Disputes over film rights are a dime a dozen in Hollywood. Most of them are dismissed. So it will be a rarity on Tuesday, when the Supreme Court hears oral arguments in a case over the rights to "Raging Bull," the 1980 Martin Scorsese movie about boxer Jake LaMotta.
Paula Petrella claims she has an interest in the movie given that in the 1960s and early 1970s, her father Frank Petrella wrote a book and two screenplays based on LaMotta's career, either on his own or in collaboration with the retired prizefighter. The nine justices, however, won't be deciding on the thorny lineage of "Raging Bull," but whether Petrella waited too long to press her copyright infringement claim against MGM.
The Copyright Act has a three year statute of limitations, and because MGM has continued to release "Raging Bull" in various formats, Petrella's claim fell within it. But the courts held that because she was made aware of her potential rights to the work as far back as 1991, ten years after her father's death, she was unreasonable in her delay in filing suit.
Unlikely as it is that her case made it to the highest court, the Supreme Court's decision has potentially significant implications for Hollywood. "This is, economically, a very significant issue, because it has to do with when you can sue for copyright infringement," said Jay Dougherty, professor of law at Loyola Law School and director of the university's entertainment and media law institute.
The studios say the case is an issue of fairness. Because they own vast libraries that are continually being released in new platforms, they are constantly resetting the clock for copyright and its statute of limitations. Without laches as a defense, there would be the constant threat of authors, their families and their estates coming out of the woodwork to lay claim to ownership of certain projects. In MGM's case, the studio spent $8.5 million distributing and promoting the movie on the assumption there was no dispute over its ownership.
"When plaintiffs unreasonably sit on their rights and sue only after [a studio or distributor] have devoted significant resources to making the copyrighted material profitable, laches serves important interests of fairness and finality, without which the validity of a work's further distribution would remain permanently in doubt," the MPAA said in an amicus brief to the high court. They were joined by the Assn. of American Publishers, the National Cable & Telecommunications Assn., and the Software & Information Industry Assn.
The case, the studios say, has parallels to the legendary battle over the rights to James Bond. Kevin McClory collaborated with Ian Fleming and another writer on the screenplay to "Thunderball." McClory secured certain rights to "Thunderball" in a settlement in the 1960s, but he asserted in litigation in the late 1990s that he had a claim for damages and profits from every James Bond film released by Danjaq Prods. But the district court and the 9th Circuit ruled in 2001 that his claim was barred by laches, even though the Bond movies continued to collect money in rereleases. They said that his wait of decades to press the claim was "unjustified and unreasonable." Many witnesses and records were gone by then, and Danjaq had since invested millions in the Bond franchise, the court noted.
Similarly, MGM argues that many of the potential witnesses have died, including Petrella's father, and Jake LaMotta is too elderly to testify. The 9th Circuit, in finding that she waited too long, cited one of her explanations for the delay, that "the film was deeply in debt and in the red and would probably never recoup" and she "did not know there was a time limit to making such claims."
MGM is represented by a team that includes Mark A. Perry and Blaine Evanson of Gibson, Dunn & Crutcher and Jonathan Zavin and David Grossman of Loeb & Loeb.
Other groups see this case as more than just an issue over rights to movies. Dish Network, Echostar Corp., DirecTV, TiVo and the Consumer Electronics Assn., among others, have weighed in to argue that the decision has potential implications for new technology, for the companies that make the products and the consumers that use them.
"A plaintiff who declines to sue on version 1 of a product should not be permitted to wait years and then assert the same infringement theory against version 5," the companies wrote in a joint amicus brief. "Not only the innovator, but consumers who believe they are making fair-use copies, gain settled and reasonable expectations of peace and repose." They even argued that a consumer could discover that the DVR he or she has been using is being "challenged as unlawful." Without laches, the result is that a company is "not protected by the statute of limitations until three years after the last consumer stops using the device."
But the 9th Circuit, which covers California and western states, is the most favorable of all the appellate courts in supporting laches as a valid reason to dismiss copyright infringement claims. In fact, their ruling in Petrella's case is viewed as an example of why the circuit has a reputation among many plaintiffs' lawyers as the "court of appeals for the Hollywood circuit", and too favorable to media conglomerates. Some of the circuits don't allow laches to be used as a defense at all, so copyright cases adhere to the three-year statute of limitations. That split between the circuits is generally viewed as a big reason why the Supreme Court took the case.
Petrella's attorneys, Stephanos Bibas and Glen Kulik, write that "allowing laches to bar all injunctive relief would permanently deprive copyright holders of their property right to exclude infringers. It would effectively grant infringers free licenses for decades, overriding the Copyright Act's compensation requirements and limits on compulsory licensing."
They add, "The separation of powers leaves it to Congress to determine which claims are timely. Courts may make timeliness determinations only when Congress has failed to do so."
Groups like the Authors Guild, the American Society of Media Photographers and the Songwriters Guild of America have sided with Petrella, arguing in an amicus brief that the "presence of the rolling three-year period reflects a balance of competing interests: that of compensating authors for their work ...on the one hand, and that of calming disputes on the other. The rolling period prohibits infringers from receiving a windfall after a long period of unauthorized exploitation, thereby preserving the incentive to create."
They also are joined by the Obama administration, as Solicitor General Donald Verrilli suggested that just because a studio or other defendant "makes substantial investments in a work does not establish that it would have been better off if the plaintiff has filed suit earlier." MGM will be able to keep profits earned outside the statute of limitations period -- that is to say, before 2006. And Petrella's team has argued that it actually is more to the advantage to a plaintiff to file a suit closer to the time when a project is being released, because that is more likely when it will collect its biggest box office and homevideo grosses.
If the high court sides with Petrella, her case would then likely go back to a lower court to decide the merits of whether she has an ownership interest in "Raging Bull." That is when a court will shed light on the real backstory of how one of the most acclaimed movies of the 1980s, a gem in MGM's massive library, made it to the screen.