PETRELLA V. MGM
By: Craig Shepard, Boston College Law School, JD/MBA Candidate 2015
The U.S. Supreme Court has granted certiorari in the case of Petrella v. Metro-Goldwyn-Mayer (MGM). The case involves a daughter of the author of “Raging Bull” and several major Hollywood studios. The outcome could resolve a circuit split over the application of the laches defense to copyright disputes. The question presented is: “Whether the non-statutory defense of laches is available without restriction to bar all remedies for civil copyright claims filed within the three-year statute of limitations prescribed by Congress, 17 U.S.C. 507(b)?”
At issue is the copyright of the 1980 movie “Raging Bull” starring Robert De Niro and directed by Martin Scorsese. The movie is based on the life of professional boxer and former World Middleweight Champion Jake LaMotta. Almost a decade after he retired from professional boxing, LaMotta collaborated with his long-time friend, Frank Peter Petrella, to produce two screenplays and a book based on his life. Petrella transferred his rights to the screenplays to MGM and other studios, but the Copyright Act of 1976 gave Petrella renewal rights, which passed to his daughter Paula Petrella after his death in 1981. Although she was aware of potential claims against the studios in 1991 when she filed a renewal application, she did not file suit against them until 2009. Asserting that the delay initiating the suit was unreasonable, the movie studios said the equitable doctrine of laches applied and the U.S. District Court for the Central District of California agreed, dismissing the suit.
The Ninth Circuit Court of Appeals subsequently upheld the decision. The court applied the standard pronounced in Danjaq LLC v. Sony Corp. Under Danjaq, the defendant must prove that: 1) the plaintiff delayed in initiating the lawsuit, 2) the delay was unreasonable and 3) the delay resulted in prejudice. That court ruled that MGM had met its burden of proving the unreasonable delay and expectations-based prejudice. In the Ninth Circuit, so long as the defendant is not a willful infringer, laches can bar all legal and equitable relief (whether retrospective or prospective) for a copyright claim. It may be available even where the plaintiff timely brought a claim within the three-year statute of limitations under the Copyright Act.
Petrella argues that her suit would have survived summary judgment in several, if not most other circuits. In fact, Judge Fletcher’s concurring opinion discussed a split among the circuits on the availability of a laches defense in copyright cases. The concurrence and many commentators have noted that several circuits either presume that a laches defense is limited to only rare cases, or that a laches defense is never available. According to the concurrence, the Ninth Circuit, is the most lenient in permitting the defense. An amicus brief by the California Society of Entertainment Lawyers argued that this leniency is part of a larger propensity the Ninth Circuit has in deferring to major Hollywood studios. In fact, part of the reason the statute of limitations was drafted into the Copyright Act was in response to the varying time periods the courts had previously been applying in different jurisdictions. Previously, the Ninth Circuit had always had a very short time period in relation to the availability in bringing copyright claims.
MGM argued in their opposition brief that there is no circuit split in relation to the applicability to laches. As laches is a defense in equity, the decisions of district courts will vary based on the facts and circumstances of each case. The differences that can be seen in various circuits are simply differences in the facts and circumstances of the cases that those circuits find themselves deciding. They also cited a number of patent and trademark cases that apply the defense of laches. However, Petrella argues that unlike patents and trademarks, the Copyright Act specifically has a statute of limitations which is at odds with a laches defense. She argues that allowing the split to continue runs counter to Congress’s desire to maintain a uniform national copyright law and will breed forum shopping.
This case will certainly be of interest to copyright lawyers in the Ninth Circuit. While laches may still be a valid defense to copyright infringement actions in some Circuits, we may see a shift in the application of this defense in the future.