DeliverMed Holdings, LLC v. Schaltenbrand

A copyright was not invalidated when the opposing parties did not ask for the Register of Copyrights to be reviewed.

Opinion (Williams): In 2005, DeliverMed Holdings, LLC ("DeliverMed") entered into an informal partnership agreement with Joey Siddle and Michael Schaltenbrad, employees of Medicate Pharmacy, Inc. ("Schaltenbrad") to operate a mail-order pharmacy. Delivermed filed suit against his other partners for trademark infringement and other claims, and submitted an application to register a copyright in the "house and pestle" logo. Schaltenbrand filed a counterclaim seeking a declaratory judgment invalidating DeliverMed's copyright registration. The trial court found against DeliverMed on all causes of action including their claim for copyright infringement, and invalidated the copyright registration of DeliverMed's logo. DeliverMed contended that the trial court erred in invalidating DeliverMed's copyright registration based on findings that Swift knowingly misrepresented facts in DeliverMed's application for registering a copyright. They also maintained that the court erred by awarding attorneys' fees to the Defendants for their successful defense of the copyright infringement claim. The Copyright Act allows for the invalidation of registrations obtained by knowing misrepresentations of material facts, but requires the court to consult the Register of Copyrights. DeliverMed had not provided any evidence to contradict the court's determination that DeliverMed knowingly lied about the existence of a written ownership transfer agreement between DeliverMed and the logo artist. Schaltenbrad did not ask the district court to consult the Register before invalidating DeliverMed's registration. Because of this, the Circuit Court VACATED and REMANDED the trial court's declaratory judgment invalidating DeliverMed's copyright registration in the "house and pestle" logo. The Copyright Act grants district courts the discretion to award attorneys' fees to the prevailing party in a copyright infringement suit. The Circuit Court reviewed the attorneys' fee award under an abuse of discretion standard and found no abuse of discretion. The district court's order requiring DeliverMed to pay Defendants' reasonable attorneys' fees incurred was AFFIRMED.