Seven Arts v. Content Media

When parties are in a “close relationship,” the three-year statute of limitations under the Copyright Act, 17 U.S.C. § 507(b), will bar an untimely claim “for copyright infringement where the gravamen of the dispute is ownership."

Seven Arts Filed Entertainment Limited (“Seven Arts”) sued Paramount Pictures Corp (“Paramount”) for copyright infringement, claiming that Seven Arts “is the registered owner or assignee of the registered owner of United States copyrights” to certain films and that Paramount has continually paid receipts from the films to Content Media Corp., "not Seven Arts, despite Seven Arts's demands." Three years prior to the filing of the lawsuit, "Paramount plainly and expressly repudiated Seven Arts's copyright ownership." The district court granted Paramount's motion to dismiss, finding that the three-year statute of limitations under the Copyright Act, 17 U.S.C. § 507(b), barred Seven Arts’s claims. On appeal, the Ninth Circuit considered whether a copyright infringement claim would be time barred when the central dispute was over ownership and a “freestanding ownership claim would be barred." Looking to the Second and Sixth Circuits for guidance, the Ninth Circuit agreed that any infringement claims should be time-barred if a freestanding ownership claim would be. Over three years had lapsed between when Paramount had repudiated Seven Arts’s ownership and when Seven Arts brought this suit. Therefore, the panel held that in situations where parties are in a close relationship, "an untimely ownership claim will bar a claim for copyright infringement where the gravamen of the dispute is ownership.” The panel also rejected Seven Arts’s argument that it was entitled to equitable tolling because there was no compelling reason for why Seven Arts hadn’t sued Paramount earlier. AFFIRMED.