NOTICE: This opinion is subject to
formal revision before publication in the preliminary print of the
United States Reports. Readers are requested to notify the Reporter
of Decisions, Supreme Court of the United States, Washington,
D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print
goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 12–1315
_________________
PAULA PETRELLA, PETITIONER v.
METRO-GOLDWYN-MAYER, INC., et al.
on writ of certiorari to the united states
court of appeals for the ninth circuit
[May 19, 2014]
Justice Ginsburg
delivered the opinion of the Court.
The Copyright Act
provides that “[n]o civil action shall be maintained under the
[Act] unless it is commenced within three years after the claim
accrued.” 17 U. S. C. §507(b). This case presents the question
whether the equitable defense of laches (unreasonable, prejudicial
delay in commencing suit) may bar relief on a copyright
infringement claim brought within §507(b)’s three-year limitations
period. Section 507(b), it is undisputed, bars relief of any kind
for conduct occurring prior to the three-year limitations period.
To the extent that an infringement suit seeks relief solely for
conduct occurring within the limitations period, however, courts
are not at liberty to jettison Congress’ judgment on the timeliness
of suit. Laches, we hold, cannot be invoked to preclude
adjudication of a claim for damages brought within the three-year
window. As to equitable relief, in extraordinary circumstances,
laches may bar at the very threshold the particular relief
requested by the plaintiff. And a plaintiff’s delay can always be
brought to bear at the remedial stage, in determining appropriate
injunctive relief, and in assessing the “profits of the infringer
. . . attributable to the infringement.”
§504(b).[
1]
Petitioner Paula
Petrella, in her suit for copyright infringement, sought no relief
for conduct occurring outside §507(b)’s three-year limitations
period. Nevertheless, the courts below held that laches barred her
suit in its en-tirety, without regard to the currency of the
conduct of which Petrella complains. That position, we hold, is
contrary to §507(b) and this Court’s precedent on the province of
laches.
I
The Copyright Act
(Act), 17 U. S. C. §101 et seq., grants copyright
protection to original works of authorship. §102(a). Four aspects
of copyright law bear explanation at the outset.
First, the length of a
copyright term. Under the Act, a copyright “vests initially in the
author or authors of the work,” who may transfer ownership to a
third party. §201. The Act confers on a copyright owner certain
exclusive rights, including the rights to reproduce and distribute
the work and to develop and market derivative works. §106.
Copyrighted works published before 1978—as was the work at
issue—are protected for an initial period of 28 years, which may
be—and in this case was—extended for a renewal period of up to 67
years. §304(a). From and after January 1, 1978, works are generally
protected from the date of creation until 70 years after the
author’s death. §302(a).
Second, copyright
inheritance. For works copyrighted under the pre-1978 regime in
which an initial period of protection may be followed by a renewal
period, Congress provided that the author’s heirs inherit the
renewal rights. See §304(a)(1)(C)(ii)–(iv). We held in Stewart v.
Abend, 495 U. S. 207 (1990) , that if an author who has
assigned her rights away “dies before the renewal period, then the
assignee may continue to use the original work [to produce a
derivative work] only if the author’s successor transfers the
renewal rights to the assignee.” Id., at 221.[
2]
Third, remedies. The
Act provides a variety of civil remedies for infringement, both
equitable and legal. See §§502–505, described supra, at 2,
n. 1. A court may issue an injunction “on such terms as it may
deem reasonable to prevent or restrain infringement of a
copyright.” §502(a). At the election of the copyright owner, a
court may also award either (1) “the copyright owner’s actual
damages and any additional profits of the infringer,” §504(a)(1),
which petitioner seeks in the instant case, or (2) statutory
damages within a defined range, §504(c).
Fourth, and most
significant here, the statute of limitations. Until 1957, federal
copyright law did not include a statute of limitations for civil
suits. Federal courts therefore used analogous state statutes of
limitations to determine the timeliness of infringement claims. See
S. Rep. No. 1014, 85th Cong., 1st Sess., 2 (1957) (hereinafter
Senate Report). And they sometimes invoked laches to abridge the
state-law prescription. As explained in Teamsters & Employers
Welfare Trust of Ill. v. Gorman Bros. Ready Mix, 283 F. 3d
877, 881 (CA7 2002): “When Congress fails to enact a statute of
limitations, a [federal] court that borrows a state statute of
limitations but permits it to be abridged by the doctrine of laches
is not invading congressional prerogatives. It is merely filling a
legislative hole.” (internal citation omitted). In 1957, Congress
addressed the matter and filled the hole; it prescribed a
three-year look-back limitations period for all civil claims
arising under the Copyright Act. See Act of Sept. 7, 1957, Pub. L.
85–313, 71Stat. 633, 17 U. S. C. §115(b) (1958 ed.). The provision,
as already noted, reads: “No civil action shall be maintained under
the provisions of this title unless it is commenced within three
years after the claim accrued.” §507(b).[
3]
The federal limitations
prescription governing copyright suits serves two purposes: (1) to
render uniform and certain the time within which copyright claims
could be pursued; and (2) to prevent the forum shopping invited by
disparate state limitations periods, which ranged from one to eight
years. Senate Report 2; see H. R. Rep. No. 2419, 84th Cong.,
2d Sess., 2 (1956). To comprehend how the Copyright Act’s
limitations period works, one must understand when a copyright
infringement claim accrues.
A claim ordinarily
accrues “when [a] plaintiff has a complete and present cause of
action.” Bay Area Laundry and Dry Cleaning Pension Trust Fund v.
Ferbar Corp. of Cal., 522 U. S. 192, 201 (1997) (internal
quotation marks omitted). In other words, the limitations period
generally begins to run at the point when “the plaintiff can file
suit and obtain relief.” Ibid. A copyright claim thus arises or
“accrue[s]” when an infringing act occurs.[
4]
It is widely recognized
that the separate-accrual rule attends the copyright statute of
limitations.[
5] Under that
rule, when a defendant commits successive violations, the statute
of limitations runs separately from each violation. Each time an
infringing work is reproduced or distributed, the infringer commits
a new wrong. Each wrong gives rise to a discrete “claim” that
“accrue[s]” at the time the wrong occurs.[
6] In short, each infringing act starts a new
limitations period. See Stone v. Williams, 970 F. 2d 1043,
1049 (CA2 1992) (“Each act of infringement is a distinct harm
giving rise to an independent claim for relief.”).
Under the Act’s
three-year provision, an infringement is actionable within three
years, and only three years, of its occurrence. And the infringer
is insulated from liability for earlier infringements of the same
work. See 3 M. Nimmer & D. Nimmer, Copyright §12.05[B][1][b],
p. 12–150.4 (2013) (“If infringement occurred within three
years prior to filing, the action will not be barred even if prior
infringements by the same party as to the same work are barred
because they occurred more than three years previously.”). Thus,
when a defendant has engaged (or is alleged to have engaged) in a
series of discrete infringing acts, the copyright holder’s suit
ordinarily will be timely under §507(b) with respect to more recent
acts of infringement (i.e., acts within the three-year window), but
untimely with respect to prior acts of the same or similar
kind.[
7]
In sum, Congress
provided two controlling time prescriptions: the copyright term,
which endures for decades, and may pass from one generation to
another; and §507(b)’s limitations period, which allows plaintiffs
during that lengthy term to gain retrospective relief running only
three years back from the date the complaint was filed.
II
A
The allegedly
infringing work in this case is the criti-cally acclaimed motion
picture Raging Bull, based on the life of boxing champion Jake
LaMotta. After retiring from the ring, LaMotta worked with his
longtime friend, Frank Petrella, to tell the story of the boxer’s
career. Their venture resulted in three copyrighted works: two
screenplays, one registered in 1963, the other in 1973, and a book,
registered in 1970. This case centers on the screenplay registered
in 1963. The registration identified Frank Petrella as sole author,
but also stated that the screenplay was written “in collaboration
with” LaMotta. App. 164.
In 1976, Frank Petrella
and LaMotta assigned their rights in the three works, including
renewal rights, to Chartoff-Winkler Productions, Inc. Two years
later, respondent United Artists Corporation, a subsidiary of
respond-ent Metro-Goldwyn-Mayer, Inc. (collectively, MGM), acquired
the motion picture rights to the book and both screenplays, rights
stated by the parties to be “exclusiv[e] and forever, including all
periods of copyright and renewals and extensions thereof.” Id., at
49. In 1980, MGM released, and registered a copyright in, the film
Raging Bull, directed by Martin Scorcese and starring Robert De
Niro, who won a Best Actor Academy Award for his portrayal of
LaMotta. MGM continues to market the film, and has converted it
into formats unimagined in 1980, including DVD and Blu-ray.
Frank Petrella died in
1981, during the initial terms of the copyrights in the screenplays
and book. As this Court’s decision in Stewart confirmed, Frank
Petrella’s renewal rights reverted to his heirs, who could renew
the copyrights unburdened by any assignment previously made by the
author. See 495 U. S., at 220–221 (relying on Court’s earlier
decision in Miller Music Corp. v. Charles N. Daniels, Inc., 362
U. S. 373 (1960) ).
Plaintiff below,
petitioner here, Paula Petrella (Petrella) is Frank Petrella’s
daughter. Learning of this Court’s decision in Stewart, Petrella
engaged an attorney who, in 1991, renewed the copyright in the 1963
screenplay. Because the copyrights in the 1973 screenplay and the
1970 book were not timely renewed, the infringement claims in this
case rest exclusively on the screenplay registered in 1963.
Petrella is now sole owner of the copyright in that work.[
8]
In 1998, seven years
after filing for renewal of the copyright in the 1963 screenplay,
Petrella’s attorney informed MGM that Petrella had obtained the
copyright to that screenplay. Exploitation of any derivative work,
including Raging Bull, the attorney asserted, infringed on the
copyright now vested in Petrella. During the next two years,
counsel for Petrella and MGM exchanged letters in which MGM denied
the validity of the infringement claims, and Petrella repeatedly
threatened to take legal action.
B
Some nine years
later, on January 6, 2009, Petrella filed a copyright infringement
suit in the United States District Court for the Central District
of California. She alleged that MGM violated and continued to
violate her copyright in the 1963 screenplay by using, producing,
and distributing Raging Bull, a work she described as derivative of
the 1963 screenplay. Petrella’s complaint sought monetary and
injunctive relief. Because the statute of limitations for copyright
claims requires commencement of suit “within three years after the
claim accrued,” §507(b), Petrella sought relief only for acts of
infringement occurring on or after January 6, 2006. No relief, she
recognizes, can be awarded for infringing acts prior to that
date.
MGM moved for summary
judgment on several grounds, among them, the equitable doctrine of
laches. Petrella’s 18-year delay, from the 1991 renewal of the
copyright on which she relied, until 2009, when she commenced suit,
MGM maintained, was unreasonable and prejudicial to MGM. See
Memorandum of Points and Authorities in Support of Defendants’
Motion for Summary Judgment in No. CV 09–0072 (CD Cal.).
The District Court
granted MGM’s motion. See App. to Pet. for Cert. 28a–48a. As to the
merits of the infringement claims, the court found, disputed issues
of material fact precluded summary adjudication. See id., at
34a–42a. Even so, the court held, laches barred Petrella’s
complaint. Id., at 42a–48a. Petrella had unreasonably delayed suit
by not filing until 2009, the court concluded, and further
determined that MGM was prejudiced by the delay. Id., at 42a–46a.
In particular, the court stated, MGM had shown “expectations-based
prejudice,” because the company had “made significant investments
in exploiting the film”; in addition, the court accepted that MGM
would encounter “evidentiary prejudice,” because Frank Petrella had
died and LaMotta, then aged 88, appeared to have sustained a loss
of memory. Id., at 44a–46a.[
9]
The U. S. Court of
Appeals for the Ninth Circuit affirmed the laches-based dismissal.
695 F. 3d 946 (2012). Under Ninth Circuit precedent, the Court
of Appeals first observed, “[i]f any part of the alleged wrongful
conduct occurred outside of the limitations period, courts presume
that the plaintiff’s claims are barred by laches.” Id., at 951
(internal quotation marks omitted). The presumption was applicable
here, the court indicated, because “[t]he statute of limitations
for copyright claims in civil cases is three years,” ibid. (citing
§507(b)), and Petrella was aware of her potential claims many years
earlier (as was MGM), id., at 952. “[T]he true cause of Petrella’s
delay,” the court suggested, “was, as [Petrella] admits, that ‘the
film hadn’t made money’ [in years she deferred suit].” Id., at
953.[
10] Agreeing with the
District Court, the Ninth Circuit determined that MGM had
established expectations-based prejudice: the company had made a
large investment in Raging Bull, believing it had complete
ownership and control of the film. Id., at 953–954.[
11]
Judge Fletcher
concurred only because Circuit precedent obliged him to do so. Id.,
at 958. Laches in copyright cases, he observed, is “entirely a
judicial creation,” one notably “in tension with Congress’
[provision of a three-year limitations period].” Ibid.
We granted certiorari
to resolve a conflict among the Circuits on the application of the
equitable defense of laches to copyright infringement claims
brought within the three-year look-back period prescribed by
Congress.[
12] 570 U. S.
___ (2013).
III
We consider first
whether, as the Ninth Circuit held, laches may be invoked as a bar
to Petrella’s pursuit of legal remedies under 17 U. S. C.
§504(b). The Ninth Circuit erred, we hold, in failing to recognize
that the copyright statute of limitations, §507(b), itself takes
account of delay. As earlier observed, see supra, at 5–6, a
successful plaintiff can gain retrospective relief only three years
back from the time of suit. No recovery may be had for infringement
in earlier years. Profits made in those years remain the
defendant’s to keep. Brought to bear here, §507(b) directs that
MGM’s returns on its investment in Raging Bull in years outside the
three-year window (years before 2006) cannot be reached by
Petrella. Only by disregarding that feature of the statute, and the
separate-accrual rule attending §507(b), see supra, at 4–5, could
the Court of Appeals presume that infringing acts occurring before
January 6, 2006 bar all relief, monetary and injunctive, for
infringement occurring on and after that date. See 695 F. 3d,
at 951; supra, at 9–10.[
13]
Moreover, if
infringement within the three-year look-back period is shown, the
Act allows the defendant to prove and offset against profits made
in that period “deductible expenses” incurred in generating those
profits. §504(b). In addition, the defendant may prove and offset
“elements of profit attributable to factors other than the
copyrighted work.” §504(b). The defendant thus may retain the
return on investment shown to be attributable to its own
enterprise, as distinct from the value created by the infringed
work. See Sheldon v. Metro-Goldwyn Pictures Corp., 309 U. S.
390, 402, 407 (1940) (equitably apportioning profits to account for
independent contributions of infringing defendant). See also infra,
at 19–22 (delay in commencing suit as a factor in determining
contours of relief appropriately awarded).
Last, but hardly least,
laches is a defense developed by courts of equity; its principal
application was, and remains, to claims of an equitable cast for
which the Legislature has provided no fixed time limitation. See 1
D. Dobbs, Law of Remedies §2.4(4), p. 104 (2d ed. 1993)
(hereinafter Dobbs) (“laches . . . may have originated in
equity because no statute of limitations applied, . . .
suggest[ing] that laches should be limited to cases in which no
statute of limitations applies”). Both before and after the merger
of law and equity in 1938,[
14] this Court has cautioned against invoking laches to
bar legal relief. See Holmberg v. Armbrecht, 327 U. S. 392,
395, 396 (1946) (in actions at law, “[i]f Congress explicitly puts
a limit upon the time for enforcing a right which it created, there
is an end of the matter,” but “[t]raditionally . . . ,
statutes of limitation are not controlling measures of equitable
relief”); Merck & Co. v. Reynolds, 559 U. S. 633, 652
(2010) (quoting, for its current relevance, statement in United
States v. Mack, 295 U. S. 480, 489 (1935) , that “[l]aches
within the term of the statute of limitations is no defense [to an
action] at law”); County of Oneida v. Oneida Indian Nation of N.
Y., 470 U. S. 226 , n. 16 (1985) (“[A]pplication of the
equitable defense of laches in an action at law would be novel
indeed.”).[
15]
Because we adhere to
the position that, in face of a statute of limitations enacted by
Congress, laches cannot be invoked to bar legal relief, the dissent
thinks we “plac[e] insufficient weight upon the rules and practice
of modern litigation.” Post, at 12. True, there has been, since
1938, only “one form of action—the civil action.” Fed. Rule Civ.
Proc. 2. But “the substantive and remedial principles [applicable]
prior to the advent of the federal rules [have] not changed.” 4 C.
Wright & A. Miller, Federal Practice and Procedure §1043, p.
177 (3d ed. 2002). Holmberg, Merck, and Oneida so illustrate. The
dissent presents multiple citations, see post, at 1, 3–4, 7–8,
10–11, many of them far afield from the issue at hand, others
obscuring what the cited decisions in fact ruled. Compare, e.g.,
post, at 1, 11, with infra, at 20–21 (describing Chirco v.
Crosswinds Communities, Inc., 474 F. 3d 227 (CA6 2007)); post,
at 1, 10–11, with infra, at 15, n. 16 (describing National
Railroad Passenger Corporation v. Morgan, 536 U. S. 101 (2002)
); post, at 8, with infra, at 15, n. 16 (describing Patterson
v. Hewitt, 195 U. S. 309 (1904) ). Yet tellingly, the dissent
has come up with no case in which this Court has approved the
application of laches to bar a claim for damages brought within the
time allowed by a federal statute of limitations. There is nothing
at all “differen[t],” see post, at 12, about copyright cases in
this regard.
IV
We turn now to MGM’s
principal arguments regarding the contemporary scope of the laches
defense, all of them embraced by the dissent.
A
Laches is listed
among affirmative defenses, along with, but discrete from, the
statute of limitations, in Federal Rule of Civil Procedure 8(c).
Accordingly, MGM maintains, the plea is “available . . .
in every civil action” to bar all forms of relief. Tr. of Oral Arg.
43; see Brief for Respondents 40. To the Court’s question, could
laches apply where there is an ordinary six-year statute of
limitations, MGM’s counsel responded yes, case-specific
circumstances might warrant a ruling that a suit brought in year
five came too late. Tr. of Oral Arg. 52; see id., at 41.
The expansive role for
laches MGM envisions careens away from understandings, past and
present, of the essentially gap-filling, not
legislation-overriding, office of laches. Nothing in this Court’s
precedent suggests a doctrineof such sweep. Quite the contrary, we
have never applied laches to bar in their entirety claims for
discrete wrongs occurring within a federally prescribed limitations
pe-riod.[
16] Inviting
individual judges to set a time limit other than the one Congress
prescribed, we note, would tug against the uniformity Congress
sought to achieve when it enacted §507(b). See supra, at 3–4.
B
MGM observes that
equitable tolling “is read into every federal statute of
limitation,” Holmberg, 327 U. S., at 397, and asks why laches
should not be treated similarly. See Brief for Respondents 23–26;
post, at 7–8. Tolling, which lengthens the time for commencing a
civil action in appropriate circumstances,[
17] applies when there is a statute of
limitations; it is, in effect, a rule of interpretation tied to
that limit. See Young v. United States, 535 U. S. 43 –50
(2002); Johnson v. Railway Express Agency, Inc., 421 U. S.
454, 464 (1975) .[
18]
Laches, in contrast, originally served as a guide when no statute
of limitations controlled the claim; it can scarcely be described
as a rule for interpreting a statutory prescription. That is so
here, because the statute, §507(b), makes the starting trigger an
infringing act committed three years back from the commencement of
suit, while laches, as conceived by the Ninth Circuit and advanced
by MGM, makes the presumptive trigger the defendant’s initial
infringing act. See 695 F. 3d, at 951; Brief for United States
16.
C
MGM insists that the
defense of laches must be avail-able to prevent a copyright owner
from sitting still, doing nothing, waiting to see what the outcome
of an alleged infringer’s investment will be. See Brief for
Respondents 48. In this case, MGM stresses, “[Petrella] conceded
that she waited to file because ‘the film was deeply in debt and in
the red and would probably never recoup.’ ” Id., at 47
(quoting from App. 110). The Ninth Circuit similarly faulted
Petrella for waiting to sue until the film Raging Bull “made
money.” 695 F. 3d, at 953 (internal quotation marks omitted).
See also post, at 3–6 (deploring plaintiffs who wait to see whether
the allegedly infringing work makes money).
It is hardly incumbent
on copyright owners, however, 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 the original work,
or even complements it. Fan sites prompted by a book or film, for
example, may benefit the copyright owner. See Wu, Tolerated Use, 31
Colum. J. L. & Arts 617, 619–620 (2008). Even if an
infringement is harmful, the harm may be too small to justify the
cost of litigation.
If the rule were, as
MGM urges, “sue soon, or forever hold your peace,” copyright owners
would have to mount a federal case fast to stop seemingly innocuous
infringements, lest those infringements eventually grow in
magnitude. Section 507(b)’s three-year limitations period, however,
coupled to the separate-accrual rule, see supra, at3–6, avoids such
litigation profusion. It allows a copyright owner to defer suit
until she can estimate whether litigation is worth the candle. She
will miss out on damages for periods prior to the three-year
look-back, but her right to prospective injunctive relief should,
in most cases, remain unaltered.[
19]
D
MGM points to the
danger that evidence needed or useful to defend against liability
will be lost during a copyright owner’s inaction. Brief for
Respondents 37–38; see post, at 2–4.[
20] Recall, however, that Congress provided for
reversionary renewal rights exercisable by an author’s heirs,
rights that can be exercised, at the earliest for pre-1978
copyrights, 28 years after a work was written and copyrighted. See,
supra, at 2–3. At that time, the author, and perhaps other
witnesses to the creation of the work, will be dead. See supra, at
7. Congress must have been aware that the passage of time and the
author’s death could cause a loss or dilution of evidence. Congress
chose, nonetheless, to give the author’s family “a second chance to
obtain fair remuneration.” Stewart, 495 U. S., at 220.
Moreover, a copyright
plaintiff bears the burden of proving infringement. See 3 W. Patry,
Copyright §9.4, p. 9–18 (2013) (hereinafter Patry) (“As in
other civil litigation, a copyright owner bears the burden of
establishing a prima facie case.”). But cf. post, at 4 (overlooking
plain-tiff’s burden to show infringement and the absence of any
burden upon the defendant “to prove that it did not infringe”). Any
hindrance caused by the unavailability of evidence, therefore, is
at least as likely to affect plaintiffs as it is to disadvantage
defendants. That is so in cases of the kind Petrella is pursuing,
for a deceased author most probably would have supported his heir’s
claim.
The registration
mechanism, we further note, reduces the need for extrinsic
evidence. Although registration is “permissive,” both the
certificate and the original work must be on file with the
Copyright Office before a copyright owner can sue for infringement.
§§408(b), 411(a). Key evidence in the litigation, then, will be the
certificate, the original work, and the allegedly infringing work.
And the adjudication will often turn on the factfinder’s direct
comparison of the original and the infringing works, i.e., on the
factfinder’s “good eyes and common sense” in comparing the two
works’ “total concept and overall feel.” Peter F. Gaito
Architecture, LLC v. Simone Development Corp., 602 F. 3d 57,
66 (CA2 2010) (internal quotation marks omitted).
E
Finally, when a
copyright owner engages in intention-ally misleading
representations concerning his abstention from suit, and the
alleged infringer detrimentally relies on the copyright owner’s
deception, the doctrine of estoppel may bar the copyright owner’s
claims completely, eliminating all potential remedies. See 6 Patry
§20:58, at 20–110 to 20–112.[
21] The test for estoppel is more exacting than the test
for laches, and the two defenses are differently oriented. The
gravamen of estoppel, a defense long recognized as available in
actions at law, see Wehrman v. Conklin, 155 U. S. 314, 327
(1894) , is misleading and consequent loss, see 6 Patry §20:58, at
20–110 to 20–112. Delay may be involved, but is not an element of
the defense. For laches, timeliness is the essential element. In
contrast to laches, urged by MGM entirely to override the statute
of limitations Congress prescribed, estoppel does not undermine
Congress’ prescription, for it rests on misleading, whether engaged
in early on, or later in time.
Stating that the Ninth
Circuit “ha[d] taken a wrong turn in its formulation and
application of laches in copyright cases,” Judge Fletcher called
for fresh consideration of the issue. 695 F. 3d, at 959. “A
recognition of the distinction between . . . estoppel and laches,”
he suggested, “would be a good place to start.” Ibid. We agree.
V
The courts below
summarily disposed of Petrella’s case based on laches, preventing
adjudication of any of her claims on the merits and foreclosing the
possibility of any form of relief. That disposition, we have
explained, was erroneous. Congress’ time provisions secured to
authors a copyright term of long duration, and a right to sue for
infringement occurring no more than three years back from the time
of suit. That regime leaves “little place” for a doctrine that
would further limit the timeliness of a copyright owner’s suit. See
1 Dobbs §2.6(1), at 152. In extraordinary circumstances, however,
the consequences of a delay in commencing suit may be of sufficient
magnitude to warrant, at the very outset of the litigation,
curtailment of the relief equitably awardable.
Chirco v. Crosswinds
Communities, Inc., 474 F. 3d 227 (CA6 2007), is illustrative.
In that case, the defendants were alleged to have used without
permission, in planning and building a housing development, the
plaintiffs’ copyrighted architectural design. Long aware of the
defendants’ project, the plaintiffs took no steps to halt the
housing development until more than 168 units were built, 109 of
which were occupied. Id., at 230. Although the action was filed
within §507(b)’s three-year statute of limitations, the District
Court granted summary judgment to the defendants, dismissing the
entire case on grounds of laches. The trial court’s rejection of
the entire suit could not stand, the Court of Appeals explained,
for it was not within the Judiciary’s ken to debate the wisdom of
§507(b)’s three-year look-back prescription. Id., at 235.
Nevertheless, the Court of Appeals affirmed the District Court’s
judgment to this extent: The plaintiffs, even if they might succeed
in proving infringement of their copyrighted design, would not be
entitled to an order mandating destruction of the housing project.
That relief would be inequit-able, the Sixth Circuit held, for two
reasons: the plaintiffs knew of the defendants’ construction plans
before the de-fendants broke ground, yet failed to take readily
available measures to stop the project; and the requested relief
would “work an unjust hardship” upon the defendants and innocent
third parties. Id., at 236. See also New Era Publications Int’l v.
Henry Holt & Co., 873 F. 2d 576, 584–585 (CA2 1989)
(despite awareness since 1986 that book containing allegedly
infringing material would be published in the United States,
copyright owner did not seek a restraining order until 1988, after
the book had been printed, packed, and shipped; as injunctive
relief “would [have] result[ed] in the total destruction of the
work,” the court “relegat[ed plaintiff] to its damages
remedy”).
In sum, the courts
below erred in treating laches as a complete bar to Petrella’s
copyright infringement suit. The action was commenced within the
bounds of §507(b), the Act’s time-to-sue prescription, and does not
present extraordinary circumstances of the kind involved in Chirco
and New Era. Petrella notified MGM of her copyright claims before
MGM invested millions of dollars in creating a new edition of
Raging Bull. And the equitable relief Petrella seeks—e.g.,
disgorgement of unjust gains and an injunction against future
infringement—would not result in “total destruction” of the film,
or anything close to it. See New Era, 873 F. 2d, at 584. MGM
released Raging Bull more than three decades ago and has marketed
it continuously since then. Allowing Petrella’s suit to go forward
will put at risk only a fraction of the income MGM has earned
during that period and will work no unjust hardship on innocent
third parties, such as consumers who have purchased copies of
Raging Bull. Cf. Chirco, 474 F. 3d, at 235–236 (destruction
remedy would have ousted families from recently purchased homes).
The circumstances here may or may not (we need not decide) warrant
limiting relief at the remedial stage, but they are not
sufficiently extraordinary to justify threshold dismissal.
Should Petrella
ultimately prevail on the merits, the District Court, in
determining appropriate injunctive relief and assessing profits,
may take account of her delay in commencing suit. See supra, at
1–2, 11–12. In doing so, however, that court should closely examine
MGM’s alleged reliance on Petrella’s delay.[
22] This examination should take account of
MGM’s early knowledge of Petrella’s claims, the protection MGM
might have achieved through pursuit of a declaratory judgment
action, the extent to which MGM’s investment was protected by the
separate-accrual rule, the court’s authority to order injunctive
relief “on such terms as it may deem reasonable,” §502(a), and any
other considerations that would justify adjusting injunctive relief
or profits. See Haas v. Leo Feist, Inc., 234 F. 105, 107–108
(SDNY 1916) (adjudicating copyright infringement suit on the merits
and decreeing injunctive relief, but observing that, in awarding
profits, account may be taken of copyright owner’s inaction until
infringer had spent large sums exploiting the work at issue). See
also Tr. of Oral Arg. 23 (Government observation that, in
fashioning equitable remedies, court has considerable leeway; it
could, for example, allow MGM to continue using Raging Bull as a
derivative work upon payment of a reasonable royalty to Petrella).
Whatever adjustments may be in order in awarding injunctive relief,
and in accounting for MGM’s gains and profits, on the facts thus
far presented, there is no evident basis for immunizing MGM’s
present and future uses of the copyrighted work, free from any
obligation to pay royalties.
* * *
For the reasons
stated, the judgment of the United States Court of Appeals for the
Ninth Circuit is reversed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.