Opinion ID: 4533496
Heading Depth: 2
Heading Rank: 2

Heading: Scholastic’s Cross-Appeal

Text: As noted above, Scholastic argues in its cross-appeal that the district court erred when it (1) applied the “discovery rule,” not the “injury rule,” to determine when Sohm’s claims accrued for statute of limitations purposes, id. at 33–35; (2) allowed damages for more than the three years prior to when the copyright infringement suit was filed; and (3) determined that Corbis’s group registrations, which did not indicate that Sohm or Visions of America was the author of any 23 included photographs, were valid under the Copyright Act for Sohm’s individual photographs. We will address each of these contentions in turn. 1. The District Court Properly Applied the Discovery Rule in Determining When Sohm’s Copyright Claims Accrued In Psihoyos, this Court adopted the “discovery rule” for determining when a copyright infringement claim accrues. 748 F.3d at 124–25. Scholastic nevertheless urges this Court to adopt the “injury rule” instead, maintaining that “in two recent decisions following Psihoyos, the Supreme Court cast serious doubt on the viability of the discovery rule.” Scholastic’s Br. at 34 (citing SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017); Petrella, 572 U.S. 663). We disagree and decline to alter this Circuit’s precedent mandating use of the discovery rule; we therefore affirm the district court’s holding that the discovery rule applies for statute of limitations purposes in determining when a copyright infringement claim accrues under the Copyright Act. “Civil actions for copyright infringement must be ‘commenced within three years after the claim accrued.’” Psihoyos, 748 F.3d at 124 (quoting 17 U.S.C. § 507(b)). As we noted in Psihoyos, we apply “a discovery rule for copyright claims under 17 U.S.C. § 507(b).” Id. Under that rule, “an infringement claim does not 24 ‘accrue’ until the copyright holder discovers, or with due diligence should have discovered, the infringement.” Id. Psihoyos, as a published opinion of a prior panel, is binding precedent upon this Court “unless and until its rationale is overruled, implicitly or expressly, by the Supreme Court or this court en banc.” United States v. Allah, 130 F.3d 33, 38 (2d Cir. 1997) (quoting United States v. Ianniello, 808 F.3d 184, 190 (2d Cir. 1986)). Scholastic contends that the Supreme Court has done just that, first in Petrella and subsequently in SCA Hygiene Products. The Supreme Court, however, has not overruled Psihoyos, either implicitly or explicitly, and therefore we must continue to apply the discovery rule. Petrella specifically noted that it was not passing on the question of the discovery rule. See 572 U.S. at 670 n.4. The Supreme Court reaffirmed that position in SCA Hygiene Products, explaining that it had “specifically noted” in Petrella that it had “not passed on the question whether the Copyright Act’s statute of limitations is governed by such a rule.” 137 S. Ct. at 962 (internal quotation marks and citation omitted). Consequently, while some language in Petrella is perhaps consistent with the injury rule, in light of the Supreme Court’s direct and repeated representations that it has not opined on the propriety of the discovery or injury 25 rules, it would contravene settled principles of stare decisis for this Court to depart from its prior holding in Psihoyos on the basis of Petrella. 2 Given the continuing propriety of the discovery rule in this Circuit, we must now determine whether the district court properly applied that rule, namely, whether the court erred in finding that Sohm did not discover, nor with due diligence should have discovered, Scholastic’s purported copyright infringements more than three years prior to when he filed suit. Scholastic contends that even under the discovery rule standard, Sohm’s claims accrued more than three years prior to his filing suit, thereby falling outside the Copyright Act’s statute of limitations and barring his claims. We find, however, that the district court did not err in rejecting these contentions and in finding that Scholastic had “failed to meet its evidentiary burden to survive summary judgment on” statute of limitations grounds. Sohm, 2018 WL 1605214, at . 2Contrary to Scholastic’s contentions, the Supreme Court’s recent decision in Rotkiske v. Klemm, 140 S. Ct. 355 (2019), does not persuade us to depart from this holding. In Rotkiske, the Supreme Court held that the statute of limitations of the Fair Debt Collection Practices Act (“FDCPA”), which states that an action may be brought under the FDCPA “within one year from the date on which the violation occurs,” 15 U.S.C. § 1692k(d), “begins to run on the date on which the alleged . . . violation occurs, not the date on which the violation is discovered,” Rotkiske, 140 S. Ct. at 358. Rotkiske’s holding, however, was based on the Court’s interpretation of the FDCPA’s text; the decision did not interpret the Copyright Act’s statute of limitations, which states that copyright infringement claims under the Act must be “commenced within three years after the claim accrued.” 17 U.S.C. § 507(b). Accordingly, Rotkiske is inapposite here. 26 The district court determined that Scholastic had failed to “identify some affirmative evidence that would have been sufficient to awaken inquiry and prompt an audit” on Sohm’s part for him to have discovered the copyright infringements earlier. Id. (internal quotation marks and citation omitted). Scholastic merely maintains that Sohm never conducted an audit or contacted his agents to inquire about payments despite having the ability to do so. Nevertheless, without identifying facts or circumstances that would have prompted such an inquiry, Scholastic cannot rely on the passage of time alone to establish that Sohm should have discovered the alleged copyright infringements at issue in this case. Scholastic has therefore not demonstrated that Sohm’s claims accrued outside the Copyright Act’s statute of limitations. Accordingly, the district court properly rejected Scholastic’s affirmative defense based on the Copyright Act’s statute of limitations. 2. The Copyright Act Limits Sohm’s Damages to the Three Years Prior to the Commencement of This Action Scholastic next argues that even if the district court was correct to apply the discovery rule, it erred in allowing Sohm to recover damages for more than three years prior to when he filed his copyright infringement suit. Again pointing to Petrella, Scholastic maintains that “[t]he Supreme Court was crystal clear . . . that, 27 independent of whether the injury or discovery rule applies, ‘[u]nder the [Copyright] Act’s three-year provision, an infringement is actionable within three years, and only three years, of its occurrence,’ and that ‘the infringer is insulated from liability for earlier infringements of the same work.’” Scholastic’s Br. at 38– 39 (quoting Petrella, 572 U.S. at 671). On this point, we agree with Scholastic. Despite not passing on the propriety of the discovery rule in Petrella, the Supreme Court explicitly delimited damages to the three years prior to the commencement of a copyright infringement action. Accordingly, we reverse the district court’s contrary determination. After Petrella, district courts in this Circuit have reached conflicting determinations regarding whether damages under the Copyright Act are limited to three years prior to when a copyright infringement case is filed. Compare Park v. Skidmore, Owings & Merrill LLP, No. 17-cv-4473, slip op. at 5 (S.D.N.Y. Sept. 30, 2019) (“[T]he Copyright Act provides for a three-year lookback period – a plaintiff can bring a suit for any infringing actions in the three years before the filing date, but cannot recover damages for infringements occurring more than three years before filing.”), Papazian v. Sony Music Entm’t, No. 16-cv-7911, 2017 WL 4339662, 28 at  (S.D.N.Y. Sept. 28, 2017) (“[B]ecause the clear and specific three-year limitation on damages under section 507(b) was necessary to the result in Petrella, it cannot be construed as dicta.”), Fischer v. Forrest, No. 14-cv-1304, 2017 WL 128705, at  (S.D.N.Y. Jan. 13, 2017), report and recommendation adopted, 2017 WL 1063464 (S.D.N.Y. Mar. 21, 2017), and Wu v. John Wiley & Sons, Inc., No. 14-cv-6746, 2015 WL 5254885, at  (S.D.N.Y. Sept. 10, 2015) (“Following Petrella, Wu can recover damages only for any Wiley infringing acts that occurred [not more than three years prior to filing the action].”), with Energy Intelligence Grp., Inc. v. Scotia Capital (USA) Inc., 16-cv-617, 2017 WL 432805, at  (S.D.N.Y. Jan. 30, 2017) (“[U]nder no reasonable reading of Petrella could the opinion be interpreted to establish a time limit on the recovery of damages separate and apart from the statute of limitations.”). Agreeing with the former decisions, we determine that Petrella’s plain language explicitly dissociated the Copyright Act’s statute of limitations from its time limit on damages. In Petrella, the Supreme Court initiated its examination of the Copyright Act’s statute of limitations by explaining that “[u]nder the Act’s three-year provision, an infringement is actionable within three years, and only three years, of its occurrence” and that “the infringer is insulated from liability for earlier 29 infringements of the same work.” 572 U.S. at 671. It stated that “§ 507(b)’s limitations period . . . allows plaintiffs . . . to gain retrospective relief running only three years back from the date the complaint was filed.” Id. at 672. It also explicitly asserted that “a successful plaintiff can gain retrospective relief only three years back from the time of suit” and that “[n]o recovery may be had for infringement in earlier years.” Id. at 677. Thus, damages “outside the three-year window” before Petrella filed suit could not be recovered. Id. Consequently, Petrella and Psihoyos counsel that we must apply the discover rule to determine when a copyright infringement claim accrues, but a three-year lookback period from the time a suit is filed to determine the extent of the relief available. Resisting this interpretation of Petrella, Sohm contends that the language from Petrella on which it relies was merely nonprecedential “dicta, taken out of context.” Sohm Reply Br. at 29. Not so. We are bound “not only [by] the result [of a Supreme Court opinion,] but also those portions of the opinion necessary to that result.” Seminole Tribe of Fla. v. Florida, 517 U.S. 44, 67 (1996). The Petrella Court partially based its determination that laches was inapplicable to actions under the Copyright Act on the conclusion that the statute “itself takes account of delay” by limiting damages to the three years prior to when suit is filed. Petrella, 30 572 U.S. at 677. Therefore, the three-year limitation on damages was necessary to the result in Petrella and thus binding precedent. Accordingly, under the Copyright Act, a plaintiff’s recovery is limited to damages incurred during the three years prior to filing suit. We reverse the district court’s contrary conclusion. 3. Corbis Validly Registered Each of Sohm’s Photographs Scholastic finally argues that Sohm’s copyright infringement claims based on Corbis’s group copyright registrations, which did not include Sohm’s name as an author, are invalid. Citing to Muench, Scholastic asserts that Sohm’s name was required to be included in the group registrations for them to be valid under the Copyright Act, 712 F. Supp. 2d at 85, thereby rejecting the district court’s contrary conclusion here and the Ninth Circuit’s contrary conclusion in Alaska Stock. We, however, agree with the district court and the Ninth Circuit. The “author” that must be identified in a group registration under 17 U.S.C. § 409(2) is the author of the compilation, rather than the author of each underlying work, and a valid group registration works to register each individual work included in the compilation. A certificate of copyright registration is a prerequisite to asserting a civil copyright infringement claim. 17 U.S.C. § 411(a). Thus, without a valid copyright 31 registration, a plaintiff cannot bring a viable copyright infringement action. The Copyright Act requires that an “application for copyright registration shall be made on a form prescribed by the Register of Copyrights and shall include . . . the name . . . of the author or authors [of the work].” Id. § 409(2). We must decide whether the registration of a compilation of photographs under § 409 by an applicant that holds the rights to the component works also effectively registers the underlying individual photos where the compilation does not list the individual authors of the individual photos. Our Court has yet to address this question, and the courts that have addressed it have arrived at conflicting conclusions. For example, in Muench, the district court concluded that interpreting the Copyright Act to allow group registrations to register the individual photographs contained therein, where the group registrations do not include the name of the authors of the individual photographs, contravened the Act’s plain language. 712 F. Supp. 2d at 92. However, in Alaska Stock, the Ninth Circuit reached the opposite conclusion, holding that if “the photographers have assigned their ownership of their copyrights in their images to the stock agency, and the stock agency registers the collection, both the collection as a whole and the individual images are registered.” 747 F.3d at 682. 32 We agree with the district court below and the Ninth Circuit. The plain language of § 409(2) does not require a group registrant like Corbis to include each individual author of each individual work in the compilation to effectively register those individual works. The key word in § 409(2) is “work” instead of “author.” As the Ninth Circuit explained, “[t]his subsection says that the name of the author or authors of ‘the work’ must be provided, the statute defines a ‘collective work’ as being a type of ‘work,’ and here, the author of the collective work was” Corbis. Alaska Stock, 747 F.3d 681 (footnote omitted). Consequently, to obtain a valid group registration under § 409(2), “[t]he ‘author or authors’ that must be listed . . . are the author or authors of the collective work itself.” 3 Id. The Corbis group registrations all satisfied this requirement by listing Corbis as the author of the collective work. Accordingly, the district court properly determined that Corbis validly registered each of the photographs in the relevant group registrations. 3The Ninth Circuit reaffirmed Alaska Stock in Unicolors, Inc. v. Urban Outfitters, Inc., 853 F.3d 980, 989 (9th Cir. 2017). 33