On November 8, 2021, the U.S. Supreme Court will hear arguments in a five-year-long copyright dispute between fashion retailer H & M Hennes & Mauritz, LP (H&M) and textile manufacturer Unicolors, Inc. The outcome could have a significant and lasting impact on copyright holders as well as alleged infringers by determining what consequences a registrant faces when it fails to provide accurate information on its copyright application.
The dispute arose in 2016 when Unicolors alleged it held a copyright to a fabric design used in a skirt and jacket sold at H&M’s stores. Unicolors claimed H&M sales of those garments infringed on Unicolors’ copyright. During trial, Unicolors testified to facts that H&M alleged were sufficient to invalidate Unicolors copyright registration. The U.S. District Court for the Central District of California disagreed and refused H&M’s request to refer the matter to the Copyright Office, pursuant to section 411(b) of the Copyright Act, holding that H&M was required to prove fraud first. H&M appealed.
In its successful appeal, H&M challenged the district court’s decision on multiple grounds, including that Unicolors did not have a valid copyright for the design sued upon, having improperly included the pattern in a purported collection of 31 different designs covered by a single copyright “group” registration. H&M argued that the copyright was invalid because the application falsely represented that all 31 designs had been first sold on the same day. H&M maintained that Unicolors knew that some of the designs were sold separately but still included them within the registration application. During trial, Unicolors’ testimony established that some of the 31 works in the group registration had been designated as “confined,” which meant they were restricted and sold exclusively to specific parties. Unicolors argued that even if its application contained inaccurate information, the registration should not be set aside unless Unicolors actually intended to defraud the Copyright Office.
In May 2020, the Ninth Circuit held that the trial court had erred in its ruling. The Ninth Circuit found that H&M had elicited trial testimony establishing that Unicolors had included known inaccuracies in its copyright registration application. Following the plain language of the Copyright Act, the Ninth Circuit rejected Unicolors’ argument that a court should not refer a matter to the Copyright Office nor invalidate a registration unless it found that the registrant had intended to defraud the Copyright Office.
Staci Jennifer Riordan, a Nixon Peabody intellectual property litigation partner who leads the firm’s Fashion practice, is part of the team arguing before the Supreme Court on behalf of client H&M. The Nixon Peabody team also includes Aaron Brian.
At the conclusion of the case, a ruling that affirms the Ninth Circuit decision would make clear that proving fraud is not required prior to referral to the Copyright Office and clarify the consequence of a registrant who fails to provide accurate information on its copyright application.
For additional details, please see the brief of respondents filed by H&M.