overy rule, copyright infringement plaintiffs presumptively will have access to a greater range of potential damages where infringing conduct stretches back numerous years prior to the filing of suit — provided that the suit is timely filed.Nevertheless, at least three justices stand ready to directly address the validity of the discovery rule and hold that it is not valid. Such a ruling would depart from the historical practice of many courts and dramatically impact the copyright infringement landscape, significantly limiting damages in many cases.That issue is squarely presented in the petition for certiorari in Hearst Newspapers, LLC v. Martinelli (Supreme Court Docket 23-474). The Court will decide whether to grant that petition in the near future.Background on Copyright Statute of LimitationsSection 507(b) of the Copyright Act 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” (17 U.S.C. § 507(b)). The statute, however, does not specify when copyright infringement claims “accrue” and the three-year statute of limitations begins running. Most courts have adopted the discovery rule.In Petrella, the Supreme Court held that laches cannot bar a claim for copyright infringement damages brought within the three-year window under Section 507(b). But the implications of that holding for the discovery and injury rules were not clear.On the one hand, the Court appeared to endorse the injury rule by stating that a copyright claim “accrues when an infringing act occurs” and that “a successful plaintiff can gain retrospective relief only three years back from the time of suit.” At the same time, however, the majority opinion recognized that the discovery rule is applied by the “overwhelming majority of courts,” and the Court disclaimed ruling on its validity.In Petrella’s wake, litigants and courts alike attempted to square the Supreme Court’s categorical language regarding accrual with the

nc. (MSI), a Florida corporation involved in the music industry. MSI released an album and multiple singles from 1983 to 1986 and dissolved in 1989, when Nealy went to prison for drug-related offenses.While Nealy was incarcerated, Butler formed a new company, and began licensing rights to MSI’s musical works. At the heart of the lawsuit was a 2008 license with Atlantic to use the MSI work “Jam the Box” in Flo Rida’s hit song “In the Ayer,” which sold millions of copies, reached No. 9 on the Billboard chart, and appeared on popular television shows such as So You Think You Can Dance.Nealy discovered the unauthorized use of MSI’s catalog in 2016, after serving a second prison sentence from 2012 to 2015. In December 2018, he sued Warner Chappell Music, Inc., Artist Publishing Group, LLC, and Atlantic Recording Corporation (together “Warner Chappell”) for their activities dating back to 2008, including with respect to Flo Rida’s “In the Ayer.”The Statue of Limitations for Copyright Claims 17 U.S.C. § 507(b) establishes a three-year statute of limitations for copyright infringement claims, stating: “No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.” The key term here is the word “accrued.”One interpretation of Section 507(b) is that a copyright claim “accrue[s]” when “an infringing act occurs.” Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U. S. 663, 670 (2014). Known as the “incident of injury rule,” this rule provides that a plaintiff can sue only for infringement that occurs within the three years prior to the filing of the lawsuit.Another interpretation of Section 507(b) is that a claim accrues when “the plaintiff discovers, or with due diligence should have discovered” the infringing act. The so-called “discovery rule” enables diligent plaintiffs to raise claims that were discovered within the past three years, regardless of their age. The difference in interpretation is significant, and in this case

arch 7, 2017, Hearst Newspapers used those commissioned photographs in news articles discussing the sale in various Hearst publications. Over the next few years, Martinelli learned about Hearst’s use of the photographs. For instance, on November 17, 2018, Martinelli learned about the use of the photographs in the Houston Chronicle, and between September 2019 and May 2020, Martinelli learned about further use of the photographs in the San Francisco Chronicle, the Times Union, the Greenwich Time, the Middletown Press and the Elle Décor website. Based on these uses, Martinelli sued for copyright infringement on October 18, 2021—more than three years after the initial publication but less than three years after Martinelli discovered the publication.Hearst stipulated both to infringement and that Martinelli could not have discovered the use of the copyrighted photographs at an earlier time. Instead, Hearst argued that Martinelli was too slow in bringing his infringement action since, under 17U.S.C.§507(b), the action must be brought within three years of the infringement, regardless of a plaintiff’s knowledge or diligence. The district court disagreed, holding that §507(b) follows the discovery rule, which means the limitations period only begins when the plaintiff knows or has reason to know of the injury. Hearst appealed.Hearst argued that the district court’s decision ran afoul of the Supreme Court’s 2019 decisions in Petrella v. MGM and Rotkiske v. Klemm. According to Hearst, under Petrella and Rotkiske, the discovery rule cannot apply to §507(b) and the limitations period starts “when the plaintiff has a complete and present cause of action.” The Fifth Circuit disagreed.The Fifth Circuit began by explaining that unless unequivocally overruled by a Supreme Court decision, an en banc court or a change in law, it was bound by its 2014 decision in Graper v. Mid-Continent Casualty, which held that the limitations period starts running “once the plaintiff knows or has reason to know of

ow thorough copyright owners have to be in their efforts to ferret out infringers before their claims are time-barred.This post is the first of a series that will follow the Warner v. Nealy case. Over the next few months, we will publish updates on the case and provide an analysis of the Supreme Court’s forthcoming decision. But first, let’s discuss the question presented to the Court, take a look at the factual background of the dispute and the potential impact of the Supreme Court’s decision.Question Presented The Supreme Court granted certiorari on one question: whether, under the discovery accrual rule applied by the Circuit Courts and arising from the Copyright Act’s statute of limitations, a copyright plaintiff can recover damages for acts that occurred more than three years before the filing of a lawsuit.The Copyright Act has a three year statute of limitations reading “no civil action shall be maintained . . . unless it is commenced within three years after the claim accrued.” 17 U.S.C. §507(b). The Supreme Court previously analyzed Copyright Acts’ statute of limitations in Patrella v. Metro-Goldwyn-Mayer, and determined that the defense of laches cannot bar a claim for damages within the 3-year limitation period. In the Patrella case, the Supreme Court said that Section 507(b) bars relief of any kind for conduct occurring prior to the three-year limitations period.Given the Supreme Court’s prior decision, it may seem clear that damages are limited to such three-year period. Enter the discovery accrual rule.Under the discovery accrual rule, a claim arises when a party learns, or a reasonable person should have learned, that the defendant violated its rights. As we have reported previously, courts apply the discovery accrual rule differently to copyright disputes relating to ownership than those relating to injury. For copyright claims relating to ownership, the claim arises only once and at the time the copyright owner discovers, or should have discovered, that another chall

ain from 2012 to 2015.3 During Nealy’s time in prison, and unbeknownst to Nealy, his former associate entered into a licensing agreement with Warner Chappell Music, Inc. (“Warner Chappell”) to license Music Specialist’s works.4 Some of the samples licensed to Warner Chappell garnered considerable fame, being used in songs by well-known artists and on popular television shows.5In 2018, Nealy sued Warner Chappell for copyright infringement, alleging ownership of the copyrights to Music Specialist’s songs and that the licensing activities by Warner Chappell infringed those rights.6 Nealy’s asserted claims of copyright infringement dated back to 2008, ten years before he filed suit.7 Nealy sought “damages and profits for the alleged misconduct,” pursuant to §504 of the Copyright Act.8As an initial matter, Nealy needed to make the threshold showing that his claims were timely under the Copyright Act, which requires a plaintiff to file suit “within three years after the claim accrued.” 9See 17 U.S.C. § 507(b). The statute does not specify when copyright infringement claims “accrue”, and the three-year statute of limitations period begins.In Petrella, the Supreme Court analyzed the language of the Copyright Act to determine whether the doctrine of laches is an equitable defense against a claim of copyright infringement asserted within a statutory three-year window.10 In reaching its decision, the Petrella Court stated that “the limitations period generally begins to run at the point when ‘the plaintiff can file suit and obtain relief’…a copyright claim thus arises or ‘accrue[s]’ when an infringing act occurs.”11 But, the Court also acknowledged that nine Courts of Appeals follow the ‘discovery rule’ to determine when a claim for copyright infringement exists.12 Other language in the Petrella opinion has also contributed to subsequent confusion, including the statement that under “the copyright statute of limitations, §507(b), …a successful plaintiff can gain retrospective relief only three

The Copyright Act provides that an action for copyright infringement must be commenced “within three years after the claim accrued.”17 U.S.C. § 507(b).The Supreme Court has not analyzed when copyright claims accrue under the statute, but the lower federal courts have.Although some federal trial courts previously held that copyright claims accrue when an infringing act occurs (the “injury rule”), the federal trial and appellate courts now uniformly hold that such claims accrue when claimants discover or with due diligence should have discovered the infringing act (the “discovery rule”).Despite the uniformity with respect to which accrual rule governs, the Fifth, Ninth, and Eleventh Circuit Courts of Appeal allowed successful claimants to recover damages starting from whenever the infringement at issue began, but the Second Circuit limited such claimants’ recovery to the three-year period prior to suit.On May 9, 2024, the Supreme Court held, in Warner Chappell Music, Inc. v. Nealy, that the Copyright Act does not contain a separate time-based limit on monetary recovery for otherwise timely claims, thereby allowing recovery of damages

he discovery rule doctrine. In doing so, the Court resolves a circuit split while leaving unanswered whether the discovery rule doctrine applies to claims under the Act, an issue focused on in the dissent. We previously addressed this issue when the Supreme Court first granted cert in Warner Chappell Music, Inc.,et al. v. Nealy, et al.Sherman Nealy and Tony Butler formed Music Specialists, Inc. in 1983. The company recorded and released one album and multiple singles. The company subsequently dissolved and, in 1989, Nealy went to prison on drug-related charges. Nealy spent 1989–2008 and 2012–2015 in prison. Upon his release in 2016, Nealy discovered that Butler (unbeknownst to Nealy) had entered into licensing agreements with Warner Chappell Music, Inc. for the works from Music Specialists, Inc.’s catalog. Nealy filed suit in 2018 for copyright infringement and sought damages back to 2008.Under the Copyright Act, a plaintiff must file suit within three years “after the claim accrued.” 17 U.S.C. § 507(b). However, the Supreme Court assumed (without deciding) that a claim could accrue “when the plaintiff discovers, or with due diligence should have discovered, the infringing act.” This is the discovery rule doctrine.In Nealy’s suit, the district court recognized the discovery rule and allowed Nealy to bring claims from 2008. However, it also found the three-year statute of limitation in § 507(b) equated to a three-year limitation on damages, precluding Nealy from recovering damages prior to 2015. Recognizing the importance of the issue, the district court granted an interlocutory appeal. The Eleventh Circuit reversed, rejecting the argument that the Copyright Act’s three‑year statute of limitations is also a three-year limitation on damages.The Supreme Court granted review to resolve a circuit split on “whether, under the discovery accrual rule applied by the circuit courts, a copyright plaintiff can recover damages for acts that allegedly occurred more than three years before the fili

It will be interesting to see if the Supreme Court takes the case and adopts either the registration or application approach to § 411.17 U.S.C. § 507(b): Statute of Limitations Under 17 U.S.C. § 507(b), the statute of limitations for a civil action is three years after the infringement claim accrued. The Supreme Court has explained that § 507(b) provides a “separate-accrual rule” so that “each infringing act starts a new limitations period.”

ony Butler, in 1983. The collaboration, Music Specialist, Inc., dissolved, after which Mr. Nealy was imprisoned on drug charges for two separate stints, the first from 1989 to 2008, and the second from 2012 to 2015. During the intervening years, and allegedly without Mr. Nealy’s knowledge, Mr. Butler licensed works from the Music Specialist catalog to Warner Chappell Music, Inc., resulting in those works’ incorporation into several other musical works and television shows. Warner Chappell Music was listed as the administrator for those works in the public records of Broadcast Music, Inc. (BMI), a music licensing organization, starting in July of 2008. Mr. Nealy allegedly discovered Warner Chappell’s uses of the works in 2016, and sued Warner Chappell for copyright infringement in December of 2018.The Discovery Rule. The Copyright Act states 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.” 17 U.S.C. § 507. At least eleven circuit courts have interpreted this language to find that a claim accrues after such time when it is, or reasonably could have been, discovered. This interpretation has not, however, been approved by the Supreme Court.The Question Presented. As rephrased by the Court: Whether, under the discovery accrual rule applied by the circuit courts and the Copyright Act’s statute of limitations for civil actions, 17 U.S.C. 507(b), a copyright plaintiff can recover damages for acts that allegedly occurred more than three years before the filing of a lawsuit.The Opinions. The difference between the opinions of the majority (Kagan, J, joined by Roberts, C.J., Sotomayor, Kavanaugh, Barrett, and Jackson, JJ.) and the dissent (Gorsuch, J. joined by Thomas and Alito, JJ.) turned on each side’s determination of whether the Court should address the propriety of the discovery rule in rendering the Court’s opinion.The majority found that the appeal “incorporates an assumption[] that the

18—more than ten years after the alleged infringement began and almost three years after learning about it.The Southern District of Florida relied on the Supreme Court precedence from a previous caseto conclude that “[a]lthough an action…accrues when a plaintiff knew or should have known that their rights were being infringed, their damages are limited to the three-year period before they filed suit even if the infringement went further back than the three-year period.” The Eleventh Circuit reversed on an interlocutory appeal, applying the discovery rule and therefore holding that a “a copyright plaintiff may recover retrospective relief for infringement occurring more than three years before the lawsuit’s filing so long as the plaintiff’s claim is timely under the discovery rule.”The Supreme Court has granted certiorari on this question presented: “Whether, under the discovery accrual rule applied by the circuit courts and the Copyright Act’s statute of limitations for civil actions, 17 U. S. C. §507(b), a copyright plaintiff can recover damages for acts that allegedly occurred more than three years before the filing of a lawsuit.”The briefing is scheduled to be completed in January 2024, with an anticipated oral argument scheduled during February 2024.The BackgroundPursuant to the statute of limitations set forth by the Copyright Act, a plaintiff in a copyright infringement action must bring suit within three years after the claim “accrues.” Claims normally “accrue” when the alleged infringement occurs. Therefore, if infringement occurs within three years of a plaintiff bringing the suit, the plaintiff can claim three years of damages. For example, in Petrella v. Metro-Goldwyn-Mayer, Inc., the plaintiff brought a copyright infringement lawsuit involving the Martin Scorsese movie “Raging Bull” based on the life of boxing champion Jake LaMotta. While the alleged infringement was based upon the releases and re-releases of the film in different mediums like VHS, DVD, Blu-ray, etc. over