In a copyright infringement suit related to “The Terminator” and “Terminator 2: Judgment Day,” the court held that in the Ninth Circuit a claim of contributory infringement accrues for statute of limitations purposes when there has been an act inducing or materially contributing to an act of direct infringement and later direct infringements do not restart the statute of limitations for contributory infringement.Plaintiff Neil Goldberg sued defendants James Cameron and Gale Ann Hurd for copyright infringement, alleging that the first two Terminator films, which Cameron directed and Hurd produced, include plot elements and a soundtrack that are similar to a script and soundtrack that Goldberg wrote in the mid-1970s. The Court granted summary judgment to defendants, finding that neither Hurd nor Cameron committed any acts of direct infringement within the statute of limitations period. However, the Court granted plaintiff’s motion to amend his complaint to include allegations of contributory infringement based on Hurd’s assignment of her rights in 1998. The court did not allow plaintiff to include contributory infringement allegations arising out of Cameron’s agreements in 1984, for “The Terminator,” and in 1991, for “Terminator 2: Judgment Day,” finding those claims barred by the statute of limitations.
A district court may deny a party’s request to amend a pleading where the amendment is futile. An amendment is futile when an amended complaint could not withstand a motion to dismiss, as would be the case where the claims the moving party seeks to add are barred by the statute of limitations. A copyright infringement claim is barred by the statute of limitations if it is not filed within three years of the date the claim “accrued.” The Court held that a contributory infringement claim accrues, and the statute of limitations period begins to run, when there has been: (1) an act inducing or materially contributing to (2) an act of direct infringement. The court also held that later direct infringements do not restart the statute of limitations for an action based upon contributory infringement. “[T]his holding treats contributory and direct infringement similarly for statute of limitations purposes: once a plaintiff has a live action for contributory infringement based on a particular act of contribution, the plaintiff has three years in which to file suit.”
In seeking to amend, Goldberg contended that warranties contained in agreements entered into by Cameron and Hurd constitute acts of contributory infringement. In order for a claim for contributory infringement to accrue within the statutory period, Ninth Circuit law requires that plaintiff must not have discovered, or reasonably could not have discovered, the first consequent direct infringement by August 31, 2002. The Court found that plaintiff may not have discovered or reasonably been able to discover Hurd’s 1998 assignment of her rights in the Terminator series, and the first consequent direct infringement resulting from that assignment, until the release of “Terminator 3: Rise of the Machines” in 2003. Therefore, plaintiff’s claim for contributory infringement arising out of the 1998 agreement may be viable. However, the Court determined that plaintiff’s remaining allegations of contributory infringement are barred by the statute of limitations since the original productions of “The Terminator” and “Terminator 2: Judgment Day,” the subject of Cameron’s agreements in 1984 and 1991, were widely released in theaters and he therefore should have reasonably discovered the alleged direct infringement.