Settlement Cannot Include Authors Who Did Not Register Their Works

Freelancers who failed to register their works cannot be awarded damages in a proposed class action settlement, a federal appeals court ruled.

The Second Circuit affirmed the long-standing rule that before an author can recover damages for copyright infringement, the work must be registered with the U.S. Copyright Office. As a result, the court threw out a class-action settlement of a case by authors who had their works used online without permission.

The class-action settlement goes back to the 2001 U.S. Supreme Court case of New York Times Co. v. Tasini where the court held that publishers cannot reproduce freelance works electronically when they lack specific authorization to do so. The Supreme Court left open the question of damages.

After years of negotiations, the parties agreed to a settlement under which those authors who had registered their works before publication would receive the most money, those who registered their works after publication but before filing the lawsuit received less money, and those who had not registered their works would receive the least. Because the settlement was for a fixed sum, it was possible that the members of the third group might not receive any payment at all. Some of the authors who had not registered their works appealed the district court’s approval of the class-action settlement.

In throwing out the settlement, the Second Circuit found that registration of a work with the Copyright Office is jurisdictional. As a result, any order approving a settlement awarding damages to those who did not register their works exceeded the trial court’s jurisdiction.

Muchnick et al. v. Thomson Corp. et al., U.S. Court of Appeals 2nd Circuit No. 05-5942 and 06-0223, (Issued Nov. 29, 2007)