Paula Petrella v. Metro-Goldwyn-Mayer, Inc. , 695 F.3d 946 ( 2012 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PAULA PETRELLA, an individual, 
Plaintiff-Appellant,
v.
METRO-GOLDWYN-MAYER, INC., a
corporation; METRO-GOLDWYN-
MAYER STUDIOS, INC., a
corporation; METRO-GOLDWYN- No. 10-55834
MAYER HOME ENTERTAINMENT,
LLC, a limited liability company;  D.C. No.
2:09-cv-00072-GW-
METRO-GOLDWYN-MAYER HOME MAN
ENTERTAINMENT DISTRIBUTION
CORPORATION, a corporation;
UNITED ARTISTS CORPORATION, a
corporation; 20TH CENTURY FOX
HOME ENTERTAINMENT, LLC, a
limited liability company,
Defendants-Appellees.

10167
10168 PETRELLA v. METRO-GOLDWYN-MAYER
PAULA PETRELLA, an individual, 
Plaintiff-Appellee,
v.
METRO-GOLDWYN-MAYER, INC., a
corporation; METRO-GOLDWYN-
MAYER STUDIOS, INC., a No. 10-55853
corporation; METRO-GOLDWYN-
D.C. No.
MAYER HOME ENTERTAINMENT,
LLC, a limited liability company;  2:09-cv-00072-GW-
METRO-GOLDWYN-MAYER HOME MAN
ENTERTAINMENT DISTRIBUTION OPINION
CORPORATION, a corporation;
UNITED ARTISTS CORPORATION, a
corporation; 20TH CENTURY FOX
HOME ENTERTAINMENT, LLC, a
limited liability company,
Defendants-Appellants.

Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted
February 1, 2012—Pasadena, California
Filed August 29, 2012
PETRELLA v. METRO-GOLDWYN-MAYER 10169
Before: William A. Fletcher, and Raymond C. Fisher,
Circuit Judges, and Jack Zouhary, District Judge.*
Opinion by Judge Fisher;
Concurrence by Judge W. Fletcher
*The Honorable Jack Zouhary, United States District Judge for the
Northern District of Ohio, sitting by designation.
PETRELLA v. METRO-GOLDWYN-MAYER 10171
COUNSEL
Glen Lance Kulik (argued), Kulik, Gottesman, Mouton & Sie-
gel, LLP, Sherman Oaks, California, for the plaintiff-
appellant.
Robert J. Catalano and David Grossman, Loeb & Loeb. LLP,
Los Angeles, California; Jonathan Zavin (argued), Loeb &
Loeb, New York, New York, for the defendants-appellees.
10172 PETRELLA v. METRO-GOLDWYN-MAYER
OPINION
FISHER, Circuit Judge:
In 2009, Paula Petrella filed an action for copyright
infringement, unjust enrichment and accounting against
Metro-Goldwyn-Mayer, Inc.; Metro-Goldwyn-Mayer Studios,
Inc.; Metro-Goldwyn-Mayer Home Entertainment, LLC;
Metro-Goldwyn-Mayer Home Entertainment Distribution
Corporation; United Artists Corporation; and 20th Century
Fox Home Entertainment, LLC (“the defendants”). According
to Petrella, the defendants infringed her purported interest in
a book and two screenplays that together allegedly formed the
basis for the 1980 motion picture Raging Bull. The district
court granted summary judgment in favor of the defendants,
holding that Petrella’s claims are barred by the equitable
defense of laches. The district court also denied the defen-
dants’ motions for sanctions and attorney’s fees. We affirm.
BACKGROUND
After Jake LaMotta (“LaMotta”) retired from boxing, he
collaborated with his long-time friend, Frank Peter Petrella
(“F. Petrella”), to produce a book and two screenplays (the
“1963 screenplay” and the “1973 screenplay”) about LaMot-
ta’s life. Together, these works allegedly became the basis for
the movie Raging Bull, released in 1980.
These works were registered with the United States Copy-
right Office. The 1963 screenplay was registered in 1963, list-
ing F. Petrella as the claimant and sole author. According to
the title page, however, it was written “in collaboration with”
LaMotta. The book was registered in 1970, listing “Peter Sav-
age” (a pseudonym of F. Petrella), LaMotta and Joseph Carter
as co-authors. The 1973 screenplay was registered in 1973,
listing F. Petrella as the sole author and stating 1970 as the
date of publication. The copyright registration certificate
noted that the work “The Raging Bull” was a “screenplay
PETRELLA v. METRO-GOLDWYN-MAYER 10173
form of the book of the same name.” Despite the copyright
registration dates, the parties dispute which of these three
works — the 1963 screenplay, the book or the 1973 screen-
play — was written first.
In a written agreement dated November 19, 1976, F.
Petrella and LaMotta assigned to Chartoff-Winkler Produc-
tions, Inc., “exclusively and forever, including all periods of
copyright and renewals and extensions thereof,” all of their
respective copyright rights in the book and “in and to those
certain screenplays based on [the book] which were written in
1963 and 1973,” save for a reservation of certain rights to the
authors of the book. The agreement represented that the book
“is original and has not been copied or adapted from any liter-
ary, dramatic or other work.” It also represented that “[t]he [F.
Petrella] Screenplays are original and have not been copied or
adapted from any literary, dramatic or other work other than
[the book].”
In about September 1978, United Artists Corporation, a
wholly owned subsidiary of Metro-Goldwyn-Mayer Studios,
Inc., acquired the motion picture rights to Raging Bull pursu-
ant to a written assignment from Chartoff-Winkler Produc-
tions, Inc. United Artists registered a copyright in the film
around September 1980. In 1981, during the original 28 year
term of the copyrights for the book and the two screenplays,
F. Petrella died, and his renewal rights in the works passed to
his heirs.
As his daughter, Petrella now alleges she is the sole owner
of the F. Petrella interest in the book and the two screenplays.
In 1990, she learned of the Supreme Court’s decision in Stew-
art v. Abend, and engaged an attorney to advise and assist her
regarding her renewal rights.1 The attorney filed a renewal
application for the 1963 screenplay on her behalf in 1991.
1
Stew. v. Abend, 495 U.S. 207 (1990), concerned a magazine story,
“It Had to be Murder,” whose author had assigned the story’s motion pic-
10174 PETRELLA v. METRO-GOLDWYN-MAYER
Seven years later, in 1998, Petrella’s attorney contacted the
defendants, asserting that Petrella had obtained the rights to
the 1963 screenplay and that the exploitation of any derivative
work, including Raging Bull, was an infringement of these
exclusive rights. Over the course of the next two years,
Petrella and the defendants exchanged a series of letters in
which she accused the defendants of infringing her copyrights
and the defendants insisted they were not, citing two grounds.
First, they claimed the 1963 screenplay was a collaboration
between F. Petrella and LaMotta, so the defendants retained
all necessary rights in the script under their agreement with
LaMotta. Second, they denied there was any substantial simi-
larity of protectable elements between the 1963 screenplay
and the film. Petrella repeatedly threatened to take legal
action, but she did not do so at that time. The final letter in
this series was dated April 5, 2000. Petrella did not initiate
this lawsuit until nine years later, in 2009.
STANDARD OF REVIEW
We review de novo a district court’s grant of summary
judgment on a copyright infringement claim. See Ellison v.
Robertson, 357 F.3d 1072, 1075 (9th Cir. 2004). “We must
determine, viewing the evidence in the light most favorable to
. . . the non-moving party, whether there are any genuine
issues of material fact and whether the district court correctly
ture rights in 1945. Id. at 211. Nine years later a production company
along with Paramount Pictures produced and distributed the Alfred Hitch-
cock murder mystery, Rear Window. See id. at 212. Much later, the holder
of the renewal copyright in “It Had to be Murder” brought an infringement
action in 1974 against those who held the rights in Rear Window, which
had been made from the story during its original copyright term. See id.
at 212-13. The Court held that when an author dies before a renewal
period begins, his statutory successors are entitled to renewal rights, even
when the author has previously assigned the rights to another party. See
id. at 219. The owner of a derivative work does not retain the right to
exploit that work when the death of the author causes the renewal rights
in the preexisting work to revert to the statutory successors. See id. at 220-
21.
 PETRELLA v. METRO-GOLDWYN-MAYER 10175
applied the substantive law.” Olsen v. Idaho State Bd. of
Med., 363 F.3d 916, 922 (9th Cir. 2004).
Whether a plaintiff’s conduct constitutes laches in any
given circumstance is an issue of fact. See 3 Melville B. Nim-
mer & David Nimmer, Nimmer on Copyright § 12.06[B]
(2011). The standard of review is subject to dispute. See id.
We addressed this standard in Danjaq LLC v. Sony Corp., 263
F.3d 942 (9th Cir. 2001):
As for the application of the laches defense itself, we
have previously noted a seeming intracircuit conflict
regarding the appropriate standard of review. See
Telink, Inc. v. United States, 24 F.3d 42, 47 & nn.10-
11 (9th Cir. 1994) (reviewing for abuse of discretion,
but noting an intracircuit conflict between the abuse
of discretion and clearly erroneous standards). Leav-
ing aside the fact that this conflict may be more
apparent than real, see id. at 47 n.11; Piper Aircraft
Corp. v. Wag-Aero, Inc., 741 F.2d 925, 940-41 (7th
Cir. 1984) (Posner, J., concurring), we need not
resolve it here, for we conclude that the district
court’s ruling on laches must stand regardless
whether it is reviewed for abuse of discretion or for
clear error.
Danjaq, 263 F.3d at 952. The same is true here. The district
court did not err under either standard of review.
We review a district court’s imposition of sanctions for
abuse of discretion, and its findings of fact for clear error. See
Christian v. Mattel, Inc., 286 F.3d 1118, 1126-27 (9th Cir.
2002). We also review an order on attorney’s fees under the
Copyright Act for abuse of discretion, and any findings of fact
underlying the fee determination for clear error. See Smith v.
Jackson, 84 F.3d 1213, 1221 (9th Cir. 1996).
10176 PETRELLA v. METRO-GOLDWYN-MAYER
DISCUSSION
The district court granted summary judgment in favor of
the defendants on Petrella’s copyright, accounting and unjust
enrichment claims. The court also denied the defendants’
motions for sanctions and attorney’s fees. We affirm.
I. Copyright Infringement
[1] The district court held that Petrella’s copyright
infringement claim is barred by the doctrine of laches. We
agree. “Laches is an equitable defense that prevents a plain-
tiff, who with full knowledge of the facts, acquiesces in a
transaction and sleeps upon his rights.” Danjaq, 263 F.3d at
950-51 (internal quotation marks omitted). “[I]f any part of
the alleged wrongful conduct occurred outside of the limita-
tions period, courts presume that the plaintiff’s claims are
barred by laches.” Miller v. Glenn Miller Prods., Inc., 454
F.3d 975, 997 (9th Cir. 2006). The statute of limitations for
copyright claims in civil cases is three years. See 17 U.S.C.
§ 507(b); see also 3 Nimmer § 12.05[A].
The underlying elements of a laches defense are factual
determinations. A defendant must prove that (1) the plaintiff
delayed in initiating the lawsuit; (2) the delay was unreason-
able; and (3) the delay resulted in prejudice. See Danjaq, 263
F.3d at 951. The defendants have established that no genuine
issue of material fact exists as to these three elements.2
2
Petrella appeals the district court’s rulings on the defendants’ evidenti-
ary objections to the declarations of Petrella, her expert and her attorney.
We hold that the district court did not abuse its discretion by finding that
“[m]uch of [the expert’s] Declaration lack[ed] foundation and [was] irrele-
vant” and that the attorney’s declaration lacked foundation. With respect
to the district court’s rulings on Petrella’s declaration, even were we to
admit the excluded evidence, laches would still apply. We therefore affirm
the district court’s evidentiary rulings. See Coursen v. A.H. Robins Co.,
Inc., 764 F.2d 1329, 1333 (9th Cir. 1985) (evidentiary errors will not be
reversed absent some resulting prejudice).
PETRELLA v. METRO-GOLDWYN-MAYER 10177
1. Delay
[2] “Generally speaking, the relevant delay is the period
from when the plaintiff knew (or should have known) of the
allegedly infringing conduct, until the initiation of the lawsuit
in which the defendant seeks to counterpose the laches
defense.” Id. at 952. As the district court found, it is
“[u]ndisputed [Petrella] was aware of her potential claims (as
was MGM) since 1991,” when her attorney filed her renewal
application for the 1963 screenplay. She did not file her law-
suit until 18 years later, in January 2009.
2. Reasonableness of the Delay
[3] “In determining reasonableness, courts look to the
cause of the delay. Delay has been held permissible, among
other reasons, when it is necessitated by the exhaustion of
remedies through the administrative process; when it is used
to evaluate and prepare a complicated claim; and when its
purpose is to determine whether the scope of proposed
infringement will justify the cost of litigation.” Id. at 954
(citations and internal quotation marks omitted). In contrast,
delay is unreasonable “when its purpose is to capitalize on the
value of the alleged infringer’s labor, by determining whether
the infringing conduct will be profitable.” Id.
There are two relevant periods of delay in this case. The
first was from 1990 (when Petrella learned of the Stewart v.
Abend decision and engaged an attorney to advise and assist
her regarding her renewal rights in the subject works) to Sep-
tember 1998 (when Petrella’s attorney contacted the defen-
dants concerning their exploitation of the film). Petrella
testified that she did not contact the defendants and make
them aware of any claims during this eight year period
because “the film was deeply in debt and in the red and would
probably never recoup” and she “did not know there was a
time limit to making such claims.”
10178 PETRELLA v. METRO-GOLDWYN-MAYER
The second period of delay began in September 1998, when
Petrella’s attorney sent the first of a series of letters to the
defendants giving “formal notice” of her claims and threaten-
ing litigation. Although the final letter in this series was dated
April 5, 2000, Petrella did not file the complaint in this case
until January 2009. Petrella contends that she delayed filing
the lawsuit until 2009 for several reasons, including (1) her
brother’s disability and her mother’s illnesses that over a
period of years required her attention and care; (2) her moth-
er’s fear of retaliation from the defendants; and (3) her fami-
ly’s inability to afford a lawsuit. She argues that these factors,
combined with the defendants’ affirmative conduct in telling
her the film’s financial position was hopeless, caused the
delay.
[4] These explanations are unsupported by evidence other
than Petrella’s own declaration, and in any event, they are
insufficient to demonstrate that the filing delay was reason-
able. There is no explanation as to why or how Petrella’s
brother’s disability and her mother’s illnesses had any impact
on her failure to file this lawsuit from 1990 until 2009, a
period during which she was consulting with attorneys,
renewing the copyright and sending letters to the defendants
threatening a lawsuit. Petrella’s excuse that she delayed
because her family could not afford a lawsuit, even if true,
does not make the delay reasonable. Such a “consideration
appears generally to be invalid.” Danjaq, 263 F.3d at 954-55.
More importantly, the evidence suggests the true cause of
Petrella’s delay was, as she admits, that “the film hadn’t made
money” during this time period. A delay “to determine
whether the scope of proposed infringement will justify the
cost of litigation” may be reasonable; but delay for the pur-
pose of capitalizing “on the value of the alleged infringer’s
labor, by determining whether the infringing conduct will be
profitable” is not. Id. at 954 (internal quotation marks omit-
ted). The district court did not err in finding Petrella’s delays
in notification and in filing suit — 19 years, combined —
were unreasonable.
PETRELLA v. METRO-GOLDWYN-MAYER 10179
3. Prejudice
[5] Laches also requires a showing that a defendant was
prejudiced by the plaintiff’s unreasonable delay. In evaluating
this element, “[i]f only a short period of time has elapsed
since the accrual of the claim, the magnitude of the prejudice
required before the suit should be barred is great, whereas if
the delay is lengthy, prejudice is more likely to have occurred
and less proof of prejudice will be required.” Miller, 454 F.3d
at 1000 (alteration and internal quotation marks omitted).
The two primary forms of prejudice in the laches context
are expectations-based prejudice, which exists where a defen-
dant “took actions or suffered consequences that it would not
have, had the plaintiff brought suit promptly;” and evidentiary
prejudice, which exists where there are “such things as lost,
stale, or degraded evidence, or witnesses whose memories
have faded or who have died.” Danjaq, 263 F.3d at 955 (cita-
tions omitted). We conclude that expectations-based prejudice
exists here, so we need not consider evidentiary prejudice.
[6] A defendant establishes expectations-based prejudice if
it shows that “during the delay, it invested money to expand
its business or entered into business transactions based on [its]
presumed rights.” Miller, 454 F.3d at 999. Specifically, there
is prejudice where, “as a result of entering into such business
transactions during the delay, it may incur liability for dam-
ages.” Id. at 1000. Prejudice can also result from the “coming
into existence of business plans and relationships based on
reliance on the state of affairs challenged by the claims of the
litigation.” Howard B. Abrams, Law of Copyright § 13:48
(2011).
[7] The defendants have established such prejudice here.
Edward J. Slizewski, Senior Vice President for Participations
& Residuals for Metro-Goldwyn-Mayer Studios, Inc., stated
that, since Petrella learned of the allegedly infringing conduct
in 1991, the defendants “distributed the Film on a continuous
10180 PETRELLA v. METRO-GOLDWYN-MAYER
basis in the United States and abroad, and . . . expended sub-
stantial financial and other resources as a part of this effort,”
including “costs relating to marketing, advertising, distribut-
ing and otherwise promoting the Film in various media.”3 He
calculated that these costs totaled nearly $8.5 million in the
United States alone. The defendants did not break out these
expenditures into specific time periods, so we cannot identify
and quantify those that were incurred before Petrella notified
the defendants of her copyright claim in 1998. But it is clear
that they incurred significant investments in promoting the
film after several years elapsed following the end of the par-
ties’ exchange of letters in April 2000 without Petrella taking
any action to carry out her threat of litigation.
For instance, in 2004 and 2005, the defendants “spent
approximately $3 million to create, promote and distribute a
25th Anniversary Edition of the Film that was released in
2005.” In 2008 and 2009, they “incurred more than $100,000
in costs to convert Raging Bull to the Blu-Ray format, and to
promote, market and distribute the Film in that medium.”
Slizewski explained that “[t]hese activities and expenditures
were made based on the understanding and belief that the
[defendants] have complete ownership and control of the
Film. . . . Had Ms. Petrella filed suit in 1991 (or 1998), the
[defendants] would have had an opportunity to litigate this
claim prior to making these various and significant invest-
ments in the Film. Because no such suit was filed prior to
2009, the [defendants] were deprived of this opportunity.”
In addition to these investments, Slizewski stated that the
defendants had, since 1991, “entered into numerous agree-
ments to license the Film, including various agreements in
which television networks . . . are authorized to broadcast the
Film through 2015. License agreements relating to future dis-
3
Petrella objected to Slizewski’s declaration, arguing that it contradicted
his deposition testimony. The district court did not abuse its discretion in
overruling the objection.
PETRELLA v. METRO-GOLDWYN-MAYER 10181
tribution also have been entered into (prior to the institution
of this lawsuit) and provide for the Film to be distributed
through defendant Twentieth Century Fox Home Entertain-
ment LLC.” Slizewski further testified:
[T]he company has made commitments for a number
of years through I think 2015 here in the United
States for this particular picture and continues to, on
a regular continuous basis, invest money into this
title and to invest the overall sales effort in this title,
everyone from television sales staff, frankly to the
participation staff where I work in the company are
dedicating some amount of their time to the contin-
ued distribution, and all the back office support
related to this particular title, and frankly, to keeping
this title out in the marketplace, out in the DVD mar-
ketplace, out in the television marketplace.
[8] Nonetheless, Petrella argues that there is a triable issue
because the defendants earned a substantial profit as a result
of the delay and, she alleges, would not have done anything
different, or been in any better position, had the suit been filed
sooner. We disagree. In Jackson v. Axton, 25 F.3d 884 (9th
Cir. 1994), overruled on other grounds by Fogerty v. Fantasy,
Inc., 510 U.S. 517 (1994), we found prejudice after a delay of
18 to 22 years, despite the defendant’s profit from the delay,
and without any assertion that he would have acted differently
had the suit been filed sooner. Jackson concerned an owner-
ship dispute over the song “Joy to the World.” During the
period of the plaintiff’s delay, the defendant had “arranged his
business affairs around the Song, promoted the Song as his
own, licensed the Song many times to third parties, and sold
the Song . . . . [N]umerous business transactions ha[d] been
made in reliance on [the defendant’s] sole ownership of the
Song.” Id. at 889-90. This was sufficient to support the laches
defense.
Our ruling in Grand Canyon Trust v. Tucson Electric
Power Co., 391 F.3d 979 (9th Cir. 2004), where we declined
10182 PETRELLA v. METRO-GOLDWYN-MAYER
to find expectations-based prejudice, does not dictate a con-
trary result. There the Tucson Electric Power Company
received a permit from the Environmental Protection Agency
in 1977 authorizing the construction of a coal-powered elec-
tric generating plant, including two 350-megawatt coal-fired
steam electric generating units. See id. at 983. One year after
the permit was issued, Congress amended the Clean Air Act
to add new requirements for such construction, but provided
that permits already obtained would remain valid — and
therefore not subject to the new requirements — so long as
(1) construction commenced by March 19, 1979; (2) construc-
tion was not discontinued for a period of 18 months or more;
and (3) the project was completed within a “reasonable”
amount of time. See id. The parties disputed whether these
requirements were met, but all agreed that Tucson Electric
completed construction of its two units in 1985 and 1990. See
id. at 984.
In Spring 2001, after Tucson Electric publicly announced
a plan to construct two additional coal-fired units, Grand Can-
yon trust, a non-profit environmental organization, became
interested in the validity of the 1977 permit for the first time.
See id. After conducting an investigation and concluding that
the permit was invalid, Grand Canyon brought a citizen
enforcement action under the Clean Air Act. See id. The dis-
trict court granted summary judgment, concluding Grand
Canyon’s suit was barred by laches. See id. at 987-88. The
court found expectations-based prejudice because, if it
granted the relief Grand Canyon sought, Tucson Electric
would be required to replace the originally installed equip-
ment, which could cost up to $300 million. See id. at 988. We
reversed:
We do not see how this delay prejudiced Tucson
Electric. Rather, it appears that Grand Canyon’s
delay worked to the benefit of Tucson Electric
because it allowed Tucson Electric the opportunity
to recover some or all of its investment in [the units]
PETRELLA v. METRO-GOLDWYN-MAYER 10183
before this suit was filed. By contrast, if Grand Can-
yon had brought this action immediately after con-
struction on each [u]nit was completed, and had the
court held that Tucson Electric was required to
replace the equipment it had just installed, Tucson
Electric’s loss would have been total. The original
[u]nits would not have operated for a single day, and
Tucson Electric would not have had the opportunity
to recover any part of its immense investment. But
in actual fact, Grand Canyon’s delay allowed Tucson
Electric to operate [the two units] for many years
before having to replace them. Indeed, the longer the
delay in bringing the suit, the greater the benefit —
not the detriment — to Tucson Electric.
Id. at 988-89.
[9] In short, Tucson Electric benefitted because the delay
gave it time to recoup its already completed investment. That
is not the case here. Rather, over the full 18 year period of
Petrella’s delay, the defendants invested financial and other
resources in marketing, advertising, distributing and promot-
ing the film, totaling $8.5 million domestically. They contin-
ued to make business decisions and enter into contracts
relying upon their belief that they were the rightful owners of
the right to exploit Raging Bull. To the extent they should be
proved wrong in their legal assumption through this litigation,
the anticipated profits from these investments and licensing
agreements — the expectation of which underlay their busi-
ness decision making — would wind up in Petrella’s pocket.
That is the essence of expectations-based prejudice. The dis-
trict court was justified in so finding, invoking the venerable
Judge Learned Hand:
In the copyright context, the most-repeated justifica-
tion for the doctrine [of laches] was penned by Judge
Learned Hand: “It must be obvious to every one
familiar with equitable principles that it is inequita-
10184 PETRELLA v. METRO-GOLDWYN-MAYER
ble for the owner of a copyright, with full notice of
an intended infringement, to stand inactive while the
proposed infringer spends large sums of money in its
exploitation, and to intervene only when his specula-
tion has proved a success. Delay under such circum-
stances allows the owner to speculate without risk
with the other’s money; he cannot possibly lose, and
he may win.” Haas v. Leo Feist, Inc., 234 F. 105,
108 (S.D.N.Y. 1916).
Danjaq, 263 F.3d at 951.
[10] Accordingly, we hold that Petrella’s copyright
infringement claim is barred by laches. We therefore do not
reach the merits of the copyright infringement claim itself.4
II. Unjust Enrichment and Accounting
Petrella also sued for unjust enrichment and accounting,
arguing that if the defendants were co-owners rather than
infringers of the book, they would have had an ongoing duty
to account to and pay Petrella for any monies derived through
the exploitation of the book and its derivatives. See Oddo v.
Ries, 743 F.2d 630, 633 (9th Cir. 1984) (“A co-owner of a
copyright must account to other co-owners for any profits he
earns from licensing or use of the copyright . . . . [This duty]
comes from equitable doctrines relating to unjust enrichment
4
We reject Petrella’s argument that the district court erred by ignoring
evidence of the defendants’ willful infringement. The laches defense can-
not apply when the infringement “occurs with knowledge that the defen-
dant’s conduct constitutes copyright infringement.” Danjaq, 263 F.3d at
957 (internal quotation marks omitted). However, willful or “deliberate”
infringement “must mean more than simply not unintentional copying,
connoting something along the lines of piratical conduct.” 3 Nimmer
§ 12.06[B][5] (footnotes omitted). “[A] party accused of infringement,
who reasonably and in good faith believes the contrary, is not willful.” Id.
Petrella has failed to present evidence sufficient to raise a genuine issue
of material fact as to the existence of willful infringement.
PETRELLA v. METRO-GOLDWYN-MAYER 10185
and general principles of law governing the rights of co-
owners.” (internal quotation marks omitted)).
[11] Recovery of an unjust enrichment is an equitable rem-
edy. See McKesson HBOC, Inc. v. New York State Common
Ret. Fund, Inc., 339 F.3d 1087, 1093 (9th Cir. 2003). Seeking
an accounting, where the accounting is not provided for by
contract, is also an equitable remedy. See Dairy Queen, Inc.
v. Wood, 369 U.S. 469, 478 (1962). Because laches is an equi-
table defense, see Jarrow Formulas, Inc. v. Nutrition Now,
Inc., 304 F.3d 829, 835 (9th Cir. 2002), we agree with the dis-
trict court that laches also bars Petrella’s unjust enrichment
and accounting claims. See McKesson, 339 F.3d at 1093
(rejecting the plaintiff’s unjust enrichment claim based on the
equities); Ronald E. Dimock, Dimock: Intellectual Property
Disputes: Resolutions and Remedies § 18.2(a)(i) (2008)
(“since an accounting of profits is an equitable remedy, the
plaintiff may be refused the remedy upon equitable grounds,”
such as a “long delay in commencing the proceedings”) (foot-
notes omitted)).
III. Sanctions and Attorney’s Fees
The defendants contend they are entitled to sanctions under
Rule 11 and attorney’s fees for Petrella’s alleged unjustified
filing and prosecution of this action, and ask that we remand
for the district court to reconsider its denial of their sanctions
and fees motions. We hold that the district court did not abuse
its discretion in denying the motions.
1. Rule 11 Sanctions
Federal Rule of Civil Procedure 11 provides for the imposi-
tion of sanctions when a filing is frivolous, legally unreason-
able, without factual foundation or brought for an improper
purpose. See Simpson v. Lear Astronics Corp., 77 F.3d 1170,
1177 (9th Cir. 1996).
10186 PETRELLA v. METRO-GOLDWYN-MAYER
[12] The district court cited White v. General Motors
Corp., Inc., 908 F.2d 675, 682 (10th Cir. 1990), for the propo-
sition that although “[p]art of a reasonable attorney’s prefiling
investigation must include determining whether any obvious
affirmative defenses bar the case[,] . . . [a]n attorney need not
forbear to file her action if she has a colorable argument as to
why an otherwise applicable affirmative defense is inapplica-
ble in a given situation.” The court found that Petrella had a
reasonable belief that she could overcome the laches defense
because laches is an equitable doctrine involving many vari-
ables, and the case was less clear cut than Danjaq. The district
court concluded that sanctions were therefore not appropriate.
We agree.
2. Attorney’s Fees Under 17 U.S.C. § 505
Under the Copyright Act, a district court has discretion to
award attorney’s fees to the prevailing party. See 17 U.S.C.
§ 505; see also Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)
(reading § 505 as giving a district court broad discretion in
deciding whether to award fees). “A district court’s fee award
does not constitute an abuse of discretion unless it is based on
an inaccurate view of the law or a clearly erroneous finding
of fact.” Fantasy, Inc. v. Fogerty, 94 F.3d 553, 556 (9th Cir.
1996) (internal quotation marks omitted). “In deciding
whether to award fees under the Copyright Act, the district
court should consider, among other things: the degree of suc-
cess obtained on the claim; frivolousness; motivation; objec-
tive reasonableness of factual and legal arguments; and need
for compensation and deterrence.” Maljack Prods., Inc. v.
GoodTimes Home Video Corp., 81 F.3d 881, 889 (9th Cir.
1996).
[13] In denying attorney’s fees, the district court evaluated
several of these factors. The court denied the motion because
it had “not grant[ed] summary judgment based on a lack of
evidence of infringement, but solely on the ground that Plain-
tiff’s claims were barred by laches.” The court also concluded
PETRELLA v. METRO-GOLDWYN-MAYER 10187
that an award of attorney’s fees in this case “would have a
deterrent effect upon other copyright owners in Abend situa-
tions who have valid claims,” and “[s]uch a result would not
‘further the policies of the Copyright Act.’ ” Because we
agree that Petrella’s attempt to distinguish Danjaq both
legally and factually was not unreasonable, and there is no
evidence of improper motive, the district court did not abuse
its discretion by denying attorney’s fees.
CONCLUSION
We hold that Petrella’s copyright, unjust enrichment and
accounting claims are barred by laches, and we therefore
affirm the district court’s grant of summary judgment in favor
of the defendants. We also hold that the district court did not
abuse its discretion by denying the defendants’ motions for
sanctions and attorney’s fees. The parties shall bear their own
costs on appeal.
AFFIRMED.
W. FLETCHER, concurring:
I concur in Judge Fisher’s opinion, which faithfully applies
our circuit’s law of laches in copyright cases. But I do so only
because we are compelled to follow our opinion in Danjaq
LLC v. Sony Corp., 263 F.3d 942 (9th Cir. 2001).
There is a severe circuit split on the availability of a laches
defense in copyright cases. In the Fourth Circuit, there is no
laches at all. If a copyright suit is brought within the statute
of limitations, it may go forward. Lyons P’ship. L.P. v. Morris
Costumes, Inc. 243 F.3d 789, 797-98 (4th Cir. 2001). In the
Eleventh Circuit, “there is a strong presumption that a plain-
tiff’s suit is timely if it is filed before the statute of limitations
has run. Only in the most extraordinary circumstances will
10188 PETRELLA v. METRO-GOLDWYN-MAYER
laches be recognized as a defense.” Peter Letterese & Assocs.,
Inc. v. World Inst. of Scientology Enters., Int’l, 533 F.3d
1287, 1320 (11th Cir. 2008). Even if laches is found, “laches
serves as a bar only to the recovery of retrospective damages,
not to prospective relief.” Id. at 1321. In the Second Circuit,
laches is available as a bar to injunctive relief but not to
money damages. See New Era Publ’ns Int’l v. Henry Holt &
Co., 873 F.2d 576, 584-85 (2d Cir. 1989). In the Sixth Circuit,
laches is available in only “the most compelling of cases.”
Chirco v. Crosswinds Cmtys., Inc., 474 F.3d 227, 233 (6th
Cir. 2007).
Our circuit is the most hostile to copyright owners of all the
circuits. In the Ninth Circuit, laches can bar all relief, both
legal and equitable, when “(1) the plaintiff delayed in initiat-
ing the lawsuit; (2) the delay was unreasonable; and (3) the
delay resulted in prejudice.” Maj. Op., at 10176 (citing Dan-
jaq, 263 F.3d at 951).
There is nothing in the copyright statute or its history to
indicate that laches is a proper defense to a suit brought under
the Act. The Copyright Act of 1909 (“1909 Act”) did not con-
tain a statute of limitations. Pub. L. No. 60-349, 35 Stat. 1075.
Federal courts applying the 1909 Act used state statutes that
provided various limitations periods, and Congress eventually
became dissatisfied with the resulting problem of forum shop-
ping by plaintiffs. S. Rep. No. 85-1014, reprinted in 1957
U.S.C.C.A.N. 1961, 1961. In 1957, Congress amended the
1909 Act to provide a three-year statute of limitations. Act of
September 7, 1957, Pub. L. No. 85-313, 71 Stat. 633. The
accompanying Senate Report noted that the adoption of a fed-
eral limitations period would extinguish equitable defenses
such as laches. S. Rep. No. 85-1014, reprinted in 1957
U.S.C.C.A.N. 1961, 1963 (“[C]ourts generally do not permit
the intervention of equitable defenses or estoppel where there
is a [statute of] limitation on the right” (quoting H. Rep. No.
85-150)). The Copyright Act of 1976 (“1976 Act”) replaced
the 1909 Act. The 1976 Act re-enacted the three-year limita-
PETRELLA v. METRO-GOLDWYN-MAYER 10189
tions period for civil copyright claims using language identi-
cal to the 1957 amendment. Pub. L. No. 94-553, § 507(b), 90
Stat. 2541, 2586. Laches in copyright cases is thus entirely a
judicial creation. And it is a creation that is in tension with
Congress’ intent.
Modern courts seeking to justify the application of laches
in copyright cases typically quote from Judge Learned Hand’s
opinion in Haas v. Leo Feist Inc., 234 F. 105, 108 (S.D.N.Y.
1916):
It must be obvious to every one familiar with equita-
ble principles that it is inequitable for the owner of
a copyright, with full notice of an intended infringe-
ment, to stand inactive while the proposed infringer
spends large sums of money in its exploitation, and
to intervene only when his speculation has proved a
success. Delay under such circumstances allows the
owner to speculate without risk with the other’s
money; he cannot possibly lose, and he may win. If
the defendant be a deliberate pirate, this consider-
ation might be irrelevant . . . ; but it is no answer to
such inequitable conduct, if the defendant Feist is
innocent, to say that its innocence alone will not pro-
tect it. It is not its innocence, but the plaintiff’s avail-
ing himself of that innocence to build up a success
at no risk of his own, which a court of equity should
regard.
See, e.g., Maj. Op. at 10183-84 (quoting from this passage);
Danjaq, 263 F.3d at 957 (same). This passage from Judge
Hand is a classic invocation of equitable estoppel, which is
distinct from its equitable cousin, laches. Compare 6 William
F. Patry, Patry on Copyright § 20:55 (2012) (criticizing Dan-
jaq for failing to distinguish between equitable estoppel and
laches).
The elements of an equitable estoppel defense have been
variously stated. We wrote in a copyright infringement case:
10190 PETRELLA v. METRO-GOLDWYN-MAYER
Four elements must be present to establish the
defense of estoppel: (1) The party to be estopped
must know the facts; (2) he must intend that his con-
duct shall be acted on or must so act that the party
asserting the estoppel has a right to believe that it is
so intended; (3) the latter must be ignorant of the
true facts; and (4) he must rely on the former’s con-
duct to his injury.
Hampton v. Paramount Pictures Corp., 279 F.2d 100, 104
(9th Cir. 1960) (internal citation omitted). The Second Circuit
wrote more succinctly, but to roughly the same effect, in a
copyright case:
Under federal law, . . . a party can be estopped from
pursuing a claim where: (1) the party makes a mis-
representation of fact to another party with reason to
believe that the other party will rely on it; (2) the
other party relies on the misrepresentation to his det-
riment.
Marvel Characters, Inc. v. Simon, 310 F.3d 280, 292 (2d Cir.
2002) (internal citation omitted). Equitable estoppel can be a
complete defense against a claim, as to both legal and equita-
ble remedies. A.C. Aukerman Co. v. R.L. Chaides Constr. Co.,
960 F.2d 1020, 1041 (Fed. Cir. 1992) (en banc).
The elements of a laches defense are less demanding. In
our circuit, laches in copyright cases does not require actual
knowledge by the copyright owner of the defendant’s
infringement. It requires only that the owner “should have
known” of the infringement. See Kling v. Hallmark Cards
Inc., 225 F.3d 1030, 1036 (9th Cir. 2000). A laches defense
is available to an infringer so long as the infringer is not a
“deliberate pirate,” to use Judge Hand’s phrase, whom our
circuit defines as a “willful infringer.” Danjaq, 263 F.3d at
956-59. A showing of actual harm to the defendant is not nec-
essary. An infringer can establish expectation-based prejudice
PETRELLA v. METRO-GOLDWYN-MAYER 10191
by showing that he has invested money to exploit the copy-
right, whether or not he has made a profit as a result of the
owner’s delay. Maj. Op. at 10182-83.
Our circuit has taken a wrong turn in its formulation and
application of laches in copyright cases. We should revisit our
case law to provide appropriate protection to innocent copy-
right owners who have brought infringement suits within the
statute of limitations. A recognition of the distinction between
equitable estoppel and laches would be a good place to start.