Raging Bull and Copyright Trolls: The Supreme Court “Knocks Out” The Laches Defense in Copyright Fights

by K&L Gates LLP
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The 1980 movie classic Raging Bull tells the story of the hard-charging boxer Jake LaMotta, the prizefighter from the Bronx who pulverized opponents and eliminated their defenses in the ring.  Just days ago in the biggest ring of them all—the U.S. Supreme Court—the Plaintiff “KO’d” MGM’s “laches” defense in a case involving alleged infringement of the screenplay from which Raging Bull was derived. See Petrella v. Metro-Goldwyn-Mayer, Inc., __S.Ct. __,  2014 WL 2011574 (2014). The ruling that laches did not bar the infringement claim is significant because the Plaintiff was aware of alleged infringement for almost two decades and did nothing while MGM continued to exploit the movie. Although it is too early to know whether the decision will lead to an onslaught of otherwise-forgotten or dormant claims for infringement, content owners will want to be aware of the decision and its potential impact. This e-lert provides a brief background on the dispute, the Court’s decision, and some of the key takeaways, intended to enable you to “float like a butterfly and sting like a bee” in assessing potential copyright claims in light of Petrella!

Background
After middleweight boxer Jake LaMotta (the “Raging Bull”) hung up his gloves, he collaborated with longtime friend Frank Petrella to write a screenplay about his hardscrabble upbringing in the Bronx and stormy championship boxing career. In 1976, Petrella and LaMotta assigned the copyright in the screenplay (and its renewal rights) to a subsidiary of Metro-Goldwyn-Mayer, Inc., which then produced the 1980 movie Raging Bull starring Robert De Niro. The movie became a cult favorite of boxing fans far and wide, and De Niro’s performance won him the Oscar for best actor. Petrella passed away in 1981, during the initial copyright term of the screenplay. Under the Court’s decision in Stewart v. Abend, 495 U.S. 207 (1990), Mr. Petrella’s death during the original copyright term resulted in the renewal rights passing to his heirs, notwithstanding his previous assignment of the renewal rights to the MGM subsidiary.  In 1991, the copyright was renewed in the name of “Frank Petrella’s heirs,” and his daughter, Ms. Paul Petrella, became the sole owner after she received an assignment from her brother and her mother passed away. Years later, in 1998, Ms. Petrella advised MGM that the film Raging Bull—a derivative work of the original screenplay—was infringing. Ms. Petrella took no action until she finally sued MGM for copyright infringement in 2009—nearly two decades after the copyright was renewed and nine years after she had first approached MGM about its alleged infringement. She limited her claim for damages going back only three years from the date the suit was commenced and sought prospective injunctive relief.

The “Undercard”
The U.S. District Court for the Central District of California found the equitable defense of laches barred Petrella’s claim for infringement because Petrella had unreasonably delayed by not filing suit until 2009, and that MGM was prejudiced by the delay. In particular, the trial court thought MGM’s significant investments in exploiting the film would be unfairly compromised by the tardy lawsuit. The Ninth Circuit affirmed the trial court’s decision, finding that the claim for copyright infringement was barred by the doctrine of laches because at least part of the claim for infringement accrued outside of the three-year statute of limitations period under the Copyright Act.

The “Main Event”
In a 6-3 “split decision,” the Supreme Court reversed the Ninth Circuit and held that laches could not bar a claim for copyright infringement, at least in so far as the Plaintiff was only seeking damages for infringement that occurred within the previous three years before the suit was filed. Notably, the Court was unfazed by the fact that Ms. Petrella sued nine years after she had first objected to MGM’s continued exploitation of Raging Bull and 18 years after the copyright was renewed. The Court observed that “[i]t is hardly incumbent on copyright owners, however, to challenge each and every actionable infringement. And there is nothing untoward about waiting to see whether an infringer’s exploitation undercuts the value of the copyrighted work, has no effect on the original work, or even complements it.” The case was remanded “for further proceedings consistent with this opinion.”

Key Takeways
Here are some of the key takeaways from the Supreme Court’s decision:

  1. To the extent it was unclear before, a Plaintiff can only recover monetary relief going back three years from the date the Complaint was filed.
  2. The defense of laches does not apply in copyright cases for claims involving monetary relief, at least in as much as the Plaintiff seeks disgorgement of profits or recovery of damages going back only three years from the date the Complaint was filed. Other equitable defenses, such as estoppel, may still be invoked however.
  3. In extraordinary circumstances, at the very outset of the litigation, laches might apply when the copyright infringement claim would destroy an ongoing project, or make for the “total destruction” of a book already printed. Otherwise, laches in the context of a claim for copyright infringement appears to no longer be viable.

Potential plaintiffs will find the Raging Bull decision welcome news. It is still too early to tell, however, whether the Court’s split decision will embolden these heretofore indolent copyright claimants to lace up their gloves and come out swinging!

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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