The 1980 movie “Raging Bull” is considered a classic boxing movie, perhaps one of the best of all time. But the biggest fight related to the movie may be coming up in this year’s Supreme Court Docket. The movie, starring Robert Deniro as middleweight slugger Jake LaMotta, was allegedly based on a book and two screenplays written by LaMotta and collaborator Frank Petrella. In 2009, Petrella’s daughter decided to sue the studio and the movie’s owners saying they never properly credited or compensated her Dad for his copyright in the work.
The lower Federal Court in California and the Federal Appellate Court in California, the 9th Circuit, said she waited too long and was too late to bring the suit under a doctrine called “laches.” Laches is a legal term that means an “unreasonable delay pursuing a right or claim…in a way that prejudices the [opposing] party” Black’s Law Dictionary. Basically, if you sleep on your rights and the other party genuinely acts a certain way (to their detriment or expense) because they believe you are not going to enforce your rights, then you are out of luck.
The problem is that the Copyright Act has a three year statute of limitations and each new infringement of a copyright is a brand new cause of action. So if MGM (which allegedly owns the rights) sells a DVD copy of the movie today, someone claiming a copyright infringement would have three years to bring the suit. That person could also collect damages for infringements that go back three years in time. In Ms. Petrella’s suit she would be seeking damages for infringements occurring roughly from 2006-present and for a declaration that she had future rights in the property.
Here are the facts that raise the issue here: In 1976, Frank Petrella and LaMotta entered into an agreement with a production company in which they assigned their rights in the screenplays and book, and in 1978, United Artists Corporation, a subsidiary of Metro-Goldwyn-Mayer, acquired the rights to the film Raging Bull from the production company. The film was released in 1980. Frank Petrella died the following year.
In 1990, Paula Petrella learned of a Supreme Court decision that she believed might impact her renewal rights in the copyrights of the two screenplays and book that she had inherited from her father. She retained an attorney, who filed a renewal application for the 1963 screenplay the following year. In 1998, the attorney contacted the defendants, claimed that Petrella had obtained the renewal rights in the 1963 screenplay, and asserted that Raging Bull was an infringement on those rights. Two years of correspondence between the parties ensued, but Petrella did not sue until 2009, nineteen years after she learned of the Supreme Court decision that prompted her to hire an attorney, and eleven years after her attorney first contacted the defendants.
That delay certainly seems unreasonable, but the Copyright Act does not contain a defense of laches in it. Furthermore, the 9th Circuit is one of only a handful of Circuits that apply laches this way in copyright cases. In fact, 9th Circuit Judge William Fletcher, one of the judges who concurred in the opinion, said he did so only because he was bound by precedent but also stated in his concurring opinion that the legal position adopted by the 9th is “the most hostile to copyright owners of all of the circuits.” It’s of even greater importance because the 9th Circuit houses California and is considered a highly important court in areas of intellectual property. Other circuits, like the 4th, do not allow laches to serve as a defense to an infringement claim that is timely brought. The 11th, 6th and 2nd (which houses NY) allow the claim, but require a much higher burden of proof than the 9th and will only allow it to diminish damages, not outlaw the claim entirely. That is an important distinction because it would still allow a claimant to have future rights until the copyright expired even if they may not receive a great deal in damages in their original lawsuit.
Judge Fletcher properly called this a “severe circuit split” which means it must be resolved by the Supremes. With the number of cases the High Court takes on diminishing every term, this could very well be the most watched copyright and IP case of this year’s term.
My feeling is that the Supreme Court will side with the position taken by the 2nd Circuit and reverse this ruling. Congress could have easily added language allowing laches to be considered in copyright claims but chose not to do so. However, equity ( or fairness) can come into play even in cases based on statutes so that the position that folks who significantly sleep on their rights should have a limit on the damages they can receive seems the best compromise. This may be the Bull’s last fight, but its a doozy.
+++++UPDATE++++++ MAY 19 2014+++++++++
As predicted, the US Supreme Court today overturned the 9th Circuit and reversed the ruling. Writing for the 6-3 majority, Judge Ruth Bader Ginsburg – a fierce protector of copyright – stated there “is nothing untoward about waiting to see whether an infringer is making money, so that litigation is worth the candle.” Ginsburg was joined by Justices Antonin Scalia, Clarence Thomas, Samuel Alito, Sonia Sotomayor and Elena Kagan. Justice Stephen Breyer was joined in dissent by Chief Justice John Roberts and Justice Anthony Kennedy. Bryer felt that the delay was unreasonable and provided an “unfair advantage” to plaintiffs because witnesses die and memories fade; it was unclear why the same isn’t true for both sides. The case comes down to the language of the Copyright Act which does not provide for undue delay as a defense and allows a case to be brought within three years of the last infringement. So in the end it will be up to Congress to decide whether to add this defense to the Act. Expect the media companies to being lobbying hard for this amendment starting tomorrow as this exposes them to lawsuits many years after the media is produced. Groups including the Motion Picture Association of America, Consumer Electronics Association, DirecTV and TiVo sided with MGM in this case and they can be counted on to spread the money around to try and get this amendment passed.