When is it Too Late to File a Copyright Infringement Lawsuit?

Disclosure: I am not a lawyer. Nothing in this is intended as legal advice. This is simply an analysis of recent major cases and how they impact when a copyright case may be filed. Please seek out legal counsel if you have questions about your specific case. Information in this is subject to human error and changing legal climate.

Yesterday, the Supreme Court announced that it would not hear the Hearst Newspapers LLC v Martinelli, a case many hoped would settle the open question of when it is too late to file a copyright infringement lawsuit.

The problem is simple. In the United States, two rules currently govern when a plaintiff can file a copyright infringement lawsuit: the Discovery Rule and The Injury Rule. Currently, lower courts (including both district and appeals courts) apply the discovery rule though the injury rule is favored by the Supreme Court.

The case involves a photographer, Antonio Martinelli, who claims that Hearst Communications used photos he took in news articles without a license. Hearst had argued that, since the infringement took place in 2017, he filed the lawsuit too late. The district court and the appeals court both sided with Martinelli. They applied the discovery rule, saying he had filed it within three years of learning of it.

By declining to hear the case, the Supreme Court is allowing the discovery rule to stand. However, it is declining to make it the law of the land and end the dispute over it.

This is actually the second missed opportunity on this issue in recent weeks. In a separate ruling, Warner Chappell Music, Inc v Nealy, the court declined to rule on the discovery rule but did find that if it is applied, a plaintiff can collect damages going back to the start of the infringement. This enables the plaintiff, music producer Sherman Nealy, to collect damages going back to 2008.

So, when is it too late to file a copyright infringement lawsuit? To answer that question we need to look at the two dominant standards.

The Discovery Rule vs. The Injury Rule

Under United States copyright law, a claimant cannot file a claim three years after it accrues. While that seems straightforward, the question is when does such a claim accrue?

Currently, there are two separate standards.

• The Injury Rule (Or Occurrence Rule): Under this rule, the claim accrues when the infringement occurs. In the Hearst case, it would have accrued in 2017, when the alleged infringement took place.
• The Discovery Rule: The claim accrues when the infringed party knows or reasonably should have discovered the infringement. In the Hearst case, this would be 2018, when the photographer claims he learned of the infringement.

The lower courts and the Appeals Courts, in general, have been very consistent with applying the discovery rule. According to Michael Beylkin at the American Bar Association, nine of the thirteen Circuit Courts have used the discovery rule, and none have embraced the injury rule.

The most prominent proponent of the injury rule is the Supreme Court itself. However, as Beylkin noted, the Supreme Court has never directly addressed the issue of when a copyright claim accrues. Instead, it’s repeatedly stated that it is the “default” rule, indicating that it would favor the injury rule over the discovery rule if it were presented.

This came to light in a major way in the Nealy case. Though the majority opinion did not weigh in on the issue of accrual, the dissent was heavily critical of the discovery rule. It pushed the Supreme Court to resolve the issue, presumably by taking up the Hearst case.

However, that didn’t happen, meaning the discovery rule will live on in the lower courts. At least for the moment.

What About Damages?

While, for right now, the discovery rule seems to be the predominant thinking, there is still a question of damages. If you learn about an old infringement, being able to collect damages only from the most recent three years could cripple the case. We saw this in the most recent CCB decision, where an author was limited to just 13 books due to this limitation.

This was an area with a serious circuit split. Some courts restricted damages to a three-year “look back” window, while others allowed damages going back to the original infringement.

However, the Nealy case ended that split. It ruled that if a claim is timely filed under the discovery rule, the plaintiff is eligible for damages going back to the initial infringement. In Nealy’s case, this was the difference between getting damages from as far back as 2008 or just 2015.

That said, the three-year look-back window still applies in cases where the infringement is ongoing, but the case is not filed timely under either the discovery or the injury rule.

The 2014 case Petrella v Metro-Goldwyn-Mayer, Inc, pitted the estate of Frank Patrella, co-author of the screenplay that would become the film Raging Bull, against MGM, the film’s distributor. According to Patrella’s estate, they reclaimed the rights to the story in 1991. Though they attempted to work with MGM on the matter, they continued to distribute the film without permission.

However, the estate didn’t file the lawsuit until 2009. Since they were aware of the infringement in 1991, neither the discovery nor the injury rule applied. MGM tried to argue that the claim was barred by latches, meaning that it was so old that it was unfair for the court to hear it.

The Supreme Court allowed the case to proceed. However, it allowed only damages to be collected from 2006, creating a three-year window.

While the case opened the door for older claims of infringement, it severely limited the damages that can be collected. As such, it’s only been helpful in a small number of scenarios.

Bottom Line

Right now, if you have an ongoing infringement, you likely can still file a lawsuit. However, if you want maximum damages, you must file within three years when you discovered or reasonably should have discovered the infringement. Failure to do so will limit you to a three-year lookback window.

That said, things could change at any moment. The Supreme Court has made its skepticism of the discovery rule very clear. While refusing to hear the Hearst case gives the discovery rule a reprieve, it likely won’t be permanent.

Though lower courts have been relatively consistent in applying the discovery rule, one word from the Supreme Court could completely abolish it. The injury rule could literally become the law of the land overnight.

This is a very active space right now. However, the discovery rule is in effect, and the most recent Supreme Court ruling grants complete damages in cases where it applies.

This could spark a wave of older cases. However, it’s unclear how many such cases there are.

That said, this is a unique moment in copyright history, and it will not likely last very long.