Wednesday, March 25, 2009

How Much Class Does the District Court Have?

Today we digress slightly to discuss an important litigation issue that will be going before the Supreme Court having to do with class actions. A class action is a powerful way to seek relief for smaller claims. One individual with a claim for $1000 is not likely to sue -- it wouldn't be cost effective. But imagine 1,000 or 10,000 people with the same $1,000 claim. If they could sue as a group -- and share the expense -- that individual $1000 claim would not go unaddressed. Of course, trying to get that many people together in a lawsuit is a daunting task, to say the least. A class action solves this problem by allowing a couple of individual plaintiffs the ability to sue on behalf of all persons in a similar position.

OK, so what does any of this have to do with IP an entertainment law? To assert a claim of copyright infringement in court, an artist must first formally register their copyright in the work with the Copyright Office. An artist who fails to take this essential step will be quickly shown the door. This requirement also exists to start a copyright based class action. But what about all of the class members who are included in the case? Since a class action includes all persons "similarly situated," can class members include artists who have not formally registered their copyrights?

Let's put the question into context. Imagine two artists with the exact same claim against an infringer. One artist has registered her copyright. The other has not. In a class action, would it be fair for the artist who did register to receive settlement proceeds, but not the other? Keep in mind that without the existence of the class action, only the artist who registered would be entitle to sue. Does this alter your opinion?

Now, look at it from the point of view of the defendant. Assume that a finding of infringement is inevitable. The defendant is equally liable to the artist who registered the copyright as the artist who did not. Do you think it would make sense for that defendant to seek the broadest possible class -- and avoid the possibility of further litigation on the subject?

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