In a majority
decision written by Justice
Ruth Bader Ginsburg, the Supreme Court said that
laches cannot be invoked as a bar to Paula
Petrella’s pursuit of a claim for damages brought
within a three-year window.
Ginsburg wrote that "the copyright statute of limitations
itself takes account of delay" by allowing a plaintiff to only
gain retrospective relief three years back from the time of the
suit. In addition, she said a defendant is able to offset
against profits in that period the expenses incurred in
generating those profits.
The dispute is over the copyright on the Martin
Scorsese-directed film Raging Bull, for which Robert De Niro
won an Oscar for his portrayal of boxer Jake LaMotta. Frank
Petrella had written a screenplay with LaMotta that was
copyrighted in 1963. In 1976, the pair assigned their rights
and renewal rights, which were acquired by MGM subsidiary
United Artists Corporation. Raging Bull was released in 1980
and MGM continues to market the film today.
Frank Petrella died in 1981 and his renewal rights reverted
to his daughter, Paula Petrella, who renewed the copyright in
1991. In 1998 she told MGM it was violating her copyright and
threatened to sue. In January 2009 she filed an infringement
suit, asking for monetary and injunctive relief for acts of
infringement from 2006 on.
MGM moved for summary judgment, invoking the doctrine of
laches. It argued that Petrella’s 18-year delay in
filing suit was unreasonable and prejudicial to MGM. This
motion was granted in district court and the Ninth Circuit
Laches: "gap-filling, not legislation-overriding"
Ginsburg said that MGM’s principal argument
about the contemporary scope of the laches defence is
unavailing. MGM urged that the plea should be available in
every civil action.
"There is nothing untoward about 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" –
Justice Ruth Bader
"The expansive role for laches MGM envisions careens away
from understandings, past and present, of the essentially
gap-filling, not legislation-overriding, office of laches.
Nothing in this Court’s precedent suggests a
doctrine of such sweep. Quite the contrary, we have never
applied laches to bar in their entirety claims for discrete
wrongs occurring within a federally prescribed limitations
MGM’s argument that laches defence must be
available to prevent a copyright owner from waiting to see how
big the outcome of an alleged infringer’s
investment will be was also shot down. "It 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
that work, or even complements it. Fan sites prompted by a book
or film, for example, may benefit the copyright owner," wrote
MGM’s concerns that the evidence that is needed
to defend against a liability will be lost during a long period
of time before being sued also did not persuade Ginsburg, who
said Congress must have been aware of this issue when providing
for reversionary renewals rights that an author’s
heirs can exercise long after the work was copyrighted.
Ginsburg was joined in the opinion by Justices Antonin
Scalia, Clarence Thomas, Samuel Alito, Sonia Sotomayor and
"No reason to erase the doctrine"
Dissenting the opinion were Justices Stephen Breyer, John
Roberts and Anthony Kennedy.
Writing the dissent, Breyer said laches applied in cases
where a plaintiff unreasonably delays in filing a suit and
causes unjust hardship to the defendant. He said it may be
inequitable for owners of a copyright with full notice of an
infringement to stand inactive while the proposed infringer
spends money in its exploitation. "Today’s
decision disables federal courts from addressing that inequity.
I respectfully dissent," he wrote.
"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"
– Justice Stephen Breyer
Breyer noted that during the 18 years Petrella waited after
renewing copyright MGM spent millions of dollars developing
different editions of, and marketing, the film as well as
entering into numerous licensing agreements to broadcast the
film on television. MGM held a licence to the screenplay under
a 1976 agreement with LaMotta. "Consequently, I believe the
Court of Appeals acted lawfully in dismissing the suit due to
laches," wrote Breyer.
He said long delays do not automatically prove inequity but
they raise that possibility. Responding to the
majority’s view that the three-year copyright
statute of limitations takes account of the delay thus removing
the need for laches, Breyer said: "I agree that sometimes that
is so. But I also fear that sometimes it is not."
Breyer also argued against the notion that a plaintiff can
recover only the defendant’s profits once the
expenses incurred have been deducted. He wrote this does not
stop a copyright holder from standing inactive while the
infringer spends large sums of money in a risky venture,
"appearing on the scene only when the venture has proved a
success; and thereby collecting substantially more money than
he could have obtained at the outset, had he bargained with the
investor over a licence and royalty fee."
Concluding, he wrote: "In sum, as the majority says, the
doctrine of laches may occupy only a 'little
place’ in a regime based upon statutes of
limitations… But that place is an important one. 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 with respect to
limitations periods applicable to damages actions."
"Open the floodgates"
The Supreme Court’s reversal could have large
ramifications. Brad Newberg, partner at Reed Smith who
previously wrote an article for Managing IP arguing for
laches to be allowed as a copyright defence, called it one
of the biggest copyright cases ever in terms of practical
"This decision is not only shocking in its result and
ramifications, but it is also surprising, because at
oral argument, it seemed fairly clear that the Justices
were going to decide with MGM" – Brad Newberg,
partner at Reed Smith
"This will open the floodgates for copyright lawsuits going
forward as masses of litigants from the '70s, '80s, and '90s
will likely come out of the woodwork to claim that hit songs,
movies, TV shows and other creative works still in the
marketplace in some fashion, belong to them and they want a
share of the profits," he said in a statement. "In many cases,
defendants will be completely unaware with key witnesses
deceased or with whereabouts unknown, and key documents and
evidence regarding the history of creation of the work
destroyed or unavailable."
Newberg pointed out that the majority opinion recognized
this when the defining the laches defense as an "unreasonable,
prejudicial delay in commencing suit." He said the decision
means that even when the plaintiff has been unreasonable in its
delay and that delay has greatly harmed the
defendant’s ability to defend itself, the laches
defense still will not be available.
"This decision is not only shocking in its result and
ramifications, but it is also surprising, because at oral
argument, it seemed fairly clear that the Justices were going
to decide with MGM, and allow the laches defense to exist to
bar copyright claims in various circumstances," he said.