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The Biggest Copyright Rulings Of 2022: A Midyear Report

Partner Lauren Schweitzer is quoted in this article from Law360 that explores some of the largest copyright rulings in the first half of 2022.

In the first half of 2022, the U.S. Supreme Court held that an applicant's lack of knowledge about the law can excuse innocent mistakes in a copyright registration, while the Ninth Circuit refused to reinstate a $2.8 million verdict against Katy Perry over her hit "Dark Horse." Here's a look at the most significant copyright decisions so far this year.

Unicolors v. H&M

The U.S. Supreme Court's February ruling that reinstated a copyright infringement verdict a fabric designer won against fast-fashion chain H&M makes clear that inadvertent errors can't be the basis for challenging copyright registrations.

The high court's 6-3 ruling interpreted a part of copyright law that states registrations can be invalidated if the owner knowingly included inaccurate information. Mistakes can be excused when an applicant doesn't know the inner workings of copyright law, the justices found.

In doing so, the high court overturned the Ninth Circuit's decision to vacate a copyright infringement verdict Unicolors Inc. won against H&M, finding that Unicolors was not aware it submitted inaccurate information to the Copyright Office in its copyright application.

The high court's ruling decides a "narrow and noncontroversial issue" that copyright applicants who make an innocent mistake of law can still be protected by the safe harbor, but cannot abuse this protection by remaining willfully blind to applicable legal requirements, according to Lauren Schweitzer of Kirkland & Ellis LLP.

What makes the ruling notable, however, is that Unicolors had sought certiorari on one issue — whether evidence of fraud is needed for a copyright registration to be invalidated under the statute — but was allowed to proceed on a "completely different issue," Schweitzer said. This "legerdemain" was also pointed out in the dissenting opinion, she noted.

"While the majority took pains to explain how the issue decided was a ''subsidiary question fairly included 'in the petition's question,'' as the dissent pointed out, the majority's logic was strained," Schweitzer said. "In this respect, Unicolors is somewhat remarkable and raises some questions about the scope of latitude that the court will allow future litigants."

The case is Unicolors Inc. v. H&M Hennes & Mauritz LP, case number 20-915, in the U.S. Supreme Court.

Gray v. Hudson

The Ninth Circuit in March affirmed a lower court's decision to throw out a $2.8 million copyright verdict against Katy Perry over her 2013 hit "Dark Horse," finding the disputed portions of a Christian rapper's song consist of "manifestly conventional" elements.

The lawsuit came from rapper Marcus Gray, who in 2014 accused Perry of ripping off his 2009 song "Joyful Noise." A California federal jury had found Perry liable for infringement and awarded $2.8 million in damages, but the district judge vacated the award after finding the disputed series of notes in Gray's song were not "particularly unique or rare."

Siding with the judge, the appeals court ruled that the eight-note patterns in both songs "consist entirely of commonplace musical elements" and that the similarities between them did not stem from an original combination that was protectable by copyright law.

The ruling "narrows the ability to assert copyright infringement in a substantially similar musical composition, at least in the Ninth Circuit," Craig Whitney of Frankfurt Kurnit Klein & Selz PC said.

"The court added to the case law that has narrowed what courts consider protectable copyrightable expression — a trend we've seen in areas outside of music as well, such as movies and video games, although not always consistently applied," Whitney said.

The case is Marcus Gray et al. v. Katheryn Hudson et al., case number 20-55401, in the U.S. Court of Appeals for the Ninth Circuit.

Oracle v. Hewlett Packard Enterprise

Hewlett Packard Enterprise Co. was ordered to pay Oracle Corp. $30 million in damages after a California federal jury in June found that HPE knowingly stole Oracle's customers by offering software updates that ripped off Oracle's copyrights.

The jury awarded $30 million in actual damages for copyright infringement and $24 million in damages for interfering with Oracle's customers, but the attorneys said during closings that the higher damages amount would apply. The jury also found HPE not liable for punitive damages.

The verdict should serve as a reminder to software service providers to "check and recheck" licensing terms before providing updates to other vendors' software products, or they risk being exposed to copyright infringement liability, Jason Bloom of Haynes and Boone LLP said.

"The verdict should further embolden owners of software copyrights to pursue claims against third-party service providers who are not strictly complying with license terms," Bloom added.

The case is Oracle America Inc. et al. v. Hewlett Packard Enterprise Co., case number 4:16-cv-01393, in the U.S. District Court for the Northern District of California.

Peretti v. Authentic Brands Group

The Second Circuit in May decided not to revive a copyright suit brought by the heirs of the late songwriter Hugo Peretti, who co-wrote Elvis Presley's hit "Can't Help Falling In Love," finding that they couldn't end an agreement transferring song rights to Authentic Brands Group LLC.

Peretti's daughter and grandson had sought to terminate a 1983 contract between Peretti and Authentic Brands to transfer the songwriter's then-contingent right to renew the copyright to the song, citing a provision in copyright law that post-1978 grants "executed by the author" may be terminated. The songwriter died in 1986 and his family renewed the copyright in 1989.

But the appeals court found that Peretti could not assign his right to renew in 1983 because it had not yet vested, thereby rendering his grant of the contingent right to renew not "executed by the author" and of no effect, according to Sherry Flax of Saul Ewing Arnstein & Lehr LLP.

Most copyrights for pre-1978 works have since expired, or the time to renew those copyrights have passed, Flax noted. Further, the "circumstance of an assignor granting unvested rights and then dying before the rights vest are unlikely to be broadly applicable," she said.

Still, "this case presents interesting facts, but is quite unusual and of limited applicability," according to Flax.

The case is Peretti v. Authentic Brands Group LLC, case number 21-2174, in the U.S. Court of Appeals for the Second Circuit.

HiQ Labs v. LinkedIn

In April, the Ninth Circuit affirmed that scraping data in bulk from public LinkedIn profiles likely doesn't breach the Computer Fraud and Abuse Act, in a win for job-search startup hiQ Labs Inc.

The appeals court found that the U.S. Supreme Court's June 2021 ruling in Van Buren v. U.S. , which narrowed the anti-hacking law's scope, reinforced hiQ's case that it did not breach the CFAA by continuing to scrape LinkedIn profile data to build a data analytics product despite receiving a cease-and-desist letter.

The case narrowly addresses CFAA claims based on publicly accessible data, with the Ninth Circuit's opinion noting that database owners have an array of potential remedies where data is not publicly accessible, according to Ian Ballon of Greenberg Traurig LLP. The opinion also did not address other potential claims that could be asserted by a database owner, beyond the CFAA claim at issue here, he noted. 

Pointing out that the Ninth Circuit's opinion is only binding within its own circuit, Ballon said that "it remains to be seen if other circuits would rule the same way, or even if the case ultimately comes out differently in a final ruling on the merits."

He added that although the case "narrowly addressed" a CFAA claim based on publicly accessible user data stored on a website, there may be implications for artificial intelligence and machine learning as well. 

"An algorithm is only as good as the data used to train it, and both machine learning and artificial intelligence depend on complete and accurate data sets," Ballon said. "The ability of database owners to license more complete versions of data sets than third parties may provide a market advantage, regardless of what the law may or may not permit third parties to do."

The case is hiQ Labs Inc. v. LinkedIn Corp., case number 17-16783, in the U.S. Court of Appeals for the Ninth Circuit.