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Immaterial error or fraud — which mistake invalidates a copyright?

by | Jun 28, 2021 | Intellectual Property, Intellectual Property Litigation

The Supreme Court of the United States recently agreed to hear a case that will help answer this question. The case involves a fabric designer who created and copyrighted a geometric pattern. The designer, Unicolors, Inc., states that popular retail store H&M stole the pattern for use on a jacket created and sold within their stores. The fabric designer filed suit against the retailer asserting a violation of their copyright protections on this fabric design. In response, H&M counters that Unicolors cannot win because their copyright is invalid.

Earlier courts held in favor for Unicolor, finding H&M should pay Unicolors almost $900,000 in damages for infringing on its copyright. H&M appealed the ruling and took the case to the U.S. Court of Appeals, where the 9th Circuit reversed the lower court’s ruling and found in favor of H&M.

Unicolor is now appealing that decision and the Supreme Court has agreed to hear the case.

Why does the Supreme Court care?

The designer argues that the 9th Circuit’s ruling furthers a divide amongst circuits that weakens copyright protections. Essentially, they state that some circuits look for fraud to consider invalidation of a copyright while others accept “immaterial registration errors” as enough evidence to defeat the copyright. As a result, Unicolors has called on the Supreme Court to provide guidance on which is the right type of evidence to invalidate a copyright in these types of cases.

Unicolors also argues that H&M’s action was in direct violation of the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (PRO-IP Act). Unicolors states that lawmakers made this law to protect copyrights and that invalidation is proper only when the copyright holder acted in bad faith or with the intent to defraud the Copyright Office.

Ultimately the case asks the Supreme Court to answer two questions. First, to address the division in the lower courts about how much scrutiny they should apply to inaccuracies and second to clarify how courts should apply the PRO-IP Act. We will watch the case and provide updates as they become available.