In this case, Sherman Nealy, an individual, and Music Specialist, Inc., a Florida Corporation, sought damages and profits for copyright infringement against Warner Chappell Music, Inc. and Artist Publishing Group, LLC, two Delaware corporations. Nealy alleged that he held the copyrights to certain songs and that Warner Chappell’s licensing activities infringed his rights. According to Nealy, the infringement started ten years before he brought the lawsuit. Under the Copyright Act, there is a three-year statute of limitations for filing a copyright infringement lawsuit, which begins at the time the claim accrues. Nealy sought recovery for the entire time frame despite the 3-year statute of limitations in the Copyright Act. Nealy argued that the lawsuit was timely because he discovered Warner Chappell’s infringement less than three years before the lawsuit was filed, and that the statute of limitations only applied to the timeliness of bringing a claim, but not to the time frame for seeking damages if a claim was timely brought.

The District Court agreed with Nealy that the claim was timely brought, but ruled that the earliest date for which he could recover damages or profits for infringements would be three years prior to the filing of the lawsuit. The U.S. Court of Appeals for the Eleventh Circuit reversed that decision, finding the claim to have been timely brought, but rejecting the three-year damages bar on a timely claim that had been imposed by the trial court. The Supreme Court agreed to review the decision and conducted oral argument in the October 2024 Term.

On May 9, 2024, the Supreme Court, in a 6-3 majority decision authored by Justice Kagan, affirmed the Eleventh Circuit’s decision. The Court acknowledged that the issue of whether a discovery rule applies in claims brought under the Copyright Act has not to date been squarely presented to the Court, and left that for determination in a future case. But, because the parties did not tee that issue up for the Supreme Court, the majority did not decide it, explaining that it was constrained by what was argued below. Three Justices joined in a dissenting opinion, taking the position that the appeal was improvidently granted because the Court should first rule on the issue of whether there is in fact a discovery rule that would apply to claims under the Copyright Act (i.e., whether Nealy’s claim was timely brought in the first place). There is another case in the pipeline on that issue, but it remains to be seen whether the Supreme Court will agree to review it.

In the meantime, in the Nealy case, the Court held that the Plaintiff is entitled to monetary relief for all infringements, regardless of when the infringement occurred, if the claim was timely brought within three years of having discovered it.

The Court’s decision can be found here: https://www.supremecourt.gov/opinions/23pdf/22-1078_4gci.pdf