by Andrew S. Goldman, Esq.

June 9, 2014

Petrella v. Metro-Goldwyn-Mayer, Inc., No. 12-1315, 572 U.S. ___ (2014)

As far as damages in copyright infringement cases are concerned, the Supreme Court, in a case centered on the Academy Award-winning boxing film Raging Bull, just laid the defense of laches out cold.

In Petrella v. MGM, the Court addressed the question of whether the equitable defense of laches may bar on an infringement claim filed within the Copyright Act’s three-year statute of limitations, even where the plaintiff waited eighteen years to file suit.   Reversing the Ninth Circuit, the Court held in a 6-3 decision that laches cannot bar a claim for damages for retrospective relief three years back from the time of suit, though may still be available as a defense to injunctive relief. The ruling potentially extends a copyright holder’s ability to sue for damages to the full term of the copyright where the infringement is ongoing, and is likely to have widespread repercussions in creative industries.

The story of this case begins decades ago, as far back as 1963—the year that Frank Petrella wrote and registered the copyright for the screenplay of tragically self-destructive boxing champ Jake LaMotta. In 1976, Petrella assigned his rights in the screenplay, including renewal rights, to a production company, who then sold the motion picture rights to MGM in 1978. In 1980, MGM released the film Raging Bull, directed by Martin Scorcese and starring Robert De Niro; the film won two Oscars, including a Best Actor win for De Niro and his brutal, intense portrayal of La Motta, and is widely considered a classic. MGM continues to market the film in new formats, including DVD and Blu-ray.

 

When Petrella died in 1981, his renewal rights reverted to his heirs, and Petrella’s daughter, Paula, renewed the copyright in the screenplay unburdened by her father’s previous assignments. But it was not until 1998 that Paula Petrella’s attorney first notified MGM of her copyright and asserted that Raging Bull constituted an infringing derivative work.

 

On January 6, 2009, a full eighteen years after Paula renewed the copyright, and almost thirty years from the date of Raging Bull’s theatrical release, Petrella filed a copyright infringement lawsuit against MGM with the United States District Court for the Central District of California, seeking monetary and injunctive relief. Petrella alleged that the film company’s production and distribution of Raging Bull was a derivative work that violated and continued to violate her copyright in her father’s 1963 screenplay. In accordance with the three-year statute of limitations provided by 17 U.S.C. § 507(b), Petrella sought relief only for acts of infringement occurring on or after January 6, 2006.

 

On motion for summary judgment, MGM argued that Petrella’s suit should be barred by laches. The District Court granted MGM’s motion, finding that the eighteen-year delay in filing suit was unreasonable and had resulted in prejudice to the film company. On appeal, the Ninth Circuit affirmed the lower court’s decision that the suit was barred by laches, finding that the suit was outside the three-year statute of limitations.   The delay, motivated by Petrella’s desire to let the damages accrue, was found to have caused MGM expectations-based prejudice as evidenced by the company’s large investment in Raging Bull.

 

The Supreme Court reversed, in a 6-3 opinion written by Justice Ginsburg, noting first that the Ninth Circuit failed to recognize that the Copyright Act’s three year statute of limitations takes account of delay, and limits retrospective relief to the three years immediately preceding the suit. Petrella at pp. 11-14. The Court reasoned that because Congress was explicit in creating the statute of limitations, the equitable common law defense of laches cannot bar a claim for damages. Id. Rejecting MGM’s argument that laches must be available to prevent a copyright owner from watching and waiting, the Court found that the three-year statute of limitations was a built-in safeguard that “allows a copyright owner to defer suit until she can estimate whether litigation is worth the candle,” but that, as a trade-off, causes the copyright holder to “miss out on damages for periods prior to the three-year look-back…” Id. at pp. 16-17.

 

The Court was careful to emphasize that there may be extraordinary circumstances where the “consequences of delay in commencing suit may be of sufficient magnitude to warrant, at the very outset of the litigation, curtailment of the relief equitably awardable.” Id. at p. 20. By way of example, the Court cited Chirco v. Crosswinds Communities, Inc., 474 F.3d 227 (CA6 2007). Id. In that case, the plaintiffs had known of the defendants’ use of the plaintiff’s copyrighted architectural design in the construction of a 168-unit housing development even prior to the breaking of ground. And in spite of the plaintiff filing suit within the three year statute of limitations under §507(b), on appeal the Sixth Circuit held that the plaintiffs would not be entitled to an order mandating destruction of the housing project, because the plaintiffs knew of the housing project’s use of their plans and yet failed to take readily available measures to stop it, and because the requested relief would “work an unjust hardship” upon the defendants and innocent third parties.

 

Yet the Supreme Court found no such extraordinary circumstances in Petrella’s case. The Court noted that Petrella’s action was commenced within the three-year limitations period of §507(b), and that Petrella notified MGM of her claims before MGM invested millions of dollars in creating a new edition of Raging Bull, and that disgorgement of unjust gains would not result in a “total destruction of the film, or anything close to it.” Petrella at p.21. The Court’s lone concession to MGM was to grant the District Court the discretion to take account of Petrella’s delay, if she were to prevail on the merits, when considering the appropriate injunctive relief and assessing profits. Id. at p.21.

 

The Court’s decision gives copyright holders an almost limitless time within which to file a copyright infringement claim for damages, and leaves the film and music industries reaching for the bag of frozen peas. For artists who have had their work ripped off many years ago, Petrella may afford them or their heirs a new opportunity to right old wrongs. Less than two weeks after the Petrella ruling came down, the trust for Randy California, late songwriter of the obscure 1960’s band Spirit, filed suit against the surviving members of Led Zeppelin alleging that they stole the classic, immediately recognizable opening bars of “Stairway to Heaven” from Spirit’s instrumental song, “Taurus.”[1] The discussion of the songs’ similarities or differences is no longer relegated to the realm of the music-geek, but can now see its day in court, whatever the merits of the actual claim. There may be many more similar lawsuits to come.

About Andrew Goldman

Andrew S. Goldman focuses on copyright, trademark, and business law, in both litigation and transactional work, at Astrachan Gunst Thomas, P.C.

[1] Lisa Respers France, Copyright Infringement Suit Filed Against Led Zeppelin for ‘Stairway to Heaven’, June 3, 2014. (Available at http://www.cnn.com/2014/06/03/showbiz/music/led-zeppelin-stairway-to-heaven-suit/)