Warner Chappell Music, Inc. v. Nealy

U.S. Supreme Court clarifies time limits for copyright damages – discovery rule vs. three-year lookback.

Short Description :

The case dealt with whether a copyright plaintiff can recover damages for infringements that occurred more than three years before the lawsuit, if the claim was timely filed under the discovery rule (i.e., when the plaintiff first discovered or reasonably should have discovered the infringement).

Facts :

⦁ Sherman Nealy, founder of a music company, alleged that Warner Chappell and others infringed his copyrights in songs dating back to the 1980s and 1990s.

⦁ Nealy was incarcerated for long periods (1989–2008, 2012–2015) and claimed he discovered the alleged infringement only in 2016.

⦁ In 2018, he sued Warner Chappell Music, Inc. in federal court for copyright infringement.

⦁ Under the Copyright Act (17 U.S.C. §507(b)), claims must be filed “within three years after the claim accrued.”

⦁ The legal conflict:

⦁ Defendants argued damages should be limited to three years before filing.

⦁ Nealy argued that under the discovery rule, he could recover for older infringements as long as he filed within three years of discovering them.

Findings :

⦁ The Eleventh Circuit sided with Nealy, holding that damages were not limited to three years before the suit if the discovery rule applied.

⦁ The U.S. Supreme Court considered whether the “three-year damages bar” exists regardless of the discovery rule.

Suggestions (Legal Significance) :

⦁ This case resolved a circuit split (different U.S. appellate courts disagreed) on whether copyright damages are capped at three years.

⦁ The ruling is crucial for creators who discover infringements late (e.g., due to hidden or secretive exploitation of works).

⦁ It also impacts big media companies facing “stale” copyright claims.

Judgment :

⦁ U.S. Supreme Court – May 9, 2024

⦁ Majority Opinion (Kagan, J.):

⦁ If a claim is timely under the discovery rule, the plaintiff may recover damages for infringements no matter how old.

⦁ The Copyright Act’s three-year limitation is for filing suit, not for damages.

⦁ Dissent (Gorsuch, J., joined by Thomas & Alito):

⦁ Criticized the discovery rule’s validity, suggesting it allows very old claims and creates

uncertainty.

Judgment Date : 9 May 2024

Court : Supreme Court of the United States