The Supreme Court ruled 6–3 in a highly technical decision on Feb. 24 that the often-reversed 9th Circuit Court of Appeals was wrong to invalidate a copyright infringement verdict that a California clothing design firm won against the gigantic Swedish fashion retailer H&M.
H&M was in the news in 2020 after it and other fashion companies announced they would no longer use cotton originating from the Xinjiang region in mainland China, after reports surfaced that the communist country uses forced Uyghur labor for cotton production. The regime denies the practice, and the Chinese Communist Party launched a propaganda campaign targeting H&M.
The appeal came after Vernon, California-based Unicolors won a nearly $800,000 award at the trial court-level against H&M for copying its fabric designs.
Unicolors owns copyrights in many fabric designs. It sued H&M for copyright infringement and a jury ruled in favor of Unicolors, but H&M asked the judge after the trial to ignore the jury’s verdict, arguing the law required it to do so, according to the opinion.
H&M argued that Unicolors’s registration certificate was invalid because it contained inaccurate information, and that Unicolors was therefore precluded from suing for infringement. Specifically, H&M claims Unicolors’s registration certificate was inaccurate in the sense that Unicolors had improperly filed a single application seeking registration for 31 separate works.
H&M cited a U.S. Copyright Office regulation that states that a single registration can cover multiple works only if those works were “included in the same unit of publication.” Because a “knowing inaccuracy” in the registration was established, H&M said the trial court should move to the second legal requirement and ask the Register of Copyrights whether it would have refused to register Unicolors’s copyright if it had known of the inaccuracy.
The U.S. District Court denied H&M’s post-trial motion and the 9th Circuit found the lower court was wrong to do so.
Justices Clarence Thomas, Samuel Alito, and Neil Gorsuch dissented from the Supreme Court’s opinion.
The dissent, written by Thomas, accused Unicolors of trickery.
“A copyright registration is invalid if the registrant included materially inaccurate information in its application ‘with knowledge that [the information] was inaccurate,’” the justice wrote, citing the Copyright Act.
Thomas said Unicolors had asked the Supreme Court to decide a question on which appellate courts were split—whether the statute’s “‘knowledge’ element requires ‘indicia of fraud.’” The company argued that “knowledge” requires “inten[t] to defraud the Copyright Office.”
But now, after having convinced the court to grant its petition for certiorari and hear the case, Unicolors changed its approach and relied on a different argument, claiming the statute “requires fraudulent intent and instead proposes a novel ‘actual knowledge’ standard.”
“Because I would not reward Unicolors for its legerdemain, and because no other court had, before today, ever addressed whether [the Copyright Act] requires ‘actual knowledge,’ I would dismiss the writ of certiorari as improvidently granted.”
In statements emailed to The Epoch Times, lawyers representing both Unicolors and H&M offered their thoughts on the Supreme Court ruling.
Unicolors attorney Scott Alan Burroughs of New York City law firm Doniger Burroughs welcomed the decision.
“Unicolors is pleased with the court’s decision, which elegantly applies the statutory text to the registration at issue and rightly concludes that the putative error should not invalidate the registration nor allow a willful copyright infringer to evade liability,” Burroughs said.
“This decision will benefit artists everywhere, particularly those who have struggled to complete the byzantine copyright registration process. It also sends a clear message to copyright infringers that they will have to address their misconduct on the merits as opposed to hiding behind technicalities.”
H&M attorney Staci Jennifer Trager of the Los Angeles office of law firm Nixon Peabody said the decision proves Unicolors behaved badly.
She said her client was “pleased that the Supreme Court agreed that Unicolors’ copyright registration contained inaccurate information, and that Unicolors did not have a good faith belief that the facts supporting its application were correct when it filed the application.”
“After today’s ruling, in order to ‘save its copyright,’ Unicolors will have to establish that it had a good faith belief that it misunderstood the legal requirements when it filed its original application, which H&M believes it cannot do given Unicolors’ existing trial court testimony demonstrating Unicolors was, at best, willfully blind to the requirement that all works in a group application be published together,” she said.
Trager also said her client “appreciates the dissent’s acknowledgment that Unicolors abandoned its original position and that the question decided today was one of first impression.”
The Epoch Times reached out to U.S. Solicitor General Elizabeth Prelogar, whose office participated in oral arguments in the case on Nov. 8, 2021, but didn’t receive a reply by press time.
