As of Thursday, July 1, 2021
The Supreme Court will examine the case of Unicolors Inc. v. H&M Hennes & Maruitz LP to see if H&M is liable for an infringement award and whether an error in a U.S. Copyright Office can be invalidated without fraudulent intent. The Southern California–based Unicolors was originally awarded $847,000 for infringement and attorney fees after suing H&M for using and selling a design on jackets and skirts in 2015. The artwork design, called Xue Xu, was one of 31 designs Unicolors registered with the copyright office in 2011. Unicolors accepted a reduced amount of $266,000 after the court deemed the original figure excessive.
Then the U.S. Court of Appeals for the Ninth Circuit reversed the decision and required the copyright office to weigh in on the validity of the copyright registration. Lauren Keller Katzenellenbogen, a partner with Knobbe Martens, who is co-chair of the consumer product litigation department, said the problem was the way Unicolors registered its designs.
Unicolors registered 31 designs together as a compilation and single publication. The problem was that in order to be registered as a single publication they needed to be published together and in the context of fabrics, meaning that all designs would need to be made public in the same showroom at the same time. That was not done because some of the designs were special for specific manufacturers and were purposely not showcased.
Therefore, the Ninth Circuit said the judgment was not correct because the trial court needed to go back to the copyright office and ask whether the registration would still be valid and ask for its guidance.
“It’s kind of surprising to people that there’s no proof that Unicolors acted fraudulently,” Katzenellenbogen said. “There’s no proof that Unicolors intended to deceive the copyright office or engaged in fraudulent behavior. It’s kind of seen as surprising that after [going to trial] the verdict could be overturned because there was a mistake in the registration.”
However, the Supreme Court will not hear Unicolors’ second question regarding if the appeals panel wrongly applied the copyright office’s requirements, which were not in place at the time Unicolors registered its designs and if that even required a referral to the copyright office.
When asked for comment, H&M’s media-relations department said it could not comment on pending litigation. Unicolors chose to release a statement.
Issued by Unicolors’ counsel, Josh Rosenkranz of Orrick Herrington & Sutcliffe and Scott Burroughs of Doniger/Burroughs, said, “An honest mistake in a registration form should not let a blatant infringer off the hook—and before the Ninth Circuit adopted its misguided approach, it never did. We expect that the court would reject a rule that makes it harder for artists to vindicate their rights and allows infringers off the hook on technicalities.”