U.S. Supreme Court’s Petrella Presages Significant Increase in Copyright Lawsuits

Frank Petrella wrote three works, including a 1963 screenplay, about the life of boxer Jake LaMotta. Both Petrella and LaMotta assigned rights to make a motion picture based upon these works. United Artists, a division of MGM, used the rights to make the hit 1980 film “Raging Bull.” Petrella died in 1981.

A twist in the copyright law provides that under certain circumstances a deceased author’s heirs may renew copyright in the author’s work free of any assignments the author made during his lifetime.

Paula Petrella, Frank Patella’s daughter and heir, renewed the copyright in the 1963 screenplay in 1991. Beginning in 1998, Paula Petrella’s counsel wrote MGM to assert that she now owned the rights to the 1963 screenplay, which MGM needed to license from her for any continued exploitation of “Raging Bull.” MGM disagreed and Paula Petrella threatened legal action.

Petrella did not sue MGM until 2009, apparently within three years of a release of “Raging Bull” in a modern format. The Copyright Act provides that actions for infringement must be filed within three years of the infringing use. MGM moved to dismiss the action based upon the defense of “laches,” an unreasonable delay in filing an action that results in prejudice to the defendant. MGM argued that it had relied upon Petrella’s non-action and that in the long delay witnesses and evidence became unavailable. Petrella acknowledged that she was not entitled to damages or profits from actions dating more than three years before her case was filed, but asserted that the judge could not override Congress’s intention that a copyright claim could be filed within three years after an infringing use by dismissing an otherwise timely claim under laches.

The trial court and appellate court agreed with MGM, but the U.S. Supreme Court disagreed and sided with Petrella. Under Petrella v. MGM, a judge may not dismiss a copyright action filed within three years of an infringing action based upon the doctrine of laches. The Supreme Court reasoned that a judge may not override the certainty Congress sought in establishing a uniform federal limitation period for copyright claims. The Court also said that any prejudice to a defendant would be ameliorated in two ways: by the limitation period’s bar on seeking damages or profits from uses more than three years before filing, and by the judge’s ability to shape any injunctive relief taking into account any unreasonable filing delay.

Petrella is important because successful copyrighted works are frequently re-released in modern media. To continue to earn money from their libraries, studios re-release older and successful works in media that did not exist when the works were first released. MGM re-released “Raging Bull” to the public in videotape, DVD and Blu-ray formats as they came into being and became popular. Each re-release after Paula Petrella’s 1991 renewal of the copyright in the 1963 screenplay arguably commenced a new infringement and started a new three-year clock on filing a copyright claim based upon each new release.

The certainty that a copyright claim may be filed within three years of a new release of previously published works gives potential copyright claimants the opportunity to see whether a work becomes profitable before deciding whether to sue. A film may not recoup all of its expenses through a theatrical release, and may only become profitable after subsequent releases in DVD, Blu-ray and other formats. Under Petrella, a potential copyright claimant could bypass suit on an allegedly infringing but unprofitable work when first released, and later file suit when a re-release of the work gives rise to profits, secure in the knowledge that a suit filed within three years of the re-release would not be dismissed due to unreasonable delay in filing. The Petrella court specifically recognized that the Copyright Act and its limitation period was constructed such that copyright claimants could wait to see whether a lawsuit was “worth the candle.”