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Protecting & Registering Your Intellectual Property

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James Irving
BKK Business Law Newsletter
September 2009

Intellectual property registration can be a complex, time consuming, and therefore costly chore. Since certain protections arise irrespective of registration, some copyright holders feel secure without formally registering their material. For example, provided a copyrightable document bears the proper notice, the owner of the copyright maintains the exclusive right to reproduce, prepare derivative works, distribute copies and publicly perform the copyrighted material. Additionally, an infringer of material bearing a copyright notice will not be able to claim innocent mistake. These remedies are vastly enhanced upon registration with the copyright office and in the case of an actual dispute, the limited protections afforded by notice alone may prove very weak.

In Balzer & Associates, Inc. v. Union Bank & Trust Co., decided in the United States District Court in Richmond in June 2009, an engineering firm failed in its effort to convince the Honorable Henry Hudson that its intellectual property, bearing a copyright notice, was sufficiently protected.

In 2006, Saymor Custom Homes retained Balzer to provide the site plan for a new residential development in King William County. The planned subdivision was financed by Union. In October 2008, Union foreclosed on the project and obtained the services of another engineering firm to complete the development.

Thereafter, Balzer brought suit against Union alleging that Union and its new engineers were using Balzer’s site plan without permission and without compensation, a position the Union did not seriously dispute. Instead, Union argued that Balzer could not prosecute a suit for copyright infringement because they had not registered the site plan.

Balzer argued that even though the copyright had not been registered under Section 411 of the Copyright Act, they were entitled to enjoin Union’s unauthorized use under Section 502 titled “Remedies for Infringement.” However, as Judge Hudson pointed out in his memorandum opinion, while Section 502 provides broad remedies including injunctive relief, those remedies are only available to plaintiffs who can demonstrate infringement under Section 501. Section 501 specifically requires registration under Section 411.

By way of a back-up position, Balzer sought damages for conversion of its site plan on the grounds that Union had physically taken the plan. Union responded by arguing that the conversion claim was preempted by the Copyright Act, requiring the court to dismiss both claims. Judge Hudson, however, reached a different conclusion. Noting that the federal court had no independent jurisdiction over the conversion claim, he remanded Count II to the King William Circuit Court to be heard and decided in that forum.

The glimmer of hope provided by Judge Hudson’s remand was probably cold comfort to Balzer, but most likely they will be careful to register their copyrightable material in the future.