By: Nathan Geronimo
In a recent case, the Ninth Circuit affirmed the district court’s grant of summary judgment based on the doctrine of laches. But Justice Fletcher, in a concurring opinion, stressed the fact that the Court’s application of the doctrine to copyright infringement cases was out of step with decisions in other federal circuits, and is likely contrary to congressional intent.
In Petrella v. Metro Goldwyn Mayer, Inc. et al., the plaintiff, Paula Petrella (“P. Petrella”) sued Metro Goldwyn Mayer (“MGM”) and others for alleged copyright infringement based on the defendants’ use of the movie Raging Bull, which is allegedly based on a book and two screenplays in which P. Petrella has a purported legal interest. Retired boxer Jake LaMotta and his friend Frank Petrella worked together to write a book and two screenplays on LaMotta’s life. The works were registered with the U.S. Copyright Office; one screenplay in 1963, the book in 1970, and the other screenplay in 1973. In 1976, Frank Petrella and LaMotta assigned their rights in the three works to Chartoff-Winkler Productions, who subsequently assigned the motion picture rights to MGM in 1978. Frank Petrella passed away in 1981, and his copyright renewal rights in the works passed to his daughter, P. Petrella. (When an author dies prior to the beginning of a renewal period, his successors get his renewal rights even if the author previously assigned the rights.)
P. Petrella filed a renewal application for the 1963 screenplay in 1991. Between 1998 and 2000, P. Petrella, through her attorney, contacted MGM and others notifying them of her rights to the 1963 screenplay and alleging that their exploitation of derivative works, including Raging Bull, constituted infringement of her exclusive rights. The defendants insisted that said exploitation of Raging Bull did not infringe on P. Petrella’s rights. Despite the disagreement, P. Petrella did not sue the defendants until 2009, nine years later. The court granted summary judgment for defendants based on the doctrine of laches.
Laches is an equitable defense that operates to bar a plaintiff’s claim where, with full knowledge of the facts, a plaintiff unreasonably delays in bringing an action, and that delay prejudices a defendant. When analyzing laches, courts look at the delay period, which begins when the Plaintiff knew or should have known of the allegedly infringing conduct, and ends when the lawsuit is filed. In looking at the reasonableness of the delay, courts have found delay to be permissible when it is used to evaluate and prepare a complicated claim, or when it is used to determine whether the infringement will justify the costs of bringing suit. By contrast, courts will find the delay unreasonable where it is used to capitalize on the value of the infringer’s labor. With regard to prejudice, court’s look at two types of prejudice: (1) expectations-based prejudice, which occurs when an alleged infringer takes actions that it would not have had the plaintiff brought suit without delay; and (2) evidentiary prejudice, which occurs when evidence becomes lost or stale due to the delay in prosecution.
The Court found that P. Petrella’s delay in bringing the action until 2009 was unjustified, as P. Petrella admitted that the delay was at least in part due to the fact that the film hadn’t made money during the delay. The Court also found the existence of expectations-based prejudice, in that since 1991 the defendants had invested approximately $8.5 in the United States promoting, marketing, and distributing the film. Since 2004, the defendants spent over $3 million in this effort. These expenditures were made with the belief that the defendants owned all rights to Raging Bull. Because P. Petrella’s delay in bringing suit was not justified, and because such delay prejudiced the defendants, the Court found P. Petrella’s claims to be barred by laches.
Interestingly, however, was Justice Flectcher’s concurring opinion, in which J. Fletcher states that “there is a severe circuit split on the availability of a laches defense in copyright cases.” For example, in the Fourth Circuit, the laches defense is not available. In the Eleventh Circuit and Sixth Circuit, laches is available only in the most extraordinary circumstances. In the Second Circuit, laches only bars injunctive relief, not money damages. J. Fletcher also points out that Congress’ creation of a statute of limitations for copyright claims was likely intended to do away with the laches defense in copyright cases altogether J. Fletcher ends the concurring opinion with these words: “Our circuit has taken a wrong turn in its formulation and application of laches in copyright cases. We should revisit our case law to provide appropriate protection to innocent copyright owners who have brought infringement suits within the statute of limitations.” Thus, although laches may still be a valid defense to copyright infringement actions in the Ninth Circuit, we may see a shift in the Court’s application of this defense in days to come.