This article is the second in a series, analyzing the Supreme Court’s decision in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC., issued on March 4, 2019.
In the briefing submitted to the Supreme Court in connection with the Fourth Estate case, the petitioner argued that a determination that the registration certificates were required before filing suit would dramatically constrict a copyright owner’s ability to stop infringements and enforce its rights in court, given the statutory time limit in which to file suit. Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, No. 17-571, 2019 WL 1005829 at ¶ 20 (U.S. Mar. 4, 2019). The Court dismissed this concern as “overstated,” noting that “the average processing time for registration applications is currently seven months.” Id.
However, the presence of a three-year statute of limitations on filing copyright infringement actions should instruct copyright owners to be diligent in policing their rights and seeking registration as soon as possible – or at least as soon as possible after infringement has occurred (if the infringed work was not already registered), so that the owner is not precluded from recovering its actual damages or enjoining further infringement. 17 U.S.C. § 507(b) (“No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.”) (emphasis added).
When Does a “Claim” Accrue?
The date when a copyright infringement claim accrues is also the subject of a circuit split – so copyright owners must also pay attention to the rule that applies in their jurisdiction.
The Discovery Rule (Knows or Has Reason to Know About the Infringement)
For a majority of these circuits, the statute of limitations begins to run when the copyright owner “knows or has reason to know” that the infringement has occurred – the so-called “discovery rule”. See, e.g., Monsarrat v. Zaiger, 286 F. Supp. 3d 253, 256 (D. Mass. 2017) (“A copyright claim accrues ‘when the plaintiff knows or has reason to know of the act which is the basis for the claim.'”) (quoting Santa-Rosa v. Combo Records, 471 F.3d 224, 227 (1st Cir. 2006)); accord Design Basics, LLC v. Best Built, Inc., 223 F. Supp. 3d 825, 836 (E.D. Wis. 2016) (confirming that Seventh Circuit has adopted “discovery rule” for copyright infringement statute of limitations purposes) (citing Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir. 2004)).
The Incident of Injury Rule (When the Infringement Occurred)
Still other circuits hold that a copyright owner’s claims must be filed within three years after the infringing event has occurred – the so-called “incident of injury” rule. See, e.g., Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 670 & n.4 (2014) (discussing, in dicta, that “a copyright claim thus arises or ‘accrue[s]’ when an infringing act occurs” but also noting that “nine Courts of Appeals have adopted, as an alternative to the incident of injury rule, a ‘discovery rule,’ which starts the limitations period when ‘the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for his claim.'”); accord William A. Graham Co. v. Haughey, 646 F.3d 138, 150 (3d Cir. 2011) (reasoning that copyright claims “accrue” when the first infringement occurred).
The Design Basics court considered the Petrella Court’s reasoning to be mere dicta, thus not requiring district courts “to apply the incident of injury rule to copyright infringement claims” in all cases. Design Basics, 223 F. Supp. 3d at 836. Again, all the more reason for the copyright owner to be familiar with the requirements of its own jurisdiction so that it can promptly address potential infringement claims.
Timing of Filing Copyright Applications
Given the current pendency of the Copyright Office’s review of new applications (see prior post, and the Copyright Office’s Registration Processing Times, Oct. 2, 2018), it is just plain prudent to filing applications for copyright protection on a proactive basis. If you believe that something you’ve created may be copied and published by someone else without your permission, just file the application with the Copyright Office before publishing. Or, get in the habit of filing applications for registration of new works within three months after the first publication.
Or, as discussed in the prior post, consider expedited processing, which is available in limited circumstances. Online applications seem to speed the review, although it’s possible that the Copyright Office’s pendency will slow significantly in the wake of the Fourth Estate decision – such that even online applications are not processed quickly enough.