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IP Litigation

Supreme Court Rules Raging Bull Claims Not Down for the Count – A Follow-Up Post

May 20, 2014

IP Litigation

Supreme Court Rules Raging Bull Claims Not Down for the Count – A Follow-Up Post

May 20, 2014

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As mentioned in our blog yesterday, the Supreme Court handed down its decision in Petrella v. MGM. hollywood star_blog_200pxThe case raised the issue of whether the equitable defense of laches is available in copyright actions but the effects of the decision may extend to other areas, including patent law. The roots of the case go back to the 1960s, when famed middle-weight champion boxer Jake Motta co-wrote a screenplay (among other works) with author Frank Petrella. The rights to that screenplay were ultimately purchased by MGM in the 1970s. MGM released the Martin Scorsese film Raging Bull in 1980, allegedly based on Petrella’s screenplay. The film went on to win many awards and eventually became a commercial success.

Copyright law provides, under certain conditions, for ownership of copyrighted works created before 1978 to be reclaimed by an author’s heirs, negating any previous transfers or licenses on those works. Frank Petrella died in 1981, and his daughter Paula Petrella acquired the copyright to the work in 1991. After multiple attempts to negotiate with MGM regarding her rights in the work, Petrella sued for copyright infringement in 2009. Her lawsuit was thus brought eighteen years after she obtained the necessary rights to sue, and nine years after her last attempt to contact MGM. MGM successfully defended in the district court on the basis of laches, a long-standing doctrine arising out of the courts of equity which bars relief when a plaintiff unreasonably delays in filing suit and the defendant suffers economic or evidentiary prejudice as a result of the delay. The Ninth Circuit Court of Appeals affirmed (noting a “presumption” of laches given the long delay), and the Supreme Court granted certiorari to resolve a circuit split on the viability of laches in copyright cases.

At the Supreme Court, Petrella argued that the Copyright Act’s bright-line and explicit three year statute of limitation was the only legal framework for timeliness. Under the “separate-accrual” rule, each allegedly infringing act (e.g., copy, distribution, or public performance) gives rise to a new cause of action and thus resets the clock to bring a claim relating to that particular act. According to Petrella, once Congress enacted a uniform statute of limitations for copyright claims in 1957, the historical laches defense no longer applied—in essence, that Congress preempted any previously existing timeliness rules. MGM, by contrast, contended that laches should always be available, even when a case was brought within an explicit statute of limitations, because laches served a different purpose than the statute of limitations and the defense had not explicitly been abrogated by Congress. The Court sided with Petrella, holding that the only requirement for a copyright claim to be timely is that the cause of action accrue within three years prior to suit. The Court observed that laches had a “gap-filling” rather than a “legislation-overriding” role in the law, and there was no “gap” to fill where Congress had spoken on the issue. The Court did note, however, that consistent with traditional equitable principles, laches could bar equitable relief including an injunction in “extraordinary circumstances.”

In a footnote, the Supreme Court explicitly declined to reach the impact of its ruling (if any) on patent law. Federal Circuit precedent recognizes laches as a valid defense to patent infringement; however, under the Federal Circuit’s Aukerman decision from 1992, laches only bars damages incurred prior to the commencement of suit, and cannot serve as a defense against injunctive relief. The Patent Act, like the Copyright Act, has an explicit statute of limitations, and thus litigants will likely argue about the impact of this decision in patent cases. Differences between the language and legislative history of the two Acts may provide for a different result—in particular, in Aukerman the Federal Circuit found that Section 282 of the Patent Act explicitly preserved the laches defense by enumerating “absence of liability for infringement” and “unenforceability” as separate defenses from “noninfringement.” Until the issue is taken up again in the patent context by the Federal Circuit or the Supreme Court, the scope and applicability of the laches defense in federal causes of action (outside of copyright law) that provide for a statute of limitations is likely to remain unsettled.

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