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Supremes Disallow 'Laches' Defense in Copyright Suit

In a legal defeat for cable operators, satellite operators, studios and book publishers, the Supreme Court Monday ruled 6-3, though not along traditional lines, that an infringement claim made within a statute of limitations set by Congress cannot be trumped by a separate doctrine that says undue delay in filing is a defense against such claims. (Justice Ginsburg wrote the opinion in which Justices Scalia, Thomas, Alito, Sotomayor and Kagan joined, with Justice Breyer writing the dissent, joined by Justice Kennedy and Chief Justice Roberts.

MGM had invoked "laches," which is the doctrine that an unreasonable delay in pursuing a claim is an inequitable defense against that claim, in defending itself against an infringement suit by the heir to the copyright holder of the screenplay to Raging Bull, a claim that was filed within the three-year statute of limitations. MGM moved for summary judgment, invoking laches, and a district court agreed, then the Ninth Circuit Court of Appeals affirmed.

There had actually been an 18-year delay, from the 1991 renewal of the copyright to 2009, when the suit was launched, but the suit was limited to infringement only from 2006, so fell within the statute of limitations.

Studios, who license the rights to books, plays and other material for films and TV shows, and program distributors who license technology, were concerned that copyright holders could wait until they have made significant investments in programming and technology before asserting their claim, in the case of a technology perhaps a further iteration, then "punish [the licensee] and innocent investors for doing what might have been prevented by timely action on the part of the [plaintiff]."

In a brief filed in support of MGM, the Motion Picture Association of America, National Cable & Telecommunications Association, and others had argued that given the "continuing investments that are required to support the long-term distribution of works such as motion pictures and books, copyright infringement claims in those fields that are brought years or decades after the dispositive events can impose significant evidentiary and economic prejudice on studios, publishers, and distributors."

The Supremes said it was "hardly incumbent on copyright owners 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."

The Supreme Court reversed the Ninth Circuit, holding that laches "cannot be invoked to preclude adjudication of a claim for damages brought within the Act’s three-year window."

Neither the National Cable & Telecommunications Association nor the Motion Picture Association of America would comment on the decision.

Veteran copyright attorney William Kane of BakerHostetler, who represented a screenwriter in a similar infringement suit over the James Bond franchise, said he thought it was a balanced decision. "Maybe that is why you saw some joining of conservatives and liberals in the 6-3 opinion." he pointed out that the court also said that damages will be limited to that three-year statute of limitations—MGM's profits from Raging Bull before 2006 are not threatened—and that the claim may be reduced by whatever money MGM invested over that three year period.