Studios Won’t Get Royalties

A U.S. appeals court ruled Friday that Metro-Goldwyn-Mayer Inc. and General Electric Co.’s Universal Studios Inc. were “out of luck” in collecting millions of dollars in royalties because their requests didn’t carry valid U.S. Postal Service postmarks to prove they made the July 31 deadline.

MGM’s request for about $10 million in royalties from TV airings during 2000 of movies it owns arrived at the Library of Congress on Aug. 2, 2001. Universal’s request arrived the next day. The U.S. register of Copyrights said they missed the deadline because the only proof the requests were mailed in time was business meter postmarks from Pitney Bowes Inc. machines.

“The rules make clear that claims arriving after July that do not bear a U.S. postmark will not be accepted unless the claimant can produce a stamped receipt” from the post office, a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit said.

Cable and satellite television companies deposit royalties each year with the U.S. copyright office, which distributes them to copyright owners. The requests for those royalties are due every July at the Library of Congress in Washington.

The copyright office accepts items Aug. 1 and after that only if there is a valid U.S. postmark or some other proof the item was submitted to a post office before July 31.

MGM, based in Century City, and Universal, based in Universal City, said they lost the certified mail receipts from the post office. Instead of a post office receipt, the studios submitted declarations from a Pitney Bowes employee saying the company’s machines couldn’t be backdated.

“The studios ran a considerable risk by mailing their claims, presumably, in the last days of July; they ran another risk by failing to have their claims postmarked by the U.S. Postal Service,” the appeals court ruled. “Under those regulations, the studios are out of luck.”