Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. __ (May 19, 2014)

Can the equitable defense of laches (based on an unreasonable and prejudicial delay in bringing suit) be applied to bar claims brought within the Copyright Act’s three-year statute of limitations period? In a 6-3 decision, the Supreme Court answered in the affirmative, resolving a split among the Circuits and holding that Frank Petrella’s daughter, who authored the screenplay for the film Raging Bull, had the right to sue MGM over copyright infringement relating to the film, even though she waited 18 years from the time she filed for renewal in the copyright of the screenplay.

In 1963, Petrella authored a screenplay based on the boxing career of his lifelong friend Jake LaMotta. MGM gained the rights to the screenplay and adapted it into the movie Raging Bull, starring Robert DeNiro and directed by Martin Scorcese, in 1980. Shortly thereafter, Petrella died and his renewal rights reverted to his heirs, who could renew the copyright in the screenplay regardless of his previous assignment.

In 1991, Petrella’s daughter filed for copyright renewal and became the sole owner of the copyright in the screenplay. Seven years later, through her attorney, Petrella informed MGM that its exploitation of any derivative works of the screenplay—including the film Raging Bull—infringed her copyright. For two years, MGM and Petrella exchanged letters, but Petrella did not sue until 2009.

Arguing that MGM continued to violate her copyright in the screenplay, Petrella sought damages for acts occurring on or after three years before the date she brought suit, i.e., MGM’s alleged infringement within the three-year statute of limitations period. MGM contended, however, that Petrella’s suit was barred by the equitable doctrine of laches because Petrella had unreasonably delayed by waiting eighteen years to bring suit and MGM would be prejudiced by the delay because it had invested heavily in the film. The district court and the Ninth Circuit both agreed with MGM and applied laches to bar Petrella’s claims.

The Supreme Court reversed. While MGM argued that laches should be applied to stop a copyright owner from taking a wait-and-see approach to infringement, the Court noted that “there is nothing untoward about waiting to see whether an infringer’s exploitation undercuts the value of a copyrighted work, has no effect on the original work, or even complements it.” The Court likewise dismissed MGM’s argument that allowing copyright owners to delay would result in evidentiary prejudice; it reasoned that Congress must have been aware of such a possibility but nonetheless allowed an author’s heirs to renew the copyright. The Court held that the district court could take into account Petrella’s delay when determining profits, but held that barring her suit in its entirety was error.