Appellate court limits copyright infringement damages to three years. SOHM v. SCHOLASTIC

Appellate court limits copyright infringement damages to three years. SOHM v. SCHOLASTIC

United States copyright law grants the creator of a new work the exclusive right to reproduce, distribute, perform, display, transmit and prepare derivative works based on the copyrighted work.  A creator is granted a copyright when they create a copyrighted work, the copyright can be registered to gain additional rights, but registration is not required for a copyright to be granted.  If someone other than the copyright owner attempts to exercise one of the exclusive rights granted by copyright law, that can be considered copyright infringement.  A copyright owner can file a complaint with a court to stop copyright infringement with an injunction and to get monetary damages for infringement which has already occurred.

In the United States a copyright is one of several legal concepts which shape the outcome of lawsuits.  One legal concept that can affect the outcome of a copyright infringement lawsuit is that statute of limitations.  Most courts agree that a lawsuit for copyright infringement does not ‘accrue’ until the copyright holder discovers, or should have discovered, the infringement.  The statute of limitations for copyright infringement is three years in the United States.  If a defendant can prove that the plaintiff knew about the copyright infringement and did nothing for three years than the defendant can motion to have the case dismissed.  However, the burden of proof is on the defendant and the evidence needed to show the statute of limitations has run out may not be discovered until the case is almost over.  Some legal scholars have noted that this gives a copyright plaintiff a significant advantage.

In SOHM v. SCHOLASTIC INC., 18-2110 (2nd Cir 2020) the Court of Appeals for the Second Circuit issued an opinion which may put litigants on a move level playing field.

This case revolves around 89 photographs created by the plaintiff.  Plaintiff entered into agreements with several agencies to license his photographs to third parties.  In one agreement Plaintiff temporarily assigned his copyrights to Corbis for registration purposes, with the understanding that Corbis would reassign the copyrights to him after registration. Corbis registered a number of Plaintiff’s photographs with the United States Copyright Office but none of the registrations named Plaintiff.

Defendant is a publisher of books that licensed several of Plaintiff’s works.  In May 2016, Plaintiff sued Defendant for copyright infringement, alleging that Defendant’s use of photographs in various publications exceeded what was allowed in the license. Defendant moved for summary judgement on several theories including that the statute of limitations had passed and alternatively that damages should be limited to infringement that occurred within three years of the suit.

The District Court found that Defendant had not established that Plaintiff knew of the infringement three years prior to filing suit and that case precedent in the Second Circuit did not limit damages to three years.  Defendant appealed this decision.

The Second Circuit held that Copyright Act’s statute of limitations is independent of the time limit on damages.  The Second Circuit based this conclusion on Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014).  In that case the United States Supreme Court  explicitly delimited damages to the three years prior to the commencement of a copyright infringement action.  Based on this precedent the Second Circuit held that damages for copyright infringement are limited to three years prior to commencement of a lawsuit.

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