Suppose that you’ve created something copyrightable. You’ve gone through the process of registration with the Copyright Office and followed the renewal procedures (if they were necessary). You learn that someone is infringing your copyright. You seek the advice of your lawyer, who sends a cease and desist letter to the infringer. How long can you wait before you have to sue? The answer, it turns out, is a complicated one.
The issue is currently under consideration by the Supreme Court. In January, the Court heard oral arguments from parties in the case of Petrella v. Metro-Goldwyn-Mayer, Inc. A decision is expected by June 2014. Ms. Paula Petrella is the owner of the copyright of a screenplay that served as a basis for the classic Martin Scorsese 1980 film “Raging Bull.” Ms. Petrella’s father, Frank Petrella, had written the screenplay with his friend, boxer Jake LaMotta (the eponymous Bull). “Raging Bull” is widely considered one of the greatest films of all time, and resulted in an Academy Award for Robert DeNiro for Best Actor.
Mr. Petrella had assigned his renewal rights in the copyright of the screenplay to the film’s production company. However, Mr. Petrella died in 1981, before the time for renewal. The Supreme Court, in Stewart v. Abend, ruled that when the original copyright owner of a work dies, the renewal rights can revert to his or her heirs, even if the original copyright owner assigned the copyright in a work and agreed to renew the copyright in the assignee’s name. The renewal's “second bite at the apple” was designed to ensure that the heirs of copyright owners had an opportunity to recoup profits made on a work that may not have received its true value at the time of assignment. With many works of art, the true value of a work is not always realized until much later. When Ms. Petrella renewed the copyright in her father’s work in 1991, she became the copyright owner of the screenplay.
Ms. Petrella’s attorney sent Metro-Goldwyn Mayer (MGM) a cease and desist letter, and the two parties exchanged correspondence throughout the 1990s and early 2000s. Ms. Petrella filed a suit for copyright infringement against MGM in 2009, nearly two decades after first gaining ownership of the copyright. The two sides offer differing explanations for the delay: Ms. Petrella blames the extended time period on family issues and an alleged conflict of interest by her first two attorneys. MGM counters that Ms. Petrella knowingly waited to see if the film would become profitable. (Although influential and critically acclaimed, the profitability of the motion picture is apparently in question.)
Whatever the reason behind the delay a federal district court -- and later the Ninth Circuit Court of Appeals -- found that Ms. Petrella’s delay was unreasonable and barred her suit on the grounds of laches. Laches is an ancient legal doctrine that protects a defendant from suit if the plaintiff has unreasonably delayed bringing its lawsuit and if allowing the suit after such an unreasonable delay would be prejudicial to the defendant. Essentially, it penalizes plaintiffs for sitting on their rights. Historically, laches was a more common defense when there was no statute of limitations prescribing the time in which the particular legal claim could be brought.
Why is the case in the Supreme Court? First, a bit more legal background helps explain the situation. Many statutes of limitation restrict a claim to a fixed period of time after the alleged wrong has occurred. For example, a certain claim might be limited to lawsuits filed within five years of the incident. Others, like the three-year statute of limitations within the Copyright Act, are more continuous and begin with each separate wrongful act over a period of time (here, three years). For example, if someone infringed a copyright in 2008, then stopped before infringing again from 2012 to present, any claim brought for the 2008 infringement would be barred by the statute of limitations. However, claims which one may choose to bring concerning the infringing activity beginning in 2012 would still be considered timely, as they would be within the previous three years. This three-year statute of limitations for copyright infringement is rolling, meaning that, if the infringer were to continue to infringe the copyright, one could sue in 2017 for damages for the infringement occurring between 2014 and that date.
Note that suing fast enough to obtain an injunction from a federal judge to prohibit activity (like publishing) by a defendant is on a faster track. Judges are often strict on the time a plaintiff has to act once it learns of infringement before obtaining the extraordinary remedy of a court-ordered injunction.
Ms. Petrella argues that because her 2009 infringement claim sought damages only for infringement from 2006 onwards, the claim was within the statute of limitations and, thus, could not possibly meet the standard for unreasonable delay required for a defense of laches. MGM, meanwhile, says that Congress could not have intended for the statute of limitations to allow for a claim to be asserted so long after the copyright owner knew of the infringement.
Ms. Petrella’s case is before the Supreme Court to resolve a split within the federal circuit courts. Right now a plaintiff doesn't know where it stands. Three positions on laches in copyright cases have evolved. The Ninth Circuit, as applied in Ms. Petrella’s case, takes the view that laches may be used as a defense in a case of copyright infringement whether the copyright owner is seeking injunctive relief or monetary damages. A second position is a restriction of laches to only “extraordinary” or “the most compelling” copyright infringement cases, as is the situation in the Sixth and Eleventh Circuits. In circuits where this second view is the rule, sometimes there is a further restriction on laches. For example, in the Eleventh Circuit, laches bars only prior damages, not prospective damages or injunctive relief. Finally, there is the Second Circuit’s view, which is similar to the Ninth Circuit’s stance, except that the Second Circuit limits laches to protection against equitable relief such as injunctions. This means that a copyright owner could be barred from obtaining an injunction against an infringer, but could still obtain monetary relief.
When the Court rules on Ms. Petrella’s case, uniformity should be established on this issue. It’s a dry, even mundane, topic, but if you have a long-ago copyright claim, the case may be important to you to learn if you’re down for the count, or have a fighting chance.
Mark A. Fischer is a partner at Duane Morris LLP based in Boston and New York City.. His law practice is focused on solving problems and making deals for innovative companies, institutions and individuals. Mr. Fischer’s clients are typically in the creative industries such as new media, social networking, music, interactive entertainment, information technology, software, television, publishing and toys. He may be contacted at: email@example.com.
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