In a victory for copyright owners, the US Supreme Court confirmed in a recent case that copyright owners who sue for infringement may recover money damages that are not limited to the three-year period before filing suit. Typically, under the statute of limitations for copyright cases, a copyright owner must sue within three years of the infringement or else be barred from suit. This case posed the question of whether the statute of limitations limits not just the right to sue but also the period that damages accrue.

In 2018, Sherman Nealy, a music producer, sued Warner Chappell Music, a music publishing company, for copyright infringement. Nealy alleged that Warner Chappell Music licensed Nealy’s songs from Nealy’s former business partner without Nealy’s permission or knowledge. Although the licensing arrangement dated back to 2008, Nealy did not learn of it until 2016 because he had been incarcerated from 1989 to 2008 and from 2012 to 2015. The parties agreed that Nealy’s case, which Nealy filed within three years of his discovery of Warner Chappell Music’s alleged infringing activity, was timely.

Nealy sought to recover damages and profits from 2008, while Warner Chappell Music sought to limit Nealy’s damages to the three-year period before Nealy filed his lawsuit. The trial court agreed with Warner Chappell Music. Nealy appealed. The appeals court reversed, finding that the Copyright Act did not support a separate damages bar for a timely claim of copyright infringement. The Supreme Court then took up Warner Chappell Music’s appeal. Noting that the Copyright Act did not provide a time limit on monetary recovery, Justice Kagan concluded that a copyright owner who filed a timely lawsuit could recover damages for infringement for any period during which the infringement occurred. Justice Gorsuch, in a dissent joined by Justices Thomas and Alito, disagreed, arguing that the Copyright Act did not support a blanket rule that would allow copyright owners to collect for damages for more than three years before the lawsuit was filed. Instead, Gorsuch supported such a rule “only in cases of fraud or concealment.”

This decision is important because a longer period of infringing activity can result in larger settlement payouts and damages awards for copyright owners, which could cause an increase in new copyright infringement lawsuit filings. The decision may also permit copyright owners in existing lawsuits to obtain more financial information from alleged infringers. Thus, the decision should also serve as a reminder for copyright owners to register their works so they can enforce them. With limited exceptions, registration with the US Copyright Office is a prerequisite for filing infringement lawsuits.

The case is Warner Chappell Music Inc. et al. v. Sherman Nealy et al., No. 22-1078 (May 9, 2024).

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