Non-U.S. Authors and Artists Lose U.S. Copyright Protection in Certain Circumstances

June 2009Art & Advocacy

A United States federal court has ruled that the section of the Copyright Restoration Act restoring rights of certain non-U.S. copyright owners is unconstitutional in certain circumstances. The ruling is binding only in certain parts of the country and will undoubtedly be appealed, possibly up to the U.S. Supreme Court, so its full effect remains to be seen. This ruling affects the rights of certain non-U.S. artists’ works in the U.S. If you (or your clients, if you’re a lawyer) have such interests, it’s important to stay up-to-date on this ruling and any appeals.

The Law…and the Problem

Under the U.S. Copyright Act of 1909, authors and artists who wanted their work to be protected in the U.S. had to place a copyright notice on it when it was first “published.” Otherwise, the work was thrust into the public domain. The revised 1976 Copyright Act (which affects works created prior to January 1, 1978) relaxed that notice requirement. Then, in 1989, Congress eliminated the requirement entirely. But because the laws of most nations other than the U.S. have never required such notice, older foreign works that were published without notice in their home country, and republished in the U.S. without notice, lost copyright protection in the U.S.

Recent case law has held that publication of a pre-1978 work outside the U.S. without copyright notice does not vitiate any copyright protection for that work in the U.S if the work was later first published in the U.S. with notice. Societe Civile Succession Richard Guino v. Jean-Emmanuel Renoir, 2008 WL 5157719 (9th Cir., Dec. 9, 2008) (involving Pierre-Auguste Renoir sculptures first published in France). Still, many other foreign works are at risk of being found to be in the public domain in the U.S.

Problem Solved?

In 2004, the U.S. tried to protect non-U.S. authors from this risk by amending Section 104A of the U.S. Copyright Act (known as the “Copyright Restoration Act”). The impetus was Section 514 of the Uruguay Round Agreements Act (“URAA”), a treaty provision that established a “restoration” right for non-U.S. authors of works that had fallen into the public domain in the U.S. but not in their home country. Under Section 514, a work of original authorship that was created outside the U.S. but whose copyright protection lapsed in the U.S. because of noncompliance with formalities imposed by U.S. copyright law, such as lack of proper copyright notice, could have its copyright restored. When a copyright is restored, it lasts for the remainder of the copyright term that the work would have enjoyed had the work never entered the public domain in the U.S.

However, because Section 104A provides that copyright vests automatically as of the date of restoration,1 it impacts the rights of U.S. citizens who lawfully exploited foreign works that had fallen into the public domain in the U.S. because of lack of notice.

Congress provided some protection for parties who already had exploited such works. The law includes detailed provisions requiring the owner of a restored work to file with the Copyright Office a notice of intent to restore the work, and to notify “reliance parties” if the owner of the rights in a restored work plans to enforce those rights. A “reliance party” is anyone who, before the source country of a work becomes what’s called an “eligible country,” engages in acts that would have violated any of the exclusive rights reserved for a U.S. copyright owner if the restored work had been subject to copyright protection, and who, after the source country becomes an eligible country, continues to engage in such acts. An eligible country is one that adheres to certain specified international conventions after enactment of the URAA.

In addition, under Section 104A, a reliance party who created a derivative work based upon a restored work that was created prior to the date of enactment of the URAA (December 8, 1994) “may continue to exploit that derivative work for the duration of the restored copyright if the reliance party pays to the owner of the restored copyright reasonable compensation ….”

A reliance party then has a 12-month grace period (starting from when the reliance party receives notice) to sell off previously manufactured stock, perform or display the work publicly, or authorize others to conduct these activities. The reliance party must cease using the restored work after the 12-month grace period expires unless such party reaches a licensing agreement with the copyright owner for continued use of the restored work. A reliance party who created derivative works based on the restored work is exempt from this requirement.

Once In the Public Domain…

A group of performers, educators, orchestra conductors, film archivists and distributors, and others filed suit challenging Section 514 of the URAA and the Copyright Restoration Act on various grounds, including violation of the First Amendment of the U.S. Constitution, which protects free speech. In 2007, the Tenth Circuit Court of Appeals held that Section 514, while not exceeding Congress’ power inherent in the Copyright Clause of the Constitution, did “not adopt supplemental free speech safeguards,” and that “copyright’s two built-in free speech safeguards — the idea/expression dichotomy and the fair use defense — do not adequately protect the First Amendment interests.” Golan v. Ashcroft, 510 F.3d 1179 (10th Cir. 2007).

The U.S. Supreme Court had previously noted that scrutinizing Section 514 under a First Amendment analysis might be appropriate if the copyright law “altered the traditional contours of copyright protection.” Eldred v. Ashcroft, 537 U.S. 186, 221 (2003). The Tenth Circuit, which covers parts of the U.S. Midwest, held that “plaintiffs have shown sufficient free expression interests in works removed from the public domain to require First Amendment scrutiny of § 514.” The Circuit Court found that “one of these traditional contours is the principle that once a work enters the public domain, no individual — not even the creator — may copyright it.” The court emphasized that “[u]nder § 514, the copyright sequence no longer necessarily ends with the public domain: indeed, it may begin there. Thus, by copyrighting works in the public domain, the URAA has altered the ordinary copyright sequence.”

The Tenth Circuit found that Section 514 “deviates from the time-honored tradition of allowing works in the public domain to stay there.” Once a work falls into the public domain, anyone has a right to use it on a non-exclusive basis — “unrestrained artistic use of these works” — and “the clear import of these principles is that the public in general and these plaintiffs in particular have a First Amendment interest in using works in the public domain…. By removing works from the public domain, § 514 arguably hampers free expression and undermines the values the public domain is designed to protect.”

The Court remanded the case to the District Court specifically to determine whether Section 514 of the URAA, and thus Section 104A of the Copyright Act, in fact, violated the First Amendment.

First Amendment Protection

On remand, the District Court held that Section 514 of the URAA did indeed violate the First Amendment and thus is unconstitutional. Golan v. Holder, 2009 U.S. Dist. LEXIS 28263 (April 3, 2009). Under U.S. Supreme Court precedent, the standard for assessing this sort of regulation of speech under the First Amendment is whether the regulation “advances important governmental interests unrelated to the suppression of free speech and does not burden substantially more speech than necessary to further those interests.” While such restriction needs to be “narrowly tailored to serve a significant government interest,” that standard is satisfied “where the restriction promotes a substantial government interest that would be achieved less effectively absent the restriction…. This requires a balancing of Plaintiffs’ interests with those of the Government.” The court noted that while complying with international treaty requirements is an important governmental interest, “[t]he impact of removing the restored works without accommodating Plaintiff’s reliance interests is substantial,” and concluded that “Plaintiffs’ interests in copying the works at issue is deserving of full First Amendment protection.”

No Easy Fix

While “reliance parties” are permitted under the statute to continue using restored works for one year and may continue to exploit derivative works forever, so long as a reasonable royalty is paid, speech that remains unprotected under Section 514 is “any speech that involves copying more than one year after notice has been filed, and any derivative works made after notice is filed and without payment of a royalty.” The court found that Congress could have complied with its treaty obligations “without interfering with a substantial amount of protected speech — for example, by permanently ‘excepting parties, such as plaintiffs, who have relied upon works in the public domain.’” As a result, the court concluded that to the extent Section 514 “suppresses the right of reliance parties to use works they exploited while the works were in the public domain — Section 514 is ‘not tied to the Government’s interest’ in complying with [its treaty obligations and] is therefore ‘substantially broader than necessary to achieve the government’s interest.’”

If that were all, it would seem that Congress could avoid the problem by amending the law to permanently “grandfather” parties who have already relied on works in the public domain. But the court found another, perhaps bigger, problem with the law. Because Section 514 grants foreign authors protection that is not granted to U.S. authors, even in their own country, “[r]ather than correct an historic inequity, Section 514 appears to create an inequity where one formerly did not exist.  The Government proffers no evidence showing how granting foreign authors copyrights in the United States — yet denying similar protections to United States authors — could constitute an important Government interest.”

This decision has substantial implications, especially in the context of the Tenth Circuit’s prior decision. It marks the first time a court has held that any provision of the 1976 Copyright Act violates the First Amendment. A further appeal will certainly follow, and the issue ultimately may be resolved by the Supreme Court or Congress. In addition, the decision raises a thorny issue: Because the decision is binding only in the Tenth Circuit,2 which does not geographically cover many major art centers in the U.S., foreign owners of works may still enforce their restoration rights in parts of the country where the courts do not follow the decision. If the Tenth Circuit affirms the decision, unless reversed by the U.S. Supreme Court, Congress may have no choice but to act in order to comply with its treaty obligations by trying to craft broader protections for U.S. reliance parties. For now, it’s a huge victory for public domain advocates.

1  The “date of restoration” under Section 104A is generally January 1, 1996, if the source country of the restored work had adhered, as of that date, to the Berne Convention, another major international copyright treaty, or was a World Trade Organization member country on such date. Other dates may apply depending on what country’s restored work is involved. 

2  The Tenth Circuit covers the states of Utah, New Mexico, Colorado, Kansas, Oklahoma and Wyoming.