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Supreme Court Agrees to Hear H&M Case Versus So-Called ‘Copyright Troll’

An upcoming Supreme Court case involving H&M could potentially mean more trouble for fabric businesses trying to copyright their designs.

The court agreed Tuesday to consider a case brought by Unicolors, Inc., a Los Angeles-based company that claims H&M infringed on one of its copyrighted patterns.

Unicolors originally sued H&M in April 2016 for selling garments it alleged bore a pattern “identical, or substantially similar” to one it had copyrighted in 2011. A California jury decided in Unicolors’ favor in 2017, awarding it damages of nearly $850,000.

Last year, however, the U.S. Court of Appeals for the Ninth Circuit reversed the decision, ruling that the fabric firm included “known inaccuracies in its application for [copyright] registration.” Consequently, the district court was required to request the Register of Copyrights to advise the court whether this inaccurate information would have caused it to refuse registration, it said. The appeals panel remanded the case to the district for it to complete this request.

According to an April 23 letter, the district court submitted an inquiry to the Copyright Office in September, requesting a response by March 5. As of the writing of that document, however, it had yet to receive an answer. The court repeated its request in the April letter, asking that the Copyright Office respond by June 18.

In the meantime, Unicolors has sought the Supreme Court’s help in reversing the appeals court’s ruling. It partially succeeded on Tuesday. Five months after Unicolors submitted its petition, the Supreme Court agreed to take up one of the two questions Unicolors posed to it: does the law require referral to the Copyright Office when there are no signs of fraud or material error in the copyright registration?

The Supreme Court declined to answer a second question, also related to whether the evidence supported referral to the Copyright Office. Lauren Katzenellenbogen, a partner with the intellectual property law firm Knobbe Martens, explained that this second question “was fairly specific to the particular case and thus, less important in terms of creating precedent.”

Unicolors sued H&M for selling garments (left) it alleged were identical, or substantially similar" to a pattern (right) it had copyrighted in 2011

Unicolors sued H&M for selling garments (left) it alleged were identical, or substantially similar” to a pattern (right) it had copyrighted in 2011.

According to Katzenellenbogen, how the court decides on the first question will have broader implications. “Fabric companies like Unicolors, Inc. may have to spend more money to obtain copyright registrations for all of their patterns since they will have to be careful about fully complying with the copyright office rules,” Katzenellenbogen said.

In Unicolors’ case, it ran into trouble partly because it applied to copyright 31 designs all under one group copyright. The appeals court decided this application contained inaccuracies because the designs were not included together “in a single unit of publication,” as required by the Copyright Act. As of the time of Unicolors’ copyright registration, it noted, several of the 31 designs had already been marketed and sold, and thus were no longer publicly available.

Unicolors disputes this, asserting that it had initially first published all the designs together on Jan. 15, 2011—a month prior to the copyright’s date of publication—before it then sold the rights to some of them. The appeals court noted in its decision that this date represented when the company presented its designs to its employees, not the public.

“It’s an interesting case in that some would consider Unicolors to be a ‘copyright troll,’” Katzenellenbogen said. “This case has the potential to make litigation a little more difficult for ‘copyright trolls.’ However, it also creates a potential snafu for artists who truly need to protect their (sometimes large) bodies of work.”

A Supreme Court decision is likely a long way off. The case is slated for the court’s upcoming term, which is scheduled to begin Oct. 4. The majority of decisions typically arrive in mid-June.

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