Property, intangible

a blog about ownership of intellectual property rights and its licensing

Bringing a Copyright Suit Is Not as Easy as It Looks

Here’s an exercise in frustration that killed a copyright infringement lawsuit twice:

1993, 1995, 1996, 1997, and 1998 – Plaintiff Kunkel creates copyrightable works.
November 2001 – Kunkel files bankruptcy.  Does not list copyrights as part of estate.
February, 2003 – Kunkel files copyright applications for works created pre-bankruptcy in his own name.
March, 2006 – Bankruptcy proceeding closed.
March 28, 2007 – Kunkel sues Jasin for copyright infringement.
May, 2007, September, 2007, and October 2007 – Kunkel files additional copyright applications for works created pre-bankruptcy in his own name.

What happens? Lawsuit killed. The court rules that, since Kunkel didn’t schedule the copyrights in the bankruptcy, they were still the property of the bankruptcy estate. Therefore the trustee was the real party in interest, Kunkel did not have standing, and the case was dismissed.

Kunkel then reopened the bankruptcy estate and scheduled the copyrights. The bankruptcy court abandoned the copyrights back to Kunkel on January 24, 2008.  Kunkel sued Jasin for copyright infringement again.

But still no luck.  This time the district court ruled that the copyright registrations are invalid because the copyrights were registered in Kunkel’s name when the owner at the time of application was the bankruptcy estate.  The Court of Appeals for the Third Circuit affirmed: “as a general matter, upon the filing of a petition for bankruptcy, all legal or equitable interests of the debtor in property become the property of the bankruptcy estate and will be distributed to the debtor’s creditors.”  Kunkel’s argument that he could claim continuous ownership under the theory of “relation back” also failed:

Kunkel also relies on the theory that, upon abandonment of an asset that was part of a bankruptcy estate, the property revests in the debtor, who is treated as having possessed the property continuously. Thus, according to Kunkel, because his “interest in the copyrights and architectural plans revert[ed] back to [him] as if the bankruptcy had never been filed and [he] is to be treated as if they had remained with him at all times,” the “copyright registrations are and have been in full force and effect since the time they were obtained . . . .” We agree with the District Court‟s refusal to apply the doctrine of “relation back” here, however. Kunkel failed to include the copyrights on the appropriate bankruptcy schedule, certified to the Copyright Office that he owned the copyrights when in fact they belonged to the bankruptcy estate, and belatedly regained possession of the copyrights only by seeking reopening of his bankruptcy case. Under these circumstances, we believe that the District Court properly granted summary judgment in favor of SVCH.
The first suit failed because Kunkel was not the copyright owner and did not have standing, the second suit failed because the copyrights were not registered by the then-owner. Third time a charm?

Kunkel v. Jasin, No. 10-4268 (3d Cir. Mar. 29, 2011) (unpublished).

Kunkel v. Jasin, No. 5:09-cv-00371-WD (E.D. Pa. Sept. 7, 2010).

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