Metro-Goldwyn-Mayer Inc and Universal Studios Inc will lose out on millions of dollars in royalties because they missed a deadline to file paperwork with the government, a federal appeals court ruled on Friday.
The US Copyright Office collects fees from cable and satellite companies that broadcast films and distributes the money to copyright owners after they file claims. Those claims must be sent by July 31 each year.
In 2001, MGM's claim arrived on Aug. 2, and Universal Studios' on Aug. 3. The studios each estimated the values of their claims in the millions of dollars. In November, the Copyright Office notified both studios that their claims would be rejected unless they could produce proof they were mailed in July.
The studios submitted sworn statements from mailroom clerks saying the claims were sent before July 31, and declarations from federal postal workers about normal delivery times.
Universal also conducted an experiment to prove letters generally reach Washington from Southern California in fewer than three days. The studios argued in court papers that the anthrax attacks caused an upheaval in Hollywood mailrooms between when they mailed the claims and were asked to produce receipts.
But a District Court sided with the Copyright Office's decision to reject the evidence and a three-judge panel of the US Court of Appeals upheld that ruling, saying, "The studios are out of luck."
"Even at this remove, we can sense the intensity of the searches that these letters must have precipitated, but neither studio was able to locate a receipt," the court wrote. "Lacking a receipt, the studios mobilized their lawyers."
The decision was written by Judge John Roberts. Judges David Sentelle and Stephen Williams were also on the panel.
An MGM spokeswoman said the studio had no comment, and a spokesman for Universal did not immediately respond to a request for comment.
Universal is part of NBC Universal Inc, a joint venture of Vivendi Universal and General Electric Corp. MGM is owned by Sony Corp.
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