Warner Chappell Music, Inc. v. Nealy
The Supreme Court ruled that a copyright owner who files a timely lawsuit — under the theory that the clock starts when the owner discovers an infringement, not when it happened — can recover full damages no matter how far back the infringement goes.
The decision resolves a split between federal appeals courts and rejects the Second Circuit's approach of capping damages at three years even when a timely lawsuit reaches further back.
How it got here: The district court certified its ruling capping damages at three years; the Eleventh Circuit reversed on interlocutory appeal; the Supreme Court agreed to hear the case to resolve a split among federal appeals courts.
The Case in Depth
What happened
Sherman Nealy co-founded a small music company in the 1980s that recorded several songs. While he was in prison on drug charges, his former business partner licensed those songs to Warner Chappell Music without Nealy's knowledge. Warner Chappell in turn licensed the songs to hit artists including Flo Rida, the Black Eyed Peas, and several television shows. After Nealy's release, he discovered the decade-long licensing activity and sued Warner Chappell for copyright infringement, seeking damages going back ten years.
The question before the Court
If a copyright owner discovers old infringements and files suit within three years of that discovery, can the owner recover damages for infringements that occurred more than three years before the lawsuit was filed?
The Court's answer
Yes — assuming the Copyright Act's "discovery rule" applies (meaning a copyright claim is timely if filed within three years of when the owner discovered the infringement, regardless of when it occurred), the Act imposes no separate cap limiting damages to only the three years immediately before filing.
The Copyright Act's statute of limitations sets a single clock for filing suit and says nothing about restricting damages to a shorter window. The Act's remedies provisions state that infringers are liable for statutory damages or actual damages and profits — with no time limit attached. The Court also clarified that language from its earlier Petrella decision, which referred to "relief running only three years back," described only the specific facts of that case, where the plaintiff had always known of the infringement and the discovery rule was unavailable. That language did not establish a general three-year damages ceiling.
Curious how the Court got there? See the step-by-step legal reasoning →
Why it matters
Copyright owners who were unaware of infringements — because of imprisonment, illness, or other circumstances — can now seek full damages once they discover the infringement, not just money for the most recent three years. Individual songwriters, photographers, and other creators with older catalogs stand to benefit most, since they often lack legal teams actively monitoring for unauthorized use.
What changes now
The case returns to the lower courts, where Nealy can now pursue damages for all timely infringement claims — potentially going back ten years — if he can prove those claims. The ruling definitively resolves the circuit split on the damages question in favor of copyright plaintiffs. However, the Court explicitly did not decide whether the discovery rule is valid under the Copyright Act at all, leaving that foundational question for a future case.
What this does not decide
The Court did not decide whether the Copyright Act actually permits the discovery rule — the rule that starts the clock when a plaintiff discovers an infringement rather than when it happened. That threshold question, which the dissent argues would doom most discovery-rule copyright claims, remains open for a future case.
Concurrences and dissents
Dissent — Justice Gorsuch
“Nothing requires us to play along with these particular parties and expound on the details of a rule of law that they may assume but very likely does not exist.”Gorsuch's central objection — the Court is detailing how a discovery rule works when the rule itself probably has no basis in the Copyright Act.
Justice Gorsuch argued the Court should not have decided the case at all. In his view, the Copyright Act almost certainly does not permit a discovery rule — the standard rule is that a claim accrues when the infringement occurs, and courts depart from that only in cases of fraud or concealment, which Nealy did not allege. Because the discovery rule likely does not exist under the Act, any ruling on how it should operate in damages cases is an advisory opinion on a dead letter. Gorsuch would have dismissed the case as improvidently granted and waited for a case that squarely raised whether the discovery rule belongs in copyright law at all.
How the Court got there
The legal reasoning, step by step
- The case turned on a single question: does the Copyright Act impose a separate three-year limit on damages recovery, on top of the three-year period for filing suit? The Court assumed without deciding that the 'discovery rule' governs when a copyright claim is 'timely' — meaning the clock starts when a diligent plaintiff discovers the infringement, not when it occurred. That assumption was built into the question the Court agreed to answer, and Warner Chappell had not challenged it below.
- The Court started with the text of the statute of limitations (17 U.S.C. § 507(b)), which simply says a lawsuit must be filed 'within three years after the claim accrued.' That provision creates one clock — for filing — and nothing more. The Court called it a 'singular' prescription: it says nothing about a second, separate three-year window governing how far back in time damages can reach.
- The Court then looked at the Act's remedies sections (§ 504), which state that an infringer is liable either for statutory damages or for the owner's actual damages plus the infringer's profits. Those provisions contain no time limit on monetary recovery. Because neither the limitations provision nor the remedies provisions impose a damages cap, the Court found no textual basis for one anywhere in the statute.
- The Court rejected the Second Circuit's reliance on language from Petrella v. Metro-Goldwyn-Mayer, Inc. — the 2014 case in which the Court noted that the limitations provision lets plaintiffs 'gain retrospective relief running only three years back.' The majority explained that statement simply described the facts of Petrella, where the plaintiff had always known of the infringement and therefore could not use the discovery rule at all; she could only sue for the three most recent years. The Court said it never meant to announce a general damages cap for plaintiffs who do have older timely claims under the discovery rule.
- Imposing a judicially invented damages cap would also be functionally self-defeating: it would let courts recognize the discovery rule with one hand (allowing suit for old infringements) and strip it of any real value with the other (denying money for those same infringements). That would make the discovery rule effectively identical to the standard injury-accrual rule, collapsing a distinction the courts of appeals had drawn.
Doctrinal impact
Cases affected by this decision
Distinguishes Petrella v. Metro-Goldwyn-Mayer, Inc. (572 U.S. 663)
Language about 'relief running only three years back' described that case's facts only, not a general damages cap.