Palmer/Kane LLC v. Rosen Book Works LLC

• Decision Date: 27 May 2016
• Docket Number: 15-CV-7406 (JSR)
• Citation: 188 F.Supp.3d 347
• Parties: Palmer/Kane LLC, Plaintiff, v. Rosen Book Works LLC d/b/a Rosen Publishing Group, Inc. Defendant.
• Court: U.S. District Court — Southern District of New York

188 F.Supp.3d 347

Palmer/Kane LLC, Plaintiff,

v.Rosen Book Works LLC d/b/a Rosen Publishing Group, Inc. Defendant.

15-CV-7406 (JSR)

United States District Court, S.D. New York.

Signed May 27, 2016

Clyde Alvin Shuman, Daniel J. Melman, Veronica Mullally Munoz, Pearl Cohen Zedek Latzer Baratz LLP, New York, NY, for Plaintiff.

Kieran Gerard Doyle, Thomas Kjellberg, Cowan, Liebowitz & Latman, P.C., New York, NY, for Defendant.

MEMORANDUM ORDER

JED S. RAKOFF, United States District Judge.

In this action, plaintiff Palmer/Kane LLC ("Palmer/Kane") sues defendant Rosen Book Works LLC d/b/a Rosen Publishing Group, Inc. ("Rosen") for copyright infringement in 19 images registered with the U.S. Copyright Office (the "Copyright Office"). Eight of those images are alleged to be registered under Certificate of Registration No. VAu 529-623, with an effective date of June 25, 2001 (the "June 2001 Registration"). See First Am. Compl. ¶ 16, ECF No. 19. Defendant now moves the Court to issue a request to the Copyright Office, pursuant to § 411(b)(2) of the Copyright Act, to advise whether that Office would have refused registration if it knew that certain information included in the underlying registration application was inaccurate. For the reasons explained below, the Court grants the motion.

The statutory provision giving rise to defendant's motion is a peculiar one. Enacted in 2008 as part of the PRO-IP Act, it provides, in relevant part as follows:

In any case in which inaccurate information described under paragraph (1) is alleged, the court shall request the Register of Copyrights to advise the court whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.

17 U.S.C. § 411(b)(2) (emphasis added).

Paragraph (1), which § 411(b)(2) incorporates for purposes of identifying the kind of inaccurate information that triggers this procedure, concerns inaccurate information that "was included on the application for copyright registration with knowledge that it was inaccurate," id.§ 411(b)(1)(A), and, which, if known to the Copyright Office, "would have caused the Register of Copyrights to refuse registration," id.§ 411(b)(1)(B).

Although there is no case law in the Second Circuit interpreting or applying § 411(b)(2) and the procedure has been rarely invoked in general, courts are in agreement that the provision is mandatory in nature, requiring district courts to solicit the advice of the Copyright Office when the statutory conditions are satisfied. See, e.g., DeliverMed Holdings, LLC v. Schaltenbrand, 734 F.3d 616, 623 (7th Cir.2013) ("[T]he statute obligates courts to obtain an opinion from the Register ...."); Roberts v. Gordy, 181 F.Supp.3d 997, 1008, 2016 WL 1441465, at *9 (S.D.Fla. Apr. 8, 2016) ("When there is a question regarding the accuracy of the information contained on a registration, the Court's referral of the matter to the Register of Copyrights under § 411(b)(2) is mandatory."); Schenck v. Orosz, 105 F.Supp.3d 812, 818 (M.D.Tenn.2015) ("By its terms, § 411(b)(2) requires the court to seek an advisory opinion from the Register in any case that 'alleges' inaccurate information under § 411(b) (1) that, if known to the Register, would have caused the Register to refuse registration."); Olem Shoe Corp. v. Wash. Shoe Co., 2010 WL 3505100, at *2 (S.D.Fla. Sept. 3, 2010) ("[T]he statutory language—'shall request'—is mandatory."). Indeed, in DeliverMed, the Seventh Circuit found that the district court's invalidation of a copyright registration without complying with the procedure set forth in § 411(b) (2) was reversible error, even though the parties had not asked the district court to consult the Copyright Office. SeeDeliverMed, 734 F.3d at 624.

At the same time, courts have recognized that the referral procedure is vulnerable to abuse and have urged caution. Seeid. at 625 ("Given its obvious potential for abuse, we must strongly caution both courts and litigants to be wary of using this device in the future."); Schenck, 105 F.Supp.3d at 818 (articulating concern "that § 411(b)(2) creates a serious potential for abuse by introducing a mechanism by which infringers can throw up roadblocks to merited infringement lawsuits, simply by 'alleging' technical violations of the underlying copyright registrations"); Olem Shoe Corp., 2010 WL 3505100, at *3 n. 4 ("[Section] 411(b)(2) gives a party accused of copyright infringement another weapon to delay the proceedings in district court, as [plaintiff] has done in this case."). Cognizant of this concern, the Seventh Circuit in DeliverMed held that courts are not required to seek immediate input from the Copyright Office after a party alleges the inclusion of knowingly inaccurate information in a copyright application. SeeDeliverMed, 734 F.3d at 625. Indeed, "courts can demand that the party seeking invalidation first establish that the other preconditions to invalidity are satisfied before obtaining the Register's advice on materiality." Id. In other words, before making a referral to the Copyright Office under § 411(b)(2), a district court may require a litigant to "demonstrate that (1) the registration application included inaccurate information; and (2) the registrant knowingly included the inaccuracy in his submission to the Copyright Office." Id.

This approach appropriately balances the Copyright Office's statutory right to weigh in on the materiality of a knowing misrepresentation in an application for copyright registration, on the one hand, against the district court's "inherent power to control its own docket and to prevent abuse in its proceedings," on the other. Ralph Lauren Corp. v. U.S. Polo Ass'n, Inc., 2014 WL 4377852, at *5 (S.D.N.Y. Sept. 4, 2014). That is particularly the case given that the Copyright Office itself has taken the position that "before asking the Register whether she would have refused to register a copyright ... a court should feel free to determine whether there is in fact a misstatement of fact." See Response of the Register of Copyrights to Request Pursuant to 17 U.S.C. § 411(b)(2) at 12, Olem Shoe Corp. v. Wash. Shoe Co., 09 Civ. 23494 (S.D. Fla.), ECF No. 209.¹ And while this Court very much shares the concern of other courts that this statutory mechanism could be improperly invoked by defendants as a delay tactic, nothing in § 411(b)(2) prevents courts from imposing a deadline by which the Copyright Office must provide its response to the Court's request. Nor does § 411(b) (2) require courts to stay proceedings while a court's request for an advisory opinion is pending. Absent unusual circumstances, discovery can continue apace, as it will in this case.

In its motion, defendant argues that plaintiff's predecessor (also referred to herein as "plaintiff" for the sake of simplicity) knowingly misrepresented in its May 18, 2001 copyright application—which resulted in the issuance of the June 2001 Registration—that the photographs it sought to register had not previously been published.²

By way of background, on May 28, 1999, plaintiff filed an application with the Copyright Office to register over 900 photographs as an unpublished collection titled "Past Mug Shots Images on the Stock Market Web site as of 2/29/99."³ Decl. of Thomas Kjellberg dated April 26, 2016 ("Kjellberg Decl."), Ex. 1, ECF No. 34-1. By letter dated March 14, 2000, the Copyright Office notified plaintiff that it was "delaying" registration because, among other reasons, aspects of the application and the deposit material (i.e., the works plaintiff sought to register) "indicate[d] that publication ha[d] occurred," even though plaintiff's application had left the "Date and Nation of First Publication" space blank. Id., Ex. 2 at 1. Specifically, in addition to the application's reference to February 29, 1999 in the "Title" space,⁴ the deposit material—which appears to have been a print-out from the web site of plaintiff's agent at the time, see id., Exs. 3, 7—contained a footer on most pages with the date "3/22/99," id., Ex. 3. The letter also noted that plaintiff had attached a somewhat cryptic document to its application stating that "[a] stock catalog/ CD / web site containing these photographs were previously registered, however that registration did not apply to this specific photograph, only in the authorship in the catalog claimed by the Stock Market Photo Agency."Id., Ex. 1. The Copyright Office's March 14, 2000 letter contained detailed instructions regarding how plaintiff should address and correct the perceived errors in its application.⁵

In an undated letter sent by the Copyright Office to plaintiff sometime thereafter, the Office stated that it was closing its file on plaintiff's application since it had not received a reply to its letter. See id., Ex. 5. The letter further stated that "[i]f you wish to re-apply for registration [,] [i]t will be necessary to submit a new application, deposit and fee." Id., Ex. 5.

On May 18, 2001, plaintiff filed a second copyright application form to register its "Past Mug Shots Images on the Stock Market Web Site," once again as an unpublished collection, but this time without the words "as of 2/29/99" in the "Title" space and without the additional document referring to a previous registration. See id., Ex. 6. Based on plaintiff's second application and despite the issues raised in its March 14, 2000 letter, the Copyright Office issued Registration No. VAu 529-623, with an effective date of June 25, 2001. See id.

According to plaintiff, far from having any nefarious motive to mislead the Copyright Office, it was acting at that Office's direction. Its principal, Patricia Kane, avers that she "had numerous conversations with the Copyright Office regarding [her] application and followed the instructions [she] was given to correct [her] application and to secure the VAu 529-623 registration." Decl. of Pat Kane dated May 4, 2016, ¶ 8, ECF No. 37. As recounted by Ms. Kane, in response to the ...