Affirming in part and reversing in part the district court’s grant of summary judgment dismissing the plaintiffs’ copyright infringement claim under the equitable doctrine of laches, the U.S. Court of Appeals for the Sixth Circuit held that, depending on the nature of the relief sought and in compelling circumstances, the defense of laches may bar a copyright infringement claim (or certain remedies) even though that claim is brought within the three-year statute of limitations. Chirco v. Crosswinds Communities, Inc., No. 05-1715 (6th Cir., Jan. 10, 2007) (Daughtrey, J.).
The plaintiffs brought suit against defendants for copyright infringement, alleging that defendants copied its architectural design for a condominium building complex. The plaintiffs sought monetary and injunctive relief, as well as the destruction of the buildings. The plaintiffs learned of defendants’ intention to build the allegedly infringing condominiums during discovery conducted in another copyright infringement lawsuit between the parties. The plaintiffs discovered the defendants’ plans for the project over a year before defendants publicly broke ground for the development. However, the plaintiffs waited nearly two-and-a-half years after first learning of defendants’ development plans to file the second lawsuit. At this time, of the 252 planned units, 168 had been constructed, 141 had been sold and 109 were already occupied. The district court granted summary judgment in favor of defendants, finding they had been prejudiced by the unnecessary delay between the time plaintiffs learned of the planned construction and the time the complaint was filed, even though the complaint was filed within the three-year statute of limitations provided by the Copyright Act, 17.
On appeal, the plaintiffs relied on the Fourth Circuit decision in Lyons Partnership, v. Morris Costumes (2001), arguing that separation of powers principles dictate that an equitable rule, such as laches, cannot bar claims that are brought within the legislatively prescribed statute of limitations. The Court acknowledged the split among the various circuits as to whether laches may bar an otherwise timely copyright infringement claim (as held in Lyons Partnership) versus the Ninth Circuit’s more expensive approach to equity as explained in Kling v. Hallmark Cards, (2000) and Danjaq v. Sony (2001). The Court, citing a non-copyright 6th Circuit case, Tandy v. Malone & Hyde (1985), adopted a “middle ground” that would allow for the application of laches in compelling and unusual cases. In analyzing whether undue prejudice would result to defendants, the Court drew an important distinction based on the relief sought, applying laches as to plaintiffs’ claim for the destruction of the buildings, but permitting plaintiffs’ claims for monetary relief and to enjoin future infringement to go forward.