The U.S. Court of Appeals for the First Circuit affirmed dismissal of a lawsuit seeking a share of the profits from the past and future sale by Goebel of copyright protected Hummel figurines and images, on the ground that the claim is barred under the U.S. Copyright Law unless brought within three years of the accrual of that claim. Cambridge Literary Properties, Ltd v. W Goebel Porzellanfabrik GmbH & Co, et al., Case No. 06-2339 (1st Cir., Dec. 13, 2007) (Lynch, J.; Cyr, J., Sr., dissenting).

At issue was whether state law (which would not have barred the suit) or U.S. Copyright Law (which would bar the suit under its three-year statute of limitations) applied. Cambridge’s purported ownership rights were derived from two sets of heirs of a putative joint author (a contributor to a book containing poems and images of the figurines, from which the figurines were derived). Cambridge was therefore seeking an accounting and imposition of a trust on past and future profits from the defendant (who could establish a chain of title from the author and another contributor to the book) who manufactures the figurines. Cambridge’s ownership rights were clearly in dispute.

In this instance, in which the plaintiff did not seek a declaration of co-ownership of the U.S. copyright, the court held that the accounting and equitable trust claims created by state law were premature: “While such claims are governed by state law, they are not ripe and necessarily rest on Cambridge having met the antecedent showing that it had ownership rights under the Copyright Act.” While some issues of ownership of copyright may be governed by state law, the U. S. Copyright Law rights at issue were questions of authorship status and initial ownership of copyrights. As explained by the Court, the Congressional intent was to apply the Copyright Act’s limitations of a three-year statute of limitations to such claims of ownership. Thus, the Court noted that there was substantial federal interest in having the federal statute of limitations applied to these determinations and held that Plaintiff may not assert the state law claims for accounting or equitable trust without first establishing that it is a co-owner. In this case Cambridge and the heirs through which it claims its ownership rights were put on sufficient notice to result in accrual more that three-years before plaintiff instituted suit.

In a dissenting opinion, Sr. Judge Cyr stated that for jurisdictional purposes a plaintiff is normally a “master” of his complaint and, if he pleads a claim purely based in state law (as in the present case), the claims cannot be deemed to have “arise[n] under” federal law. According to Judge Cyr, the majority improperly held that the state-law cause of action, even though it potentially involves a threshold determination of the plaintiff’s copyright ownership, must be said to “arise under” the Copyright Act.