Contract Defenses Argument Can’t Bypass Expired Statutes of Limitation

Drug manufacturer Amylin Pharmaceuticals hired Consumer Health to develop materials to help Amylin more successfully market its diabetes drug, Byetta.  Although Consumer Health began its work in December 2005, the parties signed a contract in March 2006.  The contract assigned to Amylin the copyright in the materials Consumer Health created.  Amylin stopped paying Consumer Health for work after September 30, 2006, but continued to use the materials Consumer Health created. 

Consumer Health sued Amylin for copyright infringement in July 2013.  The district court ruled that Consumer Health filed its lawsuit too late under both the four-year California statute of limitations applying to contract rescission and the three-year copyright statute of limitations and dismissed the suit.  The Seventh Circuit Court of Appeals affirmed the district court’s ruling that Consumer Health’s suit was filed more than four years too late.

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Discovery Rule Bars Website Display Claims, But Not Other Copying Claims

Design Basics (DB) publishes and licenses architectural designs.  Carhart sells home building products and provides blueprint drafting services.  On February 24, 2010, DB’s senior designer investigated Carhart’s website for infringing elevations and printed parts of Carhart’s website containing elevations he thought looked substantially similar to DB’s designs.

DB sued Carhart for copyright infringement on April 18, 2013, alleging that Carhart infringed DB’s copyrights on April 20, 2010.  Carhart filed a motion for summary judgement, arguing that DB’s copyright infringement claims were barred by the statute of limitations.  The district court granted Carhart’s motion with respect to some of DB’s copyright infringement claims, but not others.

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Hip-Hop Writer Didn’t Hop to Bringing Copyright Infringement Suit

Tyrone Simmons is a hip-hop music writer and performer.  In February 2006, Simmons bought an exclusive license to use a particular beat from hip-hop producer William C. Stanberry, Jr.  Although Stanberry granted an exclusive license to Simmons, precluding everyone but Simmons from using the beat, Stanberry and rapper Curtis Jackson (aka 50 Cent) collaborated to release a song using the beat, “I Get Money,” in the summer of 2007.  The Stanberry/Jackson song achieved immediate success.  In the meantime, Stanberry attempted to repudiate Simmons’ license in a May 2007 email. 

Simmons brought suit for copyright infringement against Stanberry, Jackson and others in December 2010.  The district court dismissed Simmons’ suit as untimely.  The Second Circuit Court of Appeals affirmed the district court’s decision to dismiss the suit as untimely.

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Petrella Brings Copyright Statute of Limitations Focus Shift to Circuits

Architectural firm Chicago Building Design, P.C. sued one of its former clients, Mongolian House, Inc., for copyright infringement.  At the district court level, the parties and the court focused on the date on which the statute of limitations began to run.  The district court dismissed the complaint as barred by the statute of limitations.

The Seventh Circuit reversed and remanded, stating: “In light of Petrella, we now know that the right question to ask in copyright cases is whether the complaint contains allegations of infringing acts that occurred within the three-year look-back period from the date on which the suit was filed.”  (Opinion pdf page 12).

My post on the Petrella case is Raging Bull Copyright Owner KO’s Film Studios.

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Raging Bull Copyright Owner KO’s Film Studios

The Copyright Act statute of limitations is 3 years.  (17 U.S.C. §507(b)).  The statute of limitation is rolling, in that each new infringement starts a new statute of limitations period running.  The copyright term for works created after 1922 and before January 1, 1978 is 95 years.  Laches is an equitable doctrine that prevents the plaintiff from recovering when the plaintiff has unreasonably delayed in filing suit, resulting in undue hardship to the defendant.  Does laches entirely prevent a copyright owner from claiming copyright infringement when the copyright term has not expired?

No, is the U.S. Supreme Court’s answer to this question.  Paula Petrella, the copyright owner of the 1963 screen play upon which the movie Raging Bull is based, filed suit for copyright infringement against MGM and others.  MGM argued that laches entirely precluded Petrella’s copyright infringement claim against it and the other defendants.  The district court and the Ninth Circuit Court of Appeals agreed with MGM and the other defendants.  The U.S. Supreme Court reversed and remanded.  I agree with the Supreme Court’s decision.  What is the purpose of our lengthy copyright term if the copyright owner can’t enforce the copyright throughout the entire term?

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Co-Author’s Copyright Registration Does Not Strip Other Co-Author’s Rights

Two issues of first impression came before the Third Circuit in Brownstein v. Lindsay.  “First impression” means that it is a new legal issue for that court.  The first issue of first impression addressed the point in time at which a joint authorship claim under the Copyright Act arises and accrues. In other words, when does the statute of limitations start running for joint authorship claims?  The second issue addressed whether courts have the authority to cancel copyright registrations.

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Copyright Distribution Infringement Discrete from Copying Infringement

Andrew Diversey, a Ph.D. linguistics student at the University of New Mexico (UNM), sued several administrators and members of the Board of Regents for infringing his copyright in his unpublished dissertation.  Without Diversey’s authorization, a draft of his dissertation was deposited at the UMN Zimmerman Library and was sent to ProQuest, UNM’s dissertation publisher.  The district court ruled that Diversey’s claims were barred by the three year statute of limitations.  The Tenth Circuit Court of Appeals distinguished Diversey’s claim for unauthorized copying from his claim for unauthorized distribution and affirmed in part and reversed in part.

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Distribution Infringement Claims Sink With the Time-Barred Ownership Claims Ship

In a case of first impression in this circuit, the Ninth Circuit Court of Appeals differentiated between the two kinds of copyright infringement claims:  ordinary copyright infringement (copying, preparing derivative works, distributing, publicly performing or publicly displaying without the owner’s permission) and copyright infringement in which the dispute is about ownership.  Copyright infringement claims involve establishing 1) that the plaintiff is the owner of a valid copyright and 2) that the defendant copied the original elements of the plaintiff’s work.  Seven Arts Filmed Entertainment sought to establish itself as the copyright owner of the films Rules of Engagement, An American Rhapsody, and Who is Cletis Tout? and sued Paramount Pictures for allegedly distributing the films without a license.  Paramount argued that Seven Arts’ infringement claims were barred by the statute of limitations.  The Ninth Circuit viewed this case as an ownership dispute.

Section 507(b) of the Copyright Act of 1976 requires civil copyright actions to be “commenced within three years after the claim accrued.”  Most copyright infringement lawsuits focus on whether the defendant copied the plaintiff’s work.  When copying is the issue, infringement claims for copying that occurs more than three years before the lawsuit was filed are barred, i.e., prohibited, by the statute of limitations.  But the defendant can still be held liable for copying that occurs between the three year statute of limitations date and the present.  Each new infringing act creates a new claim for infringement.  (However, damages are determined per work infringed, not by the number of infringing acts.)  The issue for the Ninth Circuit to decide was “whether a claim for copyright infringement in which ownership is the disputed issue is time-barred if a freestanding ownership claim would be barred.”  (Opinion pdf page 9).  Could Paramount be held liable for continuing infringing acts if the statute of limitations prevented Seven Arts from establishing copyright ownership ?

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Criminal Copyright Infringement Does Not Equal Strict Liability

This case highlights one of the differences between civil liability and criminal liability in copyright infringement cases.  Julius Liu owned Super DVD, a company that commercially replicated CDs and DVDs for customers.  Replication is a different copying process than making a copy by burning.  Replication involves using a master copy to stamp content onto CDs and DVDs with a molding machine.  Immigration and Customs Enforcement agents obtained a warrant and searched the Super DVD warehouse in July 2003.  Lui was convicted of three counts of criminal copyright infringement and one count of trafficking in counterfeit labels after the grand jury returned the second superseding indictment in February 2010.

Liu appealed his convictions to the Ninth Circuit Court of Appeals.  The Ninth Circuit ordered dismissal of Liu’s conviction on the second count of criminal copyright infringement, ruling that Liu’s counsel was ineffective for failing to raise a statute of limitations defense to that count.  The Ninth Circuit vacated and remanded Liu’s convictions on the other counts, ruling that the district court improperly instructed the jury on the meaning of the words “willfully” and “knowingly” in the context of a criminal case.

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Village People Cop Morphs into Copyright Grant Terminator

September 13, 2013, was the effective date for Victor Willis’ termination of copyrights granted to Scorpio Music (Black Scorpio) S.A. and Can’t Stop Productions, Inc. for Willis’ hit songs YMCA, I’m a Cruiser, Hot Cop, Ups and Downs, My Roomate and The Women.  Willis was the original lead singer for the group, the Village People.  He appeared onstage with the Village People dressed as either a cop or a naval officer.

These songs and others with lyrics written by Willis were registered with the U.S. Copyright Office in the late 1970’s in Willis’ name and the names of his co-authors.  Willis transferred his interest in the songs to Can’t Stop, the exclusive U.S. sub-publisher and administrator for Scorpio, a French corporation.  After Willis notified Scorpio and Can’t Stop in early 2011 that he was terminating the transfer of his copyrights, Scorpio and Can’t Stop sued Willis, challenging the validity of the termination and seeking a declaratory judgment that Willis has no rights in the copyrights to the songs.  The district court ruled in Willis’ favor on the three major motions filed by Plaintiffs Scorpio and Can’t Stop to date.  Early in the litigation, Scorpio and Can’t Stop claimed that Willis created the lyrics under a work made for hire agreement, but later abandoned that claim.

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