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How Long Can Copyright Holders Wait to Sue?

The federal government shutdown isn’t the only blast-from-the-past headline this week: on Tuesday a copyright lawsuit was filed against a host of musicians, artists, and labels by the rights-holders of the 1967 song, “Different Strokes.”  (Complaint available here: Twilight Records v. Raymond.) The plaintiffs — performer Sylvester Johnson and Twilight Records — allege the 46-year-old song to have been widely sampled throughout the music industry without authorization, and that those samples should all have been licensed.

As a result, the complaint’s caption is a “Who’s Who” of 1980s-90s hip-hop, naming artists from Public Enemy to Usher, including Run-D.M.C. for the 1988 hit, “Beats to the Rhyme,” 2 Live Crew for a 1989 tune, Donnie Wahlberg of New Kids on the Block fame, and his brother Mark Wahlberg, for Marky Mark and the Funky Bunch’s 1991 hit, “The Last Song on Side B.”  (For DisCo’s younger readers, “Side B” is a reference to 20th-century analog media.)

The plaintiffs seek actual damages and profits, fees, costs, and punitive damages “appropriate to the egregious nature of Defendants’ tortuous conduct.”  [sic; presumably “tortious” conduct]  The allegation of punitive damages based on tort fn1 arises from a bizarre wrinkle in copyright law that results in sound recordings made before February 15, 1972 receiving not federal but state protection.  (Why? It’s complicated.)

Exactly how far back in time can a copyright plaintiff reach when suing for infringement? This is a timely question: on the same day Twilight and Johnson sued, the Supreme Court of the United States agreed to consider precisely that in the case Petrella v. MGM Inc., (Docket No. 12-1315).

The Petrella case arises from MGM’s allegedly non-payment of royalties for the film classic “Raging Bull,” starring Robert DeNiro, misconduct which allegedly stretched back to the 1980s.  Because the plaintiff Paula Petrella did not sue until 2009, however, the question is whether too much time had passed for her to sue at all.  Last year, a federal appeals court held Petrella had brought her claim too late to recover at all.

Generally speaking, there are two interpretations of how long a plaintiff wait to sue.  One interpretation is that a plaintiff can reach back 3 years, at any time.  The three year statute of limitations is codified in the Copyright Act, 17 U.S.C. 507(b).  Thus, assuming the artists and labels sued for sampling “Different Strokes” have in fact taken enough of the song to infringe (sampling is a separate but interesting question, explored here and here), then the plaintiffs can recover for all uses of the infringing songs within the 3-year statute of limitations.  Under this approach, it would not matter whether Twilight and Johnson sued now, or decades from now, although their compensation would still be limited to only  the 3 years prior to the suit (which would require the allegedly infringing songs to continue being commercially viable).  Some view this interpretation as problematic, since the current copyright term of the life of the artist plus 70 years means that unknown infringement liabilities could come back to haunt an infringer more than a century after they had occurred.

Another interpretation is that the equitable doctrine of laches bars any claim — even if only to recover for the most recent 3 years — after so much time has passed.  Laches is a doctrine rooted in notions of fairness and predictability, which bars plaintiffs who wait too long to bring their claims to court.  This is the argument pressed by MGM and others regarding the suit over “Raging Bull”: that Petrella waited 18 years, which was far too long.  (Although the fact that the studio allegedly engaged in some “Hollywood accounting” won’t help its case.)  One possibility in the Twilight Records case is that while the more explicit statute of limitations may apply to the federal claims, laches would bar the state law claims.  (For a more extensive discussion of how courts have divided, see Petrella’s Supreme Court petition.)

The “Raging Bull” case won’t be argued before 2014, and a decision will not be rendered until much later in the year, but the outcome will likely affect some aspects of yesterday’s shotgun suit by Twilight and Johnson.

Even assuming that the federal claims in Twilight and Johnson’s complaint survive, the ultimate federal relief may be limited.  The plaintiffs do not (at present) claim statutory damages, which can be up to $150,000.  By only seeking actual damages and profits, the plaintiffs will be limited to actual royalties and licenses gained for the use of the work, which in some cases may be quite small.

The unfortunate truth is an artist’s royalties may dwindle not because of uncompensated use of the work, but because of a lack of interest in the work.  Some music loses appeal and goes out of fashion.  A one-hit wonder may have its moment in the spotlight, but years later there may be few new royalties or licenses to speak of.  Certainly, some defendants in the suit continue to be very relevant, including Public Enemy, just inducted into the Rock and Roll Hall of Fame this winter.  And while many other 80s and 90s works didn’t age as well, this is not in fact a question of aesthetic judgment: a 2002 Supreme Court brief by Nobel Prize winning economists pointed out that most copyrighted works lose value over time.  If the case reaches the question of remedies, and it is necessary to calculate the plaintiffs’ actual damages, we may find out how many people are still listening to Marky Mark and the Funky Bunch.

[Edited to correct typo in para. 3.]

fn1 Although there have been a few outlier cases, the federal judiciary has generally viewed punitive damages to be unavailable to federal copyright plaintiffs, who instead are entitled to enhanced statutory damages for willful conduct under 17 U.S.C. 504(c), a remedy conditioned on registration.

Intellectual Property

The Internet enables the free exchange of ideas and content that, in turn, promote creativity, commerce, and innovation. However, a balanced approach to copyright, trademarks, and patents is critical to this creative and entrepreneurial spirit the Internet has fostered. Consequently, it is our belief that the intellectual property system should encourage innovation, while not impeding new business models and open-source developments.