Page:Starz Entertainment v. MGM Domestic Television Distribution.pdf/9

 damages for the incidents of infringement that occurred during the three-year period before Starz filed suit, without regard to the date of accrual. We disagree that such a limitation on recovery of damages is dictated by Petrella. We hold that the discovery rule for accrual allows copyright holders to recover damages for all infringing acts that occurred before they knew or reasonably should have known of the infringing incidents and that the three-year limitations period runs from the date the claim accrued, i.e., from the date when the copyright holder knew or should have known of the infringement.

Applying a separate damages bar based on a three-year “lookback period” that is “explicitly dissociated” from the Copyright Act’s statute of limitations in § 507(b) would eviscerate the discovery rule. There is no reason for a discovery rule if damages for infringing acts of which the copyright owner reasonably becomes aware years later are unavailable. This case provides a textbook example of the absurdity of such a rule. The Library Agreements between Starz and MGM covered hundreds of titles under separate time periods, and some of the exclusivity periods ended as early as 2013. Under the approach urged by MGM and adopted in Sohm, damages may only be recovered for a 2013 infringement if the complaint is filed within three years of 2013, or by 2016. But here, Starz did not discover any infringement until August 2019, and Starz brought suit less than a year later. Thus, while Starz’s copyright infringement claim accrued upon discovery in August 2019, and was therefore timely under § 507(b) because the complaint was filed before August 2022, under MGM’s theory, that same act of infringement has been nonrecoverable since 2016. As the district court noted, under Sohm’s rule, “[t]o the extent the discovery rule ‘saved’ the claims, it was a pyrrhic victory.” Moreover, recognizing a damages bar would render the “discovery rule” functionally identical to the “incident of injury” rule. See Br. of Amicus Curiae Professor Tyler Ochoa in Supp. of Pl.-Appellee & Affirmance at 13–15. By purporting to apply the discovery rule but imposing a three-year damages bar, Sohm is inherently self-contradictory. See 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 12.05[B][2][d][ii] (2021) (“But, immedi­ately after nominally reaffirming the discovery rule, Sohm v. Scholastic took a hundred-and-eighty degree turn … In sum, the practical import of this case is to adopt the injury rule and reject the discovery rule that it had previously upheld.”). The overwhelming majority of district courts in discovery rule circuits has rejected the concept of a damages bar in discovery rule cases, as Starz argues.