On October 1, 2013, the Supreme Court of the United States granted the Ninth Circuit’s petition for a writ of certiorari in Petrella v. Metro-Goldwyn-Mayer, Inc., 695 F.3d 946 (9th Cir. Cal. 2012), and will hear an appeal by the daughter of the deceased Frank Petrella, co-author of two screenplays and a book that inspired the 1980 Oscar-winning movie “Raging Bull.” Petrella asserts ownership rights to boxer Jake LaMotta’s life story, but her claims were barred in the Ninth Circuit Court under the equitable defense of laches. That defense bars recovery by the plaintiff because of the plaintiff's undue delay in seeking relief.
In 2009, Paula Petrella sued Metro-Goldwyn-Mayer, Inc. (MGM) for copyright infringement for creating and distributing copies of the movie “Raging Bull.” Upon her father’s passing, Petrella claimed that she acquired ownership of his interest in the works as his statutory heir. In 1991, Petrella had exercised those rights and filed a renewal application for her father’s “Raging Bull” screenplay.
Seven years later, Petrella’s attorney contacted MGM and asserted that Petrella obtained the rights to the screenplay that inspired “Raging Bull” and that MGM’s exploitations of its derivative work, the “Raging Bull” motion picture, was an infringement of her exclusive rights. From 1998 through 2000, Petrella and MGM exchanged numerous letters in which Petrella accused MGM of copyright infringement and MGM denied any infringement on the grounds that they obtained all necessary rights to the script under their agreement with LaMotta, the co-writer of the disputed work, and that there was no substantial similarity of protectable elements between Frank Petrella’s screenplay and the film. During the same time period, MGM continued to internationally market and distribute “Raging Bull,” which celebrated its 25th anniversary in 2005.
In January 2009, Petrella sued MGM for copyright infringement, unjust enrichment and an accounting. The district court granted MGM’s motion for summary judgment and dismissed Petrella’s claims on the grounds that they were barred by the equitable defense of laches. The Ninth Circuit affirmed the lower court’s finding and held that Petrella unreasonably delayed initiating the lawsuit and that the delay prejudiced MGM. The Ninth Circuit emphasized that Petrella was aware of her potential claim since 1991, yet she did not file her lawsuit until 18 years later.
Petrella failed to present any evidence demonstrating why an 18-year delay was reasonable. MGM, however, established how the 18-year delay caused it prejudice because it continued to make business decisions and entered into contracts relying on its belief that MGM was the rightful owner of the right to exploit “Raging Bull.”
The Supreme Court of the United States will review this decision during its 2013–2014 session, which begins on October 7, 2013.
Federal Circuits Split
The Supreme Court is expected to rule on the formulation and application of the laches defense in copyright infringement cases because of the dramatic split on this issue in the federal circuit courts.
- In the Second Circuit, laches is available as a bar to injunctive relief but not to money damages. See New Era Publ'ns Int'l v. Henry Holt & Co., 873 F.2d 576, 584-85 (2d Cir. 1989).
- In the Ninth Circuit, where Petrella brought suit, laches can bar all relief, both legal and equitable. Danjaq LLC v. Sony Corp., 263 F.3d 942, 951 (9th Cir. 2001).
- In the Fourth Circuit, laches may not be available under any circumstances. Lyons P’ship. L.P. v. Morris Costumes, Inc., 243 F.3d 789, 797-98 (4th Cir. 2001).
- In the Eleventh Circuit, laches is permitted only in “the most extraordinary circumstances.” Peter Letterese & Assocs., Inc. v. World Inst. of Scientology Enters., Int'l, 533 F.3d 1287, 1320 (11th Cir. 2008).
- In the Sixth Circuit, laches is available in only “the most compelling of cases.” Chirco v. Crosswinds Cmtys., Inc., 474 F.3d 227, 233 (6th Cir. 2007).
Further complicating the formulation and application of laches defense in copyright infringement cases is the fact that there is nothing in the Copyright Act or its legislative history that states or indicates that laches is a proper defense to a suit brought under the Act. Indeed, a review of the legislative history of 17 U.S.C. § 501 reveals that Congress’s adoption of a three-year statute of limitations on copyright infringement claims, first in 1963 and again in 1976, was to extinguish equitable defenses such as laches. As such, laches could be considered a judicial creation that is seemingly at odds with Congress’s intent.
Nonetheless, the equitable defense is often argued as being necessary to discourage copyright owners from remaining inactive while an alleged infringer expends resources exploiting and profiting from the copyright at no cost to its owner. Without an equitable defense, such as laches, a copyright owner may decide to wait until it is economically beneficial to use judicial intervention to recover the alleged infringer’s profits as well as significant statutory damages.
For the foregoing reasons, the Supreme Court has decided to rule on whether to permit equitable relief in copyright infringement cases. Wilson Elser will continue to monitor the Supreme Court’s docket concerning this issue.