single unit of publication’ unless all individual works of the collection were first published as a singular, bundled unit.”

After reaching this determination, the Ninth Circuit concluded that the evidence was clear that Unicolors had not established that it “published” these designs as a “singular, bundled unit” because at least some of the designs “were initially made available only to individual, exclusive customers.”  The Ninth Circuit found that the evidence supported a finding that Unicolors knew that the information in its copyright registration application was inaccurate and that the district court, based on this evidence, should have requested the Register of Copyrights to weigh in on whether it would have refused the registration in light of these facts.  Because the trial court had not done this, the Ninth Circuit concluded that it had erred and therefore reversed the entry of judgment and award of attorney’s fees and remanded the case to the trial court to submit an inquiry to the Register of Copyrights as normally required.

The Unicolors decision is a reminder that attorneys litigating copyright infringement should not necessarily take the first prong of proving in infringement case, i.e., ownership of a valid copyright, for granted. Further investigation or discovery on this issue may be warranted, especially in the case where multiple designs or works are registered as a single work.