The equitable defense of laches cannot be invoked to bar a copyright damages claim brought within three years of an alleged violation, according to a recent Supreme Court ruling.
On May 19, 2014, the Court decided Petrella v. Metro-Goldwyn-Mayer, Inc. ("MGM"), a case in which Paula Petrella, the daughter of the late screenwriter Frank Petrella, brought a copyright infringement suit seeking royalties from the continued commercial use of the film, Raging Bull. The 1963 screenplay by Frank Petrella was based on the life of boxer Jake LaMotta.
Under the Copyright Act, works published before 1978 receive protection for an initial term of 28 years, which is renewable for a period of up to 67 years. If an author dies before the renewal period, as in this case, the assignee may continue to use the original work only if the author's successor transfers the renewal rights to the assignee. Under the copyright statute of limitations found in Section 507(b), however, a civil action can be maintained only if it is brought within three years after a claim accrued. A claim normally accrues when an infringing act occurs, or when a "plaintiff has a complete and present cause of action." If there are multiple violations over time, each infringing act triggers a new limitations period; however, an action must be brought within three years of an infringing act.
Ms. Petrella brought suit against MGM in 2009 seeking relief only for infringing acts that took place on or after January 6, 2006. MGM sought summary judgment under the equitable doctrine of laches—a defense which asserts the opposing party has "slept on its rights," and thus should be barred from bringing suit. The district court agreed with MGM and ruled that Petrella waited too long to bring suit after originally discovering the infringement in 1991. The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court's dismissal based on laches, noting that the delay was "unreasonable" and prejudicial to MGM.
In a 6-3 decision, the Supreme Court overruled the lower courts, finding that Ms. Petrella still owned actionable rights and that laches could not be invoked to bar her attempts to recover damages. Although Ms. Petrella could not recoup damages for infringement committed before 2006, the heir was not barred from seeking relief for claims arising after 2006. "[W]e have never applied laches to bar in their entirety claims for discrete wrongs occurring within a federally prescribed limitations period," Justice Ginsberg wrote on behalf of the majority. The Court also clarified that Section 507(b) allows a copyright owner to defer suit "until she can estimate whether litigation is worth the candle." If, on the other hand, a copyright owner intentionally misleads an opposing party to believe he or she will not bring suit, and the other party relies on the owner's representation, the doctrine of estoppel may bar the copyright owner's infringement claims. In this case, however, the Supreme Court noted that the courts below erred by confusing laches and estoppel. Because Ms. Petrella had notified MGM of her claims before MGM invested millions into a new edition of Raging Bull, she could seek to recover copyright damages.
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