Member Article

A recent US Supreme Court decision highlights a defence that’s raised from time to time in intellectual property (IP) matters, but rarely succeeds. It’s the defence of delay, something that’s referred to by various names, including ‘acquiescence’, ‘estoppel’ and ‘laches’. It relates to a situation where the owner of the IP right – usually a copyright or a trade mark – tries to enforce its right after a lengthy delay, and the party being sued claims that the IP owner has, because of the long delay and the impression that this has created, effectively foregone its right. The reason why acquiescence is raised rather than prescription is because in IP cases the infringement is often of an ongoing nature.

The US case dealt with the copyright in the film Raging Bull, the old boxing movie starring Robert De Niro. The case, officially known as Petrella v MGM, dealt with a claim to copyright in the film after a delay of some 18 years. The case went all the way up to the highest court in the USA, which held, in a split decision, that the defence of acquiescence raised by the film company should not succeed. The majority view was essentially this: there is no reason why a copyright owner can’t wait to see how big the outcome of an alleged infringement is before taking action. Justice Ginsburg said this on behalf of the majority: ‘It is hardly incumbent on copyright owners, however, to challenge each and every actionable infringement. And there is nothing untoward about waiting to see whether an infringer’s exploitation undercuts the value of the copyrighted work, has no effect on that work, or even complements it. Fan sites prompted by a book or film, for example, may benefit the copyright owner.’

The minority view, expressed by Justice Breyer, was very different. It took account of the fact that, over the 18 years, MGM spent millions of dollars on developing different editions of the film and licence agreements. It was appalled by the idea of a copyright owner watching whilst the infringer spends money on a risky venture, and then  ‘appearing on the scene only when the venture has proved a success; and thereby collecting substantially more money that he could have had he bargained with the investor over a licence and royalty fee.’ It spoke of the inequity and unjust hardships attached to allowing a copyright owner to look on whilst a proposed infringer spends money on the exploitation of the work: ‘Today’s decision disables federal courts from addressing that inequity. I respectfully dissent.’ Lawyers who support the minority view argue that the decision will open the floodgates to all sorts of claims.

Claims like this do come up from time to time. A few years back there was a case in the UK where the band, Procol Harum, was sued for copyright infringement in respect of eight bars of its greatest hit, A Whiter Shade of Pale, a full 40 years after the song was released. Unsurprisingly, the band raised the defence of acquiescence. The trial court accepted it. But the appeal court didn’t, and took the view that there was no reason why the claim should be barred.

Interestingly, it’s just been reported that rock band Led Zeppelin has been sued for copyright infringement in relation to the opening bit of its greatest hit, Stairway to Heaven. A full 43 years after the event! The claim is that this guitar arpeggio was lifted from a song called Taurus that was written by a band called Spirit – Led Zeppelin and Spirit apparently performed together at a number of concerts many years ago. One would imagine that acquiescence will be raised as a defence here. But in an article written on the case the author, Oliver Herzfeld, suggests that the matter will be resolved by way of an agreement that entails both an acknowledgment of authorship and a monetary payment. Led Zeppelin fans will be disappointed to hear that, according to Herzfeld, the band has dealt with four previous infringement claims in this way, including one for equally well-known song Whole Lotta Love.

The defence of acquiescence comes up in trade mark cases occasionally too. In the Habib Bank case, a UK court held that the test is basically whether it would be unconscionable to allow the plaintiff to maintain its claim. It went on to say that courts will consider various factors, including the length of the delay, and the issue of whether the trade mark owner, through its representations, encouraged the defendant’s behaviour. In UK and European trade mark law there is also a specific statutory acquiescence provision, and this says that if the owner of a trade mark acquiesces in the use of a registered trade mark for five years it can no longer apply for its cancellation or oppose its use, except in cases where there has been bad faith. The courts have interpreted acquiescence to mean ‘knowingly tolerated the use’ of the trade mark.

So what about South Africa? Although for the purposes of this article I have lumped the three defences (acquiescence, laches and estoppel) together, in South Africa the courts tend to draw a distinction between mere delay (acquiescence) and situations where one party leads the other to believe that it tolerates a certain situation, thereby encouraging it to act in a certain way (estoppel). In the 2009 case of Turbek Trading v A & D Spitz, one party relied on what it described as the ‘equitable defence’ of delay, based on the fact that the party suing it for passing-off and cancellation of its trade mark registration had known of its use and registration for some six years. The court emphasized that mere delay or acquiescence is not a defence in itself. Estoppel is a defence, but this requires something more, a representation of acceptance and an encouragement. The court did, however, go on to say that mere delay may still have procedural consequences, for example the court might refuse to grant an interdict (injunction) and limit the aggrieved party to damages.

So there you have it, a defence that does exist, but also seems to have limited practical significance. For many, that won’t be difficult to rationalize. After all, why should an owner be punished simply because they chose to rage silently before they finally took action?

 

Footnotes: For more information, please contact: Gaelyn Scott Director Head of Intellectual Property +27 83 632 1445 [email protected]