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May 20, 2014 Melanie A. Miller
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The Honorable Jeffrey L. Schmehl
United States District Court for the Eastern
District of Pennsylvania
The Madison Building, Suite 401
400 Washington Street
Reading, PA 19601
Re: Disney Enterprises, Inc., et al. v. Entertainment Theatre Group, et al.
Civil Action No. 5:13-cv-05570(JLS)
Our Ref.: ETGP-L1 (343034.000)
Dear Judge Schmehl:
Defendants in the above-referenced matter, namely, Entertainment Theatre Group d/b/a
American Music Theatre, James D. Martin, Frederick W. Steudler, Jr. and Dwight H. Brubaker
(the “AMT Defendants”), take this opportunity to alert the Court to the Supreme Court’s recent
decision in Petrella v. Metro-Goldwyn-Mayer, Inc. et al., No. 12-1315, 572 U.S. ___ (2014),
which has direct bearing on Plaintiffs’ arguments in support of their Motion to Dismiss, which
Motion is currently pending before the Court and was argued on May 15, 2014. Please find
attached a copy of the opinion for your convenience.
In support of their Motion, Plaintiffs argue, inter alia, that AMT Defendants’ counterclaims
and affirmative defenses are time-barred because SLMI and AMT knew or should have known
as early as 1998 (or earlier) that Marvel effectively claimed ownership in the Spider-Man
copyright based on Marvel’s open and notorious use thereof for years and, because SLMI
allegedly failed to timely assert its ownership claim, its current claims-and AMT’s by extension—
are time-barred by the Copyright Act’s statute of limitations. See, e.g., Plaintiffs’ Memorandum
in Support of Motion at 17-19.
However, the Supreme Court in Petrella makes plain that there is a “separate-accrual
rule [that] attends the copyright statute of limitations,” slip op. at 5, and that the Copyright Act’s
statute of limitation “runs separately from each violation.” Id. Thus, Section 507(b) of the
Copyright Act “allows plaintiffs . . . to gain retrospective relief running only three years back from
the date the complaint was filed.” Id. at 6-7. Thus, the Supreme Court reversed the Ninth
Circuit and found that laches could not act as a bar to Petrella’s claim for infringement when
Petrella filed her infringement claim over 15 years after learning about MGM’s alleged infringing
actions. Id. at 8; 11-14.
Similarly, the Petrella decision supports the argument that AMT Defendants’
counterclaims and affirmative defenses should not be deemed to be time-barred under the
The Honorable Jeffrey L. Schmehl
May 20, 2014
Page 2
______________________________________

circumstances. 17 U.S.C. § 507(b) provides that “[n]o civil action shall be maintained under the
provisions of this title unless it is commenced within three years after the claim accrued.” Here,
AMT Defendants’ counterclaims and affirmative defenses did not accrue until the Plaintiffs
brought suit against AMT Defendants or at least when there was an imminent threat of suit, as
AMT Defendants’ counterclaims and affirmative defenses are brought in direct response to
Plaintiffs’ claims for copyright infringement. These claims were therefore brought well within the
three year statute of limitations set forth in 17 U.S.C. § 507(b).
Applying the reasoning set forth in Petrella, it is evident that AMT Defendants’
counterclaims and affirmative defenses must therefore be deemed timely—even if AMT and/or
SLMI knew or should have known of Plaintiffs’ alleged open and notorious use of the Spider-
Man copyright for many years before the initiation of this suit. By suing the AMT Defendants,
Plaintiffs effectively opened the door for SLMI and AMT to argue ownership of the Spider-Man
copyright. After all, “[t]o the extent that an infringement suit seeks relief solely for conduct
occurring within the limitations period … courts are not at liberty to jettison Congress’ judgment
on the timeliness of suit.” Slip op. at 1. Thus, just as laches was held not to preclude
adjudication of a damages claim brought within the three-year statute of limitations window, id.,
here, too AMT Defendants’ counterclaims and affirmative defenses should not be time-barred
as they were plainly brought within three years of accruing.
We trust that you will find the Petrella decision informative. Thank you for your time and
consideration with respect to this matter.
Sincerely,
COZEN O'CONNOR
By: Melanie A. Miller
cc: All Counsel of Record




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