Gold Value International Textile, Inc., which does business as Fiesta Fabric (“Fiesta”), designs and sells fabric. It sued a clothing manufacturer, Sanctuary Clothing, LLC (“Sanctuary”) for copyright infringement, claiming that Sanctuary copied Fiesta’s fabric design and used the infringing fabric to make blouses.
Sanctuary then filed a counterclaim, asking the court to invalidate Fiesta’s copyright registration for the fabric design at issue.
The lower court agreed with Sanctuary, finding that Fiesta had knowingly included inaccurate information in its copyright application that would have caused the Copyright Office to deny registration had the Copyright Office known the truth.
Fiesta appealed the decision to the US Court of Appeals for the Ninth Circuit, which affirmed the lower court decision.
A group of related works may be registered together for a single fee under some limited circumstances. To be registered as a group, the individual works must be either all published or all unpublished.
Fiesta applied to register the copyright in this design (the “1461 Design”) as part of a group of more than 30 fabric designs. In the copyright application, Fiesta’s president certified that none of the works in the collection had been published as of October 23, 2013.
In reality, by that time, Fiesta had sold about 190 yards of the 1461 Design fabric, as part of a sale of samples to “a limited group of existing and potential customers for the limited purpose of securing full production contracts.”
The copyright statutes provide that work is published when copies are distributed “to the public by sale or other transfer of ownership, or by rental, lease, or lending” or offered to be distributed “to a group of persons for purposes of further distribution, public performance, or public display.”
Fiesta’s president testified that although he knew sample fabric bearing the 1461 Design had been sold before he signed the application, he did not know that selling samples was considered to be “publication.”
Because the 1461 Design had been sold prior to registration, it had been “published” and, therefore, Fiesta’s identification of the 1461 Design as “unpublished” in the copyright application was inaccurate.
Further, because Fiesta knew that the fabric had previously been sold, it had included inaccurate information in its copyright application with knowledge that it was inaccurate.
Under the copyright law, a certificate of registration satisfies the registration requirement for a copyright owner to file an infringement suit, “regardless of whether the certificate contains any inaccurate information,” unless:
(1) “the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate,” and
(2) “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.”
The Ninth Circuit held that although Fiesta claimed it didn’t believe the sale of samples constituted publication, Fiesta provided no reasonable basis for this belief. Further, the knowledge referred to, said the court, is factual knowledge, not knowledge of the law.
Fiesta was admittedly aware of the facts regarding its fabric sales; its inclusion of designs that it knew had been sold, and therefore published, in an unpublished collection cannot be characterized as an inadvertent or good faith mistake. Thus, Fiesta included inaccurate information on its application with knowledge that it was inaccurate.
As you can see from this case, it’s vitally important for you to ensure that your copyright application is correct and, as the Ninth Circuit’s opinion makes clear, this includes knowing how each of the relevant terms is defined by applicable law.
Please feel free to contact us if you need help registering or enforcing your copyrights.
Photo by Trang Nguyen on Unsplash
