In Nealy v. Warner Chappel Music Inc., a twice-incarcerated plaintiff sued his former manager for licensing his music without authorization — all while the inmate had been serving his first sentence. Argued before the 11th Circuit, this case highlights a circuit split.
The sole issue was whether the plaintiff could bring a lawsuit for copyright infringement, which:
- occurred more than three years ago, but
- allegedly occurred less than three years from the date the plaintiff discovered the infringement.
The district court found that, based on the discovery rule, there was a question of fact as to whether the plaintiff knew or should have known about the infringement prior to three years before the lawsuit began. It was good news to Nealy that the 11th Circuit already has a discovery rule that allows for exactly this circumstance. A plaintiff would still have to prove their claims, but they can start a cause of action in the 11th Circuit.
In this way, the judges on the 11th Circuit panel ruled the same way as the 9th Circuit: the date when the plaintiff learned or should have learned of the infringement triggered the cause of action, even if that date was more than three years ago. They went through their analysis of the defendant’s argument that Petrella v. Metro-Goldwyn-Mayer applied in this case. Petrella is a 2014 case in which the Supreme Court affirmed that one cannot bring a lawsuit for copyright infringement, as the owner of a copyright, longer than three years before the claim accrued.
In this case, the 11th Circuit court went on to say that the Petrella case cannot be cited in the same way one cites statutes — which allows a litigant to take bits and pieces out of context. To cite a judicial precedent, all the circumstances of the case need to be looked at. Petrella contained no question about discovery rules; rather, it was based on a clear injury that occurred on a certain date.
In this case, the plaintiff said that his former manager sold songs the inmate allegedly co-authored while he was incarcerated so that he hadn’t known of such infringement until more than three years later. The court expressly left open key factual issues, and remanded the case to the District Court to determine when the infringement occurred and when the defendant should have learned of it. But if those issues were resolved in favor of the plaintiff, the discovery rule would allow the lawsuit to go forward more than three years after the actual infringement took place.
As a practitioner based in the Second Circuit, I’m used to the hard, three-year deadline from the date the infringement occurred — so the 9th and 11th Circuit’s take is rather novel to me. Unfortunately, as long as this split exists among the federal appellate circuit courts, confusion will not be the only problem facing the courts. Forum shopping is likely to give litigants who file in district courts located in the 9th and 11th Circuits an advantage that they may not have had otherwise.
