Starz hits back at MGM’s “discovery rule” argument in ‘Bill & Ted’s’ suit
Streaming company Starz has hit back at MGM’s claim that its infringement suit is unreasonable under US copyright law, at the US district court for the central district of California.
Last summer, the cable and satellite TV network put MGM on notice for violating the terms of their exclusive library agreements after an employee noticed that Amazon Prime was streaming “Bill & Ted’s Excellent Adventure” when it should have been exclusive to Starz, the company claimed.
In May 2020, Starz then sued MGM at a California federal court for copyright infringement and breach of contract, claiming that MGM had infringed 340 titles. In July, MGM did not dispute the infringement suit and instead blamed its breach on“error[s]” made by its human operated rights-tracking database that led to overlapping “collisions” of exclusivity.
According to MGM, it was not aware of the breaches until “the matter first surfaced”. A US copyright law known as the discovery rule is integral to the dispute. Under it, the statute of limitations starts to run when the rights owner “reasonably should have discovered the infringement”, and not necessarily at the time of the alleged infringement.
MGM claimed that Starz should have noticed the infringement and filed its suit much earlier because the statute of limitations for copyright infringement is three years and the licences for 127 of the 340 titles expired by March 2017.
MGM also cited case law from a 2014 US Supreme Court's decision in a dispute over “Raging Bull” claiming that even if Starz is allowed to proceed with those claims, it can only recover damages for the three-year period before the suit was filed. Starz claims that it “reasonably did not discover MGM’s infringement until August 2019.
It said that “it exclusively licenses thousands of movies and television episodes from various sources”. It stated that to monitor in real time whether its copyrights are being infringed would require checking every distribution platform every day against every exclusivity window for every picture licenced to Starz, constituting “an unreasonably heavy burden”.
A further hearing is set for September 11.
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