Last week the U.S. Supreme Court ruled in a copyright case, and I want to make readers aware of it, but also point out that it is likely to have little impact on libraries. In Petrella v. MGM Studios, the majority of the Court, in an opinion written by Justice Ginsburg, held that the equitable doctrine called “laches” cannot be used to stop a rights holder from bringing a lawsuit even where she has delayed her filing for twenty years. Laches is a judge-made doctrine that prevents people from “sitting on their rights” unreasonably, especially where the delay is prejudicial to the defendant. In this case, however, the Court held that the scheme built into the copyright law — a very long term of protection but a three-year limitation on recovery for infringement — adequately accounts for the risk of delay.
The facts of the case are odd. Ms. Petrella owns all of the rights in the screenplay for the movie Raging Bull, and has done since she inherited from her father in 1981. She renewed the copyright in 1991, and first informed MGM of her rights seven years later, in 1998. She did not file suit for infringement until 2009. MGM argued that she waited too long, that she had delayed in order to bring suit when it would be most lucrative to her and financially difficult for the studio, and that important evidence had become unavailable due to the delay. For all these reasons the lower courts dismissed her lawsuit, relying on the equitable doctrine of laches. But the Supreme Court reversed, saying that the structure of the copyright law itself anticipated and accounted for delay. Petrella is entitle to recover for infringements that occurred in the three years prior to her lawsuit, if she can prove infringement, and the district court must give her that chance.
The Court’s opinion is very pedagogical in its approach, providing a clear account of the four major doctrines in play in its first section. That portion, at least, is worth reading because it explains some obscure doctrines quite well. I am interested here in one specific part of the copyright law related to the case, the idea of a rolling statute of limitations. As Justice Ginsburg notes, the term of protection is very long, and if a rights holder could sue anytime for acts that occurred many years earlier, the result would be a tremendous amount of litigation and some manifest injustice. So the law provides this three year window. A rights holder can, apparently, bring a lawsuit whenever she wishes, but can recover damages only for infringing acts that occurred within the three years immediately prior to the litigation.
Imagine, as an example, that I wrote a book that infringed the copyright of a famous author. My book sold poorly, but, freakishly, one copy per month was sold every month for five years. At the end of that time, famous author sues me. That suit can recover damages only for the 36 infringements that occurred in the previous three years (one infringing copy sold per month in those three years). The 24 copies sold in the two earlier years are outside the window created by this rolling statute of limitations, so famous author cannot reach back to include those infringing acts in his lawsuit. By contrast, if my infringement had been a single unauthorized public performance of famous author’s work, about which he knew when it took place, but he waits four years to sue me, he will be entirely out of luck. That single act of infringement (as opposed to the ongoing sales in my first example) took place too long before the lawsuit and is outside the window of the statute of limitations.
One thing this case reminds us is that copyright issues make for strange alliances. As usual, the split in the Court is not along usual liberal v. conservative lines. Scalia, Thomas and Alito join Ginsburg, Kagan and Sotomayor in the majority opinion, while Roberts and Kennedy join Breyer in his dissent. One thing that is consistent is that Breyer and Ginsburg have very different views about copyright, and they are usually the opinion authors on the two sides of any copyright issue that comes before the Court. Another oddity is for a major motion picture studio to be arguing in favor of a limit on rights holders’ ability to recover for infringement. The application of laches, had their argument been upheld, would almost certainly have come back to bite them. Their defense of laches as a limitation on the right to sue even for infringing acts that occurred with the three year statute of limitations in this peculiar case seems to have been a matter of pure opportunism.
In her opinion, Justice Ginsburg makes one remark that is rather striking and represents a new approach for the Court. She is defending the option of a rights holder to delay her lawsuit for a variety of reasons, including, as in the Petrella case, to see if the recovery would be worth the cost of suing. But this is what J. Ginsburg says:
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 compliments it. Fan sites prompted by a book or film, for example, may benefit the copyright owner.
I don’t know that the Court has every before acknowledge that infringements might be beneficial to rights holders. Perhaps this is an acknowledgement of the myriad potential for reuse and remix. Certainly the authors of fan fiction should feel buoyed by the remark. From a more technical perspective, it seems to me to further undermine what was once a strongly held belief that whenever infringement was found, harm could be presumed. It seems clear that the Court is now reinserting harm as a separate element in the plaintiff burden of proving the tort of copyright infringement.
Although I am usually more often on Justice Breyer’s side on copyright issue than Justice Ginsburg’s, in my opinion the majority opinion seems right given the particular circumstances of the case, and the way the statute is constructed. In his dissent J. Breyer asserts that the majority is now “erasing laches from the copyright lexicon,” but it is not clear to me that that is the case. J. Ginsburg acknowledges some extraordinary cases where laches would still apply to bar a lawsuit over copyright infringement, but she does not find such circumstances in this case. And although J. Breyer is persuasive in the suggestion that laches does still have a place, it is not clear that the Petrella situation presents such circumstances, and he really does not argue that it should.
For routine library practices this case will have relatively little impact. Libraries try hard to avoid infringement, of course, and, when challenged, they have strong defenses built into the statute, so they need rely less on equitable defenses like laches. As I said above, the main value of this opinion may be an opportunity to be reminded of the doctrines surrounding when a lawsuit can be brought and when it would be untimely. But it also raises the possibility, albeit obliquely, that a defendant could argue that there has been no harm from the infringement and even that the added distribution of the work has supported its commercial value. Since Judge Chin made this argument in his dismissal of the Google Books lawsuit brought by the hapless Authors Guild, even oblique support from the Supreme Court is significant.
I am intrigued by the impact that this decision might have had on the decision in the Diversey case, which you discussed earlier. In that case, the court made much of the fact that while the 3 year statute of limitations for infringing reproductions had passed, it had been less than 3 years since Diversey had learned of the infringing distribution. It therefore allowed the case to proceed. This new decision would suggest that as long as a library loaned (and possibly even just offered to loan) an infringing copy of a work within the previous three years, an action could be brought. Sure, actual damages might be limited to losses during those previous three years, but the copyright owner could claim statutory damages instead (assuming that the work was registered).
In short, it seems to me that as long as a library is loaning a work, the statute of limitations is moot. This new decision would seem to confirm that a library is always at risk. It is fortunate that libraries only rarely lend infringing copies.