Petrella v. MGM

Petrella v. Metro-Goldwyn-Mayer, Inc., et al.
Reference: Docket No. 12-1315
Term: 2013
Important Dates
Argued: January 21, 2014 Decided: May 19, 2014
Outcome
United States Court of Appeals for the 9th Circuit reversed and remanded
Majority
Samuel Alito • Ruth Bader Ginsburg • Elena Kagan • Antonin Scalia • Sonia Sotomayor • Clarence Thomas
Dissenting
Stephen Breyer • Anthony Kennedy • Chief Justice John Roberts

Petrella v. Metro-Goldwyn-Mayer, Inc., et al. (MGM) was decided on May 19, 2014, by the U.S. Supreme Court. The case is famous for holding that a legal defense known as laches cannot be invoked to bar a copyright infringement claim if that claim is brought within the statutory limitations period.

Questions presented: Whether the nonstatutory 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 in 17 U.S.C. § 507(b)?

Case background

Upon his retirement as a professional fighter, Jake LaMotta and a friend, Frank Petrella, worked together to produce biographical works based on events in LaMotta's life. The pair produced two screenplays and a book. The first screenplay was registered for copyright protection with the U.S. Patent and Trademark Office in 1963, identifying Petrella as the sole author of the work; the registration, however, stated that the work was produced in collaboration with LaMotta. The book was registered in 1970. The second screenplay was registered in 1973. Under the Copyright Act, Petrella, as the author, was afforded copyright protection for an initial period of 28 years. After the initial period, this protection could be renewed for another 67 years. This latter period constituted Petrella's renewal rights.

In 1976, LaMotta and Petrella entered into an agreement with a production company, Chartoff-Winkler Productions, Inc., in which Chartoff-Winkler gained exclusive rights, including renewal rights, to the book and to both screenplays. In 1978, United Artists Corporation, a subsidiary of MGM, acquired motion picture rights to the book and both screenplays. In 1980, United Artists produced the film Raging Bull based on the Petrella and LaMotta works. Petrella died in 1981, and his renewal rights passed to his heirs. In 1991, the U.S. Supreme Court held in Stewart v. Abend that if an author died before the renewal period began, as happened here, then any entity to which the copyright holder assigned his or her rights could continue to use the original work (here, the 1963 screenplay) to produce derivative work (here, Raging Bull) if and only if the author's successor(s) transferred those rights to the assignee (here, United Artists and MGM).

In 1991, when the initial 28-year period for copyright protection on the 1963 screenplay was exhausted, Petrella's daughter and successor, Paula Petrella, filed an application for renewal of the copyright on the 1963 screenplay, which afforded her copyright protection for another 67 years on that screenplay. There were no timely renewals filed for either the book or the second screenplay. In 1998, Paula Petrella contacted MGM, claiming that she had obtained the rights to the 1963 screenplay and to any derivative works, including Raging Bull. MGM argued that it retained rights to the 1963 screenplay through LaMotta, with whom MGM also had an agreement.

In 2009, Petrella sued MGM for copyright infringement for all infringing acts that occurred from January 6, 2006, until the time of her lawsuit, which corresponded to a statutory limitations period of three years established by Congress for civil suits arising under copyright infringement claims. A federal district court granted summary judgment to MGM under a legal doctrine known as laches. Generally, a laches defense is used to show that a plaintiff has waited an unreasonable amount of time to file a claim and that this delay is prejudicial toward the defendant. Here, the district court argued that MGM established both an "'expectations-based prejudice,' because the company had 'made significant investments in exploiting the film'" as well as an "'evidentiary prejudice,' because Frank Petrella had died and LaMotta, then aged 88, appeared to have sustained a loss of memory." The Ninth Circuit affirmed the laches-based dismissal based on its determination "that MGM had established expectations-based prejudice: the company had made a large investment in Raging Bull, believing it had complete ownership and control of the film."

Oral argument

Oral argument was held on January 21, 2014. The case was decided on May 19, 2014.

Decision

The judgment of the United States Court of Appeals for the 9th Circuit was reversed and remanded.

Opinion

Justice Ruth Bader Ginsburg delivered the opinion for a six-justice majority. In her opinion for the court, Justice Ginsburg held that the Ninth Circuit erred in allowing laches to bar a claim of copyright infringement filed within a three-year statute of limitations period. In her view, this statute of limitations period accounted for the delay that would otherwise necessitate laches and that, since Congress wrote this statute of limitations period into the Copyright Act, laches could not be used to bar relief of timely claims. The justice wrote,

“

The Ninth Circuit erred, we hold, in failing to recognize that the copyright statute of limitations, §507(b), itself takes account of delay. As earlier observed ... a successful plaintiff can gain retrospective relief only three years back from the time of suit. No recovery may be had for infringement in earlier years. Profits made in those years remain the defendant's to keep. Brought to bear here, §507(b) directs that MGM's returns on its investment in Raging Bull in years outside the three-year window (years before 2006) cannot be reached by Petrella. Only by disregarding that feature of the statute, and the separate-accrual rule attending §507(b) ... could the Court of Appeals presume that infringing acts occurring before January 6, 2006 bar all relief, monetary and injunctive, for infringement occurring on and after that date.

”

The court went on to reject numerous arguments advanced by MGM regarding the propriety and use of laches, holding that the court has "never applied laches to bar in their entirety claims for discrete wrongs occurring within a federally prescribed limitations period."

Dissent

Justice Stephen Breyer wrote a dissenting opinion joined by Chief Justice John Roberts and Justice Anthony Kennedy. Justice Breyer did not accept the court's rationale that laches should be prohibited as a defense against all infringement claims made within a fixed statute of limitations period,

“

...there is no reason to believe that the Court meant ... to announce a general rule about the availability of laches in actions for legal relief, whenever Congress provides a statute of limitations. To the contrary, the Court has said more than once that a defendant could invoke laches in an action for damages (even though no assertion of the defense had actually been made in the case), despite a fixed statute of limitations ... In those few and unusual cases where a plaintiff unreasonably delays in bringing suit and consequently causes inequitable harm to the defendant, the doctrine permits a court to bring about a fair result. I see no reason to erase the doctrine from copyright's lexicon, not even in respect to limitations periods applicable to damages actions.

”

Impact

This case clarified the use of laches as a bar to copyright infringement cases. The court held that so long as copyright infringement claims are limited to those occurring within the statutory period of three years, laches cannot bar such claims.

See also

• Supreme Court of the United States
• History of the Supreme Court
• SCA Hygiene Products Aktiebolag v. First Quality Baby Products

External links

• Supreme Court of the United States