The Ninth Circuit today issued a decision in a copyright matter concerning statutes of limitations on copyright claims — in particular, on claims concerning the ownership of copyrights. It explicitly chose to "decline [plaintiff] Seven Arts’s invitation to create a circuit split" with the Second and Sixth Circuits. Seven Arts Filmed Enter. Ltd. v. Paramount Pictures Corp., No. 11–56759 (9th Cir. 06 Nov 2013), slip op. at 12 (PDF). As far as that goes, that's fairly unobjectionable. The problem is that neither the statement nor the consideration go nearly far enough.
Seven Arts concerns ownership of motion pictures. We'll leave aside the poor theoretical and treaty-compliance foundation for the American work-for-hire doctrine that by default vests ownership of the copyright, and designation of authorship, in an investor (the producer) and not in anyone who actually creates copyrightable expression (or expression that would be copyrightable in any other context). In this particular instance, we've got multiple parties asserting that they are the proper producer (or at least successor in interest to the proper producer). The key question is when the claim accrued... because there's a three-year statute of limitations on copyright claims.
Judge O'Scannlain's opinion goes to considerable lengths to harmonize the holding in Seven Arts with existing Second and Sixth Circuit cases, and to further link those cases back to an older Ninth Circuit opinion. This is a rather disturbing and curious variety of circular reasoning ("we said said so a long time ago in a different context, others have agreed with us since in yet other contexts, and so we must be right and we'll agree with the others who agreed with us") that is — pardon the pun, or not — far from uncommon in the common law. Whether this is good logic or reasoning is a deep question well beyond a blawg entry.
Pointing out an unacknowledged circuit split, however, is not. In Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004), the decision also turned on when the claim accrued — and statute of limitations began to run — concerning ownership of certain comics characters. Gaiman is a bit more factually complicated because there was actual creative expression from both parties, but on the other hand it is simpler because there was no question of a chain of title to be unlinked. The legal question was answered in a not-incompatible fashion, compared to Seven Arts. Judge Posner held
The parties also rightly agree that 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, Taylor v. Meirick, 712 F.2d 1112, 1117 (7th Cir. 1983), in this case by repudiating Gaiman's ownership of copyright. Aalmuhammed v. Lee, 202 F.3d 1227, 1230–31 (9th Cir. 2000); Merchant v. Levy, supra, 92 F.3d at 53, 56; Zuill v. Shanahan, supra, 80 F.3d at 1370–71. McFarlane claims that Gaiman knew, or certainly should have known, no later than 1997 when Gaiman's lawyer wrote the demand letter from which we quoted, that McFarlane was denying that Gaiman had any copyright interest in the three characters — that McFarlane had in effect appropriated Gaiman's copyright interest. Actually McFarlane thinks that Gaiman's copyright claim accrued a lot earlier — in 1993 when Spawn No. 9 was published with a copyright notice that did not mention Gaiman. It doesn't matter; if Gaiman's claim accrued before February 1999, the suit is untimely.
Gaiman, 360 F.3d at 653 (boldface emphasis supplied, highlighting a case cited with approval in Seven Arts).
But on the facts — contrary to the implications of Seven Arts — the question is really what constitutes the event of repudiation. In Gaiman, a copyright application denying joint authorship and printing of the work with sole attribution of copyright to McFarlane (or his company) were not events of "repudiation"; neither was failure to respond to a lawyer's demand letter. In Seven Arts, however, a noncommunicative failure (a nonresponse to a formal demand) to redirect royalties and rights payments from one party to another was an event of "repudiation" that began the running of the statute of limitations... disturbingly contrary to treatment of McFarlane's nonresponse.
There are good, results-oriented arguments that in both Gaiman and Seven Arts, the outcome is about right... within and near the strange world of the work-for-hire doctrine. Unfortunately, Seven Arts never cites Gaiman at all — and that's the real circuit split. It's not the kind of circuit split that results in Supreme Court review; it's the kind of circuit split that makes it inordinately (and unjustifiably) difficult to advise clients on their rights and responsibilities concerning claims of copyright ownership, either retrospectively or prospectively. Some of the parties in the various cases (beyond just Gaiman and Seven Arts) did not help by attempting to hide their intentions, presumably to avoid triggering opponents' awareness or action. That implicates perhaps the only way to reconcile these cases and avoid declaring a circuit split: Designation of a particular event/nonevent as "repudiation" is a matter of equity that will be decided by a judge (or three, on appeal) based upon documentary facts clear enough to avoid a jury question. Once that designation is made, the rest is just counting to three... and even the science-and-math-averse bar can do that (just pretend it's about billable hours).
The Seventh and Ninth Circuits disagree on whether silence in response to a demand constitutes a repudiation of copyright claim that begins the running of the statute of limitations. Unfortunately, it does not appear that this was briefed to the Ninth Circuit, as neither side's briefs in the matter cite Gaiman. There is a circuit split here; it's just not the one that Judge O'Scannlain tried to avoid.