Supreme Court to Clarify Copyright Infringement Limits in Case Against Warner Music

The Supreme Court will clear up how far back copyright holders can recover damages for infringement in a case involving a Florida producer who sued Warner Chappell Music after Flo Rida sampled a song he owns.

The justices agreed on Friday to review an appeal from Warner Music and Artist Publishing Group of a lower court’s ruling that recovery for damages that occurred prior to the three-year window to sue is allowed. The decision may clarify uncertainty over whether there is truly open-ended copyright liability, as two federal appeals courts have recently held.

At the center of the dispute is the 1984 song “Jam the Box,” which Sherman Nealy’s Miami record label Music Specialist owns and was used by Flo Rida in his 2008 tune “In the Ayer.” At the time, Nealy was incarcerated for cocaine distribution. In 2018 he sued Atlantic Records, Warner Chappell and Artists Publishing Group, arguing that he didn’t authorize the use of his label’s music and that his former business partner didn’t have permission to grant licenses.

On summary judgment, the music publishers argued that Nealy didn’t sue within the three-year window to file a lawsuit for copyright infringement. The federal judge overseeing the case agreed, but his decision was reversed by the 11th U.S. Circuit Court of Appeals. It found that the three-year statute of limitations doesn’t begin until the copyright owner “knows or has reason to know [they] were injured.” The finding endorsed application of the so-called “discovery rule” under the Copyright Act, which holds that the clock to sue starts when plaintiffs learn or should’ve reasonably learned that their rights are being violated. This is opposed to the so-called “injury rule,” which holds that the statute of limitations starts to run when the infringement occurs, regardless of plaintiffs’ knowledge.

Federal appeals courts have reached clashing conclusions on the issue. In Petrella v. Metro-Goldwyn-Mayer, the Supreme Court in 2014 prohibited recovery of damages for infringement past the three-year window to sue. It found the Copyright Act “bars relief of any kind for conduct occurring prior to the three-year limitations period.” Interpretation of this language remains unresolved.

The 11th Circuit in February joined the 9th U.S. Circuit Court of Appeals in choosing not to impose a time limit, finding that copyright holders can pursue damages for infringement more than three years before the filing of a lawsuit as long as they are “timely under the discovery rule.” This stands in contrast to the 2nd U.S. Circuit Court of Appeals, which found that “a plaintiff’s recovery is limited to damages incurred during the three years prior to filing suit.”

Randy McCarthy, an intellectual property lawyer, says it’s likely the Supreme Court will reverse the 11th Circuit’s ruling since “having open-ended copyright liability that could be potentially devastating to wide sectors of our society.” He adds, “possible liabilities for things you did 20 years ago, so long as someone locates it online, seems a bit chilling.”

The Recording Industry Association of America and National Music Publishers’ Association have filed friend-of-the-court briefs urging the Supreme Court to review the case since uncertainty on the issue encourages forum shopping.