Los Angeles. Nixon Peabody client fashion retailer H & M Hennes & Mauritz, LP (H&M), prevailed in a dispute involving allegations of fabric design copyright infringement. In a unanimous decision published today, the U.S. Court of Appeals for the Ninth Circuit held that the trial court had erred in its ruling, and found that instead of infringement, the plaintiff’s copyright was invalid and the plaintiff did not use the copyright process appropriately.
The dispute began in 2016 when textile manufacturer Unicolors claimed that it had a copyright covering fabric on a skirt and jacket sold in H&M’s stores, and H&M sold those goods without its permission.
H&M argued that Unicolors did not hold a valid copyright for the design at the center of the case, having improperly included the pattern in a group of 31 separate designs that were registered in a single work registration. Such copyright registrations are valid only if all designs are first published together as a “single unit.” Unicolors’ claimed in the application that all 31 designs were first published together, but H&M counsel obtained trial testimony from Unicolors showing that it included some designs that were made available for public sale, as well as other “confined” designs that were kept private and restricted to specific parties—meaning all the works in the registration at issue were not published as a “single unit.” H&M maintained that Unicolors had known that some of the designs were published separately but still included them in the registration application to save money.
The U.S. District Court for the Central District of California found in favor of the plaintiff in a 2017 decision, which H&M appealed.
On May 29, 2020, the Ninth Circuit agreed with H&M’s argument that fraudulent intent was not required and it had elicited sufficient trial testimony to establish that the plaintiff had included known inaccuracies in its copyright registration process. The unanimous verdict stated: “A collection of works does not qualify as a ‘single unit of publication’ unless all individual works of the collection were first published as a singular, bundled unit.” Thus, H&M successfully rebutted the presumption of validity and Unicolors’ registration was held invalid.
“The ramifications of the Ninth Circuit’s opinion are immediate and broad-reaching,” said Staci Jennifer Riordan, Nixon Peabody partner and lead counsel for H&M. “A valid copyright registration is a prerequisite to any copyright suit, and this opinion provides much needed clarity, and scrutiny, on the validity of single work registrations—which are often the basis for dubious litigation. It is extremely gratifying that H&M and other defendants will be able to cite to this decision, together with the recent Gold Value decision, to defend against unmeritorious cases,” said Riordan who leads Nixon Peabody’s Fashion practice and is vice-chair of the firm’s Litigation Department.
In addition to throwing out the plaintiff’s previous damages award and attorneys’ fees, the Ninth Circuit sent the case back to the district court and has directed it to seek the input of the Copyright Office on the validity of plaintiff’s copyright registration, as originally requested by H&M.
Nixon Peabody’s legal team that advised H&M was led by Riordan, and included Aaron Brian, Dale Hudson, and Neal Gauger.