Time is not on the side of copyright infringers, SCOTUS rules

Intellectual Property /
John Simpson
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By Tony Poland, LegalMatters Staff • A recent Supreme Court of the United States (SCOTUS) ruling that found a copyright infringer was liable for damages accruing more than nearly a decade before the infringement was discovered raises interesting limitations issues, says Toronto intellectual property lawyer John Simpson.

In Warner Chappell Music, Inc. v. Nealy, SCOTUS held that the U.S. “Copyright Act entitles a copyright owner to obtain monetary relief for any timely infringement claim, no matter when the infringement occurred.”

That essentially means U.S. plaintiffs can seek relief dating many years into the past, says Simpson, principal of IP boutique Shift Law Professional Corporation.

‘It is a sensible decision’

“It is a sensible decision because the purpose of limitations periods, whether for copyright or other civil actions, is to compel a potential plaintiff to bring a lawsuit within a limited period after discovering the cause of action,” Simpson tells LegalMattersCanada.ca. “Limitation periods were not designed to determine how far back you could claim monetary remedies.”

The plaintiffs in the case claimed that the defendants began infringing on their musical copyrights in 2008. The alleged infringement was discovered by the plaintiffs in 2016, SCOTUS heard.

The defendant argued that the plaintiffs should only be allowed to seek relief for the infringement that occurred in the past three years, during the limitation period.

However, the court ruled the plaintiffs are within their rights to recover damages for any infringement, even if it occurred more than three years before a lawsuit was filed.

Simpson notes that Canada also has limitation periods for civil lawsuits including for copyright infringement.

Clock starts when breach is discovered

“When you discover that there was a breach, the clock starts ticking,” he says. “You need to commence legal action within a limited time after the event comes to your attention or when you ought to have known about it.”

In Canada, like the U.S., the limitation period for filing a Copyright Act claim is three years.

“It should be noted the principle dictates that it is three years from when you ought to have discovered an infringement,” he says. “One of the reasons for that is the court does not want plaintiffs to allow  infringers to run up damages for years, pretending that they didn’t know about it, before deciding to pursue a claim.”

Simpson says determining how much a copyright holder is entitled to monetarily after learning of an infringement can make for an interesting legal argument.

Monetary entitlement issue

“If someone has been profiting from infringing on your copyright, what isn’t always clear is how far back you can claim against them,” he says. “If someone has been infringing on your copyright since 2000 and you discovered it in 2015, are you only entitled to monetary remedies dating back to 2012?”

Simpson says he has litigated the issue himself recently.

“My contention as the plaintiff’s lawyer has been that you can claim relief as far back as the infringement was occurring,” he says. “If you only found out in 2020 that someone had been infringing your copyright since 1980, you should be able to claim damages back to when the infringement started.”

”The limitation period only determines how quickly you must bring the lawsuit, not how far back monetary remedies apply.”

Technology exposing copyright infringement

Simpson says the issue is becoming more and more significant in copyright infringement cases given the role technology is playing in exposing copyright infringement from long ago.

“You can now use software to scrape the internet and find images from decades ago on a website,” says Simpson.  “If that image was used without permission, there could be grounds for a lawsuit today.”

He says it “is another example of how technology has developed faster than the law.”

“When laws were developed to deal with limitations period, we didn’t have technology that could peer into the distant past,” says Simpson. “That is a potential concern that perhaps needs to be worked out. Legislation may need to be updated to account for that in relation to limitations periods and how far back you can claim monetary remedies.”