601 U.S. 366
SCOTUS2024Background
- Sherman Nealy and Tony Butler formed Music Specialist, Inc. in 1983; Nealy later went to prison and was unaware that Butler licensed Music Specialist works to Warner Chappell Music.
- Warner Chappell licensed these works to various artists; Nealy, upon release in 2015, learned of these licenses and sued for copyright infringement in 2018.
- Nealy's suit covered alleged infringements dating back ten years, seeking damages under the Copyright Act.
- The district court ruled Nealy could bring claims under the discovery rule, but limited damages to the three years preceding the filing of the lawsuit.
- The Eleventh Circuit reversed, holding that no three-year damages bar exists for timely claims under the discovery rule, and Nealy could recover damages for the entire period of infringement.
- The Supreme Court granted certiorari to resolve a circuit split on whether damages are limited to three years back from suit when the discovery rule applies.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a three-year limit on damages for timely copyright claims under the discovery rule? | Nealy argued the discovery rule allows damages for all infringements discovered within three years of suit, even if those infringements happened longer ago. | Warner Chappell argued even if the claim is timely under the discovery rule, damages or profits should be limited to infringements that occurred within the last three years. | The Court held there is no separate three-year damages limit; a timely claim under the discovery rule allows recovery for all infringements, regardless of when they occurred. |
Key Cases Cited
- Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014) (explaining claim accrual under the Copyright Act and discussing the incident of injury and discovery rules)
- United States v. Detroit Timber & Lumber Co., 200 U.S. 321 (1906) (syllabus does not constitute part of the Court's opinion and should not be cited as such)
- TRW Inc. v. Andrews, 534 U.S. 19 (2001) (discovery rule generally applies only in cases of fraud or concealment)
- Rotkiske v. Klemm, 589 U.S. 8 (2019) (presumption against expansive use of the discovery rule in federal statutes)