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This week the Third Circuit decided two issues of first impression in the circuit: (1) when a claim of joint authorship arises and accrues under the Copyright Act; and (2) whether courts are imbued with the authority to cancel copyrights.
Tina Lindsay and Peter Brownstein worked for a direct mailing list company. While there, they began working on their own venture: an ethnic identification system for purposes of direct marketing. Lindsay developed the step-by-step rules, and she enlisted Brownstein to develop the code.
Throughout the process the two considered each other joint-owners, though afterward, in a series of agreements, Lindsay tried to act as the sole owner of the copyrights. The court found that Brownstein and Lindsay were indeed joint owners, and that Lindsay's claims that Brownstein worked for hire were without merit, because among other things, he was never compensated.
Having established that Brownstein indeed, had copyright ownership interests, the court next had to determine at which point his claim of joint authorship began to accrue. The district court erroneously determined that his claim began to accrue when Lindsay registered the copyright, but the Third Circuit, relying on other circuits, disagreed. The court noted that a joint author cannot be expected to troll the copyright register, and that the purpose of registration was not to start the statue of limitations from running.
Instead, the Third Circuit combined, and adopted, the discovery rule and the express repudiation rule; that is, the cause of action begins to accrue when the wrongdoing is discovered. In this case, discovery of the express repudiation of joint ownership would begin the statue of limitations count down.
Lindsay, and later Brownstein, engaged in an array of license agreements, and settlement agreements stemming from other litigation. Because as a joint owner Lindsay could only grant a non-exclusive license, and not Brownstein's ownership rights, all other agreements that stemmed from the initial license agreement were all potentially flawed -- Brownstein still retained his rights because they were never transferred to begin with. Accordingly, the district court granted judgment as a matter of law in error because there were triable issues of fact -- that is, when, and if, Brownstein's ownership interest was expressly repudiated.
The short answer is no, courts can not cancel copyright registrations. First, there is no "statutory indication whatsoever that courts have such authority." The court noted that there was nothing in the Copyright Act granting courts this authority, unlike the Lanham Act, which gives courts the express authority to cancel trademarks. However, the court was careful to explain that though it cannot cancel copyrights, it could find underlying copyrights invalid.
Due to its findings, the Third Circuit reversed the court's Rule 50(a) judgment as a matter of law, and reversed the courts cancelation of Brownstein's copyright, and remanded for a new trial.