MVS Filewrapper® Blog: Copyright 3-year Statute of Limitations Trumps Laches Defense

PETRELLA v. METRO-GOLDWYN-MAYER, INC.

 

Frank Petrella wrote two screenplays and one book based on the life of boxing champion Jake LaMotta.  One of the screenplays, registered in 1963, identifies Patrella as the sole author, written in collaboration with LaMotta.  LaMotta and Patrella assigned their rights in the screenplay, including renewal rights, to Chartoff-Winkler Productions, Inc. in 1976, who in turn sold the motion picture rights to Metro-Goldwyn-Mayer, Inc. (MGM).  MGM released the motion picture portrayal of Jake LaMotta in 1980:  Raging Bull, staring Robert DeNiro and directed by Martin Scorcese. 

 

Patrella died in 1981, during the original term of the copyright in the screenplay.  Under the Supreme Court's decisions in Stewart v. Abend and Miller Music Corp. v. Charles N. Daniels, Inc., the right to renewal of the copyright reverted to Patrella's heirs, unencumbered by any of the assignments previously made by Patrella.  Patrella's daughter filed a renewal of the copyright in the screenplay in 1991.  In 1998, Patrella's daughter notified MGM that she owned the copyright in the screenplay, and any further exploitation of any derivative work, including Raging Bull, infringed that copyright.  A copyright infringement suit was not filed, however, until 2009.

 

Section 507(b) of the Copyright Act establishes a three-year limitation on claims seeking relieve for copyright infringement.  The 2009 complaint sought monetary and injunctive relief for violation of the copyright in the 1963 screenplay by using, producing, and distributing Raging Bull.  However, the complaint only sought such relief for acts occurring on or after January 6, 2006—three years prior to filing the suit.  MGM moved for summary judgment based on the doctrine of laches, asserting that even though the three-year limitations period set out in the statute had not run out, the claim was still barred under the equitable principle of laches— the 18 year delay between obtaining the copyright and filing suit was unreasonable and prejudicial.  The district court granted the motion, which was affirmed by the Ninth Circuit Court of Appeals.     

 

On ultimate appeal, the Supreme Court held that a copyright infringement suit seeking relief solely for conduct occurring within the limitations period cannot be precluded by a claim of laches, so long as the claim for damages is brought within the three-year window.  The Court highlighted that laches is an equitable defense, applicable to claims for which the legislature has not provided a limitation period.  Although laches may not preclude an infringement claim made within the limitations period, the Court made clear that other doctrines such as estoppel may limit the relief awarded.   

 

The full opinion is available here. 

MVS Filewrapper® Blog: StoneEagle v. Gillman – Patent Inventorship, Authorship, and Ownership

In StoneEagle Services, Inc.,v. Gillman the Federal Circuit confirmed that assistance in reducing an invention to practice generally does not contribute to inventorship. In this case, the issue centered on whether there was a sufficient controversy regarding inventorship for the case to remain in federal court.  The plaintiff alleged that the defendant had "falsely claimed that it is his patent, that he wrote the patent, that it is on his computer, and that he ‘authored’ or ‘wrote’ it, or words to that effect.” 

 

The court determined that the most favorable possible inference in favor of the plaintiff only indicated that the defendant assisted in constructively reducing an invention to practice by drafting the patent application.  The court confirmed that those activities confer no more rights of inventorship than activities in furtherance of an actual reduction to practice, which is usually insufficient to rise to the level of inventorship.  As the court concluded, if they were to hold otherwise, "patent attorneys and patent agents would be co-inventors on nearly every patent. Of course, this proposition cannot be correct."

 

The full decision is available here.

MVS Filewrapper® Blog: Federal Circuit Addresses Subject Matter Jurisdiction in Patent-Related Cases

In Semiconductor Energy Lab. Co., Ltd. v. Yujiro Nagata, the Federal Circuit weighed in on federal subject matter jurisdiction and provided two important reminders:

(1)       Just because a cause of action originates from a patent, standards in the patent statute, or even from other patent litigation, it is the present cause of action and claims that dictate whether subject matter jurisdiction is proper; and

(2)       Subject matter jurisdiction, in this case federal question, must be sufficiently pled.

The background of this case is as follows:  Semiconductor Energy Laboratory (“SEL”) owns U.S. Patent 6,900,463 (“the ’463 patent”).  Dr. Yujiro Nagata (“Dr. Nagata”) is a named co-inventor of the ’463 patent.  Dr. Nagata assigned his rights in any applications and patents related to the ’463 patent to SEL’s founder in 1991.  He later signed a substitute Declaration and Assignment of those applications and patents.  Dr. Nagata assisted SEL in a patent infringement lawsuit during the span of 2002 and 2003. 

SEL sued Samsung for infringement of the ’463 patent in 2009.  Dr. Nagata was contacted by Samsung to serve as a fact witness, which he agreed to do.  Subsequently, SEL contacted Dr. Nagata assuming that he would cooperate with them during the litigation, as he had previously done.   During the litigation, Dr. Nagata testified that he did not sign the 1991 Declarations and Assignments, but that his signature was forged.  Samsung then argued that the ’463 patent was unenforceable because of inequitable conduct.  Due to Dr. Nagata’s testimony the lawsuit was settled for less money than SEL otherwise would have considered.

SEL went on to sue Dr. Nagata in federal court, with five claims:  (1) Declaratory Judgment – Violation of Federal Patent Law; (2) Declaratory Judgment – Anticipatory Breach of Contract; (3) Slander of Title; (4) Quiet Title; and (5) Unjust Enrichment.  SEL asserted that the claim for declaratory judgment of violation of federal patent law was a federal question—one of the two bases for federal subject matter jurisdiction—and sought supplemental jurisdiction for the other causes of action.  Dr. Nagata moved to have the case dismissed for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1).  The district court granted the motion and dismissed the case with prejudice.  SEL appealed. 

In order to invoke federal subject matter jurisdiction under federal question, the “complaint must either plead a federal cause of action or necessarily implicate a substantial issue of federal law.”  SEL v. Nagata, Slip op., at p. 5.  SEL’s argument in support of its “Declaratory Judgment – Violation of Federal Patent Law” claim was based on the doctrine of assignor estoppel.  The Federal Circuit summarized the doctrine of assignor estoppel as, “an equitable doctrine that prohibits an assignor of a patent or patent application, or one in privity with him, from attacking the validity of that patent when he is sued for infringement by the assignee.”  Id. at p. 6.  SEL argued that the doctrine should be extended to apply not only as a defense limiting arguments by assignors, but offensively to estop assignees from undermining the validity of a patent as well.  The Federal Circuit went on to note SEL did not plead or offer any precedent establishing that assignor estoppel is a federal cause of action.  As such, the Court concluded,

SEL thus effectively invites us to create a new federal cause of action recognizing a supposed violation of the assignor estoppel doctrine under the Declaratory Judgment Act. . . .  Despite SEL’s contentions, assignor estoppel is a form of estoppel, and with rare exception, estoppel is a shield; it is an affirmative defense, not a claim for relief on its own.

Id. at p. 7 (citations omitted).  In light of this, the Court held that the doctrine of assignor estoppel as applied to patent law was not at issue in this case, since here it was the assignee, Dr. Nagata, who was undermining the validity of the patent.  The court held that the underlying dispute in this case was an evidentiary one in the original case and the proper remedy were through the laws of evidence that permit impeachment and other methods of countering the credibility of a witness.  Therefore, the district court’s dismissal of the case was affirmed. 

This case raises two important points to consider when contemplating litigation.  The first is that the present cause of action and claims dictate whether subject matter jurisdiction is proper, despite the fact that the dispute may have evolved from the patent statute or even patent litigation.  The second is that the plaintiff’s complaint controls the litigation, or lack thereof when the case is dismissed under FRCP 12(b)(1).  In this case, this meant that although there was arguably a basis to seek extension of a federal law doctrine, the insufficiency of the pleadings precluded the federal court from fully addressing the issue.

Bayh-Dole Patent Ownership Dispute to be heard by Supreme Court

Last week, the Supreme Court announced it will review the Federal Circuit decision in Stanford v. Roche, addressing patent ownership under the Bayh-Dole Act, after granting Stanford's petition for a writ of certiorari. The Court will decide an interesting patent ownership dispute involving the contractual obligation of a University inventor to assign rights to the University and the same inventor's prior assignment of future rights to a company (which eventually became Roche).  The Federal Circuit ruled against Stanford, finding that the prior assignment of the inventor trumped the assignment obligation he later had with the University.

Whether a federal contractor university's statutory right under the Bayh-Dole Act35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor's rights to a third party.
More on Bd. of Trustees of Leland Stanford Jr. Univ. v. Roche Molecular Sys., after the jump. 
 

Ninth Circuit: Termination of rights allows Lassie to come home to author's heir

In a decision last week, the Ninth Circuit reversed a district court's denial of summary judgment in a copyright case.  The district court held the heir of an author had, by agreement, "given away" the termination right granted by 17 U.S.C. § 304(c).

The Ninth Circuit reversed, stating that the district court had gone against the express language of § 304(c)(5), Congress's intent of protecting authors, and the lack of any language transferring the right of termination in the agreement.  The court specifically stated that the language of § 304(c) and Congress's clear intent in the passage of § 304(c) was to allow authors the opportunity to renegotiate previously-granted rights in copyright after the 1976 Copyright Act extended the term of protection in existing works.  The court said that Congress wanted to reward authors, and it would not make sense for the Act to benefit the assignee rather than the author's heir.  As a result, the court reversed the grant of summary judgment in favor of the assignee and remanded with instructions to enter judgment for the heir.

More on Classic Media, Inc. v. Mewborn after the jump.

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Ninth Circuit: Heirs of "Pink Panther" coauthor do not retain interest in copyright in the films

In a decision last week, the Ninth Circuit affirmed the district court's grant of summary judgment in a copyright case, holding that a coauthor of a story treatment is not necessarily a coauthor of a motion picture produced based on that treatment, and the factors applied to determine coauthorship led to the conclusion that the coauthor of the treatment was not a coauthor of the motion picture. 

In this case, that meant the heirs of one coauthor of the treatment that formed the basis for the film "The Pink Panther" could not assert an interest in the copyright in the motion picture.  Likewise, renewal of the copyright in the motion picture had no effect on the copyright of the treatment, as its copyright is separate and distinct under the law.  Accordingly, the court affirmed the district court's grant of summary judgment.

More on Richlin v. Metro-Goldwyn-Mayer Pictures, Inc. after the jump.

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Patent ownership may change by operation of law, including operation of foreign law

In a decision today, the Federal Circuit vacated a district court's dismissal of a case for lack of standing on the basis of insufficient evidence of patent ownership.  The inventor of the patent died intestate as the only owner of the patent.  While his two daughters executed transfers of ownership to the inventor's widow, the district court held that under 35 U.S.C. § 261, the executor of the estate had to first transfer the patent rights to the heirs, and without such a transfer, there was no standing to bring suit.

The Federal Circuit vacated, noting that while § 261 states that patents are assignable only in writing, previous decisions have held that state law controls the issue of patent ownership.  Further, ownership may transfer by operation of law, and when a patent owner dies, it is state probate law that determines to whom ownership passes.

The court held that this concept applied in this case, even though it would be Japanese law that would determine ownership rather than a state's law.  Because it was unclear from the record whether an administrator is required under Japanese law when a person dies intestate, the court remanded the case to make that determination, which would resolve the standing issue.

More detail of Akazawa v. Link New Tech. Int'l, Inc. after the jump.

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Second Circuit: retroactive assignment cannot cure past infringement claim by co-author

The Second Circuit yesterday issued a decision regarding whether an action for infringement brought by one co-author of a song can be defeated by the grant of a "retroactive" transfer of ownership to the infringer from a co-author who is not party to the infringement action. The case involved licensing and litigation regarding authorship of two tracks on Mary J. Blige's 2001 album, ironically named "No More Drama."

In this issue of first impression, the court held that the "retroactive" transfer of ownership does not defeat any infringement causes of action that had already accrued at the time that the transfer occurred.  This was because the retroactive assignment amounted to a transfer of rights that had already vested in the other co-authors, namely the right to sue for infringement.

More on Davis v. Blige after the jump.

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