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First Circuit: Copyright statute of limitations applies to accounting claims between joint authors
December 19, 2007

In a decision last week, the First Circuit held that a purported assignee of a joint author of a copyrighted work was barred by the Copyright Act's three-year statute of limitations from seeking an accounting of profits, even though the state statute of limitations for seeking such an accounting had not yet run.The plaintiff had purportedly acquired rights in a copyrighted work, Das Hummel-Buch. from the heirs of a joint author of the work, and brought suit for an accounting of profits on the original work and deriviative works, commonly known as Hummel figurines. However, the plaintiff could only assert the state law claim if it first established its ownership interest in the copyright. As a result, because copyright ownership was an essential first determination in the matter at hand, the Copyright Act's three-year statute of limitations applied, barring the claim, even though the applicable state statute of limitations had not expired.More detail of Cambridge Literary Props., Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. after the jump.Sister Maria Innocentia Hummel (a German nun) was a talented artist, and drew several pictures of children in folk dress in the early 20th century. Hummel was approached in 1934 by a publishing company to publish her artworks in a book with accompanying poems and other text. The poetry was authored by a Viennese poet, Margarete Seeman. The book, Das Hummel-Buch, was first published in Germany in December 1934, and was first filed for United States copyright protection in June 1936. All in all, the book contained forty of Hummel's drawings and fifty of Seeman's poems. In 1935, Franz Goebel contracted with Hummel for the exclusive right to manufacture and market porcelain figurines based on Hummel's drawings, now commonly known as "Hummel figurines." Eventually, after conclusion of a lawsuit between the German publisher and Goebel, Goebel obtained all rights to the Hummel book and figurines—or so it appeared.Years later, the plaintiff in this case, Cambridge, purportedly acquired an ownership interest in the copyright of Das Hummel-Buch by traveling to Austria and obtaining assignments from Seeman's heirs. The assignments were received in 1995 and February 1999 from the two surviving heirs. Cambridge argued that these assignments provided a 50% interest in Das Hummel-Buch, representative of the poet Seemann's interest as a joint author of the book. Plaintiff then filed suit seeking "an accounting from Goebel of their profits from their use and benefit of said book and the two- and three-dimensional works derived therefrom" as well as a separate claim for unjust enrichment.The district court dismissed the suit for lack of personal jurisdiction and the First Circuit reversed and remanded. On remand the district court again did not reach a decision on the merits of the accounting and unjust enrichment claims, instead granting summary judgment based on the Copyright Act's three year statute of limitation barring the suit. Cambridge appealed.The First Circuit affirmed. As an initial matter, the court noted that while the complaint was styled as a request for an accounting, the threshold question that must be answered before an accounting can be ordered is whether Cambridge did, in fact, obtain an interest in the copyright of Das Hummel-Buch. Given that ownership of copyright is a question of federal copyright law, the court held it was governed by the Copyright Act. Therefore, the Copyright Act's statute of limitations also applied. 17 U.S.C. § 507(b) states that no action is maintainable unless it has been commenced within three years after the claim accrued. As a result, in order for Cambridge to assert that Seeman was a joint author, such a claim must be brought within the Copyright Act's statute of limitations period.Here, the case was filed on February 24, 2000, making the statute of limitations cutoff February 24, 1997. It was undisputed that Cambridge knew of the potential claim from the first heir at the latest in 1995, when it obtained the first assignment from Seeman's heir. In addition, the court held that the second heir (from whom an assignment was not obtained until 1999), knew or should have known of her rights at least as early as 1995 as well, based on contacts he had with an attorney in 1995. She testified that that in 1995, she was interested in obtaining some income by assigning her American rights in Das Hummel-Buch. As a result, the statute had run on Cambridge's predecessor-in-interest in 1998, and could not be revived by assignment in 1999. Because the statute of limitations had run, the district court's summary judgment for the defendant was affirmed.Judge Cyr dissented. He argued that the application of the Copyright Act's three year statute of limitation was both "unprecedented and potentially pernicious." He placed great importance on the fact that Cambridge did not bring an action under the Copyright Act for a declaration of copyright ownership, instead pursuing a state law cause of action for an accounting. He stated that the court's holding threatens to "draw into the federal courts many copyright-related claims over which Congress deliberately intended to give the state courts concurrent jurisdiction." As a result, he would have reversed, finding the state statute of limitations applicable and not the three-year federal statute of limitations.This case presents an interesting wrinkle in copyright cases involving arguable joint authors of a work. For plaintiffs, it once again encourages early pursuit of claims of joint authorship, lest rights in the work be lost. For defendants, it provides a possible mechanism to fend off claims of joint authorship that may not have otherwise been available.To read the full decision in Cambridge Literary Props., Ltd. v. W. Goebel Porzellanfabrik G.m.b.H., click here.

Read Bill Patry's blog post on the case here.

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