Legal Docket: Copyright case threatens Hollywood profits

Hollywood took it on the chin in a U.S. Supreme Court ruling last week that decided a battle over the 1980 film Raging Bull. The Oscar-winning movie told the tale of boxer Jake La Motta and starred Robert de Niro and Joe Pesci.

In 1963, La Motta and writer Frank Petrella co-wrote a screenplay about the boxer’s career. Then in 1976, LaMotta and Petrella granted exclusive rights to the screenplay to a company later purchased by film studio MGM. Petrella died in 1981, still within the 28-year lifespan of his initial copyright. The right to renew the copyright passed to his heirs.

His daughter, Paula Petrella told MGM it was infringing on her copyright by continuing to market Raging Bull. MGM argued it had the rights per its agreement with La Motta himself. After a lot of back-and-forth, she finally sued MGM in 2009 for copyright infringement.

MGM won in the lower courts under the doctrine of laches, which keeps things fair when the law as applied to a particular case is too harsh. The court ruled that because Paula Petrella waited so long to sue MGM, the resulting damages for copyright infringement would be too burdensome for the studio.

But Petrella had her reasons for waiting so long. Ten years after her dad died, the Supreme Court decided a case that would be important to her. In 1991, the court ruled original copyright owners’ heirs get to decide whether to renew a copyright. So, even though MGM owned the copyright for 28 years, when it came time to renew it, Petrella’s heir needed to give permission. She never did that.

Before the Supreme Court, MGM argued that Paula Petrella had impure motives for waiting around. “What happened there is the plaintiff … had a part interest in the gold mine, sat around and waited until somebody else developed it enough to make a profit, and then rushed in and demanded a share,” attorney Mark Perry argued. Three of the judges agreed. How would a company ever know its investments and profits are safe, they asked, if people can come out of nowhere and claim copyright infringement?

But six judges, including the Court’s most conservative and most liberal justices, ruled in Paula Petrella’s favor. They said she was reasonable to wait and see what kind of damages were accumulating.

The case sounded alarms in Hollywood, but Justice Ruth Bader Ginsburg gave the decisive blow in her opinion that MGM marketed Raging Bull for 30 years and has made a handsome profit. It will still have a profit even after negotiating a settlement with Paula Petrella.

Lynde Langdon contributed to this report.