A federal appellate court has reversed a copyright infringement trial loss for clothing retailer H&M Hennes & Mauritz LP, finding that the district judge below erred in evaluating the company's defense that textile designer Unicolors Inc. had included known inaccuracies in its application to register a copyright for the pattern at the center of the dispute. 

The U.S. Court of Appeals for the Ninth Circuit on Friday held that U.S. District Judge Andre Birotte Jr. of the Central District of California should have requested that the Register of Copyrights advise him as to whether Unicolor's inclusion of inaccurate information would have caused the agency to refuse registration rather than making the determination himself in the first instance. The panel also found the Birotte erred in imposing an intent-to-defraud requirement for H&M to invalidate Unicolor's registration.

In practical terms, the decision tosses Unicolor's damages award of $266,209.33 and attorneys' fees and costs of $508,709.20 and $5,856.27, respectively. But perhaps more importantly to H&M and others in the fashion industry accused of copyright, the opinion provides clarity on a potential route to challenge registration in instances where a "single-unit" registration is used to claim copyright protection over multiple works.

Staci Jennifer Riordan of Nixon Peabody who represents H&M in the case said that the decision follows a string of cases that have given defense lawyers "tools in their toolbox" to challenge registration. The decision comes after last year the U.S. Supreme Court held in Fourth Estate Public Benefit v. Wall-Street.com that a claimant must hold a registered copyright, rather than just a filed application, to sue for infringement. The Ninth Circuit just two months later in Gold Value International Textile v. Sanctuary Clothing held that a showing of fraud on the part of the claimant isn't necessary to invalidate a copyright registration. 

"A valid copyright registration is a prerequisite to any copyright suit, and this opinion provides much-needed clarity, and scrutiny, on the validity of group registrations—which are often the basis for dubious litigation," Riordan said.

In the underlying case, Unicolor claimed that H&M copied the disputed design "row by row, layer by layer" in a skirt and jacket on sale in the retailer's stores in Fall 2015. H&M's lawyers, however, argued that the design had been included as part of a batch of 31 separate designs Unicolor included in one registration. To register the collection as a "single unit," as Unicolors did, H&M maintained that the works must have been first sold or offered for sale in some integrated manner. But the registration, Unicolor witnesses testified at trial, included both designs, which Unicolor made available for sale to the public and so-called "confined" works, which were designated for a specific customer and kept private. 

In Friday's opinion, Judge Carlos Bea of the U.S. Court of Appeals for the Ninth Circuit wrote "that 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" and that Unicolor had provided inaccurate information to the copyright register since some of its designs had been offered to only single, exclusive customers. Bea, who was joined in his opinion by Judge Bridget Bade of the U.S. Court of Appeals for the Ninth Circuit and U.S. District Judge Jon Phipps McCalla of the Western District of Tennessee sitting by designation, further concluded that Birotte, the trial judge, was required under federal copyright law to request that the Register of Copyrights advise him about whether registration would have been refused had the inaccurate information been known. 

"Because the district court did not make the statutorily required request, we remand the case so that the district court can complete this requirement before deciding whether Unicolors's registration is invalid, which would require dismissing Unicolors's claims and entering judgment in favor of H&M," Bea wrote.

Unicolor's counsel, Stephen Doniger of Doniger Burroughs in Venice, California, did not respond to a message seeking comment. 

Nixon Peabody's Riordan said Friday's win was "extremely gratifying," especially considering that, prior to the decisions of the past year, it was difficult to rebut the presumption of validity of a copyright.