The Background to the Battle

According to the , Frank Petrella co-wrote a screenplay about boxer Jake LaMotta in 1963. When Frank Petrella passed away, renewal rights reverted to his heirs. Consequently, his daughter Paula renewed the copyright in 1991. However, LaMotta’s life had been put on film in 1980 in Martin Scorsese's Oscar-winning movie . In 1998 Petrella advised MGM that Raging Bull infringed her copyright, but did not sue until January 6, 2009. MGM argued in response that the equitable doctrine of laches prevented Petrella from seeing through her lawsuit as her 18 year delay in filing the claim was unreasonable and prejudicial. The District Court and Ninth Circuit Court of Appeals agreed with MGM, but as we see here, the Supreme Court did not.

The Majority’s Strike

Justice Ginsburg delivered the of the Court, noting that of the Copyright Act provides that “[n]o civil action shall be maintained under the [Act] unless it is commenced within three years after the claim accrued.” The Court found that the equitable defence of laches could not be invoked to preclude an action brought within a federally prescribed limitation period. Therefore, since Petrella was not seeking relief for conduct that occurred outside the limitation period, and was only addressing acts of infringement occurring on or after January 6, 2009, the lower courts’ decisions to bar her suit on the basis of laches were overturned. Justice Ginsburg did, however, acknowledge that the doctrine and a plaintiff's delay in filing suit could still play a role in regards to equitable relief and when considering what an appropriate remedy may be.

The most powerful blow to the entertainment industry however was Justice Ginsburg’s  that Petrella’s decision to hold off on suing MGM until the film made money was not a wrongdoing.  Justice Ginsburg argued that “there is nothing untoward about waiting to see whether an infringer's exploitation undercuts the value of the copyrighted work, has no effect on the original work, or even complements it.” According to Justice Ginsburg, the limitation period allows a copyright owner to “defer suit until she can estimate whether litigation is worth the candle.” Essentially, knowing that your copyright has been infringed but waiting to see if the infringing work is profitable is not a reason to be barred from pursuing a claim - no matter how many years ago the infringement occurred.

The Dissenters Enter the Ring

For the  judges, Justice Ginsburg’s decision “disables federal courts” from dealing with the unfairness that can arise in the “unjust hardship” created on a party by another that “unreasonably delays [filing] a suit.” Such hardships could include situations where a claim is made for a film released so far in the past that witnesses and evidence that could be crucial to a defendant’s ability to prove their case are no longer around.

In my opinion, the dissent's discussion of section , which is recognized by the majority as a tool to ensure fairness in awarding damages, was very convincing.  §504(b) only allows a plaintiff to recover profits attributed to the infringement in question, and only those profits less “deductible expenses incurred in generating those profits.” However, the dissent rightly notes that fairness is not guaranteed. A plaintiff’s purposeful delay could mean that by the time a claim is filed the defendant may have recovered the majority of his or her expenses. Thus, a defendant that has devoted years to producing a work can lose their future profit stream to the plaintiff who waited in the shadows for the work to move out of the red, the plaintiff who will make more now than they would have had royalties and a licence been negotiated at the onset.

The Aftermath

Petrella is not just a bold statement about the doctrine of laches, but also greatly impacts the entertainment industry as it functions today. Movie studios, for example, will always be wondering if the film they put out twenty years ago may be subject to a lawsuit tomorrow. This may not be a bad thing however. According to lawyer : “Now [studios] are going to have to be more vigilant, search their titles more, communicate more with copyright holders.” Copyright holders in turn will have to be more aware of the practices of studios, looking out for revivals of past forgotten works. The expectation for both sides of the copyright battle to do their due diligence in the creation of future works is in my opinion a happy consequence.

It is not yet clear how the decision may impact pending copyright infringement concerns for works already in existence. Commentators have discussed what the ruling might mean for the current infringement claim against  Led Zepplin relating to their song “”, and whether Stan Lee Media Inc. may be able to assert ownership over  - a claim that has been dismissed in the past as “time-barred”. Lawyer believes that, “We can expect a flood of new lawsuits based on purported infringement of films, television programs, music and other copyrighted materials that were created decades ago but are still exploited today.” A statement all so true in this era of revivals and re-releases (exactly how many Spidermans have there been?)

Concluding Thoughts

I think it is a positive consequence of the ruling that both large studios and individual creators alike will now have an increased level of accountability when it comes to being aware of each other’s actions when releasing new works.  However, with no way to shut out old claims, organizations may find themselves digging through files in an attic in order to defend against lawsuits for works possibly released before the company’s lawyers were born. In a way, there will be no sense of finality or completeness in the entertainment industry if creative works are forever vulnerable to lawsuit. What’s immortalized through film or script or song will essentially also live forever in the eyes of the law.

Jaimie Franks is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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And that's exactly what happened in , 695 F.3d 946 (2012). On October 1, 2013, the U.S. Supreme Court it would hear an appeal.

After boxer Jake LaMotta retired, he collaborated with author Frank Petrella to write a book and two screenplays about his life. In 1976, the rights to the book and both screenplays were assigned “exclusively and forever, including all periods of copyright and renewals and extensions thereof” to Chartoff Winkler Productions Inc., who subsequently assigned them to Metro-Goldwyn-Mayer Inc. (“MGM”). These works allegedly formed the basis for the critically-acclaimed film Raging Bull.

In 1981, Mr. Petrella died, and his “exclusive and forever” assignment became not quite “exclusive and forever” any longer. Before the U.S. Copyright Act was amended in 1976 to extend protection for the life of the author plus fifty years (later increased ), the period of copyright protection for Mr. Petrella was a 28-year original term followed by a second 28-year renewal term. But in 1990, the U.S. Supreme Court decided in , 495 US 207 (1990), that an assignment by an author of his or her renewal rights made before the original copyright expires is valid against the world, if the author is alive at the commencement of the renewal period. If the author dies before the commencement of the renewal period, the rights revert back to the author’s heirs, notwithstanding any agreement to assign the renewal rights to a third party.

Because Mr. Petrella died before the commencement of the renewal period for his 1963 screenplay, his rights reverted back to his daughter Paula in 1991, who then had a cause of action against MGM for copyright infringement. However, Ms. Petrella did not sue MGM until 2009, eighteen years after she became aware of her right to do so.

The US district court (C.D. Cal.) viewed her delay as unreasonable and granted summary judgment for the defendants based on the equitable doctrine of laches, whatever the merits of Ms. Petrella's claims (the district court’s decision is available at of the plaintiff’s petition for a writ of certiorari). The Ninth Circuit affirmed (albeit reluctantly in a concurring judgment by Circuit Judge Fletcher).

The point is that Ms. Petrella's suit, albeit eighteen years after she became aware of it, was found in the U.S. Copyright Act. The three-year limitation period for civil actions accrues separately for each act of infringement, essentially creating a “rolling” limitation period for a series of continuing subsequent infringements. While Ms. Petrella filed her lawsuit in 2009, her claim only covered infringements that had occurred in or after 2006.

Applying the doctrine of laches to override a statutory limitation period may create uncertainty where none should exist. The three-year limitation period provides a hard-line rule for plaintiffs and defendants to rely on. Barring any consideration of the merits of a plaintiff’s claim despite her complying with the letter of the statute seems an unjustifiable boon for defendants. Courts elsewhere would agree. In the recent Canadian case of , (2012) FCA 12, Gauthier J.A. had difficulty seeing how the doctrine of laches could apply in light of a statutory limitation period, and do not recognize laches as a defence at all.

Meanwhile, in [2009] UKHL 41 (“Fisher”), the House of Lords allowed a claim of co-authorship where a plaintiff had waited for thirty-eight years before suing.  It affirmed an award to the plaintiff of a percentage of the copyright in the disputed work. The court found that the defendants, far from being prejudiced by the delay, had financially benefited from it by not being liable for back royalties.  Similarly, Ms. Petrella’s delay has benefited MGM because the company has enjoyed twenty-six years of profits that Ms. Petrella is statute-barred from claiming.

In contrast to Fisher, a recent decision of the Ninth Circuit Court of Appeals that claims of co-authorship are statute-barred three years after “plain and express repudiation of co-ownership [has been] communicated to the claimant.”

The U.S. Supreme Court will therefore have to decide whether plaintiffs who “sleep on their rights” allow defendants to dream easily, unaffected by long-standing copyright claims.

Fraser Turnbull is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

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