Decisions in brief

• Date: 01 December 2023
• Author: John C. Gatz

Published in Landslide, Volume 15, Number 2, 2022. © 2022 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion

thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the

American Bar Association.

54

Copyrights

Concept of Controlling Fireworks Displays Is Not

Copyrightable

Pyrotechnics Management, Inc. v. XFX Pyrotechnics LLC, 38 F.4th

331, 2022 U.S.P.Q.2d 638 (3d Cir. 2022). Pyrotechnics Management

sued reTEK for copyright infringement of Pyrotechnics’ alleged

copyright in the communication protocol it uses to control reworks

displays. The district court granted a preliminary injunction against

reTEK. reTEK appealed on the basis that Pyrotechnics’ copyright

in the protocol was invalid. The Third Circuit disagreed with the

district court and found the copyright to be invalid.

The copyright at issue in the case was Pyrotechnics’ alleged propri-

etary protocol for communications between the eld modules and

control panel for ring reworks. In 2019, Pyrotechnics sought regis-

tration for the communication protocol, submitting a seven-page

document describing its protocol as the deposit copy with the U.S.

Copyright Ofce. The resulting registration certicate identied the

work as “text”; however, Pyrotechnics asserted that the deposit mate-

rial was instead identifying material for the protocol. The district court

determined that Pyrotechnics was likely to succeed on its infringe-

ment claim because its command codes as part of the protocol were

protected by copyright and reTEK infringed. On appeal, reTEK

challenged whether Pyrotechnics was likely to succeed on its claim

and, on that basis, the merits of the preliminary injunction.

The Third Circuit described and analyzed the deposit copy to

understand the scope of the copyright. It concluded that the digi-

tal message format and the individual messages comprising the

command codes, which were the basis of the infringement claim,

were not copyrightable and instead were unprotectable ideas or

lacked originality. The Third Circuit stated that the district court

correctly articulated the purpose and function of the protocol,

which was namely to control reworks displays, and the digi-

tal message format was an essential part to this idea. In fact,

Pyrotechnics admitted that the only way for the control panel

to communicate with the eld module was through the digital

messaging format. Additionally, the Third Circuit found that the

individual messages lacked the necessary spark of creativity to

sustain a copyright. Because neither the digital message format nor

the individual messages were protected by copyright, Pyrotech-

nics could not succeed on its copyright infringement claim. The

Third Circuit vacated the preliminary injunction and instructed

the district court to dismiss the claim.

Ninth Circuit Confirmed That the Discovery Rule Is

Still Good Law after Petrella

33Starz Entertainment, LLC v. MGM Domestic Television Distri-

bution, LLC, 39 F.4th 1236, 2022 U.S.P.Q.2d 649 (9th Cir. 2022).

Starz entered into a licensing agreement with MGM granting

Starz the exclusive right to exhibit a large number of MGM-

owned content. Pursuant to the agreement, MGM warranted

that it would not exhibit or license the same content to other

third parties under certain terms. In August 2019, Starz discov-

ered that the lm Bill & Ted’s Excellent Adventure, which was

part of the content exclusively licensed to Starz, was available

to stream on Amazon Prime Video. Starz notied MGM of the

violation, and MGM admitted to the improper license. Starz

investigated further and discovered that additional licensed

content was available on Amazon Prime Video. Starz put MGM

on notice again, and in October 2019, Starz requested formal

assurances from MGM that there were no further violations of

the agreement. Instead of providing such assurances, in Novem-

ber 2019, MGM provided Starz with a list of 136 movies and 108

television episodes that had been licensed to others in violation

of the license agreement. Starz conducted a further investiga-

tion and identied an additional 100 titles licensed in violation

of the agreement.

Starz sued MGM in May 2020, alleging 340 separate copy-

right infringement claims, among other related causes of action.

MGM moved to dismiss the complaint on the basis that Starz’s

copyright infringement claims were barred by the U.S. Supreme

Court decision in Petrellav. Metro-Goldwyn-Mayer, Inc., 572 U.S.

663 (2014). MGM argued that Petrella barred the collecting of

any damages for copyright infringements that occurred more than

three years prior to the ling of the suit. The district court found

that Petrella did not change the discovery rule, which provides

that under the Copyright Act there exists a three-year damages

bar except when the complainant reasonably was not aware of

the infringements at the time they occurred.

MGM requested that the Ninth Circuit conclude that the

damages Starz may recover be limited to the three years prior to

ling the complaint based on Petrella and a case in the Second

Circuit that made such determination. See Sohm v. Scholas-

tic Inc., 959 F.3d 39 (2d Cir. 2020). The court disagreed with

MGM and held that the discovery rule allows copyright owners

to recover damages for all infringing acts that occurred before

they knew or reasonably should have known of the infringing

acts and that the three-year limitations period runs from the date

the claim accrued. The Ninth Circuit determined that Petrella is

only relevant to incident of injury cases (not discovery rule cases)

and that the plain language of the Copyright Act, as well as the

intention behind the statute, supports the continued application

of the discovery rule.

The Ninth Circuit held that the district court properly applied

the discovery rule. Since Starz brought its claim within the three-

year accrual period, it was not barred from seeking damages for

all acts of infringement before the period.

John C. Gatzis a member of the firm Nixon Peabody LLP in

Chicago, Illinois. Column contributors include the following

writers: Copyrights: Jenni Psihoules, Nixon Peabody LLP; and

Mark R. Anderson, Actuate Law LLC. Patents: Cynthia K. Barnett,

Johnson & Johnson; R. Trevor Carter and Andrew M. McCoy,

Faegre Drinker Biddle & Reath LLP; Robert W. (Bill) Mason,

Southwest Research Institute; and Angelo Christopher, Nixon

Peabody LLP. Trade Secrets: R. Mark Halligan, FisherBroyles

LLP. Trademarks: Elizabeth W. Baio, Nixon Peabody LLP; and

Amy L. Sierocki, Blumenfield & Shere LLP.

By John C. Gatz

DECISIONS IN BRIEF