Film Production Company Avoids Copyright Infringement Suit on Basis of Statute of Limitations

Intellectual Property: State and Federal law provides various remedies for parties who have been wronged by another. However, depending upon the nature of that claim, the injured party only has a limited time period in which to assert his claim. These deadlines, set by the law, are commonly referred to as “statute of limitations.” The statute of limitations for a copyright infringement claim is generally three years. A potential plaintiff’s claim often revolves around when the claim originally accrued that determines whether or not his lawsuit was timely filed.

This was addressed in a recent Southern District of New York case, Ortiz v. Guitian Brothers, Inc., et al., 2008 WL 4449314. The Ortiz case was derived from a film production company engaging an artist, Mr. Ortiz, to create the musical score for the motion picture. When Mr. Ortiz later claimed that the film production company infringed his copyright in incorporating that score into the movie and not paying him royalties, he sued for copyright infringement.

In copyright cases, the statute of limitations generally begins to run when the plaintiff knows or should have reason to know of a potential infringement. Courts make a distinction in evaluating this time period, though, when copyright ownership is at issue. In other words, if the party alleged to have infringed upon the work is claiming that it owns the work, such a claim changes the evaluation of the statute of limitations.

In Ortiz, the defendant-film production company defended the lawsuit by arguing that (a) they did not engage in copyright infringement and (b) the claim was also time-barred by the statute of limitations. The film production company included copyright notices on the DVD which arguably asserted a claim in the copyright to the sound recording. In addition, the defendant-film production company also filed for and received a US Copyright registration for the film. In this regard, the production company claimed that the copyright in and to the musical score for the film was incorporated within this filing. Without addressing this question, the Court determined that such a copyright notice and filing was clear evidence of the film production company’s assertion of a claim of ownership over the score. In fact, the Court noted that since Mr. Ortiz authored the work “with the knowledge that it was going to be used in the Motion picture, he should reasonably have anticipated that [the film production company] would seek to copyright the Motion Picture prior to or in conjunction with marketing and distributing it and, in the exercise of reasonable diligence, discovered [the film production company’s copyright] registration.”

In other words, the Court determined that

     (a) the plaintiff needed to exercise due diligence in learning of a copyright registration that would have asserted an ownership claim and
     (b) by making such a filing, the film production company did so assert its ownership so as to start the running of the statute of limitations.

“As ‘[c]opyright ownership claims accure swhen (sic) a plaintiff knows or has reason to know of the injury upon which the claim is premised, . . . [a]n express assertion of sole authorship or ownership will start the copyright statute of limitations running.” (citations omitted).

Accordingly, Mr. Ortiz’s claim was dismissed because the Court determined that the claim accrued upon the film production company’s assertion of ownership, which was more than three years prior to Mr. Ortiz’s institution of the lawsuit. This case underscores the importance of evaluating potential infringement claims in a timely manner, and undertaking enforcement action as quickly as possible. Moreover, the case points out another benefit to making an appropriate copyright filing: based on the Ortiz decision, film production companies should be sure to promptly file copyright registrations as they can effectively be deemed to put potential plaintiffs on notice of the company’s assertion of ownership and therefore start the statute of limitations clock. In other words, the sooner the film production company files the registration, the sooner it can argue that the statute of limitations started, therefore helping to preclude a future claim.

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