Page:Nealy v. Warner Chappell Music, Inc. (11th Cir. 2023).pdf/6

  Armed Forces of Colom., 704 F.3d 910, 914 (11th Cir. 2013).

The Copyright Act’s statute of limitations provides that “[n]o civil action shall be maintained … unless it is commenced within three years after the claim accrued.” 17 U.S.C. § 507(b). Under our precedent, where the “gravamen” of a copyright claim is ownership, the discovery rule dictates when a copyright plaintiff’s claim accrues. Webster v. Dean Guitars, 955 F.3d 1270, 1276 (11th Cir. 2020). Under the discovery rule, a copyright ownership claim accrues, and therefore the limitations period starts, “when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his ownership rights.” Id.

The question in this appeal is whether the Copyright Act’s statute of limitations, 17 U.S.C. § 507(b), precludes a copyright plaintiff from recovering damages for harms occurring more than three years before the plaintiff filed suit, even if the plaintiff’s suit is timely under our discovery rule. Our discussion proceeds in two parts. First, we briefly confirm that the discovery rule governs the timeliness of MSI and Nealy’s claims. Second, assuming MSI and Nealy’s claims are timely, we evaluate the Copyright Act and the Supreme Court’s decision in Petrella to determine whether the plaintiffs may recover damages for infringement that occurred more than three years before they filed this lawsuit.

We start with the timeliness of the plaintiffs’ claims. The copyright statute of limitations runs from the day that a claim “accrues.” And there are two recognized rules for determining that date: the discovery rule and the injury rule. Under the discovery rule, a claim “accrues when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his” rights. Webster, 955 F.3d at 1276. These kinds of claims can only accrue one time. Id. Conversely, under the injury rule, a copyright plaintiff’s claim accrues when the harm, that is, the infringement, occurs, no matter when the plaintiff learns of it. Petrella, 572 U.S. at 670, 134 S.Ct. 1962. But, attendant to the injury rule is the separate-accrual rule, which means that a new copyright claim accrues with each discrete infringement. Id. at 671–72, 134 S.Ct. 1962.

Under our precedent, where the “gravamen” of a copyright claim is ownership, a plaintiff’s claim accrues when he knew or should have known about the infringement. Webster, 955 F.3d at 1276. The gravamen of a copyright claim is ownership if ownership of the copyright is the only disputed issue. Id. For example, in Webster, the defendant conceded that it used a copyright without the plaintiff’s permission. Id. But the defendant argued that it had a license from a third party who owned the copyright instead of the plaintiff. Id. Accordingly, the plaintiff’s claim was an ownership claim because the only disputed issue was whether the plaintiff or the third party owned the copyright. Id. And so, the discovery rule governed the timeliness of the plaintiff’s claim. Id.

We have little difficulty concluding that the discovery rule governs the timeliness of MSI and Nealy’s claims in this case. The parties entered a joint-pretrial stipulation in which they agreed “that this case presents an ‘ownership dispute’ within the meaning of the statute of limitations for copyright claims.” And the dispute in this case is materially indistinguishable from Webster for this purpose. The defendants concede that if MSI and Nealy prove that they own the copyrights to the works, the only remaining issue in the case would be damages because the defendants’ use of