## Facts

- Sherman Nealy and Tony Butler created and released an album and several songs through their company, Music Specialist, Inc. (MSI).
- Soon after the releases, Nealy was incarcerated on drug charges and remained out of the music business for long periods, including time in prison.
- While Nealy was incarcerated and without his knowledge, Butler entered into licensing arrangements involving MSI’s works, including a deal permitting Warner Chappell Music, Inc. (Warner) and related entities to use the works.
- Nealy was released from prison in 2015.
- Nealy alleged that he did not learn of the challenged licensing and uses until after his release, around 2016.
- In 2018, Nealy sued Warner for copyright infringement, alleging infringing activity beginning in 2008 and seeking monetary relief (actual damages and profits).
- Nealy relied on the “discovery rule” for claim accrual, arguing the statute of limitations began when he discovered (or reasonably should have discovered) the infringement.
- For purposes of the timeliness dispute, Warner accepted the assumption that the discovery rule governed accrual, but argued that monetary recovery still could not reach infringements occurring more than three years before the complaint.
- The district court agreed with Warner and imposed a three-year limit on monetary recovery measured back from the filing date.
- The Eleventh Circuit reversed, holding that if claims are timely under the discovery rule, the Copyright Act does not impose a separate three-year limit on damages.
- The Supreme Court granted certiorari to decide whether, assuming discovery-based accrual, § 507(b) restricts monetary relief to a three-year lookback period.

## Issues

1. Assuming a copyright infringement claim is timely under a discovery-based accrual rule, does 17 U.S.C. § 507(b) limit monetary relief to infringements occurring within the three years before the lawsuit was filed?
2. Does the Copyright Act require injury-based accrual rather than discovery-based accrual (not decided)?

## Decision

- The Supreme Court affirmed the Eleventh Circuit.
- The Court held that the Copyright Act allows monetary relief for any timely infringement claim, regardless of when the infringement occurred.
- Section 507(b) creates a single time bar: a civil action must be filed within three years after the claim accrued; it does not create a separate time bar for damages.
- The Court rejected Warner’s argument that prior language in Petrella v. MGM established a general three-year damages limit; Petrella addressed a case litigated on injury-based accrual and did not impose a remedies cap for discovery-accrual cases.
- The Court assumed without deciding that the discovery rule can govern accrual of copyright infringement claims, because the parties litigated on that assumption and the Court took only the remedies question.
- Dissent (Justice Gorsuch, joined by Justices Thomas and Alito): the Court should not decide remedies based on an assumed discovery rule that likely is not authorized by § 507(b); the dissent would have dismissed the case as improvidently granted.

## Legal Principles

- 17 U.S.C. § 507(b) is a statute of limitations that bars untimely suits; it does not, by its text, limit remedies for timely claims.
- When a copyright infringement claim is timely under the governing accrual rule (here, assumed to be discovery-based), the Copyright Act’s remedies provisions (including §§ 504–505) permit recovery of monetary relief without a judge-made three-year lookback restriction.
- Statements in Petrella about a “three-year lookback” describe how damages operate when accrual is tied to each infringing act (injury-based accrual); they do not create an extra, free-standing damages cutoff applicable when accrual is delayed by discovery.
- The Court left open the broader question whether copyright infringement claims accrue on discovery or on the date of the infringing act.

## Conclusion

Warner Chappell Music, Inc. v. Nealy holds that, assuming discovery-based accrual makes a copyright infringement claim timely under § 507(b), the Copyright Act allows the plaintiff to seek monetary relief for infringements occurring more than three years before filing suit because § 507(b) sets only a filing deadline and does not impose an additional three-year cap on damages.


Warner Chappell Music, Inc. v. Nealy, 601 U.S. 366, 144 S. Ct. 1135 (2024)