USDC C.D. California, February 3, 2010

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In copyright infringement suit brought by the heir of an author of a screenplay that allegedly became the basis of the motion picture Raging Bull against the copyright owners of the picture, district court grants defendants’ motion for summary judgment based on the equitable defense of laches where plaintiff had knowledge of the legal theories asserted in the action as early as 1990 and refrained from filing suit until 2009 because the picture was allegedly not yet profitable.

Frank Petrella, plaintiff’s father, collaborated with his long-time friend, boxer Jake LaMotta, to produce a book (the “Book”) and two screenplays based on LaMotta’s life. The first screenplay was registered in 1963 and listed Petrella as the claimant and sole author. The Book was registered in 1970, listing Petrella, LaMotta, and Joseph Carter as co-authors. The second screenplay was registered in 1973, listing Petrella as the sole author and giving 1970 as the date of publication. Pursuant to a 1976 agreement, Petrella and LaMotta assigned to Chartoff-Winkler Productions, Inc. (CWP), “exclusively and forever,” all of their respective copyrights in the Book and “in those certain screenplays based on the Book which were written in 1963 and 1973.” The 1976 agreement represented that the Book “is original and has not been copied or adapted from any literary, dramatic, or other work.” The agreement further represented that the screenplays “are original and have not been copied or adapted from any literary, dramatic, or other work other than [the Book].” In or about September 1978, defendant MGM acquired the motion picture rights to Raging Bull from CWP. Together, the subject works allegedly became the basis for the picture Raging Bull (the “Picture”), which was released in 1980.

In 1981, during the original 28-year term of the copyrights for the works, Petrella died, passing his renewal rights to his heirs. Plaintiff alleges that she is now the sole owner of the Petrella interest in the three subject works. In 1990, plaintiff learned of the Stewart v. Abend decision and engaged an entertainment attorney to advise and assist her regarding her renewal rights. In 1991, plaintiff filed a renewal registration for the 1963 screenplay. Plaintiff did not make any claims or pursue litigation at the time, nor did plaintiff timely renew the rights in her 1973 screenplay or the Book. In about September 1998, plaintiff’s attorney contacted MGM concerning MGM’s exploitation of the Picture, and claimed that MGM’s exploitation infringed Petrella’s rights in the 1963 screenplay. MGM rejected plaintiff’s claims on two bases. First, MGM contended that the 1963 screenplay was a collaboration between Petrella and LaMotta, so MGM retained all necessary rights in the screenplay pursuant to its agreement with LaMotta. Second, MGM contended that there was no substantial similarity of protectable elements between the Picture and the 1963 screenplay. Defendants subsequently argued that even were Petrella the sole author of the 1963 screenplay, because LaMotta was a co-author of the Book and had the power to fully assign his interest in the property, LaMotta’s assignment of the rights to the Book to defendants means that they cannot be liable for copyright infringement with respect to the elements in the book that were in the 1963 screenplay.

In analyzing plaintiff’s claim of infringement, the district court instructed that in the absence of an agreement to the contrary, “one joint owner may always transfer his interest in the joint work to a third party, subject only to the general requirements of a valid transfer of copyright.” According to the court, in order to have a claim for copyright infringement with respect to the 1963 screenplay, plaintiff must therefore establish, as its registration certificate states, a work of sole authorship. In order to show infringement of any elements that are present in the 1963 screenplay, plaintiff would have to prove: (1) that, contrary to Petrella’s representation in the 1976 agreement, the Book is a derivative work based on the 1963 screenplay, and (2) that defendants’ exploitation of the Picture based on their ownership of rights in the Book would constitute infringement of plaintiff’s copyright in the 1963 screenplay.

The court first considered whether a factual issue existed concerning whether the 1963 screenplay is a derivative work based on the Book. If the screenplay were a derivative work of sole authorship based on the Book, and defendants were assigned LaMotta’s rights in the Book, stated the court, defendants would share in the right to create derivative works based on the Book, but plaintiff might still be able to assert a claim for copyright infringement based on any new elements in the 1963 screenplay. In light of defendants’ concession that the Book was published in 1970, the court concluded that there was at least a factual dispute as to whether the 1963 screenplay was based on the Book.

Assuming that plaintiff was correct that the Book is a derivative work based upon the 1963 screenplay, the court addressed the effect of LaMotta’s transfer of his rights in the Book. Defendants contended that, because the Book was a joint work of authorship, each owner possessed “an undivided ownership interest in the entire work, including all of the contributions contained therein.” While the court observed that “an authorization to the defendant from one joint owner will be an effective defense to an infringement action brought by another joint owner,” the court held that such an authorization would not provide a defense to an action for infringement of an underlying work created solely by a co-author. Therefore, concluded the court, plaintiff could still have a claim of copyright infringement with respect to any parts of the Book that are also present in the 1963 screenplay, even though defendants may have received a valid license from LaMotta.

The court then turned to the issue of substantial similarity. In order for the plaintiff to prevail on her claim of copyright infringement, the court noted that plaintiff must show that the Picture copied consistent elements of the 1963 screenplay that are original. Defendants argued generally that the only similar elements between the 1963 screenplay and the Picture arose from the use of historical acts, biographical details, and scenes-à-faire. Although the court acknowledged that many of the similarities identified by plaintiff arguably arose from historical events and were not protectable, it opined that the issue of substantial similarity in this context was “probably not conducive to summary judgment.” Citing Ninth Circuit precedent in Swirsky v. Carey, 376 F.3d 841, 845 (9th Cir. 2004), the court reaffirmed that if “an indicia of a sufficient disagreement concerning the substantial similarity of the two works” is present “then the case must be presented to a trier of fact.”

In spite of the court’s denial of summary judgment on the basis of the agreement with LaMotta or a lack of substantial similarity, the court held that defendants were entitled to summary judgment with respect to their equitable defense of laches. To establish the equitable defense of laches, a defendant must prove three elements—(1) delay, (2) lack of diligence by the plaintiff, and (3) prejudice to the defendant. In considering the first element, the court stated that the relevant delay is the period from when the plaintiff knew (or should have known) of the allegedly infringing conduct, until the initiation of the lawsuit in which the defendant asserts the laches defense. Here, the court found that plaintiff had knowledge of the legal theories asserted in the present action in 1990 or 1991 when she initially retained counsel and filed a renewal application for the 1963 screenplay. However, plaintiff testified that she refrained from filing suit at that time because the Picture was not yet profitable. The court found this element of defendants’ laches defense easily satisfied.

Next, the court assessed plaintiff’s diligence in pursuing the instant litigation. As a corollary to this analysis, the court considered whether plaintiff’s delay was reasonable. Here, the only justification offered for the delay was that plaintiff waited to bring suit to assess the Picture’s profitability. The court rejected plaintiff’s reliance in this argument on authority related to works that “rested in oblivion” because Raging Bull was “one of (if not the) best motion pictures of the decade of the 1980’s.”

Finally, the court found that defendant demonstrated two chief forms of prejudice resulting from the delay—expectations based and evidentiary based prejudice. First, the court held that defendants had been prejudiced as a result of plaintiff’s delay in bringing her claims because they made significant investments in exploiting the Picture “based on their understanding that they were the rightful registrant and owner of the film.” And second, as a result of the long delay, most of the key players, including LaMotta and co-author Joseph Carter, are unavailable to testify on the grounds of death or lack of mental capacity. The court thus concluded that there were strong equitable arguments against allowing plaintiff’s action to proceed and granted defendants’ motion for summary judgment on their laches defense. The court further found that laches served as a basis for precluding plaintiff from proceeding on her equitable state claims for unjust enrichment and accounting.