In a blow to defendants in copyright infringement actions,on May 20, 2024, the Supreme Court of the United States denied the petition for certiorari in Hearst Newspapers, L.L.C., et al., v. Antonio Martinelli, thereby declining to decide whether the discovery rule applies to copyright infringement claims and leaving the rule intact for now, despite the hope that the Court would soon consider the issue. This decision comes on the heels of the Court's decision in Warner Chappell Music, Inc. v. Nealy, issued earlier this month. In Warner Chappell, the Supreme Court rejected a three-year damages cap on timely copyright infringement claims, but expressly did not consider the threshold question of whether copyright claims brought under the discovery rule are indeed timely under the Copyright Act.
Section 507(b) of the Copyright Act provides that "No 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). In considering when a claim "accrued" under the Copyright Act such that the three-year limitations period begins to run, lower courts have applied the discovery rule, under which a claim accrues when a plaintiff discovers, or with reasonable diligence should have discovered, the infringement that forms the basis for the claim. If the discovery rule does not apply, a copyright infringement claim generally accrues at the time that the infringement occurred, regardless of when a plaintiff became aware of it.
In seeking certiorari, the defendants in Martinelli challenged the lower courts' application of the discovery rule to the copyright infringement claim at issue. The question presented in Martinelli was "whether the Copyright Act's statute of limitations for civil claims incorporates a so-called 'discovery rule' that does not appear in the statute." While the Supreme Court has previously avoided ruling on this threshold question by limiting its decisions to the specific questions at hand, the petition in Martinelli placed it squarely before the Court. In Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014), the question presented was "whether the equitable defense of laches (unreasonable, prejudicial delay in commencing suit) may bar relief on a copyright infringement claim brought within §507(b)'s three-year limitations period." In considering the laches issue, the Court stated that "A copyright claim thus arises or 'accrue[s]' when an infringing act occurs," while noting in a footnote:
Although we have not passed on the question, nine Courts of Appeals have adopted, as an alternative to the incident of injury rule, a "discovery rule," which starts the limitations period when "the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim."
As lower courts grappled with how to interpret and apply Petrella, a circuit split emerged concerning whether to apply a three-year damages cap to copyright infringement claims brought under the discovery rule, which the Court addressed in Warner Chappell. As noted in our earlier Alert, the dissenting justices indicated that they would have awaited another case presenting the "antecedent question" of the discovery rule's application under the Copyright Act before reaching the damages question. Thus, the Warner Chappell decision (and dissent) seemed to tee up the Court to grant certiorari in Martinelli, which squarely presented the question for decision.
By denying certiorari in Martinelli, the Supreme Court seems to have tacitly affirmed the lower courts' application of the discovery rule to copyright infringement claims, at least for the time being. However, aspects of its application remain unsettled. While all 11 circuits follow the discovery rule, its application requires a fact-specific inquiry with potentially inconsistent standards, such as for example, when a plaintiff should have discovered an infringement. Indeed, even where the rule is followed, its clear application to copyright infringement cases may be in doubt. The Fifth Circuit's decision in Martinelli noted that none of its previous decisions explain why the discovery rule applies to copyright infringement claims, and stated that it did not endorse the reasoning of other circuits in applying the rule. The Second Circuit, which previously curtailed the discovery rule by capping the recoverable damages to three years from when the lawsuit was filed, may have occasion to revisit its application following the Warner Chappell decision. Thus, in view of the dissenting justices' opinion in Warner Chappell and potentially emerging questions in the circuits, copyright infringement defendants may be expected to continue to argue against the discovery rule's application in copyright cases. In the meantime, plaintiffs may continue to rely on the discovery rule to bring actions for aging copyright infringements, but nevertheless would be well advised to remain diligent in monitoring their works.
For now, until at least one circuit strays from the current application of the discovery rule, or Congress decides to weigh in, the Supreme Court has preserved the status quo by allowing the discovery rule to remain intact for claims of copyright infringement.
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