Supreme Court Weighs Into Copyright Issues Involving Tech, New Media

March 4, 2019 by Dan McCue

The Supreme Court on Monday sided with a third-party software maintenance provider in its quest to recoup the nearly $13 million it paid to Oracle Corp. to cover the litigation costs of a copyright dispute.

Writing for a unanimous court, Justice Brett Kavanaugh held the winning party in a copyright case can’t collect expert-witness fees and jury consultant costs.

The long-running legal battle began when Oracle, which develops and licenses software that, among other things, manage data for businesses and non-profits, sued Rimini Street Inc., alleging it had made unauthorized copies of Oracle’s copyrighted software to provide support to customers who had licensed them.

In 2015, a Nevada jury ruled in Oracle’s favor, finding that Rimini Street had violated both federal copyright law as well as laws pertaining to computer access in California and Nevada.

The jury awarded Oracle $50 million in damages, and the district court later tacked on an award of fees and court costs, including $12.8 million for litigation expenses including expert witnesses, e-discovery, and jury consulting.

The court arrived at the figure by focusing a specific sentence in Section 505 of Title 17 that made reference to the prevailing party in a copyright case being entitled to recoup the “full costs” of the litigation.

But Rimini Street found that reading of the law wanting.

It appealed to the Ninth Circuit, arguing the awarded litigation fees were excessive and violated the six categories of costs the statute otherwise specifies.

On review, the appellate court acknowledged Rimini Street was correct in claiming the award fell outside the six categories of costs. But it went on to hold the award was appropriate because the Copyright Act gives federal district courts discretion to award “full costs” to a party in copyright litigation.

In reversing that ruling on Monday, Kavanaugh wrote that while Oracle had advanced substantial arguments in favor of sustaining the award, “We ultimately do not find those arguments persuasive.”

“Oracle argues that the word ‘full’ authorizes courts to award expenses beyond the costs specified in [in the Copyright Law] … We disagree,” the justice wrote. “‘Full’ is a term of quantity or amount. It is an adjective that means the complete measure of the noun it modifies. … The adjective ‘full’ in §505 therefore does not alter the meaning of the word ‘costs.’ Rather, ‘full costs’ are all the ‘costs’ otherwise available under law.”

To make his point plain, Kavanaugh went on to explain that “the word ‘full’  operates in the phrase ‘full costs’ just as it operates in other common phrases: A ‘full moon’ means the moon, not Mars. A ‘full breakfast’ means breakfast, not lunch. A ‘full season ticket plan’ means tickets, not hot dogs. So too, the term ‘full costs’ means costs, not other expenses.”

In a second copyright case, Fourth Estate Public Benefit Corp. v. WallStreet.com, the high court ruled Monday that a copyright claimant cannot sue for infringement until after the Copyright Office has ruled on its copyright-registration application.

Then, and only then, can the copyright owner can sue for infringement that occurred both before and after the application was approved, the justices said.

The case stems from a falling out between two media companies. Fourth Estate Public Benefit Corporation, a news organization, licensed works to WallStreet.com, a news website.

WallStreet.com later cancelled the license agreement and Fourth Estate sued after learning the website had not removed its content.

WallStreet.com fought back by noting that at the time the dispute erupted, Fourth Estate had filed applications to register the articles with the Copyright Office, but the Register of Copyrights had not acted on those applications.

Writing for the unanimous court, Justice Ruth Bader Ginsburg acknowledged Fourth Estate’s concern that a copyright owner could lose the ability to enforce its rights if the Copyright Act’s three-year statute of limitations runs out before the Copyright Office acts on its application for registration.

” … the statutory scheme has not worked as Congress likely envisioned,” Ginsburg wrote. “Registration processing times have increased from one or two weeks in 1956 to many months today. Delays in Copyright Office processing of applications, it appears, are attributable, in large measure, to staffing and budgetary shortages that Congress can alleviate, but courts cannot cure. … Unfortunate as the current administrative lag may be, that factor does not allow us to revise §411(a)’s congressionally composed text.”

“For the reasons stated, we conclude that ‘registration . . . has been made” within the meaning of 17 U. S. C. §411(a) not when an application for registration is filed, but when the Register has registered a copyright after examining a properly filed application,” she said.

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