Seven Arts Filmed Entm't, Ltd. v. Content Media Corp. PLC

Where a copyright ownership claim was time-barred, and ownership was the deciding issue, the related infringement claims failed.

Opinion (O’Scannlain): In 2011, plaintiff, Seven Arts Filmed Entertainment Limited ("Seven Arts"), asserted ownership of copyrights in several motion pictures such as Rules of Engagement, An American Rhapsody, and Who is Cletis Tout? against defendants, Paramount Pictures Corp. ("Paramount"), and Content Media Corp. PLC ("Content"). Seven Arts initially brought an action in Canada against CanWest in 2003 asserting ownership rights of the movies. While the Canadian action was pending, Seven Arts returned to the US in 2005 and asserting the same claims as it asserted in 2011. In 2005, the district court stayed a summary judgment order made by Seven Arts pending the Canadian action. The Canadian court finally secured Seven Arts’ summary judgment order in February of 2011. The Canadian court had found that at all times, Seven Arts had been the owner of copyrights registered and enforceable pursuant to the US Copyright Act of 1976. After getting the new summary judgment, Seven Arts asserted the 2011 action, the instant case, in federal district court. The court dismissed the complaint with prejudice on the ground that Seven Arts’ claim was barred by the Copyright Act’s three-year statute of limitations. Under the statute of limitations of the Copyright Act, when a claim accrues depends on the nature of the copyright claim. For ordinary claims of copyright infringement, each new infringing act causes a new claim to accrue. The Court of Appeals determined that the present claim regarded ownership and thus considered the question of whether a claim for copyright infringement disputing ownership is time-barred if an ordinary ownership claim would be barred. The Second and Sixth circuits have determined that where ownership of a copyright infringement is the essence of the suit, and a free-standing ownership claim would be subject to the statute of limitations, infringement claims would also be barred. The Second Circuit held that where the ownership claim is time-barred, and ownership is the deciding issue, any related infringement claims must fail. The Court agreed with the Second Circuit approach because allowing plaintiffs to establish ownership through infringment claims would effectively circumvent the statute of limitations. Seven Arts argued that the statute of limitations for declaratory-judgment actions should not be applied to claims for copyright infringement because Congress’s intent in enacting the statute of limitations was to bar particular remedies, not extinguish substantive rights. The court was unpersuaded by this argument and AFFIRMED dismissal.