On May 19, 2014, the U.S. Supreme Court ruled in Petrella v. MGM, No. 12–1315, that laches does not preclude a copyright infringement action filed within the three-year statute of limitations from the last instance of infringement.
Back in 1963, Frank Petrella wrote a screenplay based on the life of Jake LaMotta. In 1976, United Artists Corporation, a subsidiary of Metro-Goldwyn-Mayer, Inc. (collectively, MGM) acquired those rights. In 1980, MGM released, and registered a copyright in, the movie Raging Bull, which MGM continues to market. Frank Petrella died during the initial copyright term, so renewal rights reverted to his heirs including his daughter, Paula Petrella. See Stewart v. Abend, 495 U. S. 207 (1990). She renewed the copyright in 1991, becoming its sole owner. In 1998, she advised MGM that its continued exploitation of Raging Bull violated her copyright and threatened suit, but she did not file an infringement suit until some nine years later in 2009. Her lawsuit was limited to acts of infringement occurring on or after January 6, 2006. MGM successfully moved for summary judgment for laches.
Copyright infringement has a three-year statute of limitations “after the claim accrued.” 17 U.S.C. §507(b). However, similar to patent law, copyright law follows a separate-accrual rule where each successive violation of a copyright is treated as a new infringing act with its own statute of limitations.
In a 6-3 decision, the Supreme Court ruled in favor of Petrella. Justice Ginsburg, joined by Justices Scalia, Thomas, Alito, Sotomayor, and Kagen, wrote that laches "cannot be invoked to preclude adjudication of a claim for damages brought within the three-year window." The Court noted that the copyright statute of limitations itself takes account of delay so Petrella cannot reach MGM’s returns on its investment in Raging Bull in years before 2006. Moreover, an accused infringer may offset against profits made in that period expenses incurred in generating those profits, assuming there is infringement. See 17 U.S.C.§ 504(b). An accused infringer also may retain the return on investment shown to be attributable to its own enterprise, as distinct from the value created by the infringed work. And a copyright owner’s delay can shape the remedy such as whether to issue an injunction.
However, when a copyright owner engages in intentionally misleading representations concerning abstention from suit, and the alleged infringer detrimentally relies on such deception, the doctrine of equitable estoppel (rather than laches) may bar the copyright owner’s claims completely, eliminating all potential remedies.
In a footnote, the court noted the six-year statute of limitations in patent law under 35 U.S.C. § 286, and the Federal Circuit's 1992 decision that laches can bar damages incurred prior to the commencement of suit, although not injunctive relief, A. C. Aukerman Co. v. R. L. Chaides Constr. Co., 960 F. 2d 1020 (Fed. Cir. 1992) (en banc); but went no further, stating, "We have not had occasion to review the Federal Circuit’s position."