Loss/Waiver of Copyright Infringement Rights

Author: LegalEase Solutions

Research Findings

  1. Whether an owner of a copyright can “waive” or lose its (1) common law and (2) registered copyright protection by failing to control use of the copyrighted material. Specifically, if an organization produces copyrighted works (such as standards or program criteria and related materials, such as applications and program guidance) and fails to tell others to stop using the copyrighted works, is the right to seek damages and to get an injunction against further use waived?

An owner of a copyright can waive copyright protection only if there is intent by the copyright proprietor to surrender rights in his work.  Under common-law copyright, ownership of copyrighted property is absolute until one voluntarily part[ed] with the same.  Even though retrospective relief may not be granted in cases where one has failed to control use of the copyrighted material, a prospective relief most likely will be granted.

Waiver is the intentional relinquishment of a known right with knowledge of its existence and the intent to relinquish it. United States v. King Features Entm’t, Inc., 843 F.2d 394, 399 (9th Cir. 1988).  In copyright, waiver or abandonment of copyright “occurs only if there is an intent by the copyright proprietor to surrender rights in his work.” A&M Records v. Napster, 239 F.3d 1004, 1026 (9th Cir., 2001).

A copyright can be forfeited through some overt act which indicates the copyright proprietor’s desire to surrender its rights. Lopez v. Electrical Rebuilders, Inc., 416 F.Supp. 1133, 1135 (C.D.Cal.1976). Acquiescence, with full knowledge in the publication of a vast number of copies without copyright notice, may work a forfeiture. Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1019, 227 USPQ 598, 82 A.L.R.Fed 97 (C.A.9 (Cal.), 1985). Publication by a licensee of “vast numbers of copies without copyright notice may work a forfeiture” if done with full knowledge of a licensor who acquiesces. Synercom Tech. v. University Computing Co., 462 F. Supp. 1003 – Dist. Court, ND Texas 1978.

Protection afforded by the copyright law confers upon the copyright proprietor the exclusive right to print, reprint, publish, copy and vend the copyrighted work. Section 106 of the Copyright Act grants to the copyright owner the exclusive rights to: (1) reproduce the copyrighted work; (2) prepare derivative works; (3) distribute copies of the work; (4) perform the work publicly; and (5) display the work publicly. 17 U.S.C. § 106.  The grant of these exclusive rights implies the prohibition that others shall not exercise them without the consent of the copyright proprietor; to do so without such consent would be infringement of copyright.” U.S. v. Wise, 550 F.2d 1180, 1186 (C.A.9 (Cal.), 1977).

In order to prove copyright infringement under the Copyright Act, a plaintiff must show: “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Harolds Stores, Inc. v. Dillard Dept. Stores, Inc., 82 F.3d 1533, 1543, 38 USPQ2d 1609 (C.A.10 (Okla.), 1996). The limitations period for bringing copyright infringement claims is three years after the claim accrues. See 17 U.S.C. S 507(b). A claim accrues when “one has knowledge of a violation or is chargeable with such knowledge.” Lyons Partnership v. Morris Costums, 243 F.3d 789, 796 (4th Cir., 2000).

The doctrine of laches is based on the maxim that equity aids the vigilant, not those who sleep on their rights. Lyons Partnership v. Morris Costums, 243 F.3d 789, 798 (4th Cir., 2000). Laches is a doctrine that applies only in equity to bar equitable actions, not at law to bar legal actions. In connection with the copyright claims, separation of powers principles dictate that an equitable timeliness rule adopted by courts cannot bar claims that are brought within the legislatively prescribed statute of limitations. Finally, even in equity under the Lanham Act, laches does not bar a claim for prospective injunctive relief. Id.

A copyright owner is entitled to recover actual damages as well as those profits of the infringer that are attributable to the infringement and that are not already included in the computation of actual damages. 17 U.S.C. Sec. 504(b).  No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued” Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir., 2004).  The copyright statute of limitations starts to run when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his rights.Id.

A court has power in its discretion, to fashion appropriate remedial relief. As the Supreme Court has observed, a permanent injunction does not automatically issue upon a finding of copyright infringement. Courts `may’ grant injunctive relief `on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.'” (quoting 17 U.S.C. § 502(a))). Rather, under “well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief,” and a court’s decision to grant or deny such relief is within the exercise of its discretion. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. Peter Letterese & Assoc. v. World Inst. of Scient., 533 F.3d 1287, 1323 (11th Cir., 2008).

Section 502(a) of the Copyright Act authorizes a court to issue a permanent injunction “on such terms as it may deem reasonable to prevent or restrain infringement of a copyright.” 17 U.S.C. § 502(a). A copyright holder that establishes past infringement and a substantial likelihood of infringement in the future is normally entitled to a permanent injunction against the infringer pursuant to § 502(a). Harolds Stores, Inc. v. Dillard Dept. Stores, Inc., 82 F.3d 1533, 1555, 38 USPQ2d 1609 (C.A.10 (Okla.), 1996)

Short of a surrendering one’s rights to their copyright, it is very difficult to obtain a finding that indeed rights  to a copyright work were waived or abandoned.

  1. Can a copyright owner be estopped from pursuing his/her rights? 

A copyright owner cannot be estopped from pursuing his/her rights unless s/he has so acted as to mislead another and the one thus misled has relied upon the action of the inducing party to his prejudice. The party to be estopped must have used conduct or language amounting to a representation of material fact and the party asserting estoppel must have detrimentally and justifiably relied on the representation.

In Peter Letterese & Assoc. v. World Inst. of Scient., 533 F.3d 1287, 1322 (11th Cir., 2008), the court referred to a Fifth Circuit’s explanation in a patent infringement action, that although laches and estoppel are related concepts, there is a clear distinction between the two. The defense of laches may be invoked where the plaintiff has unreasonably and inexcusably delayed in prosecuting its rights and where that delay has resulted in material prejudice to the defendant. The effect of laches is merely to withhold damages for infringement which occurred prior to the filing of the suit.  Whereas, Estoppel, “arises only when one has so acted as to mislead another and the one thus misled has relied upon the action of the inducing party to his prejudice.” Estoppel forecloses the patentee from enforcing his patent prospectively through an injunction or through damages for continuing infringement.

This distinction between the remedies foreclosed by laches and those foreclosed by estoppel applies with equal force in the copyright context.  It is also true in the copyright infringement context that “from the very nature of the thing [a copyright owner] cannot be fully cognizant of all infringements that occur throughout the length and breadth of this country. His information may be largely hearsay,” and “the validity of [the copyright] and the infringement thereof may be, as here, disputed. …….(“[L]aches bars relief on a patentee’s claim only with respect to damages accrued prior to suit.”). Permitting laches to operate as a bar on post-filing damages or injunctive relief would encourage copyright owners to initiate much needless litigation in order to prevent others from obtaining effective immunity from suit with respect to future infringements.  Laches therefore does not preclude Plaintiff from seeking prospective relief.

The doctrine of laches may be applied to equitable claims brought under the Lanham Act, which contains no express limitations provision. When federal courts, in the exercise of their equitable power, consider laches, they are guided by the limitations period that they would borrow for actions at law and presume that if an equitable claim is brought within the limitations period, it will not be barred by laches. But if the claim is one for injunctive relief, laches would not apply. A prospective injunction is entered only on the basis of current, ongoing conduct that threatens future harm. Inherently, such conduct cannot be so remote in time as to justify the application of the doctrine of laches. See Sara Lee, 81 F.3d at 461 (“[I]n consideration of the public interest, estoppel by laches may not be invoked to deny injunctive relief if it is apparent that the infringing use is likely to cause confusion.

A party asserting laches must show: (1) lack of diligence by the party against whom the defense is asserted, and (2) prejudice to the party asserting it.  It is inequitable 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 speculation has proved a success.” Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d 470, 493 (6th Cir., 2007).  In this case court cautioned that although the doctrine of laches may be applied in copyright cases, it should be applied “rarely” and only in “unusual circumstances.” In Chirco v. Crosswinds Cmtys., Inc., 474 F.3d 227, 233-36 (6th Cir. 2007) the appellate court affirmed district court’s application of laches to plaintiffs’ two-and-one-half-year delay in filing suit, where plaintiffs knew of defendants’ infringement of construction plans before construction began, “ma[de] any effort to procure the destruction of buildings already occupied, sold, or substantially constructed unduly prejudicial to the defendants.  Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d 470, 493 (6th Cir., 2007)

In Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d 470, 493 (6th Cir., 2007) the court discussed the term “estoppel”.  The district court noted that Defendants appear to equate estoppel with laches and repeatedly refer to the “inactivity” of plaintiffs.   The court held that Estoppel requires, among other things, that “the party to be estopped must have used conduct or language amounting to a representation of material fact” and “the party asserting estoppel must have detrimentally and justifiably relied on the representation.”Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d 470, 494 (6th Cir., 2007)

“It must be obvious to everyone familiar with equitable principles that it is inequitable 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 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.  There is a strong presumption that a plaintiff’s suit is timely if it is filed before the statute of limitations has run. Only in the most extraordinary circumstances will laches be recognized as a defense.” Peter Letterese & Assoc. v. World Inst. of Scient., 533 F.3d 1287, 1320-1321 (11th Cir., 2008).

The limited applicability of laches to copyright cases shall be in “what can best be described as unusual circumstances”.  Even where such extraordinary circumstances exist, however, laches serves as a bar only to the recovery of retrospective damages, not to prospective relief.