In 1963, biographer Frank Petralla wrote a screenplay based on the life of professional boxer Jake LaMotta and assigned the rights of the screenplay to United Artists Corporation, a subsidiary of what is now Metro-Goldwyn-Mayer, Inc. (“MGM”). MGM released Raging Bull, the critically acclaimed film based off of the screenplay, in 1980. Approximately ten years after Frank Petralla’s death in 1981, his daughter, Paula Petralla, renewed the copyright to her father’s screenplay. In 1998, Petralla informed MGM that continued exploitation of the Raging Bull film violated her copyright. Finally, in 2009, Petralla sued MGM seeking monetary and injunctive relief from infringement acts incurred between 2006 and 2009. Petralla alleged that MGM continued to violate her copyright by producing and distributing Raging Bull in modern digital format.
In the instant case, since Frank Petralla did not transfer the renewal rights to MGM, his daughter owned the copyright to the screenplay.
Under the Copyright Act of 1976 , the copyright owner has exclusive rights to reproduce and distribute his work. The law also enables the copyright owner’s heirs to inherit renewal rights. Copyright works published before 1978, including the Raging Bull screenplay, receive protection for a term of twenty-eight years, and may be extended for a renewable period of up to sixty-seven years.
Pursuant to copyright laws, if an author dies prior to the renewable period, as Frank Petralla did, then the assignee may continue to use the author’s work so long as the successor transfers the renewal rights to the assignee. Although Frank Petralla assigned his rights to MGM to produce Raging Bull, when he died in 1981 the renewal rights to the screenplay copyright automatically reverted to his daughter irrespective of any assignment previously made to MGM. In the instant case, since Frank Petralla did not transfer the renewal rights to MGM, his daughter owned the copyright to the screenplay.
The District Court granted MGM summary judgment under the doctrine of laches and the Ninth Circuit affirmed noting an unreasonable delay prejudicial to MGM.
Under the Copyright Act, a plaintiff may obtain both equitable and legal relief. A court may issue an injunction or award actual damages in addition to any profits earned by the infringer. The Copyright Act enables copyright seekers to sue within the prescribed three-year statute of limitations time period for all civil claims. Therefore, a suit for copyright infringement must be brought within three years of an infringer’s act. The statute of limitations begins when an infringing act occurs or when a plaintiff has “complete and present cause of action.” If there are multiple infringing acts over a period of time, each infringing act triggers a new limitation period.
Petralla initially filed suit in 2009 against MGM in the U.S. District Court for the Central District of California seeking relief for infringed acts that occurred between 2006 and 2009. The District Court granted MGM summary judgment under the equitable doctrine of laches based on Petralla’s eighteen-year delay since renewing the copyright in 1991.
The U.S. Court of Appeals for the Ninth Circuit affirmed the lower court’s decision under the same doctrine noting an unreasonable delay, which was prejudicial to MGM. The Ninth Circuit noted that MGM was prejudiced by Petralla’s delay in bringing suit not only because the statute of limitations had run past the allowable three year period, but also because Petralla sat on her potential claims for several years before filing suit.
The doctrine of laches is used as a defense to assert that an opposing party has waited too long to file a lawsuit, and thus, should be barred from bringing suit.
The United States Supreme Court granted certiorari to resolve the conflict on the application of the doctrine of laches as applied to copyright infringement claims brought within the three-year limitations period. Justice Ginsburg, writing for the majority in a 6-3 decision, favored Petralla and reversed the Ninth Circuit’s decision, holding that the doctrine of laches did not apply. The doctrine of laches is used as a defense to assert that an opposing party has waited too long to file a lawsuit, and thus, should be barred from bringing suit.
MGM alleged that Petralla waited over eighteen years to bring an action. Distinguishing an equitable remedy from legal damages, the Court acknowledged that laches was a defense developed by the courts of equity “for which the Legislation [. . .] provided no fixed time limitation.” Therefore, laches may bar the particular equitable relief sought by a plaintiff in extraordinary circumstances.
Under the Copyright Act, the doctrine does not apply when copyright laws have their own statute of limitation built into them.
In contrast to equitable relief, when a plaintiff seeks legal relief from damages, “courts are not at a liberty to jettison Congress’ judgment on the timeliness of suit.” Under the Copyright Act, the doctrine of laches does not apply when copyright laws have their own statute of limitations built into them. Therefore, a suit brought within the three-year statute of limitations is valid and the doctrine of laches cannot be used to prevent a claim for damages brought within the statutory time period.
Notably, the doctrine of laches originally served as a guide to courts when no statute of limitations controlled a claim. However, when a claim is controlled by the statute of limitations, the plain language of the statute controls by way of statutory construction.
MGM also argued, and the Ninth Circuit affirmed, that the defense of laches should be available in order to prevent Petralla from “sitting still, doing nothing, [and] waiting to see what the outcome of an alleged infringer’s investment will be.” The Ninth Circuit further faulted Petralla for waiting to see if the movie “made money” before filing suit.
The United States Supreme Court noted the three-year statute of limitations period allows a copyright owner to defer suit until she can determine whether “litigation is worth the candle.”
The Supreme Court reconciled this concern noting that copyright owners cannot challenge every actionable infringement. The Court further noted there was nothing wrong with 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.” Accordingly, the three-year statute of limitations period allows a copyright owner to defer suit until she can determine whether “litigation is worth the candle.” Justice Ginsburg acknowledged, if the rule were, as MGM urges, “sue soon, or forever hold your peace,” copyright owners would have to quickly decide to sue on seemingly innocuous infringements.
In his dissenting opinion, Justice Breyer noted that the doctrine of laches should be applied when a plaintiff unreasonably delays in filing suit. The doctrine helps courts ensure fairness and prevent inequitable results. Although the Copyright Act accounts for a time period to file suit, the limitations period is a rolling one, which restarts upon a “separate accrual” of a claim. A plaintiff may sue every three years if a defendant reproduces or sells work on a continuing basis. Therefore, if a plaintiff delays legal action, the defendant may have obtained profits, allowing a plaintiff to reap greater benefits.
During the eighteen years Petralla waited to file suit, MGM spent millions of dollars developing and marketing different versions of Raging Bull. Additionally, MGM also entered into numerous licensing agreements with television networks to broadcast the film through 2015. Therefore, Justice Breyer noted, while long delays “do not automatically prove inequity, they raise that possibility.”
The Court’s decision establishes a bright line rule for copyright owners seeking damages within the statutory time period and bears good news for plaintiffs. The decision makes clear that the doctrine of laches does not preclude the ability to seek legal damages so long as a claim is filed within the statute of limitations.