*Cross-posted at Forbes’ On the Docket

Clarity and predictability in the law are essential elements for any economic system built on free enterprise.

Decisions to create new companies, invent new products and services, and invest time and money are all contingent on knowing which of the thousands of federal, state, and local laws and regulations apply, and how they apply.  Justice Stephen Breyer made this point in a February 23, 2010 opinion on what constitutes a company’s “principal place of business,” Hertz v. Friend.  Writing for a unanimous Supreme Court, Breyer noted, “Predictability is valuable to corporations making business and investment decisions.”

Individuals and businesses that choose to formally register their copyrights, regretfully, don’t benefit from such valued  predictability.  With its May 25 decision in Cosmetic Ideas Inc. v. IAC/Interactive Corp. (described at law.com), the U.S. Court of Appeals for the Ninth Circuit exacerbated an already deep split in the federal circuits over the fundamental issue of when a copyright is deemed “registered.”  The matter at stake: when can a plaintiff assert copyright infringement claims in court: the date they submit the application, or the date the U.S. Copyright Office formally grants registration?  Two circuits, the Tenth and Eleventh, consider a copyright registered when the Copyright Office acts; the Fifth, Seventh, and now the Ninth with Cosmetic Ideas, say it’s when the application is submitted.

When dealing with products and services sold in a national marketplace, one’s ability to assert rights under the law, and defend oneself, shouldn’t depend on where a court is located.  This is especially true for copyrights, which are registered by one national Copyright Office.  Congress, whose ambiguously worded Copyright Act provision is ultimately to blame for the dueling standards, could fix this with an amendment.  But we can’t rely on Congress for that.  A circuit split of this depth on an important federal law matter should lead to Supreme Court review and one uniform standard.  However, and much to our chagrin (as expressed by WLF litigator Cory Andrews here), the Court this week refused to end a three-circuit split on a critical business privilege issue by denying review in Textron v. U.S.  Such an outcome highlights the risks of investing in a quest for High Court review.  IAC/Interactive Corp. hasn’t indicated whether it will seek cert in the Supreme Court, but if it doesn’t, hopefully one copyright litigant some day will.