Supreme Court issues ruling over Raging Bull copyright infringement lawsuit

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by Charles Miller

In a 6-3 opinion written by Justice Ginsburg, the Supreme Court has held that the equitable doctrine of laches cannot be invoked as a bar to a claim for damages brought within the three-year window established by Section 507(b) of the Copyright Act. Petrella v. Metro-Goldwyn-Mayer, Inc, No. 12–1315. (U.S. May 19, 2014). Justice Breyer filed a dissenting opinion, in which Chief Justice Roberts and Justice Kennedy joined.

The motion picture Raging Bull was based on the life of boxing champion Jake LaMotta, who, with Frank Petrella, told his story in a screenplay copyrighted in 1963. In 1976, the pair assigned their rights and renewal rights, which were later acquired by respondent United Artists Corporation, a subsidiary of respondent Metro–Goldwyn–Mayer, Inc. (collectively, MGM). In 1980, MGM released Raging Bull and it continues to market the film today.

The Copyright Act protects copyrighted works published before 1978 for an initial period of 28 years, renewable for a period of up to 67 years. According to the Act, the author’s heirs inherit the renewal rights. Thus, when an author who has assigned rights away “dies before the renewal period, … the assignee may continue to use the original work only if the author’s successor transfers the renewal rights to the assignee,” Stewart v. Abend, 495 U.S. 207, 221.

Frank Petrella died during the initial copyright term, so renewal rights reverted to his heirs. Paula Petrella, his daughter, renewed the 1963 copyright in 1991, becoming its sole owner. Seven years later, she advised MGM that its exploitation of Raging Bull violated her copyright and threatened suit. Then, some nine years later, Ms. Petrella filed an infringement suit on January 6, 2009, seeking monetary and injunctive relief limited to acts of infringement occurring in the three previous years, i.e. on or after January 6, 2006.

The Copyright Act provides that “[n]o civil action shall be maintained under the [Act] unless it is commenced within three years after the claim accrued.” 17 U.S.C. § 507(b). Although a claim ordinarily accrues when an infringing act occurs, each infringing act starts a new limitations period. However, each infringement is actionable only within three years of its occurrence.

MGM moved to dismiss the case based on the equitable doctrine of laches. Laches is an equitable defense, essentially asserting that an unreasonable delay by the plaintiff is pursuing a right or claim is prejudicial to the defendant. The defense is based on the idea that a plaintiff has “slept on its rights,” and, as a result of the delay, the circumstances have changed such that it is no longer just to grant the relief requested. The doctrine of laches developed, and is most commonly applied, in the context of claims for equitable relief, as opposed to claims for money damages.

MGM argued it was unreasonable and prejudicial to MGM for Ms. Petrella to have waited 18 years before filing her suit. The District Court granted MGM’s motion, holding that laches barred Petrella’s complaint, and the Ninth Circuit affirmed. The Supreme Court has now reversed.

As noted, Section 507(b) directs that Ms. Petrella’s 2009 suit cannot seek to recover any damages based on infringement prior to 2006. The Supreme Court noted that Ms. Petrella sought no relief for any conduct occurring outside § 507(b)’s three-year limitations period. The court determined that the Act itself already took delay into account by allowing a successful plaintiff to gain retrospective relief for only three years back from the time of suit.

The court rejected MGM’s argument that a laches defense is necessary to prevent a copyright owner from sitting still, doing nothing, waiting to see what the outcome of an alleged infringer’s investment will be. Rather, the court noted that the Act specifically envisions that a copyright owner is not required to challenge each and every actionable infringement. The court stated there was nothing untoward about an owner waiting to see whether an infringer’s exploitation undercuts the value of the copyrighted work, has no effect on that work, or even complements it. In sum, the Act’s limitations period, coupled with the fact that each act of infringement gives rise to new claim, allows a copyright owner to defer filing suit until she can estimate whether litigation is worth it.

The court did note that, unlike claims for damages, there can be circumstances where laches is an appropriate defense to claims for equitable relief. For example, owners of a copyrighted architectural design who delay filing suit (despite knowledge of infringement) until the project is substantially complete would not be entitled an order mandating destruction of the project. Similarly, where a copyright owner is unable to explain its delay in bringing suit, it would not be proper to order “total destruction” of a book already printed, packed, and shipped.

The Supreme Court found no such extraordinary circumstance present in Petrella’s suit against MGM. Petrella had notified MGM of her copyright claims before MGM invested millions of dollars in creating a new edition of Raging Bull, and the equitable relief she sought—such disgorgement of unjust gains and an injunction against future infringement—would not result in anything like “total destruction” of the film.

Intellectual Property Law at Heygood, Orr & Pearson

At Heygood, Orr & Pearson, our attorneys have handled hundreds of commercial litigation cases ranging in value from tens of thousands of dollars to tens of millions. We have successfully represented businesses of all sizes, from small “mom and pop” businesses to some of the largest corporations in the world.

Whether we are representing a huge, multi-national corporation or a small local business, we understand that clients want their legal representation to be not only excellent but cost-effective and efficient. For that reason, we will often offer our clients flexible fee structures such as contingent fees, flat fees, reduced hourly fees with a bonus payment contingent on success and reverse contingent fees.

At Heygood, Orr & Pearson, our attorneys have handled numerous patent matters including prosecuting claims for infringement, as well as for interfered-with patent rights. We have handled claims brought by a large local company for infringement of its rail car patent, claims by a local inventor for infringement of her patent for a childcare product and claims by an Israeli company against a Fortune 500 company for infringement of its wireless technology patent. Our firm has also represented a client suing a large American pharmaceutical company for interfering with its patent rights to liposome technology. Right now, our attorneys are representing an international businessman in a trademark infringement lawsuit relating to the diamond and jewelry business.

Our attorneys are capable of litigating patent infringement claims throughout the country. In addition, firm attorney John “Jay” Pate is licensed to prosecute patents before the U.S. Patent and Trademark Office.

Beyond our specific experience in the field of intellectual property, our ability to prosecute patent infringement action is aided by our extensive trial experience in general. While technical knowledge and familiarity with patent rules is a must for attorneys handling patent infringement claims, there is no substitute for courtroom experience. At Heygood, Orr & Pearson, our seasoned litigators have the experience to take even the most complex patent case and explain it in terms a jury can understand. We have a track record of proven success representing businesses large and small. Several of our trial lawyers are board certified* and many of them have been selected as Super Lawyers in the State of Texas** for several years in a row. Our firm is AV rated, the highest legal and ethical ranking available from the leasing law firm ranking service, Martindale-Hubbell.

If you or your company is in need of representation in an intellectual property matter, contact us for a free consultation by calling toll-free at 1-877-446-9001, or by completing the free case evaluation form on our firm’s contact page.

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Michael Heygood, James Craig Orr, Jr. and Eric Pearson are all Board Certified in Personal Injury Trial Law — Texas Board of Legal Specialization.

** Michael Heygood, James Craig Orr, Jr. and Eric Pearson were selected to the Super Lawyers List, a Thomson Reuters publication, for the years 2003 through 2014.