US Supreme Court to take up Warner Chappell case around limitations on copyright damages, after appeal over Flo Rida ‘In The Ayer’ lawsuit

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American rapper, singer, and songwriter Flo Rida 

At the request of music publisher Warner Chappell Music and copyright owner Artist Publishing Group, the US Supreme Court is set to make a decision on statutes of limitations for copyright lawsuits.

The decision could impact how long rights holders have to file infringement complaints. It involves an unusual case where an alleged copyright holder waited for years to file a copyright complaint because he was serving a prison sentence. However, due to a series of contradictory appeals court rulings on the issue, industry groups say there is uncertainty about the law when it comes to the time allowed for a copyright infringement suit to be brought.

In a petition to the US’s top court in June, Warner Chappell and Artist Publishing Group asked the court to resolve a disagreement between federal appeals courts on whether or not a copyright holder can sue for damages over copyright infringement that took place more than three years prior to the lawsuit being filed.

The case has drawn the attention of the US Chamber of Commerce and the Recording Industry Association of America (RIAA), both of whom filed “friend of the court” briefs urging the Supreme Court to take up the case. According to a report at Reuters, the Supreme Court is scheduled to hear arguments in the case in its fall term, which began on Monday (October 2).

A 1957 amendment to US copyright law limited the time to file a lawsuit to within three years of the infringement taking place.

However, in a series of recent rulings in different cases, several federal appeals courts interpreted this rule in different ways. The Second Circuit Court of Appeal ruled that the three-year limit applies from the moment the copyright infringement took place, while the Ninth Circuit and Eleventh Circuit appeals courts ruled that the three-year limit applies from the time when the copyright holder knew or should have known about the infringement of their rights.

“The resulting conflict on an important question of copyright law is intolerable, creating confusion for parties and encouraging forum-shopping,” states the Warner Chappell/Artist Publishing Group petition, which can be read in full here.

“Forum-shopping” is the practice of lawyers choosing particular courts for cases because those courts have more favorable rules for their legal challenge.

The three appeals courts in question here “are home to the major artistic centers of New York, Los Angeles, and Miami,” the petition noted – meaning how those courts rule affects many copyright lawsuits.

The Supreme Court will look at a 2018 case filed by Sherman Nealy, who alleged that some rights for songs he co-wrote in the 1980s were improperly sold off by his business partner, Tony Butler (aka Pretty Tony), while Nealy was serving sentences for cocaine distribution from 1988 to 2008, and again from 2011 to 2015.

Nealy’s complaint, which can be read in full here, alleged that 321 Music, a company owned by Butler, unjustly licensed the rights to one of the songs the duo co-owned, Jam the Box, to Warner Music Group’s Atlantic Records, without Nealy’s permission, while Nealy was incarcerated.

Jam the Box was heavily sampled on Atlantic-signed hip-hop artist Flo Rida’s 2008 track In the Ayer.

In the Ayer was the third single off Flo Rida’s album Mail on Sunday. The track hit No.9 on the US Billboard Hot 100, and as of last count, it had 34 million YouTube views on its official video, and just short of 40 million plays on Spotify.

The 2018 lawsuit also alleged that Artist Publishing Group, a music publishing company owned by Mike Caren – at the time the A&R Vice President at Atlantic Records – bought licenses to a number of other tracks co-owned by Nealy and Butler, without Nealy’s permission.

“The infringements of the master recordings and compositions which are owned by [Nealy] include but are not limited to the use of Jam the Box in In the Ayer by multi-platinum recording artist Flo Rida, the use of When I Hear Music in Fuego by multi-platinum recording artist Pitbull and the use of Look Out Weekend in Weekends by multi-platinum recording artist Black Eye Peas,” the complaint stated.

Nealy maintains that he only found out about the alleged copyright infringements in 2016, after his prison sentences were completed.

The complaint called those licensing agreements “fraudulent.” As defendants, the lawsuit named Atlantic Records, Warner Chappell Music and Caren.

The US District Court for the Southern District of Florida, Miami division, effectively ruled in favor of Atlantic Records and the other defendants, on the grounds that the alleged copyright infringement on Flo Rida’s In the Ayer and the other tracks in question took place more than three years before the lawsuit was filed in December of 2018.

However, the US Court of Appeals for the Eleventh Circuit, which includes Florida, reversed that ruling, arguing that Nealy can sue for copyright infringement because of the “discovery rule.” In essence, the court said the three-year limit runs not from the time of the infringement itself, but from the time when the copyright holder knows or should have known that their rights had been infringed.

It’s this ruling that Warner Chappell Music and Artist Publishing Group appealed to the Supreme Court.

In their petition, they urge the Supreme Court to uphold the three-year rule from the time of the infringement and also argue that Nealy should have known well before December 2015 — i.e, three years before he filed his lawsuit — that his works were allegedly being infringed.

It said that, prior to that date, performance rights organization BMI sent Nealy royalty checks for the music licensed to Artist Publishing Group, some of which identified Warner Chappell as the “publisher” and “administrator” on the music in question.

In a response to the petition, which can be read in full here, lawyers for Nealy argued that the Supreme Court should let the lower court’s ruling stand because it was decided “consistent with established statutory interpretation principles” and that the relevant copyright law statute doesn’t actually limit claims to three years prior to the lawsuit being filed.

“Thus, the bizarre and misplaced request by the petitioners for this court [to] strike down the discovery rule when no challenge was made to same… should be denied,” the response states.Music Business Worldwide

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