The U.S. Court of Appeals for the Sixth Circuit upheld the district court ruling barring claims of contributory infringement for activity that occurred more than three years prior to the filing of the complaint. The court also held that equitable estoppel is not a valid basis for avoiding the limitations bar. Bridgeport Music v. Diamond Time, Ltd., et al., Case Nos. 03-5003/5656 (6th Cir. June 18, 2004) (Ralph B. Guy, Jr., J.).

TVT Records hired Diamond Time to handle clearance of a sample of a sound recording. A "sample" is a piece of an existing sound recording used as the basis for a new composition. Diamond Time negotiated an agreement between Bridgeport, the owner of the sound recording, and TVT. Diamond Time sent the agreement to TVT for signature but the agreement was never executed. More than five years later, Bridgeport filed a complaint for copyright infringement against TVT and contributory infringement against Diamond Time. The plaintiff claimed that Diamond Time was liable as a contributory infringer because it failed to shepherd the clearance process through execution of the written release and therefore, materially contributed to direct infringement by TVT. The plaintiff’s argument rested on a "continuing wrong" theory. The plaintiff argued that "the defendant’s conduct outside the limitation period contributed to direct infringement by another party within the limitations period." The district court held that the plaintiff may not "piggy back" the defendant’s conduct outside the statute of limitations period onto the actions of another within the period. Bridgeport appealed.

The Sixth Circuit affirmed, rejecting the plaintiff’s argument and holding that claims against contributory infringers, like claims against direct infringers, are subject to a three year statute of limitations. The court also held that equitable estoppel was not a valid basis for avoiding the statute of limitations. Initially, the plaintiff asserted a claim for equitable estoppel based on fraudulent concealment. On appeal, the plaintiff shifted its equitable estoppel claim to argue that the defendant’s misconduct "lulled them [plaintiff] into believing it was not necessary for them [plaintiff] to commence litigation." The Sixth Circuit held that it was not reasonable to forego litigation for more than five years after the agreement had been forwarded to TVT for signature.

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