Section 407 of the Copyright Act states that “the owner of copyright or of the exclusive right of publication in a work published in the United States shall deposit, within three months after the date of such publication . . . two complete copies of the best edition” of the work. 17 U.S.C. § 407(a)(1). The “required copies . . . shall be deposited in the Copyright Office for the use or disposition of the Library of Congress.” 17 U.S.C. § 407(b). Because the deposit requirement is triggered upon “publication,” unpublished works are not subject to it. 17 U.S.C. § 407(b).

For most literary works, the Copyright Office's regulations presently require deposit of only a single copy rather than two copies, although the Office reserves the right to request a second copy. See 37 C.F.R. § 202.19(d)(2)(ix).

The Copyright Office, however, “may make written demand for the required deposit on any of the persons obligated to make the deposit under [Section 407(a)].” 17 U.S.C. § 407(d). If a copyright owner fails to make the “required deposit” within three months of a demand, she becomes liable for a “fine of not more than $250 for each work” in addition to “the total retail price of the copies or phonorecords demanded” (or, “if no retail price has been fixed, the reasonable cost to the Library of Congress of acquiring” those works). 17 U.S.C. § 407(d)(1)–(2). And if the copyright owner “willfully or repeatedly fails or refuses to comply with such a demand,” she becomes liable for an additional $2,500 fine. 17 U.S.C. § 407(d)(3).

The D.C. Circuit recently held that “[w]hile copyright owners are subject to a series of fines for failure to deposit, they retain copyright regardless of whether they pay the fines.” Valancourt Books LLC v. Garland, No. 21-5203, — F.4th — (D.C. Cir. Aug. 29, 2023). Indeed, Section 407(a) itself states that the deposit requirement is not a “condition[] of copyright protection.”

The Court noted the statute's history shows “Section 407 became a burden untethered to any benefit.”

For many years, the benefits of copyright were intimately tied to mandatory deposit, and authors had to deposit works to either obtain or maintain copyright and its related benefits.

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            Subsequent legislative developments eroded the quid pro quo nature of mandatory deposit. The Copyright Act of 1976 made copyright automatic upon fixation of a work in a tangible medium, and that regime persists today, meaning mandatory deposit remains unnecessary to gain copyright. See Copyright Act of 1976, Pub. L. No. 94-553, § 102(a), 90 Stat. 2541, 2544– 45. The Act also removed loss of copyright as a sanction for failure to deposit, meaning mandatory deposit also became unnecessary to maintain copyright. See id. § 407(d), 90 Stat. at 2579.

In 1988, Congress again amended the copyright regime, this time to comply with the Berne Convention for the Protection of Literary and Artistic Works, which prohibits its members from conditioning copyright on “any formality.” Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as revised at Stockholm on July 14, 1967, art. 6(2), 828 U.N.T.S. 221, 233.

The Court further held that “Section 407's scheme of fines does not save the statute” from constituting a taking.

A statute can effect a taking even if the property owner never actually forfeits property and is instead subject to a fine.

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A “demand for money” that “operate[s] upon . . . an identified property interest” can violate the Takings Clause because a “monetary obligation burden[s]” ownership of property. Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595, 613 (2013) (quoting E. Enters. v. Apfel, 524 U.S. 498, 540 (1998) (Kennedy, J., concurring in the judgment and dissenting in part)). . . . Thus, “when the government commands the relinquishment of funds linked to a specific, identifiable property interest” such as a piece of personal property, the “‘per se [takings] approach' is the proper mode of analysis.” See id. at 614 (alteration in original) (quoting Brown v. Legal Found. of Wash., 538 U.S. 216, 235 (2003)).

Here, the Copyright Office had demanded that Valancourt deposit physical copies of its published books on the pain of fines. But Valancourt, an independent press, could not afford to deposit physical copies.

The Court held that, in demanding physical copies of Valancourt's copyrighted works, “the Copyright Office's enforcement of Section 407 against Valancourt worked an unconstitutional taking of property.” But the Court declined to assess the Office's offer during the litigation to accept electronic copies in lieu of physical copies.

The attorneys at Thomas P. Howard, LLC litigate copyright cases nationwide including in Colorado.