March 2, 2009. This morning, we learned that the Supreme Court has agreed to hear the appeal regarding our freelance class-action settlement with electronic datase companies and decide whether federal courts have jurisdiction over lawsuits involving unregistered works. (Unregistered works are copyright protected, under U.S. law, but have a lesser status than registered works.) This is good news.
The Supreme Court decides to hear only a handful of the many cases it is asked to consider each year, so we're encouraged by this decision. It keeps alive the possibility that the settlement agreement originally reached in 2005 will be upheld.
The freelance electronic database class-action settlement, valued at up to $18 million, was to resolve the copyright infringement claims of freelance writers against database companies, such as Dow Jones and the owners of Lexis-Nexis, that had made digital use of the writers' articles without permission. Plaintiffs and defendants had arrived at a settlement in 2005, which the Southern District Court of New York approved. The settlement was objected to and appealed by a group of freelance writers who thought it failed to allocate sufficient funds to authors of unregistered works.
On November 29, 2007, the 2nd Circuit Court of Appeals reversed, in a 2-1 decision, the district court's approval of the settlement. The appellate court ruled that the district court lacked jurisdiction over claims relating to unregistered freelance articles. Copyright registration is required to bring a suit for infringement, but since registration is viewed as a formality (comparable, many of us believe, to the requirement that one file a complaint in order to get into court), lawyers on both sides thought the settlement could resolve infringement claims for both registered and unregistered works.
In January 2008, we filed a motion to ask that all of the 2nd Circuit judges rehear our appeal. That motion was denied. In August 2008, class counsel filed a motion for review by the U.S. Supreme Court. The Supreme Court has agreed to hear the case in order to decide the following question: "Does 17 USC 411(a) restrict the subject matter jurisdiction of the federal courts over copyright infringement actions?" The case is Reed Elvesier, et al., v. Muchnick, et al. (08-203).
Please note that the freelance electronic database class action is a completely different lawsuit from the recently announced settlement of Authors Guild v. Google over the scanning of books. For more information about that settlement, which is pending final approval, please visit www.googlebooksettlement.com.
We'll keep you updated on the outcome of the Supreme Court hearing.