The D.C. Circuit Court of Appeals held on August 29, 2023, that the requirement to deposit physical copies of copyrighted material with the Library of Congress under Section 407 of the U.S. Copyright Act is an unconstitutional taking of property under the Takings Clause of the Fifth Amendment of the U.S. Constitution. See Valancourt Books, LLC v. Merrick B. Garland, Attorney General and Shira Perlmutter, in her official capacity as Registrar of Copyrights of the U.S. Copyright Office.
This holding is only with respect to the demand for physical copies of copyrighted works, not electronic copies in lieu of physical copies. Moreover, this holding does not apply to the deposit requirement with respect to registering copyrighted works with the U.S. Copyright Office under Section 408 of the U.S. Copyright Act.
Under Section 407 of the U.S. Copyright Act, the owner of the copyright in a work of art/authorship/music, etc. shall deposit two copies of it with the Library of Congress within three months of publication. Under Section 407, the U.S. Copyright Office may demand that copyright owners make such deposits even if they do not apply to register a work. Unpublished works (not available to the public) are not subject to this requirement.
Copyright in a work attaches automatically upon fixation of an original work of authorship in a tangible medium. A copyright symbol may be used with such a work but is not required. The copyright owner is the author unless such rights are assigned to someone else. While such rights are enforceable, registration of a copyrighted work with the U.S. Copyright Office under Section 408 provides benefits such as filing an infringement action in court and being awarded statutory damages.
In June 2018, the Copyright Office sent a letter to Valancourt Books, which publishes rare and out-of-print fiction, demanding one physical copy of 341 books published by Valancourt on the pain of fines of up to $250 per work and $2,500 for repeated, willful failures to comply. Valancourt protested that it could not afford to deposit physical copies, that much of what it published was in the public domain, and that it only printed books in response to specific requests of customers. Valancourt never applied to register the copyright in any books.
In response, the Copyright Office narrowed the list of works but continued to demand that Valancourt deposit copies of its books with the Library of Congress or otherwise face fines.
The government must pay just compensation for what it takes, whether it's real or personal property. A demand for property is not a taking if it involves a voluntary exchange for a government benefit. However, the requirement to turn over copies of works is not a condition of attaining copyright protection under the Copyright Action. Therefore, the court held that the demand to forfeit property cannot be justified as the conferral of a benefit in exchange for property. The Copyright Office could not point to a single incremental benefit that copyright owners receive for depositing works pursuant to Section 407.
After a review of the legislative history of Section 407 and any possible benefit that a copyright owner could gain from its mandatory deposit requirement, the court reversed the district court's grant of summary judgment in the government's favor and instead remanded with instructions to grant summary judgment to Valancourt on its Taking Clause claim under the Fifth Amendment.
The D.C. Circuit Court's opinion can be viewed here.
Originally Published by 5 September 2023
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