Supreme Court Rules that Copyright Damages Are Available for All Timely Infringement Claims

On May 9, 2024, the Supreme Court in Warner Chappell Music Inc. v. Nealy held in a split decision that copyright plaintiffs are able to obtain monetary relief for any timely infringement claim, no matter when the infringement occurred.

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). Federal courts of appeals, however, have held that this statute of limitations has a “discovery rule” exception – that is, Copyright Act claims are timely when filed within three years of when a plaintiff discovered (or should have discovered) an older infringement.

That left open the following question: when a plaintiff relies upon the discovery rule to sue for copyright infringement that occurred more than three years before suit, does Section 507(b) of the Copyright Act preclude the recovery of damages?

In Warner Chappell Music, the Supreme Court held that “no such limit on damages exists.” Rather, copyright owners may “recover damages for any timely claim.” Writing for the Court, Justice Kagan explained that Section 507(b) is simply a “time-to-sue prescription” that “establishes no separate three-year period for recovering damages.” The Court rejected the contrary view of the Second Circuit in Sohm v. Scholastic Inc., 959 F.3d 39 (2d Cir. 2020). That view is “self-defeating,” Justice Kagan explained, because it depends on the viability of the discovery rule but simultaneously “takes away the value in what it has conferred, by preventing the recovery of damages for those older infringements.”

Warner Chappell Music itself may have limited impact outside of the Second Circuit, the only court of appeals to have adopted the three-year damages bar. The decision, however, raises the salience of the antecedent question whether the Copyright Act’s statute of limitations is subject to a discovery rule exception.

The majority in Warner Chappell Music assumed without deciding that the discovery rule applies to Copyright Act claims, leaving that question for another day. And three Justices (Justice Gorsuch, joined by Justice Thomas and Justice Alito) asserted in dissent that the Copyright Act “almost certainly does not tolerate a discovery rule.” The dissenting Justices would have dismissed the case as improvidently granted and “awaited another squarely presenting the question whether the Copyright Act authorizes the discovery rule.”

As it happens, the Supreme Court does have a case before it squarely presenting whether the discovery rule applies to the Copyright Act: Hearst Newspapers, LLC v. Martinelli. Hearst’s petition for certiorari challenging the Fifth Circuit’s application of the discovery rule was filed in November 2023 and has not yet been decided. The copyright bar will keep a close eye on that case, particularly given that three Justices have signaled their opposition to the discovery rule that plaintiffs have long relied upon when bringing claims based on older infringements.

Written By
Jason Joyal and Saul Cohen