Opinion ID: 899620
Heading Depth: 2
Heading Rank: 2

Heading: Timeliness of Ownership Claims

Text: Because Marvel asserts that there is an alternative ground for affirming the district court's judgment, we next consider its argument that Friedrich's - 32 - claim is barred by the statute of limitations. We may affirm the district court's order granting summary judgment on any ground supported by the record, even if it is not one on which the district court relied. McElwee v. Cnty. of Orange, 700 F.3d 635, 640 (2d Cir. 2012).
Under the Copyright Act, all civil actions, including claims of ownership, must be commenced within three years after the claim accrued. 17 U.S.C § 507(b); see Kwan v. Schlein, 634 F.3d 224, 228 (2d Cir. 2011). An ownership claim accrues only once, when 'a reasonably diligent plaintiff would have been put on inquiry as to the existence of a right.' Kwan, 634 F.3d at 228 (quoting Stone v. Williams, 970 F.2d 1043, 1048 (2d Cir. 1992)). If the ownership claim is time-barred, and ownership is the dispositive issue, any attendant infringement claims must fail. Id. at 230. Although an alleged author is aware of his claim to ownership of the work from the moment of its creation, Merchant v. Levy, 92 F.3d 51, 56 (2d Cir. 1996), the author does not need to bring suit until there has been an - 33 - express repudiation of that claim, see Zuill v. Shanahan, 80 F.3d 1366, 1370-71 (9th Cir. 1996). [A]ny number of events can trigger the accrual of an ownership claim, including '[a]n express assertion of sole authorship or ownership.' Kwan, 634 F.3d at 228 (quoting Netzer v. Continuity Graphic Assocs., Inc., 963 F. Supp. 1308, 1315 (S.D.N.Y. 1997)); see also Zuill, 80 F.3d at 1369 ([C]laims of co-ownership, as distinct from claims of infringement, accrue when plain and express repudiation of co-ownership is communicated to the claimant, and are barred three years from the time of repudiation.). For example, a claim can accrue: when a book is published without the alleged co-author's name on it, see Kwan, 634 F.3d at 229; when alleged co-authors are presented with a contract identifying the defendant as the sole owner and copyright holder, Zuill, 80 F.3d at 1368; see also Gaiman v. McFarlane, 360 F.3d 644, 652 (7th Cir. 2004); or when alleged co-owners learn they are entitled to royalties that - 34 - they are not receiving, see Merchant, 92 F.3d at 53, 56; Stone, 970 F.2d at 1048. 13
Marvel is not entitled to summary judgment on its statute of limitations defense. Friedrich filed his complaint on April 4, 2007 and thus Marvel had to have repudiated Friedrich's claim to ownership of the renewal rights prior to April 4, 2004 for his claim to be untimely. We conclude the district court could n ot have granted summary judgment on this basis because there are genuine disputes of fact regarding whether and , if so, when Marvel: (a) publicly repudiated Friedrich's claim; (b) privately repudiated Friedrich's claim in its communications with him; and (c) implicitly repudiated Friedrich's claim by 13 Friedrich argues that the statute of limitations merely restricts his recovery to damages suffered in the three years before filing. In Stone v. Williams, 970 F.2d 1043 (2d Cir. 1992), we permitted the illegitimate heir of a famous singer to seek royalties for the three years prior to filing even though she was charged with knowledge of her ownership claim well before that. See id. at 1051. We have subsequently made clear, however, that a stale ownership claim bars recovery for all subsequent infringement claims. See Kwan v. Schlein, 634 F.3d 224, 228 (2d Cir. 2011). Stone represents a narrow exception in those rare situations where uncertainty surround[s] the relative's status as a member of the author's family. Merchant v. Levy, 92 F.3d 51, 56 (2d Cir. 1996). - 35 - conspicuously exploiting the copyright without paying royalties.
First, there is a genuine dispute whether Marvel publicly repudiated Friedrich's claim. There is evidence that, over the years, Marvel repeatedly and publicly recognized that Friedrich created the work. Marvel publicly credited Friedrich with conceiv[ing] Spotlight 5 each time it reprinted the original comic -- including as late as 2005. When the comic was originally published in 1972, Marvel explained in a contemporaneous publication that Friedrich had dreamed the whole thing up. Moreover, Marvel did not register a copyright in Spotlight 5 or Ghost Rider before Friedrich filed this action, even though it had registered nearly all of its other characters and several later Ghost Rider stories. Marvel argues that the copyright notice on Spotlight 5 declared that Marvel was the owner and publicly repudiated Friedrich's claim. But in 1972, the notice would have only indicated that Marvel held the rights to the initial term of copyright. It would not have - 36 - conclusively demonstrated that Marvel was the author or otherwise had the right to register the renewal term. 14 See, e.g., P.C. Films Corp., 138 F.3d at 456 (explaining that agreement permitted alleged assignees to register[] the renewal copyright in the[ir] names . . . as co - claimants [just] as [their predecessors] had done for the original copyright registration). At a minimum, there is a genuine dispute regarding whether this notice publicly repudiated Friedrich's claim of authorship, and thus his claim to ownership of the renewal rights.
Second, the record is unclear as to whether Marvel privately repudiated Friedrich's claim in its communications with Friedrich before April 4, 2004. Although Marvel contends that it told Friedrich that it 14 Under the 1909 Act, copyright protection was not renewed automatically. See 3 Nimmer on Copyright § 9.05[A][1]. Only certain parties could file for renewal and formal renewal was an absolute condition to continued copyright protection. Id. § 9.05[A][1], [D][1][a]. While subsequent amendments made it possible for the renewal rights in works published between 1964 and 1977 to vest without formal registration, see Copyright Renewal Act of 1992, Pub. L. No. 102-307, 106 Stat. 264; 3 Nimmer on Copyright § 9.05[A][1]-[2], this historical fact indicates that the name on the original 1972 copyright notice was not necessarily a public repudiation of Friedrich's claim to ownership of the renewal copyright. - 37 - considered Ghost Rider to be a work made for hire either at the time of the comic book's creation or at the time he executed the Agreement in 1978, the circumstances surrounding those events are in dispute. Only Marvel's letter dated April 16, 2004 clearly communicates that position to Friedrich. Because Friedrich filed his complaint less than three years later, his ownership claim would be timely if that was the first time Marvel privately repudiated his ownership claim. Accordingly, there is a genuine dispute as to when Marvel first told Friedrich that it intended to take sole credit for Ghost Rider.
Finally, there is a genuine dispute as to whether Marvel's exploitation of the Ghost Rider copyright during the renewal term, 15 without paying royalties, implicitly repudiated Friedrich's claim to ownership. In Merchant v. Levy, 92 F.3d 51 (2d Cir. 1996), and Stone v. Williams, 970 F.2d 1043 (2d Cir. 1992), the alleged co-owners were 15 Marvel's extensive exploitation of Ghost Rider during the initial term is irrelevant, as it would be merely consistent with Friedrich's claims that he is the author and assigned only the initial copyright term to Marvel. - 38 - charged with notice of their ownership claim once they knew they were entitled to receive royalties, but the works in both those cases were hit songs regularly played on the radio. See Merchant, 92 F.3d at 52-53, 56 (Why Do Fools Fall in Love by Frankie Lymon and the Teenagers); 16 Stone, 970 F.2d at 1046, 1048 (songs of Hank Williams). In contrast, Marvel used the Ghost Rider copyright sparingly and in non-obvious ways between 2001 and 2004. Cf. Zuill, 80 F.3d at 1370 (analogizing statute of limitations for ownership claims to doctrine of adverse possession, which requires an express or implicit ouster to put the owner on notice); 3 Am. Jur. 2d Adverse Possession § 62 (2d ed. supp. Feb. 2013) (explaining that the possession of the adverse claimant must be open and notorious). During the renewal period but before 2004, Marvel merely: published six issues of a short-lived Ghost Rider comic book series from August 2001 to January 2002; advertised a single Ghost Rider toy in each of its 2003 and 2004 toy catalogs; and used Ghost Rider for a cameo appearance in a video game 16 In Merchant, the jury decided when the alleged co- owners should have been charged with knowledge of their claim. See Merchant, 92 F.3d at 56. - 39 - entitled Spider-Man. There is a genuine dispute as to whether a reasonably diligent person would have been put on notice by this activity. Marvel points out that its agreement to license a Ghost Rider movie had been highly publicized since 2000 and argues that this implicitly repudiated Friedrich's ownership of the renewal copyright. We conclude that there are genuine disputes of fact regarding whether these news reports repudiated Friedrich's claim. First, it is unclear whether this conduct even occurred during the renewal term. Because the copyright appears to have been first secured in 1972, the renewal term would not have vested in Friedrich until January 1, 2001. See 17 U.S.C. § 304(a)(2)(A)(i); 3 Nimmer on Copyright § 9.05[C][2] (explaining that the initial term for a work first published on March 12, 1969 would end December 31, 1997 -- at the end of the twenty-eighth year -- and the renewal term would vest on January 1, 1998). Marvel entered the license agreement on May 15, 2000, before the initial term expired. Therefore, news of - 40 - that agreement would not necessarily have repudiated Friedrich's ownership of the renewal term. Second, it was not clear that Marvel would refuse to pay royalties to Friedrich when the movie was released. According to Merchant and Stone, an ownership claim is triggered by knowledge of an entitlement to royalties that are not being paid, rather than by mere knowledge of the exploitation. See Merchant, 92 F.3d at 53, 56; Stone, 970 F.2d at 1048. Of course, in many cases, these two will go hand-in-hand. For example, a co-owner is aware of his claim of co-ownership from the moment the work is created, see Merchant, 92 F.3d at 56, and thus learning that another joint author is exploiting the work is sufficient notice that royalties are due. Here, however, Friedrich alleges primarily that he is sole author and alternatively that he is a joint author. As to his claim of sole authorship, Friedrich would not have a right to royalties with respect to the movie, but a claim for damages. But as explained above, it is not clear that entering the agreement infringed Friedrich's ownership rights as it may have occurred during - 41 - the initial term. With respect to the alternative coauthorship claim, it is unclear whether the agreement entitled Friedrich to any royalties before the movie was released and began generating profits in 2007. Moreover, there is evidence that Marvel did pay Friedrich royalties when it reprinted Spotlight 5 in 2005, suggesting that Marvel also might pay him royalties when the movie was released. Hence, a jury could find that a reasonably diligent person would not have known that Marvel was exploiting Ghost Rider, without paying royalties, during the renewal term but before April 4, 2004. Because there are genuine disputes regarding whether Friedrich should have known about Marvel's repudiation of his claim of ownership, his claim is not untimely as a matter of law. 17 17 We also reject Marvel's arguments that Friedrich is barred by the doctrines of laches, see New Era Publ'ns Int'l, ApS v. Henry Holt & Co., 873 F.2d 576, 584-85 (2d Cir. 1989), and equitable estoppel, see Veltri v. Bldg. Serv. 32B-J Pension Fund, 393 F.3d 318, 326 (2d Cir. 2004). Marvel has not suffered any prejudice, New Era Publ'ns, 873 F.2d at 584, or injustice, Veltri, 393 F.3d at 326, warranting the invocation of these equitable remedies. The loss of evidence and the deterioration of key witnesses' memories are the products of the twenty-eight year initial copyright term and the parties' joint failure to properly document the ownership of the Ghost Rider copyright at the time of its creation. Furthermore, Marvel was on notice of a competing claim to the Ghost Rider renewal - 42 -