A Costly Blunder in Losing Mailing Receipts Runs Afoul of Copyright Office Regulations on Mailing Royalty Claims

MGM and Universal Studio are out millions of dollars for waiting to the last minute to mail royalty claims to the Copyright Office and then failing to keep mailing receipts proving timely mailing. Universal City Studios v. Peters (D.C. Cir. 04/08/05 - No. 04-5138).

The Copyright Act requires that claims for royalties under compulsory broadcast licenses must be mailed in July of each year. 17 U.S.C. §§ 111, 119. The Copyright Office regulations implementing the Act set out that the claims must either be received in July, be postmarked in July, or if business-metered in July, accompanied by a mailing receipt. 37 C.F.R. § 252.4.

The royalty claims for MGM and Universal Studios for the year 2000 were rejected by the Copyright Office because they were received on August 2 and August 3, 2001 respectively. When MGM and Universal Studios could not produce mailing receipts, their attorneys tried to prove factually that the claims had to have been mailed in July. When the Copyright Office refused to consider their evidence, the studios sued, trying every argument available to excuse the failure, including Administrative Procedure Act and due process violations.

The D.C. Circuit Court agreed with the district court and held that the regulations are clear, and they were not complied with, and the Copyright Office was allowed to reject the claims. Summing up, the court stated:

"Under the regulations, the studios are not entitled to royalties on a claim that arrives in August without a July U.S. postmark or a stamped postal receipt, regardless of how compelling the proof may be that the claim was mailed in July. The regulations themselves — all of them — define what constitutes proper filing, under the express terms of the statute. See United States v. Locke, 471 U.S. 84, 103 (1985). And under those regulations, the studios are out of luck."