Stuart Weitzman, LLC v. Microcomputer Resources, Inc.

In this declaratory judgment action, the plaintiff sought a declaration that its use of the defendant’s computer program – which the defendant had failed to register for copyright – did not constitute infringement by reason of section 117 of the Copyright Act. Specifically, the plaintiff alleged that it was the rightful owner of a copy of the program at issue, and that it could therefore use, maintain and modify its copy of the program without infringing the defendant’s copyright However, the Eleventh Circuit Court of Appeals dismissed the action, and held that there was no basis for exercising subject matter jurisdiction over a declaratory judgment action that sought a declaration of non-infringement, where the declaratory judgment defendant failed to obtain copyright registration.

The Court of Appeals explained that subject matter jurisdiction exists over a declaratory judgment action “if the plaintiff has alleged facts in a well-pleaded complaint which demonstrate that the defendant could file a coercive action arising under federal law.” Noting that the registration of a copyright is a jurisdictional prerequisite to an infringement suit under 17 U.S.C. § 411, the court held that the district court would lack subject matter jurisdiction over a copyright infringement claim brought by the declaratory judgment defendant because the defendant had failed to obtain copyright registration. This hypothetical claim thus did not confer subject matter jurisdiction over the declaratory judgment action.

The Court of Appeals also rejected the plaintiff’s argument that the district court had subject matter jurisdiction over the declaratory judgment action because the defendant could bring state law claims that would be completely preempted by the Copyright Act. Explaining that complete preemption (or “field preemption”) confers federal question jurisdiction over the preempted state law claims, the court noted that four other circuits have held that certain state law claims are completely preempted by the Copyright Act so as to confer such federal question jurisdiction. The court, however, declined to rule on whether the Copyright Act has complete preemptive effect, because complete preemption would still require a federal claim under the Copyright Act that displaces the preempted state law claims. Because the district court did not have subject matter jurisdiction over a copyright infringement action, due to the defendant’s failure to obtain registration, and because the declaratory judgment plaintiff failed to raise any other claims that the defendant could bring under the Copyright Act that would not be barred by Section 411, the plaintiff had failed to establish complete preemption over the hypothetical state law claims. Accordingly, the court held that there was no basis for subject matter jurisdiction over the declaratory judgment action.