Why Foreign Companies Should Register Copyrights in the U.S.

There is a critically important piece of United States (U.S.) copyright law that any foreign company monetizing content in the States should know. I have counseled many in-house counsel and IPR managers outside of the U.S. who simply do not believe that they need to file copyright registration applications here. Many learn the hard way, when they discover that they are not entitled to statutory damages or recovery of their attorney’s fees and costs.

The reason for this false sense of confidence is that the plain language of the international copyright treaty called the Berne Convention for the Protection of Literary and Artistic Works (the “Berne Convention”) leads many to assume that registering a copyright in the U.S., a signatory to the Berne Convention, is an unnecessary formality.

Article 5 of the Berne Convention seems to provide such comfort:

(1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of the Union […] the rights which their respective laws do now or may hereafter grant to their nationals, as well as the rights specially granted by this Convention.

(2) The enjoyment and the exercise of these rights shall not be subject to any formality[.]

This article discusses U.S. copyright law regarding the Berne Convention and copyright registration, summarizes the benefits of registering a work with the U.S. Copyright Office (“USCO”), and provides an overview of registration.

Berne Is Not The Law!

The U.S. finally joined the Berne Convention more than a century after it was drafted. The U.S. Congress, however, explicitly made the Berne Convention non-executing through the Berne Convention Implementation Act of 1988 (the “Berne Implementation Act”). This means that the Berne Convention has no legal effect in the courts of the U.S.; only the laws passed by Congress to conform U.S. law to the Berne Convention carry any weight.

The Berne Implementation Act is “a minimalist approach, amending the [U.S.] Copyright Act only where there is a clear conflict with the express provisions of the Berne Convention [House Report on the Implementation Act of 1988 § (III)(C)].

To conform U.S. law to Article 5 of the Berne Convention, for example, the U.S. Congress passed a law that eliminated the previous requirement that a foreign copyright holder register its work with the Copyright Office before filing a lawsuit. Thus, under the “Berne Implementation Act” a rights holder does not need a formal registration to file a lawsuit in the U.S., but to obtain all the benefits of U.S. copyright laws, formal registration is still required.

Benefits Of Registration With The USCO

Congress believed there are 3 benefits of timely copyright registration that are compatible with Berne: the presumption of copyright validity, statutory damages, and attorney’s fees awards. The U.S. House of Representatives rationalized that the presumption of validity satisfies Berne because it affects the ordering of proof, and statutory damages and attorneys’ fees awards do not violate Berne because they affect remedies, not rights. While this approach is subject to criticism, it remains the law here.

The presumption of copyright validity substantially reduces the evidentiary burden on a plaintiff during litigation. In essence, a court will presume that the plaintiff has a valid copyright, subject to the defendant proving that the copyright is invalid. Without timely registration, a plaintiff must first prove that the work is entitled to protection under U.S. law, including showing that the work is copyrightable, that the plaintiff owns the copyright to the work, and a jurisdictional basis.

Perhaps most importantly, registered copyright holders may also elect to recover statutory damages currently up to US $150,000 for each registered work infringed (absent timely registration, foreign authors in American courts are limited to recovery of actual damages, which may be substantially less) and, at the court’s discretion, be awarded their attorney’s fees and costs. As a practical matter, this is often the most decisive factor in deciding whether to file suit to enforce one’s copyrights in the U.S. as legal fees can easily dwarf the actual damages and even the maximum statutory damages that a plaintiff might recover.

Infringers also face the unpleasant possibility of paying their own attorney’s fees as well as those of the plaintiff. Even if litigation is avoided, timely registration creates significant leverage when negotiating with a copyright infringer.

Unfortunately, it is often only when foreign copyright owners and exclusive licensees face infringement of their works in the U.S. that the benefits of registration become apparent. The good news is that the benefits of registration with the U.S. Copyright Office usually are easily obtainable and affordable.

The Copyright Office’s website at www.copyright.gov provides numerous publications describing both U.S. copyright law and registration, such as “Copyright Basics,” “Frequently Asked Questions about Copyright,” and “International Copyright Relations of the U.S.,” which documents the relevant agreements between the U.S. and other countries. The Copyright Office has also created a reasonably user-friendly online registration procedure with a registration fee of US $55 per work for people with USCO accounts.

I routinely handle copyright registration applications with the U.S. Copyright Office for our clients. To date, I have filed well over 1,000 of them! The cost-benefit analysis greatly favors registration for any company or person whose copyrighted works are sold in the U.S. and thus faces the possibility of infringement.

Benefits of working with experienced copyright counsel include properly addressing proper deposit requirements for the work(s) at issue, correct listing of authorship, identifying preexisting materials, and to take advantage of attorneys with many years of experience working with examiners and attorneys at the U.S. Copyright Office in case there are any issues with the application. There also are certain mistakes in the registration process that can invalidate a registration.

Should You Register Your Copyrights In The U.S.?

We often hear from companies and authors located outside of the U.S. that they are certain they do not need to file copyright registrations in the U.S. because their country is a Berne signatory and such a formality cannot be required under Berne. Another common argument is that they are not worried about their works being massively pirated in the U.S. They are right, but only partially.

On the first point, registration is not required to bring legal action for Berne members, but only those who timely file copyright registration applications with the U.S. Copyright Office are legally entitled to the benefit of statutory damages which can range up to US $150,000 per work registered and, at the court’s discretion, be able to receive an award of their attorney’s fees and costs. Those rights can provide significant leverage when negotiating copyright infringement cases in the U.S.

On the second issue, massive piracy is not required. If a software product is for example overdeployed by a licensee, the minimal cost of the copyright registration in the U.S. could provide maximum benefit as the defending company knows it is subject to substantial statutory damages and might need to pay not only its own attorney’s fees, but also those of the copyright holder.

Similarly, a breach of a license agreement of a right protected by U.S. copyright law, could lend itself to a claim for copyright infringement. This is also why it is critical to have properly written license agreements in the U.S., but that’s a topic for another day.

Donahue Fitzgerald LLP – Jonathan Osder, Partner

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