U.S. Supreme Court overturns H&M win in fabric copyright case

(Reuters) - The U.S. Supreme Court on Thursday ruled against fast-fashion retailer H&M in a copyright dispute with fabric designer Unicolors, reversing an earlier appeals court decision.

Unicolors' copyright registration for its fabric design can survive despite inaccuracies in its application if those mistakes were based on a good-faith misreading of the law, Justice Stephen Breyer wrote in a 6-3 decision.

The 9th U.S. Circuit Court of Appeals had previously nixed a $750,000 win for Unicolors based on its interpretation of the relevant statute.

"This is a big win for artists and poets, who can now enforce their copyrights without fear that blatant infringers will skate on a technicality," Unicolors' attorney Joshua Rosenkranz of Orrick Herrington & Sutcliffe said.

H&M attorney Staci Trager of Nixon Peabody said her client was also pleased with parts of the decision.

"After today's ruling, in order to 'save its copyright' Unicolors will have to establish that it had a good faith belief that it misunderstood the legal requirements when it filed its original application, which H&M believes it cannot do," Trager said.

Unicolors sued Sweden-based H&M in 2016 over a jacket that it said copied its fabric-design copyright. H&M, which has accused Unicolors of suing "virtually every major clothing retailer in America," argued that the company had obtained its copyright registration through fraud on the U.S. Copyright Office.

A jury found for Unicolors, and a Los Angeles federal judge later awarded it over $750,000 in damages and attorneys' fees.

The 9th Circuit reversed the award in 2020, finding Unicolors' copyright may have been invalid because of mistakes in its application.

Copyright law says that a registration based on an application with inaccurate information is valid unless the applicant knew it was wrong when it applied. Unicolors argued that it had honestly misinterpreted the law, but the court said the law only excuses mistakes of fact.

The Supreme Court rejected the Ninth Circuit's reading on Thursday.

"If Unicolors was not aware of the legal requirement that rendered the information in its application inaccurate, it did not include that information in its application 'with knowledge that it was inaccurate,'" Breyer said.

The court sent the case back for further proceedings.

Justices John Roberts, Sonia Sotomayor, Elena Kagan, Brett Kavanaugh, and Amy Coney Barrett joined the majority opinion.

In a dissent, Justices Clarence Thomas, Samuel Alito, and Neil Gorsuch said they would have dismissed the case because Unicolors argued a different theory than it presented in its petition.

The case is Unicolors Inc v. H&M Hennes & Mauritz LP, U.S. Supreme Court, No. 20-915.

For Unicolors: Joshua Rosenkranz of Orrick Herrington & Sutcliffe

For H&M: Staci Trager of Nixon Peabody, Peter Stris of Stris & Maher

For the U.S.: Melissa Patterson of the U.S. Department of Justice

(NOTE: This story has been updated with comment from H&M's attorney.)

Read more:

U.S. Supreme Court questions H&M's bid to sew up copyright win

SCOTUS to review H&M’s 9th Circuit win in copyright dispute

Unicolors’ copyright win against H&M unravels in 9th Circuit

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