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Explore the latest in patent, trademark, and copyright cases on the Merchant & Gould LLP blog. Stay informed with expert insights on intellectual property law updates.

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Last week, the U.S. Supreme Court issued a decision in <a href="https://www.supremecourt.gov/opinions/23pdf/22-1078_4gci.pdf"><em>Warner Chappell Music, Inc., et al. v. Sherman Nealy, et al.</em>, No. 22–1078 (May 9, 2024)</a>, holding that damages may be recovered under Copyright Act for conduct occurring greater than three years prior to filing suit.

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In 2018, Sherman Nealy sued Warner Chappell Music in the Southern District of Florida for the unauthorized use of music created in the mid-1980s with former collaborator Tony Butler. While Nealy was serving prison terms, Butler entered into a license agreement with Warner Chappell Music for music created by Nealy and Butler, eventually landing it in popular songs by modern artists such as Flo Rida, the Black Eyed Peas, and Kid Sister. &nbsp;

Under the Copyright Act, claims must be brought within three years of accrual. 17 U.S.C. § 507(b). The Eleventh Circuit applies the discovery rule to assessing compliance with the Copyright Act’s statute of limitations. Under the discovery rule, accrual occurs when a claim is discovered or should have been discovered by the exercise of due diligence. Relying on precedent from the Second Circuit, the district court held that even if Nealy’s claims were timely filed under the discovery rule, monetary relief on those claims is “limited” to “the three years prior to the filing” of the action. Nealy appealed, and the Eleventh Circuit reversed, holding that a plaintiff with a timely claim under the discovery rule may obtain “retrospective relief for [an] infringement” even if it “occurr[ed] more than three years before the lawsuit’s filing.”

The Supreme Court granted certiorari to answer the question “[w]hether, 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 filing of a lawsuit.” For purposes of deciding the question under review, the Court assumed that, but declined to decide whether, the discovery rule should apply to statute of limitations assessments in copyright actions. On the question under review, the Court affirmed the decision of the Eleventh Circuit, noting that the “time-to-sue prescription” in the Copyright Act establishes no separate time limit for the recovery of damages. The Court further noted that the contrary view espoused by the Second Circuit would gut the efficacy and purpose of the discovery rule by allowing a plaintiff to sue for past infringements while denying them damages.

Supreme Court Upholds Eleventh Circuit’s Rejection of Three-Year Damages Bar on Timely Copyright Claim

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