U.S. Supreme Court Holds That Laches Cannot Bar Damages Relief for Timely Filed Copyright Infringement Claims

by Eversheds Sutherland (US) LLP

The U.S. Supreme Court held Monday that the defense of laches cannot serve as an absolute bar to relief for actions brought within the Copyright Act’s three-year limitations period. The majority opinion, penned by Justice Ruth Bader Ginsburg, drew a sharp distinction between legal damages and equitable relief. In extraordinary circumstances, Justice Ginsburg wrote, laches may bar the particular equitable relief sought by a plaintiff. With respect to damages, however, “courts are not at liberty to jettison Congress’ judgment on the timeliness of suit.” Slip Op. at 1. The Supreme Court’s opinion in Petrella v. Metro-Goldwyn-Mayer, Inc. is here. The holding presents a bright-line rule for copyright owners seeking damages within the limitations period prescribed by the Copyright Act.

The case involves a 1963 screenplay for the critically acclaimed motion picture Raging Bull, directed by Martin Scorsese and starring Robert De Niro. Frank Petrella, the screenwriter and sole registered author of the 1963 screenplay, assigned his rights to the work in 1976; the work was subsequently acquired by a subsidiary of Defendant Metro-Goldwyn-Mayer, Inc. (MGM). Copyrighted works published before 1978, such as the screenplay, are protected for an initial term of 28 years, which may be extended for a renewal period of up to 67 years. Supreme Court precedent provides that when an author dies during the initial copyright term, as did Frank Petrella (in 1981), renewal rights revert to the author’s heirs. Plaintiff Paula Petrella (Petrella), the screenwriter’s daughter, renewed the copyright in the subject work in 1991, thereby securing ownership of the copyright.

Seven years later, in 1998, Petrella’s attorney contacted MGM, alleging that exploitation of Raging Bull, as a derivative work of the screenplay, infringed on Petrella’s copyright. A two-year letter exchange followed, replete with threats of legal action. Nine years after that, in 2009, Petrella sued MGM for copyright infringement, seeking injunctive relief against future infringements and monetary relief for acts of infringement occurring in the three years prior to the suit. MGM moved for summary judgment on several grounds, including the equitable defense of laches. The district court granted MGM’s motion, and the U.S. Court of Appeals for the Ninth Circuit affirmed.

The Supreme Court granted certiorari to address a conflict in the Circuits relating to the equitable defense of laches in the context of timely filed copyright infringement claims, and a 6-3 majority reversed and remanded the Ninth Circuit’s judgment. The majority opinion held that the Ninth Circuit had erred in allowing MGM to invoke laches to bar Petrella’s pursuit of legal remedies, because “the copyright statute of limitations, [17 U.S.C.] §507(b), itself takes account of delay.” Slip Op. at 11. The Court criticized the Ninth Circuit’s faulting of Petrella “for waiting to sue until the film Raging Bull ‘made money.’” Slip Op. at 16 (internal citation omitted). The Court observed that the three-year limitations period “allows a copyright owner to defer suit until she can estimate whether litigation is worth the candle.” Slip Op. at 17.

The majority opinion explained that laches was developed by courts of equity to “fill the holes” in statutes lacking set limitations periods. “Both before and after the merger of law and equity in 1938,” Justice Ginsburg writes, “this Court has cautioned against invoking laches to bar legal relief.” Slip Op. at 12. In extraordinary circumstances, however, the Court noted that laches may be invoked to preclude equitable relief that would work an “unjust hardship” on innocent parties, or result in the “total destruction” of a work. Slip Op. at 21. However, the Court found no such circumstances present in this case.

Justice Stephen Breyer, joined by the Chief Justice and Justice Anthony Kennedy, dissented. Citing precedent relied upon by the majority, the dissent argued that “[t]raditionally and for good reasons, statutes of limitation are not controlling measures of equitable relief.” Dissent at 9 (internal citation omitted). Relying on the legislative history of the Copyright Act’s limitations provision, the dissent maintained that Congress’ “silence is consistent, not inconsistent, with the application of equitable doctrines,” and that “Congress expected” that federal courts would continue to recognize equitable defenses in the copyright context. Dissent at 7. Invoking Judge Hand’s ancient warning, the dissent lamented the resultant inequity that a copyright owner, “with full notice of an intended infringement, [may] stand inactive while the proposed infringer spends large sums of money in its exploitation, … interven[ing] only when his speculation has proved a success.” Dissent at 1 (internal citation omitted).

The majority maintained that courts are authorized under the Copyright Act to fashion injunctive relief “on such terms as it may deem reasonable,” with full consideration of the equity of a plaintiff’s complaint. Slip. Op. at 22 (quoting 17 U.S.C. §502(a)). Accordingly, the majority held, absent extraordinary circumstances, where a copyright plaintiff complies with the three-year limitations provision of the Copyright Act, a defendant may not invoke laches as a complete bar to relief.


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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