U.S. Supreme Court clarifies rights for copyright owners

Attorney Bill Meyerof Settle Meyer Lawjoins producer/host Coralie Chun Matayoshi to discuss a recent U.S. Supreme Court case which allowed a case filed within three years of the discovery of the copyright infringement to move forward even though the infringement itself occurred over three years prior.

Q.  Under the Copyright Act, a plaintiff must file suit within three years after the claim “accrued.”  There was a recent U.S. Supreme Court case about this, can you tell us more about the case?

The law is clear that a copyright owner has to file a lawsuit for copyright infringement within three years after the claim “accrues” in order to recover damages for the unauthorized use of their work.  One interpretation of that provision provides that a copyright claim “accrues” when an infringing act occurs.  An alternative view is the so-called “discovery rule,” wherein a claim “accrues” when the plaintiff discovers (or with due diligence should have discovered) an infringing act.  That rule allows a diligent plaintiff to raise claims about even very old infringements as long as they discover the infringement within three years prior to filing suit.

In this case, the plaintiff invoked the discovery rule to sue a music company for copyright infringements going back ten years.  The plaintiff argued that his claims were timely because he learned of the infringing conduct less than three years before he sued.  In the trial court, the music company agreed that the discovery rule governed the timeliness of the claim but argued that even if the plaintiff could sue under that rule for older infringements, he could only recover damages or profits for those infringements occurring in the last three years.  The trial court agreed, but on appeal the Eleventh Circuit reversed and rejected the notion of a three-year damages bar on a timely claim.

The US Supreme Court affirmed the Eleventh Circuit, holding that when the discovery rule applies, the plaintiff is entitled to recover past damages and is not limited by the three-year rule as the music company argued. 

Because Hawaii is in the Ninth Circuit and the Ninth Circuit follows the discovery rule, this means that copyright plaintiffs in Hawaii can recover damages and profits even for very old infringements, as long as they file suit within three years of when they learn (or should have learned) of the infringement.

Q.  What kind of creative work does a copyright protect? 

Copyright laws protect against someone else copying creative works such as music, visual art, movies, videos, video games, novels, poetry, software code, and architectural designs.  The work must:

1. Exist in some tangible form for at least some period of time, no matter how brief (e.g., Snapchat),

2. Be original or independently created by the author, and

3. Be the result of at least some creative effort on the part of its author. There is no hard and fast rule as to how much creativity is enough, and a work can be sufficiently creative even if it is arguably lacking in quality, ingenuity or aesthetic merit.

Q.  What happens if you use copyrighted material without permission? 

You may be held liable for the profits derived from using the infringing work and other damages suffered by the copyright owner, as long as they are not duplicative.  Alternatively, because actual damages may be hard to quantify in some cases, the Copyright Act provides that a court may award statutory damages.  In addition, a successful plaintiff is generally entitled to recover attorneys fees as long as certain technical conditions are met (i.e., the copyrighted work has been timely registered with the U.S. Copyright Office).  

Q.  What kind of evidence do you need to prove copyright infringement?

In order to prevail in a copyright infringement case, the plaintiff must prove that the defendant copied the plaintiff’s work.  Since there is rarely direct evidence of copyright infringement (e.g., you see someone xeroxing your work), circumstantial evidence is generally used. 

In such a case, the plaintiff must prove that 1) the defendant had access to the original work, and that 2) the two works are “substantially similar.”  These two elements are considered on a sliding scale; the more similar the works are, the less evidence of access is required, and vice versa.

Copyright infringement is strict liability, which means that once infringement is established, the plaintiff does not have to show that the infringement was intentional in order to recover profits and damages.  In fact, George Harrison was found liable for “subconscious infringement” of the song “He’s So Fine” (written by Ronnie Mack and recorded by the Chiffons) when he released his song “My Sweet Lord” on his double album “All Things Must Pass.”

Q.  Are there ways you can use copyrighted material without permission?

Yes, if the fair use doctrine applies.  This is a highly fact-based test set forth in the Copyright Act, and it can be quite tricky to predict whether a court will find a use to be “fair.”  The four-factor test set forth in the Copyright Act requires that the court consider:

1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
   1. Use for criticism, comment, news, reporting, teaching, scholarship, and research would suggest a fair use. 
   2. If the new work is “transformative,” the use is more likely to be considered fair
   3. If the defendant acted in good faith, the use is more likely to be considered fair
2. the nature of the copyrighted work;
   1. If the copied work was factual, the use is more likely to be considered a fair use, whereas if the copied work was artistic and creative, the use is less likely to be considered fair
   2. If the copied work was published, the use is more likely to be fair use, whereas if the copied work was confidential, the use is less likely to be considered fair.
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole;
   1. There is no set rule about how much of an underlying work may be used without permission.  However, when small and/or insubstantial portions of the original work are used, the use is more likely to be fair use, whereas when great and/or substantial portions of the original work are used, the use is less likely to be fair
4. the effect of the use upon the potential market for or value of the copyrighted work.
   1. If the allegedly infringing work had little effect on the potential market for or value of the copied work, it favors fair use treatment, whereas if the allegedly infringing work has a substantial effect on the potential market for or value of the copied work, it is less likely to be considered fair.

This information is provided on a general basis, but please note that every case is different, and you should contact a copyright lawyer to determine how the law applies to your specific circumstances.  If you have questions about copyright law, you may contact Mr. Meyer at wmeyer@settlemeyerlaw.com.