On May 9, 2024, the U.S. Supreme Court decided Warner Chappell Music, Inc. v. Nealy, No. 22-1078, holding that the Copyright Act entitles a copyright owner to obtain monetary relief for any timely infringement claim, no matter when the infringement itself occurred.
The Copyright Act’s statute of limitations provides that a copyright owner must bring an infringement claim within three years of its accrual. The Supreme Court has never decided, however, whether copyright claims accrue when an infringing act occurs or upon discovery of that infringement, an issue that has split the circuits. In this case, Sherman Nealy and a business partner, Tony Butler, recorded music during the 1980s that Butler later licensed to third parties, including Warner Chappell Music, while Nealy was in prison. Nealy sued for infringement within three years of discovering the license, but the infringing activity itself dated back 10 years.
The District Court held that although his copyright infringement claim was timely, Nealy could not recover damages stemming from before the three-year limitations period. The Eleventh Circuit reversed, and assuming that the claims were timely under the discovery rule, held that Nealy was entitled to copyright damages dating back more than three years.
The Supreme Court held that, assuming the discovery rule is available under the Copyright Act, Nealy is entitled to damages even where the infringing activity dates back more than three years from the time of suit. The Court held that the plain text of the Copyright Act contains no separate three-year period for recovering damages running from the date of the infringement. A contrary ruling, the Court pointed out, would lead to the anomalous result that a party could bring claims for infringing acts beyond that three-year period, but could not recover any damages.
Justice Kagan delivered the opinion of the Court, in which Chief Justice Roberts and Justices Sotomayor, Kavanaugh, Barrett, and Jackson joined in full. Justice Gorsuch filed a dissenting opinion, which Justices Thomas and Alito joined.
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