Infringement Claim Based on Time-Barred Ownership Claim Also Barred Under §507

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When a claim of copyright infringement cannot be resolved without adjudicating a claim of ownership that is barred under the statute of limitations, the dependent copyright claim is also time-barred, the U.S. Court of Appeals for the Second Circuit ruled Jan. 25 (Kwan v. Schlein, 2d Cir., 09-5202-cv, 1/25/11).

Affirming an award of summary judgment, the court found that a plaintiff who had asserted authorship status before publication had lost the chance to bring that claim and any infringement claim based on her assertion of authorship three years after the first publication under operation of the Copyright Act's statute of limitations. Claims regarding later editions that also required resolving the time-barred authorship claim were similarly barred, the court said.

Editor Claims to Have Ghostwritten Book.

In 1998, Business Resources Publications Inc. d/b/a BRB Publications and Facts on Demand Press engaged Alan M. Schlein to write a book to be called Find It Online. Schlein asked BRB to engage Shirley Y. Kwan as an editor for 100 hours of work; her compensation was to include a credit as editor on the title page. After fulfilling the 100 hours, Schlein asked BRB to continue Kwan's employment and Kwan was offered a percentage of royalties as compensation for further work.

Just prior to publication, a disagreement arose as to the form of the credit to be given to Kwan. The publisher proposed using both Schlein's and Kwan's names on the cover and asked them to work out the exact wording. Schlein proposed the form “By Alan M. Schlein Edited by Shirley”; however, Kwan, who asserted that she had “essentially … ghostwritten” the book, suggested “by Alan Schlein with Shirley Kwan Kisaichi.”

In 1999, BRB published the first edition using the form preferred by Schlein and BRB, and Schlein filed for registration with the Copyright Office in their names. Kwan began receiving royalty payments. Three more editions were published as of the end of 2004, and each one was registered in the names of BRB and Schlein.

However, in 2002, BRB informed Kwan that after the publication of the second edition, the book had been rewritten and that she would receive no royalties for editions following the second.

In 2005, Kwan sued, alleging copyright infringement. She also filed to register her copyright interest as a co-author of the book, later corrected to identify herself as the sole author. Schlein moved for summary judgment, arguing that Kwan's claim was time-barred.

Schlein counterclaimed, seeking a declaratory judgment that Kwan was not an author and a permanent injunction barring her from bringing any future claims.

Judge Sidney H. Stein of the U.S. District Court for the Southern District of New York pointed to 1998, when Kwan sent a letter to BRB asserting authorship and expressed the wish not to be identified only as editor. At the latest, the statute of limitations began to run in September 1999, when Kwan cashed her first royalty check, the district court said; thus, under 17 U.S.C. §507(b), the three-year statute of limitations expired in September 2002. The district court thus granted Schlein's motion for summary judgment. The court also dismissed Schlein's counterclaims without prejudice.

Kwan appealed.

Authorship Claim Accrued With First Publication.

Judge Rosemary S. Pooler determined that Kwan's claim of authorship accrued in January 1999, when the first edition was published. Her claim was filed in December 2004, outside the three-year period set forth in Section 507(b), the court said.

The court rejected Kwan's argument that--even if her claim was time-barred with respect to the first and second editions, which were published in 1999--she could still make claims with regard to the third and fourth editions, which were published within three years of her complaint.

According to the court, any such claim would be based on the underlying claim of authorship, which was time-barred. Indeed, according to the court, Kwan's claim would be valid only if she had alleged that she was the sole author, because co-authors cannot assert infringement claims against each other.

Any claim of infringement based on the time-barred claim of authorship was also time-barred, the court held. This principle was applied in several cases, including Big East Entertainment Inc. v. Zomba Enterprises Inc., 453 F. Supp. 2d 788 (S.D.N.Y. 2006), Roger Miller Music Inc. v. Sony/ATV Publishing LLC, 477 F.3d 383, 81 USPQ2d 1652 (6th Cir. 2007) (73 PTCJ 469, 2/23/07), and Zuill v. Shanahan, 80 F.3d 1366, 38 USPQ2d 1430 (9th Cir. 1996) (51 PTCJ 702, 4/18/96).

The court also affirmed the lower court's dismissal without prejudice of Schlein's counterclaims, finding no abuse of discretion. According to the court, since Kwan's own claims had already been dismissed with prejudice, she suffered no legal prejudice from the court's declining to resolve Schlein's counterclaims.

The court's opinion was joined by Judges Amalya L. Kearse and Richard C. Wesley.

Kwan was represented by Jeffrey Sonnabend of New York. Schlein was represented by Lawrence D. Bernfeld of Graubard Miller, New York.

By Anandashankar Mazumdar

Opinion at

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