In a 6-3 decision, the Supreme Court revived a copyright dispute over the award-winning film “Raging Bull,” holding that the doctrine of laches cannot bar a suit filed within the three-year statutory limitations period prescribed by 17 U.S.C. § 507(b). Petrella v. Metro-Goldwyn-Mayer, Inc., No. 12-1315 (May 19, 2014).
At issue were the rights to a screenplay documenting the life of boxing champion Jake LaMotta, written and copyrighted by Frank Petrella in 1963. As a pre-1978 work, the screenplay was subject to a 28-year period of initial copyright protection, with a right to renew for another 67 years. In 1976, Frank sold the rights and the renewal rights, which were later acquired by United Artists Corp. The company went on to produce “Raging Bull,” a critically acclaimed film starring Robert De Niro, who won an Academy Award for his portrayal of LaMotta. Frank died several years later in 1981, during the original period of copyright protection. Per the Supreme Court’s decision in Stewart v. Abend, 495 U.S. 207 (1990), the renewal rights passed to Frank’s heirs outright, invalidating the earlier agreement to sell the rights to United Artists. The heirs renewed the copyright and, by 1998, Paula Petrella (Frank’s daughter) obtained full rights to the screenplay. She began sending letters to MGM, Inc. (parent company of United Artists) the same year, claiming violation of her copyright and threatening legal action. She did not file suit, however, until 2009—almost a decade later.
Paula sought an injunction and royalty payments for infringement claims accruing between 2006 and 2009, the only claims that she could reach in light of the Copyright Act’s three-year statute of limitations. MGM asserted laches against Paula, arguing that she failed to assert her rights for years while MGM made significant investments in releasing a new version of “Raging Bull,” based on the belief that it had complete ownership of the film. The district court agreed that the defendants suffered prejudice from Paula’s unreasonable delay and dismissed the suit. The Ninth Circuit affirmed. Because a portion of the alleged wrongful conduct occurred outside the limitations period, the circuit court applied a presumption of laches against Paula. She failed to overcome this presumption. The circuit court agreed with MGM that Paula knew of her potential claims for many years, yet she did not sue until after the defendants had reinvested in the film and began generating new revenue.
In a decision authored by Justice Ginsburg, the Supreme Court reversed. The majority held that the equitable doctrine of laches cannot bar legal relief “in face of a statute of limitation enacted by Congress” as part of the Copyright Act. The Court supported this conclusion by placing great weight on the specifics of § 507(b), namely the separate accrual rule (i.e., every new act of infringement creates a separate actionable claim), the relatively short limitations period, and the ability of defendants “to prove and offset . . . ‘deductible expenses’ incurred in generating [new] profits [within the limitations period].”
The majority went on to reject the principal assertions raised by the respondents and adopted by the dissent (authored by Justice Breyer, and joined by Chief Justice Roberts and Justice Kennedy). The majority dismissed the broad claim that laches must be available “in every civil action,” particularly when, as here, Congress created a limitations provision specifically to achieve uniformity over the prior limitations regime in which laches played a large role. Next, the Court found no inconsistency in permitting equitable tolling while forbidding laches. Tolling, the Court observed, “applies when there is a statute of limitations. . . . Laches, in contrast, originally served as a guide when no statute of limitations controlled the claim[.]” The Court further rejected the argument that MGM was prejudiced by Paula’s idleness and by the sheer passage of time. To the former, the Court responded that “[it] is hardly incumbent on copyright owners . . . to challenge each and every actionable infringement” and to the latter that “[a]ny hindrance caused by the unavailability of evidence . . . is at least as likely to affect plaintiffs as it is to disadvantage defendants.” Finally, the majority stated that while laches may be unavailable, “the doctrine of estoppel may bar the copyright owner’s claims completely” in cases where she has made intentional misrepresentations to the defendants, thereby “eliminating all potential remedies.”
While significant, particularly for claims arising under the Copyright Act, the Court’s decision in Petrella contains two key limitations. First, it appears to apply only to claims for money damages: “In extraordinary circumstance, however, the consequences of a delay. . . may be of sufficient magnitude to warrant . . . curtailment of the relief equitably awarded.” Thus, the Court explained, a plaintiff may not sit by while defendants invest in the production of tangible items (e.g., a building with an allegedly copyrighted architecture or books containing allegedly copyrighted material) only to ask later that those items be destroyed. Likewise, the Court did not suggest that its holding extends beyond the Copyright Act. Indeed, the Court acknowledged, but specifically refused to comment on, the legitimacy of a similar laches defense applied in cases arising under the Patent Act.