On May 19, 2014 in the case of Petrella v. Metro-Goldwyn-Mayer, Inc., et al., the U.S. Supreme Court, in a 6 to 3 decision, held that laches cannot be invoked as a bar to the plaintiff’s pursuit of a claim for damages brought under the U.S. Copyright Act. The opinion is instructive for its discussion on the intersection between the equitable doctrine of laches and statutes of limitations. The case is also a reminder that copyright infringement lawsuits may be brought by the heir(s) of a deceased person’s copyrighted works and that these lawsuits may be brought decades after the death of the work’s creator.
Millions of individuals have seen the movie Raging Bull (the allegedly infringing work) which depicts the life of boxing champion Jake LaMotta. The plaintiff in the case is the daughter of Frank Petrella, who, along with LaMotta, developed a screenplay and copyrighted it with the U.S. Copyright Office in 1963. Under U.S. Copyright Law at the time, copyrighted works were protected for an initial period of 28 years. Longer protection for up to a period of 67 years was obtainable by renewing the copyright. It is noted that the Copyright Act of 1978 eliminated the renewal requirement for works copyrighted since January 1, 1978 wherein works are now generally protected from the date of creation until 70 years after the author’s death.
Frank Petrella died during the initial copyright term, and his renewal rights reverted to his heirs under the then in-effect copyright law. The daughter renewed the 1963 copyright in 1991, becoming its sole owner. The movie itself was released by Metro-Goldwyn-Mayer (MGM) in 1980. She advised MGM in 1998 that its exploitation of the movie Raging Bull violated her copyright and threatened a lawsuit. The lawsuit was not, however, commenced until January 6, 2009. See Slip Opinion at 2.
Those who have been involved in lawsuits may wonder who such a “late date” lawsuit could even be maintained. Most readers will be aware of statutes of limitations established by each state for most causes of action that require a lawsuit to be filed within a certain number of years. For example, the statute of limitations for bringing a personal injury lawsuit in Florida is four years from the date of the incident.
Prior to 1957, federal copyright law did not include a statute of limitations for civil suits. Federal courts, when faced with a copyright infringement lawsuit, “therefore used analogous state statutes of limitation to determine the timeliness of infringement claims and they sometimes invoked laches to abridge the state-law prescription.” See Slip Opinion at 3. In 1957, Congress prescribed a three-year look-back limitations period for all civil claims arising under the Copyright Act. That is, any civil action under the Copyright Act had to be commenced within three years after the claim for copyright infringement accrued. This three year look-back period remained in effect with the enactment of the 1978 Copyright Act.
So far so good. So why should the daughter have been able to maintain her lawsuit in 2009 when the alleged infringing move was made in 1980? Because the copyright statute of limitations involves the separate-accrual rule wherein in when a defendant commits successive violations, the statute of limitations runs separately from each violation. Each time an infringing work is reproduced or distributed, the infringer commits a new copyright violation, and the statute of limitations runs separately from each violation. See Slip Opinion at 5.
The Petrella plaintiff waited about eleven years to file her lawsuit after first notifying MGM that its exploitation of the screenplay infringed on the copyright now vested in her. By the time she filed the lawsuit, MGM had released a special edition celebrating the 25th anniversary within the three-year look-back period.
The district court dismissed the case at the summary judgment stage even though there were disputed issues of material fact related to the plaintiff’s infringement claim which should have precluded summary judgment. The district court nevertheless granted summary judgment by finding that laches barred Petralla’s complaint because “[she] had unreasonably delayed suit by not filing until 2009 . . ., and further determining that MGM was prejudiced by the delay.” See Slip Opinion at 9.
The Ninth Circuit affirmed the laches-based dismissal. In reaching its decision, the Ninth Circuit opined that the true reason for deferring her suit was because the film had not made money for years and she hoped the 25th anniversary release would increase the amount of any potential damages. One of the concurring judges noted that he was only concurring on the basis of Circuit precedent but that the doctrine of laches was in tension with Congress’ provision for a three-year statute of limitations. See Slip Opinion at 10.
In reversing the Ninth Circuit, the U.S. Supreme Court, stated that the Ninth Circuit had disregarded the parameters of the Copyright Statute under 17 U.S.C. § 507(b) and the separate-accrual attending §507(b) to find that “infringing acts occurring before January 6, 2006 barred all relief, monetary and injunctive fore infringement occurring on or after that date.” See Slip Opinion at 11. The High Court went on to emphasize that laches is a defense developed by courts of equity and its principal application was and remains for those situation where the Legislature has not provided a fixed time limitation for bringing a lawsuit (i.e. a statute of limitations).
MGM’s strongest argument was that it would be prejudiced in defending itself because that “evidence needed or useful to defend against liability will be lost during a copyright’s owner inaction.” The High Court disposed of this argument in several ways. First Congress provided for reversionary rights by the author’s heirs. These rights can be exercised at the earliest 28 years after a work was written and copyrighted for pre-1978 copyrights. As the Court pointed out, by then the authors and perhaps other witnesses to the work will be dead. The purpose of reversionary rights was to give the author’s family a second chance to obtain fair remuneration, and Congress must have been well aware of the impact of the passage of time and the author’s death on evidence. See Slip Opinion at 18.
Second, the copyright registration process itself reduces the need for extrinsic evidence. See Slip Opinion at 18. To bring a copyright infringement lawsuit in federal court, the copyrighted material must be registered with the U.S. Copyright Office. Registration requires that a copy of the work be filed with the Copyright Office. Here, the screenplay had been copyrighted in 1963 and MGM’s Raging Bull movie had also been later copyrighted. The U.S. Copyright Office thus serves as repository of copyrighted works. As the High Court said, the key evidence in the lawsuit will be the registration certificates, the original work, and the allegedly infringing work. Indeed, the registration mechanism thus helps to protect the interests of the heirs of an author’s work who may not have a copy of the original work.
Third, the Court acknowledged that laches is listed among affirmative defenses along with, but separate from, the statute of limitations in the Federal Rules of Civil Procedure. See Slip Opinion at 14. In particular, the Court noted that MGM stated at oral argument that laches could apply in an ordinary six-year state of limitations even if the lawsuit was brought in five years. In response, the opinion stated that the laches defense has no application to bar a claims in their entirety for discrete wrongs occurring within a federally prescribed limitations period. Here, that statute of limitations is three (3) years from the date of accrual. Any damages resulting from infringement before the three-year period of statute of limitations cut-off do not count towards the calculus of determining damages.
Fourth, the Court noted the plaintiff’s delay in filing the lawsuit for suspect reasons as argued by MGM had probably contributed to both lower courts’ disposal of her case. The doctrine of laches was not, however, a proper defense presented by MGM to try and entirely override the statute of limitations Congress prescribed. The Court pointed out that the doctrine of estoppel is available to address the situation where a “copyright owner engages in intentionally misleading representations concerning his abstention from suit and the alleged infringer detrimentally relies on the copyright owner’s deception.” Under a different theory not related to the timeliness of bringing a lawsuit, the doctrine of estoppel may bar the copyright owner’s claims completely, thereby eliminating all potential remedies. See Slip Opinion at 19.
The Court’s opinion concludes with a summary of various steps that may be taken by the court including taking into account the plaintiff’s delay in commencing the suit but at the same time, closely examining MGM’s alleged reliance on her delay. For example, why didn’t MGM pursue a declaratory judgment action when it became aware of claims as early as 1998? The Court also pointed out that in fashioning equitable remedies, the court has considerable leeway. It could, for example, “allow MGM to continue using Raging Bull as a derivative work upon payment of a reasonable royalty to the plaintiff.” See Slip Opinion at 21.
In conclusion, the case is a thorough study of copyright law involving lawsuits brought by heirs and associated civil procedure matters and may well end up in a case book for law school students. The take home points are as follows:
1. The application of the doctrine of laches is inappropriate where there is a governing statute of limitations established by an elective legislative body and cannot be used to bar a claim for damages with the 17 U.S.C. §507(b)’s three-year window. See Slip Opinion at 2.
2. Copyright protection extends for a long period of time into the future (today, 70 years following the death of the author) and therefore may well inure to the benefits of the copyright owner’s heirs or statutory successors as the Petralla case demonstrates. The Copyright Act of 1978 even provides for recapture of a copyright by the author (or, if deceased, his/her heirs and/or statutory successors) who will assume ownership of the copyright for the remainder of the copyright term.
3. Registration with the U.S. Copyright Office reduces the need for extrinsic evidence in the event the copyright owner or his/her heirs file a copyright infringement lawsuit. See Slip Opinion at 18. As discussed in another one of our blogs, there are also other good reasons for formally registering a copyright with the U.S. Copyright Office.
4. Where the plaintiff intentionally engaged in misleading representations concerning his/her abstention from initiating a lawsuit and the alleged infringer detrimentally relies on such deception, the doctrine of estoppel may bar a copyright owner’s claims completely, eliminating all potential remedies. The doctrine of estoppel does not undermine the statute of limitations as does the doctrine of laches. See Slip Opinion at 3.
THE FOREGOING IS FOR INFORMATIONAL PURPOSES AND DOES NOT CONSTITUTE LEGAL ADVICE. IF YOU ARE CONTEMPLATING AN ACTION WHICH MAY HAVE LEGAL CONSEQUENCES, YOU SHOULD CONSULT WITH AN ATTORNEY OF YOUR CHOOSING.
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