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Ninth Circuit Affirms in Favor of Creators in Starz v. MGM Copyright Infringement Suit

Court cites from amicus brief filed by the Authors Guild in its decision granting copyright holders the right to sue even if they don’t learn of the infringement until years later

The Ninth Circuit Court of Appeals today ruled in Starz v. MGM that the plaintiff, Starz, retained the right to collect damages for infringement of their copyrights even though more than three years had passed since the infringements first occurred. The Ninth Circuit uses the discovery rule for applying copyright law’s three-year statute of limitations, meaning that the three years runs from the plaintiff’s reasonable discovery of the infringement rather than from when the infringement commenced. MGM had argued that the ability to collect damages should run from the commencement of the infringement, not plaintiff’s discovery.

Starz filed a suit against MGM when the latter licensed rights to certain films and television shows in its library to third parties even though Starz still held those rights based on an earlier licensing agreement with MGM. MGM claimed that, for some of those infringements, more than three years had elapsed between when the infringements occurred and when Starz discovered them, and, therefore, Starz was barred from collecting damages. A federal district court in California disagreed and denied MGM’s motion to dismiss, drawing on the “discovery rule,” which “operates as an exception to the general principle that damages are only recoverable for infringing acts within three years prior to filing suit.”  

The Ninth Circuit concurred. In her decision, Judge Kim McLane Wardlow cited directly from an amicus brief filed by the Authors Guild that highlighted why creators may not always know right away that copyright infringement occurred.

This ruling impacts not only large entertainment companies but also book authors, filmmakers, screenwriters and other individual artists. These individuals rarely have the training or resources to quickly identify when someone may have infringed on their copyright and may only become aware of it when someone points it out to them or after the situation has already gotten out of hand, such as in the case of e-book piracy rings that sell illegal copies of books to legitimate book buyers, depriving the copyright holder of income.

“We’re pleased that the court recognized that creators often don’t have the time or the ability to monitor the marketplace in order to locate copyright infringements in a speedy manner, especially where, as the decision states, ‘the infringer knows of and controls the infringing acts and the copyright holder has little means of discovering those acts,’” said Cheryl L. Davis, General Counsel for the Authors Guild, the nation’s oldest and largest nonprofit advocacy organization for published writers and journalists. “As the court stated, quoting our amicus brief: ‘With the constant evolution of technology, copyright infringement is now “easier to commit, harder to detect, and tougher to litigate.”’ We hope that the court’s decision to uphold the discovery rule will make it a bit easier for creators to litigate their claims of copyright infringement.”

The amicus brief was filed on behalf of the Authors Guild and other artists organizations by pro bono counsel Benjamin H. Diessel, Nathan E. Denning, and Michael Rondon of Wiggin & Dana LLP.

In addition to the Authors Guild, the other organizations which signed on to the brief are the American Society of Media Photographers, the Dramatists Guild of America, the Graphic Artists Guild, the Romance Writers of America, the Songwriters Guild of Americ, and the Textbook & Academic Authors Association. 

Click here to read the court’s opinion.