Property, intangible

a blog about ownership of intellectual property rights and its licensing

Does an Incorrect Claimant Invalidate a Copyright Registration?

Awhile back I reported on Kunkel v. Jasin, an unpublished decision out of the Third Circuit. In it, Kunkel, who was in bankruptcy, filed copyright applications in his own name rather than the name of the estate. His case was dismissed, and the dismissal affirmed, because the certificates named the wrong owner.

We now have the same fact pattern in the Northern District of Ohio, but with a different outcome. In Mowder v. Permanent General Assurance Corp., plaintiff David Mowder registered a copyright in his own name while in bankruptcy and then sued defendant Permanent General Assurance Corp. Permanent General moved to dismiss the case on the theory that Mowder was judicially estopped from pursuing the claim because he didn’t list the copyright as an asset in his bankruptcy. In response, Mowder reopened his bankruptcy and had a trustee appointed. The court then substituted the trustee as the real party in interest in the copyright infringement case.

So to sum it up, we have a certificate of registration in the name of Mowder filed when the estate owned the copyright. Permanent General moved for a judgment on the pleadings on the theory that the trustee does not have a valid copyright registration, a prerequisite for the suit.

As to the original judicial estoppel theory, that died with the appointment of the trustee: a bankrupt plaintiff’s failure to disclose claims in a bankruptcy petition does not bar the trustee from pursuing them.

As to the validity of the registration, the district court parted ways with Kunkel v. Jasin:

Title 17 United States Code section 411(b) states that a copyright registration is valid “regardless of whether the certificate contains any inaccurate information” unless the applicant knew that the information was inaccurate and “the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse the registration.”

First, reading the pleadings most favorably to the Trustee, there is no indication that Mowder knew that he technically did not own the copyright when he filed his application. Permanent General does not even suggest in their motion that Plaintiff Mowder knew he did not own the copyright when he filed his application. Kunkel v. Jasin is, therefore, distinguishable: in that case, the defendant moved for summary judgment, not a judgment on the pleadings when all inferences are based solely on the pleadings. Accordingly, under 17 U.S.C. § 411(b), the mistake on the copyright registration does not invalidate the registration.

Moreover, even if the pleadings did show that Mowder knew he did not own the copyright, Permanent General makes no showing that this technical misstatement was material. It is unclear why the Copyright Office would care whether Mowder owned the copyright or his bankruptcy estate owned the copyright. Although the Third Circuit has held differently, that decision is not binding on this Court, nor is it persuasive on this issue. The Kunkel Court did not explain why the Copyright Office would deny a registration if the Copyright Office knew that the estate, not the individual, owned the copyright; the court merely asserted that the error was material. The only support for this assertion was another Third Circuit decision which held that a misstatement of the type of work to be copyrighted—such as a song or video—was a material misstatement. This does not show that the error in this case—naming the individual as the owner instead of his bankruptcy estate—was material. Therefore, Permanent General has not shown that even if there were a knowing misstatement, that misstatement was material.

What the Kunkel court also seems to have missed is that it had to ask the Register of Copyrights whether the inaccurate information, if known, would have caused the Register to refuse registration. 17 U.S.C. § 411(b). I couldn’t find any opinion where a court asked for the Register’s opinion on an incorrect ownership question, only one on other factual statements made in a certificate of registration. Olem Shoe Corp. v. Washington Shoe Co., 09-23494-CIV (S.D. Fla. Dec. 1, 2011) (requesting opinion whether status of publication or nondisclosure that a work was a derivative work would affect registrability). The Olem Shoe response from the Register said that, had the Office been aware that an unpublished work was published, it would have corresponded with the applicant, allowed the applicant to correct the information, and then granted the registration. In the case of a work that was claimed as original but was instead derivative, the Office would have followed the same procedure. After some more shenanigans with supplementary registrations and more challenges, the Olem Shoe court ultimately held the registrations were valid.

But we may have some insight from the Register of Copyrights soon. In DeliverMed Holdings, LLC v. Schaltenbrand, the 7th Circuit instructed the district court to ask the Register whether an intentional misstatement of authorship and assignment invalidates the registration, which it has done.

There’s also a nice discussion on whether the trustee should use the same lawyer Mowder hired for the copyright infringement suit. The district court deferred to the bankruptcy court’s opinion that it was fine, but the district court wouldn’t have allowed it.

Mowder v. Permanent General Assurance Corp., No. 1:13-CV-00082 (N.D. Ohio Oct. 31, 2013).

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