On May 20, 2024, the Supreme Court declined to review the application of the “discovery rule” in the case of Hearst Newspapers, L.L.C. v. Antonio Martinelli, leaving copyright defendants in uncertain waters. This decision follows the Court’s May 10 ruling in Warner Chappell Music, Inc. v. Nealy, which rejected a three-year damages cap yet didn’t address whether copyright claims under the discovery rule are timely.
What is a statute of limitations?
A “statute of limitations” is how long a plaintiff has after a specific point in time to bring a lawsuit.
What is the Discovery Rule?
Section 507(b) of the Copyright Act states that copyright claims have a three year statute of limitations, meaning that claims must be brought within three years of when the claim “accrued.” However, the word “accrued” has been under debate.
When discussing claim “accrual,” we are looking at two options: the date of injury rule, or the “discovery rule.”
With the actual injury rule, the claim accrues when the alleged act actually occurs.
In contrast, the discovery rule, adopted by lower courts, determines that a claim accrues when the plaintiff discovers, or should have discovered, the infringement. Without this rule, claims accrue when the infringement occurs, regardless of the plaintiff’s awareness.
In 2001, the Supreme Court clarified that Congress must explicitly state if a discovery rule applies. The Court emphasized that this rule only applies in cases of fraud or concealment, not as a general presumption.
The issue with this discovery rule is that “knew or should have known” is vague, presenting no certainty of claim accrual dates.
Current Legal Landscape
The Supreme Court’s decision not to hear Martinelli means lower courts will continue to apply the discovery rule. However, its application varies by jurisdiction, leading to inconsistent standards. The discovery rule’s applicability has resulted in a circuit split, with varying interpretations and implementations across different courts. Specifics, such as when a plaintiff should have discovered the infringement, can differ, especially with the advent of new technology like AI.
Implications for Plaintiffs and Defendants
Plaintiffs can rely on the discovery rule to bring older infringement claims, but must remain diligent in monitoring their works.
Defendants may continue challenging the rule’s application, citing circuit splits and differing interpretations. Until Congress or SCOTUS intervenes, the discovery rule remains a crucial aspect of copyright litigation.
Key Takeaways
- The Supreme Court’s decision leaves the discovery rule in place.
- The rule allows claims to be brought within three years of discovering the infringement.
- Inconsistent application across circuits creates legal uncertainties.
- Plaintiffs should monitor their works diligently to leverage the discovery rule.
- Defendants may persist in challenging the rule’s application.
For detailed legal advice on copyright infringement and the statute of limitations, contact us today. Understanding these nuances can help protect your intellectual property and navigate potential litigation effectively.
