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Case 1:16-cv-01215-VSB Document 63 Filed 08/17/16 Page 1 of 34

UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF NEW YORK
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PK MUSIC PERFORMANCE, INC.,
:
:
Plaintiff,
:
:
-against:
:
JUSTIN TIMBERLAKE, et. al.
:
:
Defendants.
:
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Docket No. 16 CV 1215 (VSB)

PLAINTIFFS MEMORANDUM OF LAW IN OPPOSITION TO


DEFENDANTS MOTION TO DISMISS

SCHWARTZ, PONTERIO & LEVENSON, PLLC


Brian S. Levenson
Attorneys for Plaintiff
134 West 29th Street, Suite 1006
New York, NY 10001
(212) 714-1200

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TABLE OF CONTENTS
Page
PRELIMINARY STATEMENT ..................................................................................................1
BACKGROUND FACTS ..............................................................................................................2
ARGUMENT
I.

PLAINTIFFS CLAIMS ARE TIMELY UNDER 17 U.S.C. 507(b).........................3

II.

DAMAGES RECOVERABLE UNDER THE DISCOVERY RULE INCLUDE


THOSE OCCURING BEYOND THE THREE-YEAR LOOK-BACK
PERIOD .........................................................................................................................4
A. Before Psihoyos, Damages Beyond Three Years Were Recoverable Under the
Discovery Rule.........................................................................................................4
B. Psihoyos Held Damages Beyond Three Years Are Recoverable ............................5
C. After Psihoyos, Infringement Claims More Than Years Old Cannot Be Barred
by the Statute of Limitations as a Matter of Law .....................................................6
D. Courts Outside the Second Circuit Have Universally Awarded Damages Beyond
Three Years When Applying the Discovery Rule, Both Before and After
Petrella .............8
(i) Ninth Circuit......................................................................................................8
(ii) Seventh Circuit ................................................................................................10
(iii) Fifth Circuit .....................................................................................................10
(iv) Third Circuit ....................................................................................................11
(v) The Defendants Argument Has Been Rejected by Courts in
Every Circuit ...................................................................................................12
E. Defendants Argument is Nothing More Than the Injury Rule in Disguise ..........12

III.

PETRELLA IS INAPPOSITE ......................................................................................13

IV.

DEFENDANTS CASE LAW DOES NOT SUPPORT THEIR ARGUMENT .........16


A. Psihoyos Marked the First Time the Second Circuit Applied the Discovery Rule
to a Copyright Infringement Claim ........................................................................16
B. Defendants Have Completely Misstated the Holding of UMG .............................18

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C. The Other Cases Cited by Defendants Are Easily Distinguished ..........................18


D. The Defendants Have Improperly Conflated the Discovery Rule with the
Continuing Infringement Doctrine .........................................................................22
V.

THE COPYRIGHT ACT IS CLEAR THAT DAMAGES ARE NOT LIMITED


WHEN THE ACTION IS COMMENCED WITH IN THREE YEARS OF
ACCRUAL ..................................................................................................................24

CONCLUSION ............................................................................................................................25

ii

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TABLE OF AUTHORITIES

CASES

Page(s)

Abeshouse v. Ultragraphics,
754 F.2d 467 (2d Cir. 1985).................................................................................................................... 25
Armstrong v. Virgin Records, Ltd.,
91 F.Supp.2d 628 (S.D.N.Y. 2000) ............................................................................4, 5, 11 22, 25
Auscape Intern. v. National Geographic Soc.,
409 F.Supp.2d 235, 241 (S.D.N.Y. 2004) .....................................................................5, 13, 17, 20
B.V. Optische Industrie de Oude Delft v. Hologic, Inc.,
925 F.Supp. 162 (S.D.N.Y. 1996) ......................................................................................................... 13
Brandon v Musoff, 2012 WL 135592
(S.D.N.Y. Jan. 17, 2012) ......................................................................................................................... 14
Byron v. Chevrolet Motor Div. of General Motors Corp.,
1995 WL 465130 (S.D.N.Y. Aug. 7, 1995) ......................................................................................... 21
Castronuovo v. Sony Music Entertainment,
2013 WL 4597038 (M.D.Tenn. Aug. 29, 2013) ........................................................................... 11, 12
Cooley v. Penguin Group (USA) Inc.,
31 F.Supp.3d 599, 612 (S.D.N.Y. July 14, 2014) ........................................................................... 8, 16
Dandong v Pinnacle Performance Ltd.,
2012 WL 6217646 (S.D.N.Y. Dec. 3, 2012) ....................................................................................... 13
EMI Entmt World, Inc. v. Karen Records, Inc.,
603 F.Supp.2d 759 (S.D.N.Y. 2009) .................................................................................................... 20
Energy Intelligence Group, Inc. v. Kayne Anderson Capital Advisors, LP,
2016 WL 1203763 (S.D.Tex. Mar. 22, 2016) ..................................................................................... 11
iii

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Felix the Cat Prods., Inc. v. Cal. Clock Co.,


2007 WL 1032267 (S.D.N.Y. Mar. 30, 2007) ..................................................................................... 20
Franklin v. Gwinnett County Public Schools,
503 U.S. 60, 112 S.Ct. 1028 (1992) ...................................................................................................... 12
Galet v. Carolace Embroidery Prods. Co.,
1994 WL 542275 (S.D.N.Y. 1994) ................................................................................................. 21, 23
Gaste v. Kaiserman,
669 F.Supp. 583 (S.D.N.Y. 1987) ......................................................................................................... 22
Global Network Commc'ns, Inc. v. City of New York,
458 F.3d 150 (2d Cir. 2006) ................................................................................................................... 14
Grant Heilman Photography, Inc. v. McGraw-Hill Global Educ. Holdings,
2015 WL1279502 (E.D.Pa Mar. 20, 2015) .......................................................................................... 11
Grant Heilman Photography, Inc. v. McGraw-Hill Companies Inc.,
28 F.Supp.3d 399 (E.D.Pa 2014) .......................................................................................................... 16
Groden v. Allen,
279 Fed.Appx. 290 (5th Cir. 2008) ....................................................................................................... 10
Habersham Plantation Corp. v. Art & Frame Direct, Inc.,
2011 WL 4005454 (S.D.Fla. Sept. 8, 2011) ......................................................................................... 11
Huebbe v. Oklahoma Casting Co.,
2009 WL 3245404 (W.D.Okl. Sept. 30, 2009) ................................................................................... 11
Hutson v Notorious B.I.G., LLC,
2015 WL 9450623 (S.D.N.Y. Dec. 22, 2015) ........................................................................................ 7
John Wiley & Sons, Inc. v. Book Dog Books, LLC,
2016 WL 3176620 (S.D.N.Y. June 6, 2016) .......................................................................................... 8
Kregos v. Associated Press,
3 F.3d 656 (2d Cir. 1993) ........................................................................................................................ 18
iv

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Kwan v. Schlein,
634 F.3d 224, 228 (2d Cir. 2011) ........................................................................................................... 22
Lefkowitz v. McGraw-Hill Global Educ. Holdings, LLC,
23 F.Supp.3d 344 (S.D.N.Y. 2014)........................................................................................................ 16
Mangiafico v. Blumenthal,
471 F.3d 391 (2d Cir.2006)..................................................................................................................... 24
Merchant v. Levy,
92 F.3d 51 (2d Cir. 1996) ........................................................................................................... 16, 17, 18
Mount v. Book-of-the-Month Club, Inc.,
555 F.2d 1109 (2d Cir. 1977) .................................................................................................... 17, 19, 22
Muench Photography, Inc. v. Houghton Mifflin Hardcourt Pub. Co.,
2013 WL 44640002 (S.D.N.Y. 2013) .................................................................................................. 17
Nutter v. Clear Channel Communications, Inc.,
2007 WL 2773830 (N.D.W.V. Sept. 21, 2007) ................................................................................... 11
Oracle USA, Inc. v. Rimini Street, Inc.,
2015 WL 5089779 (D.Nev. Aug. 27, 2015) .......................................................................................... 9
Petrella v. Metro-Goldwyn-Mayer, Inc.,
No. 09 Civ. 00072 (C.D.Cal. Feb. 3, 2010) ......................................................................................... 14
Petrella v Metro-Goldwyn-Mayer, Inc.,
695 F.3d 946, 952 (9th Cir. 2012) ........................................................................................................... 14
Petrella v. Metro-Goldwyn-Mayer, Inc.,
134 S.Ct. 1962 (2014) ............................................................................. 1, 7, 9, 10, 11, 12, 13, 15, 16, 18
Parker v. City of New York,
2010 WL 1693007 (E.D.N.Y. Apr. 28, 2010) ..................................................................................... 14

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Polar Bear Productions, Inc. v. Timex Corp.,


284 F.3d 700 (9th Cir. 2004) ......................................................................................................... 8, 9, 12
Psihoyos v. John Wiley & Sons, Inc.,
2011 WL 4916299 (S.D.N.Y. Oct.14, 2011) ............................................................................. 5, 13, 25
Psihoyos v. John Wiley & Sons, Inc.,
2012 WL 5506121 (S.D.N.Y. Nov. 7, 2012) ......................................................................................... 5
Psihoyos v. John Wiley & Sons, Inc.,
748 F.3d 120 (2d Cir. 2014) ................................................................................................. 1, 3, 5, 13, 17
Panoramic Stock Images, Ltd. v. McGraw Hill Global Educ. Holdings, LLC,
2015 WL 393381 (N.D.Ill. Jan. 27, 2015) ........................................................................................... 10
Ranieri v. Adirondack,
2016 WL 796061 (N.D.N.Y. Feb. 22, 2016) ......................................................................................... 8
Reiter v. Cooper,
507 U.S. 258 (1993) .................................................................................................................................. 3
Repp v. Webber,
914 F.Supp. 80 (S.D.N.Y. 1996) ..................................................................................................... 12, 21
Rosette v. Rainbo Record Mfg. Corp.,
354 F.Supp. 1183 (S.D.N.Y. 1973), affd 546 F.2d 461 (2d Cir. 1976)
(per curiam) .............................................................................................................................................. 22
Rothman v. Gregor,
220 F.3d 81 (2d Cir.2000) ...................................................................................................................... 14
Rouse v. Walter & Associates, L.L.C.,
513 F.Sup.2d 1041 (S.D.Iowa 2007) .............................................................................................. 11, 12
Senisi v. John Wiley & Sons, Inc.,
2015 WL 7736545 (S.D.N.Y. Nov. 30, 2015) ...................................................................................... 8
Sharp v. Patterson,
2004 WL 2480426 (S.D.N.Y. Nov. 3, 2004) ................................................................................. 17, 21
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Stockbridge-Munsee Community v. New York,


756 F.3d 163 (2nd Cir. 2014) .................................................................................................................. 15
Stone v. Williams,
970 F.2d 1043 (2d Cir. 1992) .......................................................................................................... 16, 19
Taylor v. Meirick,
712 F.2d 1112 (7th Cir. 1983) ......................................................................................................... 10, 23
Torres-Negron v. Rivera,
2005 WL 1308675 (D.P.R. May 18, 2005) .......................................................................................... 11
Tufamerica v. Diamond,
968 F.Supp.2d 588, 609 (S.D.N.Y. 2013) ............................................................................................ 12
UMG Recordings Inc. v. Escape Media Grp., Inc.,
2014 WL 5089743 (S.D.N.Y. Sept. 29, 2014) ................................................................................ 7, 18
UMG Recordings Inc. v. Global Eagle Entertainment, Inc.,
2016 WL 345179 (C.D.Cal. Apr. 20, 2016) .......................................................................................... 9
Union of Needletrades, Indus. & Textile Employees v. INS,
336 F.3d 200, 210 (2d Cir.2003) ........................................................................................................... 17
United States v. Sasbon,
2011 WL 867177 (E.D.N.Y. Mar. 8, 2011) ......................................................................................... 13
United States v. Wurts,
303 U.S. 414 (1938) .................................................................................................................................. 3
William A. Graham Company v. Haughey,
568 F.3d 425 (3rd Cir. 2009) ........................................................................................................... 11, 15
Wu v. John Wiley & Sons, Inc.,
2015 WL 5254885 (S.D.N.Y. Sept. 10, 2015) ................................................................................ 7, 20

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STATUTES
17 U.S.C. 504(b) .................................................................................................................. 1, 23, 24, 25
17 U.S.C. 507(b) .............................................................................. 1, 3, 4, 9, 12, 15, 17, 19, 23, 24, 25
17 U.S.C. 1323 ...................................................................................................................................... 24
28 U.S.C. 1498 ...................................................................................................................................... 24
35 U.S.C. 286 ........................................................................................................................................ 24

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PRELIMINARY STATEMENT
Plaintiff PK Music Performance, Inc. respectfully submits this memorandum of law in
opposition to the defendants motion seeking to limit plaintiffs damages to only those occurring
within three years before the complaint was filed in this action based on a strained reading of 17
U.S.C. 507(b) and dicta from, Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014).
As demonstrated herein, plaintiff is entitled to seek damages for the defendants infringement of
plaintiffs copyrighted work from the time the infringement began in 2006.
First, Section 507(b) cannot be construed to preclude damages for claims timely brought.
The one sentence comprising Section 507(b) does not specifically limit the damages recoverable
to only three years, or even discuss damages for that that matter. In fact, it is Section 504(b),
entirely omitted from defendants brief, that provides that the copyright owner is entitled to
recover the actual damages incurred as a result of the infringement including the infringers
profits. Further, in 2014, the Second Circuit joined all of the other Circuit Courts that took up
the issue and held in Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120 (2d Cir. 2014) that the
discovery rule, and not the injury rule, applied to infringement claims and concluded that
damages beyond three years are not barred when the claim is timely brought. The case law after
Psihoyos is clear that damages beyond three years are recoverable under the discovery rule.
Second, the defendants have not cited a single case that supports their baseless argument
that Section 507(b) bars damages before the infringement claim accrues. The best that the
defendants could do is cite dicta from Petrella that is not controlling. In fact, the Supreme Court
in Petrella expressly did not pass on the question at issue in this case.

Defendants motion is

nothing more than an attempt to revive the injury rule rejected in Psihoyos and by every other
Circuit, in the disguise of an absolute bar on damages.

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BACKGROUND FACTS
PK Music is owned by Janis McQuinton, the sister of Perry Kibble, an accomplished
musician and songwriter who died in 1999. Kibble is perhaps best known as a member of the
funk and disco band, A Taste of Honey, winners of the Grammy Award for Best New Artist in
1978 when they released their hit Boogie Oogie Oogie, which Kibble wrote. When Kibble died
in 1999, he left his copyrighted musical compositions to his sister. McQuinton formed PK
Music, named in honor of her brother, to own these copyrights.
One of the Kibble compositions owned by PK Music is A New Day Is Here at Last. In
2006, defendants released Justin Timberlakes recording of Damn Girl which copies A New Day
Is Here at Last wholesale and without license from McQuinton or PK Music. McQuinton only
learned of Timberlakes recording of Damn Girl in 2015. Plaintiff commenced this action on
February 17, 2016, within a year of discovering the infringement.
During the nine-year period that McQuinton was unaware of their infringement,
defendants reaped the benefits of their wrongful conduct and enjoyed massive sales of the
infringing album grossing in excess of $30 million together with unknown additional revenues
from touring and other sources. As with most music albums, virtually all of these moneys were
received in the first two years after the albums release.
On this motion, defendants do not dispute plaintiffs ownership or the validity of the
copyright in A New Day Is Here At Last. Defendants have admitted they copied plaintiffs
composition in Damn Girl and that they profited handsomely from it. Def. Memo, p. 3, n.2.
Having wrongfully profited from plaintiffs work, defendants claim they are entitled to keep
these profits, and have now filed a partial motion to dismiss seeking to preclude recovery of
damages from the period more than three years prior to the commencement of suit. In other

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words, defendants seek to shield virtually all of their ill-gotten infringement profits from the
rightful owner of the work they infringed based on their strained reading of 507(b). As
demonstrated herein, defendants arguments are baseless and the defendants motion must be
denied.
POINT I
PLAINTIFFS CLAIMS ARE TIMELY UNDER 17 U.S.C. 507(b)
The statute of limitations for copyright infringement claims is set forth in 17 U.S.C.
507(b) which provides that: No civil action shall be maintained under the provisions of this title
unless it is commenced within three years after the claim accrued. In the Second Circuit, like all
Circuits, copyright infringement claims accrue under the discovery rule, that is, with actual or
constructive discovery of the relevant infringement. Psihoyos v. John Wiley & Sons, Inc., 748
F.3d 120, 125 (2d Cir. 2014). The discovery rule means a claim does not accrue until a diligent
person either knew or should have known about her injury. Since no claim has accrued before
the discovery, the statute of limitations does not bar recovery for acts before discovery.
According to the defendants, however, plaintiff was barred by 507(b)s statute of
limitations from recovering damages for the defendants infringing activity before plaintiffs
claim accrued. See Def. Memo, p. 6. The Supreme Court has expressly rejected this argument.
See Reiter v. Cooper, 507 U.S. 258, 267 (1993)(While it is theoretically possible for a statute to
create a cause of action that accrues at one time for the purpose of calculating when the statute of
limitations begins to run, but at another time for the purpose of bringing suit, we will not infer
such an odd result in the absence of any such indication in the statute.); United States v. Wurts,
303 U.S. 414, 418 (1938)(It would require language so clear as to leave room for no other
reasonable construction in order to induce the belief that Congress intended a statute of

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limitations to begin to run before the right barred by it has accrued.). There is no plausible
construction of Section 507(b) that would allow one to conclude that the recovery of damages
would be barred by the statute of limitations before the claim has even accrued. Plaintiffs
claims are timely under the statute.
POINT II
DAMAGES RECOVERABLE UNDER THE DISCOVERY RULE INCLUDE
THOSE OCCURING BEYOND THE THREE-YEAR LOOK-BACK PERIOD
A. Before Psihoyos, Damages Beyond Three Years Were Recoverable Under the
Discovery Rule
Defendants argument that Section 507(b) provides an absolute three-year damage
limitation was definitively rejected in the Southern District before Psihoyos was decided. In
Armstrong v. Virgin Records, Ltd., 91 F.Supp.2d 628 (S.D.N.Y. 2000)(Sweet, J.), the plaintiff
filed his complaint in 1998, within three years of discovering the infringing activity in 1996. The
defendants infringement began in 1991. The defendants in Armstrong made the same motion
made here, and sought to limit the plaintiffs damages to those infringements occurring within
three years of the plaintiffs filing suit. Judge Sweet denied the motion and held recovery could
be had for the earlier infringements. The court explained that there was no basis in the Copyright
Act for the absolute three-year damage limitation sought by the defendants, and that damages
were dependent on the accrual of the claim, not when the infringement occurs:
Thus, to the extent that the defendants request that this Court impose an
interpretative gloss on Section 507(b) delimiting a plaintiffs recovery of damages to
those damages occurring within three years of suit for copyright infringement,
notwithstanding the initial accrual date of a plaintiffs claims or any other tolling of the
limitations period, the Court declines the invitation.
Armstrong, 91 F.Supp.2d at 642.

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This result was endorsed in the well-regarded pre-Psihoyos case, Auscape Intern. v.
National Geographic Soc., 409 F.Supp.2d 235, 241 (S.D.N.Y. 2004), which applied the injury
rule but recognized that when the accrual date is later than the infringement date, as was in
Armstrong, and is in this case, more than three years of damages are recoverable. Id. at 241.
B. Psihoyos Held Damages Beyond Three Years Are Recoverable
In Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120 (2d Cir. 2014), the Second Circuit
affirmed the district courts holding that damages beyond three years were recoverable and the
district courts denial of Wileys motion for remittitur or new trial on damages. Prior to trial, the
defendant, Wiley, moved for summary judgment seeking to limit the infringements considered
by the jury to those within three years of the complaint to minimize the statutory damage award:
Wiley argues that the general rule in federal statute of limitations is a time-of-injury
rule, not a time-of-discovery rule, and this this rule applies to copyright
infringement cases. Because Psihoyos filed suit on March 1, 2011, Wiley argues,
Psihoyoss damages are limited to infringing acts occurring on or after March
1, 2008.
Psihoyos v. John Wiley & Sons, Inc., 2011 WL 4916299, at *5 (S.D.N.Y. Oct.14, 2011) (internal
citation omitted)(Levenson Decl. Exh. 4, p.12). The district court denied Wileys motion because
it held the discovery rule applied and no claims were barred. Id. At trial, Psihoyos demonstrated
that Wiley garnered substantial profits from its textbook sales and that this factor may well
explain the magnitude (such as it is) of the jury's award. Psihoyos v. John Wiley & Sons, Inc.,
2012 WL 5506121 at * 3 (S.D.N.Y. Nov. 7, 2012)(Levenson Decl. Exh. 5, p. 6). On appeal,
Wiley again argued:
Wiley respectfully requests that this Court reverse the District Courts judgment and
remand this action for a new trial as to damages. In the context of that new trial, the trial
court should be required to bar the jury from considering any act of infringement
that occurred prior to March 1, 2008.

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Psihoyos v. John Wiley & Sons, Inc., No. 11 Civ. 01416, Docket No. 47, p. 54 (internal citation
omitted)(Levenson Decl. Exh. 6)(emphasis added). The Second Circuit affirmed the district court
and rejected Wileys arguments holding that the district court properly applied the discovery rule
and there was no dispute that under the discovery rule, none of Psihoyoss claims were timebarred. Id. at 123-124. Furthermore, the Second Circuit held that the profits earned by the
infringer was a factor to be considered in setting the statutory damage award, and that the jurys
award was supported by, in particular, the evidence . . . that Wiley earned substantial profits.
Id. at 127. Accordingly, the Second Circuits adoption of the discovery rule was necessary to
affirm the jurys statutory damage award because in Psihoyos the limitations period reached
further back under the discovery rule than the injury rule, and the actual damages for the claims
in the limitations period was a key factor considered by the jury in calculating that award. Id.
C. After Psihoyos, Infringement Claims More Than Three Years Old Cannot Be
Barred by the Statute of Limitations as a Matter of Law
At the pre-motion conference, the Court requested that the parties brief the issue of
whether any other court has allowed a claim to proceed for damages for infringements prior to
three years before the filing of the lawsuit:
THE COURT:

I guess what I would need to see again in connection with


any motion that gets filed is not only the case, but cases, in
looking at the look-back period, I know the cases that have
been cited, but has the circuit since Psihoyos revisited it to
cite it for that fact, for the look-back? Have there been
cases since it's been filed where, even if they haven't been
appealed where the damages have been collected, in other
words, the jury has been instructed or the damages that
have been collected are more than three years from the date
of filing of the complaint or some other three-year period?
Let's assume that they used the date of the discovery to use
the three-year period. I would like to see an analysis of that.

June 16, 2016 Transcript, p. 6 (Docket No. 58)(Levenson Dec., Exh. 1).

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Plaintiff advised the Court there were at least five cases in this Circuit where courts have
revisited Psihoyos for the look back (discussed below). June 16, 2016 Transcript, p. 7:12-17.
The defendants stated That is just not the case. But we will address that further on our papers.
June 16, 2016 Transcript, p. 8:2-3. The defendants motion papers do not cite a single case in
which a court dismissed damages beyond the look-back period where the claim was asserted
timely. In their motion papers, the defendants claim [d]espite having undertaken a diligent
search, Defendants have been unable to locate any such documents apart from the Wu and UMG
decisions discussed herein. Def. Memo, p. 11-12 at n.5.1
Our research, on the other hand, reveals total unanimity among all federal courts applying
the discovery rule that have considered the issue in permitting damages for look-back periods of
more than three years, both before and after Petrella. Following the Psihoyos decision in 2014,
Second Circuit district courts have rejected attempts to dismiss claims beyond the three-year
look back period as defendants seek to do here.
In Hutson v Notorious B.I.G., LLC, 2015 WL 9450623, at *4 (S.D.N.Y. Dec. 22, 2015),
the defendants argued that plaintiff's claims for copyright infringement more than three years
prior to the filing of the lawsuit were barred by the Copyright Act's three-year statute of
limitations. The court rejected that argument, citing Psihoyos, and held that because the Second
Circuit has stated that copyright infringement claims do not accrue until actual or constructive
discovery of the relevant infringement and Plaintiff alleges that he discovered Defendants'
infringement in 2012, the Court finds that Plaintiff's claims prior to 2011 may not be dismissed
on statute of limitations grounds at this stage of the proceedings.

As discussed below, the limited case law located by defendants does not support their argument.
Defendants completely misstate the holding of UMG and Wu is only an unadopted referees recommendation of no
precedential value.
1

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Ranieri v. Adirondack, 2016 WL 796061 (N.D.N.Y Feb. 22, 2016) is also instructive. In
Ranieri, the plaintiff-architects building plans were infringed and suit was brought to recover
the defendants profits. The defendants argued that the plaintiff was prohibited from seeking
damages regarding Unit 27 on Jordan Point because the infringing unit was constructed and sold
more than three years before the commencement of this action. Id. at 24. The Court rejected the
argument because there was no evidence plaintiff was aware of the infringing Unit 27 on Jordan
Point more than three years prior to suit. Id. at 25 (emphasis added).
In several cases, summary judgment has been granted in plaintiffs favor to strike statute
of limitations defenses where the infringements occurred more than three years prior to suit but
where there was no factual dispute that plaintiff brought the action within three years of
accrual of the claim. Cooley v. Penguin Group (USA) Inc., 31 F.Supp.3d 599, 612 (S.D.N.Y.
July 14, 2014); Senisi v. John Wiley & Sons, Inc., 2015 WL 7736545 at *5 (S.D.N.Y. Nov. 30,
2015); John Wiley & Sons, Inc. v. Book Dog Books, LLC, 2016 WL 3176620 (S.D.N.Y. June 6,
2016). This is precisely what is at stake in this motion the procedural posture of this case has
merely flipped the motion in that defendants have not yet filed an Answer asserting the statute
of limitations as an affirmative defense as defendants had in Cooley, Senisi and John Wiley.
D. Courts Outside the Second Circuit Universally Award Damages Beyond Three
Years When Applying the Discovery Rule, Both Before and After Petrella
In addition to the Second Circuit, there is total consensus among all Circuits that
copyright infringement claimants are entitled to recover more than three years damages under
the discovery rule when the claim is timely brought:
(i)

Ninth Circuit

The Ninth Circuit has awarded damages beyond the three-year look back since 2004. In
Polar Bear Productions, Inc. v. Timex Corp., 284 F.3d 700 (9th Cir. 2004), the defendant sought
8

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to preclude plaintiff from obtaining any damages resulting from infringement occurring more
than three years before filing the copyright action, regardless of the date the plaintiff discovered
the infringement. Id. The Polar Bear court held damages were not so limited under the
discovery rule: We conclude that Section 507(b) permits damages occurring outside of the
threeyear window, so long as the copyright owner did not discoverand reasonably could not
have discoveredthe infringement before the commencement of the three-year limitation
period. Id. at 706. The Polar Bear Court explained the equities requiring this result:
The statute of limitations does not prohibit recovery of damages
incurred more than three years prior to the filing of suit if the copyright
plaintiff was unaware of the infringement, and that lack of knowledge was
reasonable under the circumstances. Without the benefit of tolling in this
situation, a copyright plaintiff who, through no fault of its own, discovers
an act of infringement more than three years after the infringement
occurred would be out of luck. Such a harsh rule would distort the tenor of
the statute. Section 507(b), like all statutes of limitations, is primarily
intended to promote the timely prosecution of grievances and discourage
needless delay. It makes little sense, then, to bar damages recovery by
copyright holders who have no knowledge of the infringement,
particularly in a case like this one, in which much of the infringing
material is in the control of the defendant.
Id. at 706-707 (emphasis added).
After Petrella, Ninth Circuit district courts continue to hold that plaintiffs may recover
damages arising more than three years prior to filing suit. Oracle USA, Inc. v. Rimini Street, Inc.,
2015 WL 5089779 (D.Nev. Aug. 27, 2015)(denying defendants motion in limine to exclude
damages evidence more than three years old); UMG Recordings Inc. v. Global Eagle
Entertainment, Inc., 2016 WL 345179 (C.D.Cal. Apr. 20, 2016)(granting summary judgment
dismissing statute of limitations defense).

Case 1:16-cv-01215-VSB Document 63 Filed 08/17/16 Page 19 of 34

(ii)

Seventh Circuit

The Seventh Circuit first adopted the discovery rule and permitted damages more than
three years prior to the complaint in Taylor v. Meirick, 712 F.2d 1112, 1119 (7th Cir.
1983)(since Taylor was unaware of the infringements . . . [he is allowed] to collect damages for
acts of infringement more than three years in the past, at least if he acted promptly once he
discovered them, and he did.). After Petrella, the Seventh Circuit courts continue to allow
damages for infringements more than three years prior to suit. See, Panoramic Stock Images, Ltd.
v. McGraw Hill Global Educ. Holdings, LLC, 2015 WL 393381 (N.D.Ill. Jan. 27, 2015).
In Panoramic Stock the court limited Petrella and held under the discovery rule, a
copyright owner is entitled to recover for infringements, regardless of when they occurred, so
long as he or she did not have actual or constructive notice of the infringements more than three
years before filing. Id. at *2. The court agreed that the plaintiff was entitled to pursue damages
for all infringing activity that it first became aware of in October 2012, including infringements
that ended in 2008. Finally, the court stated it would apply the jury instruction, if a jury finds
that [plaintiff] did not learn of [defendants] infringing activity before October 2012, the jury
must consider all alleged infringements regardless of when they occurred. Id.
(iii)

Fifth Circuit

In Groden v. Allen, 279 Fed.Appx. 290 (5th Cir.2008), on appeal, the defendant argued
the district court erred by failing to instruct the jury that Grodens recovery of actual damages
should be limited to damages for infringement occurring within the three years prior to the filing
of this case. Id. at 294. The Fifth Circuit rejected the argument. Id. (Thus, Allen's argument
that Groden may only recover damages resulting from infringement that occurred within the
three years of his filing suit is erroneous, since the relevant inquiry is when the claim accrued,

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not when the infringement occurred.). After Petrella, Fifth Circuit courts continue to hold
damages beyond the three-year look back are recoverable. See, Energy Intelligence Group, Inc.
v. Kayne Anderson Capital Advisors, LP, 2016 WL 1203763 (S.D.Tex. Mar. 22, 2016).
(iv)

Third Circuit

In William A. Graham Company v. Haughey, 568 F.3d 425 (3rd Cir. 2009) the Third
Circuit applied the discovery rule and upheld a jury award of $16 million in damages for
infringements of an insurance manual that occurred over the course of the thirteen years prior to
suit. Third Circuit courts continue to award damages for infringements more than three years
prior to suit after Petrella. See, Grant Heilman Photography, Inc. v. McGraw-Hill Global Educ.
Holdings, 2015 WL1279502 at *3 (E.D.Pa. Mar. 20, 2015)(jury awarded damages beyond three
years). Defendants attempt to distinguish Graham as pre-dating and inconsistent with Petrella.
Def. Memo, p. 13. However, Graham was specifically cited in Petrella as the discovery rule case
that the Supreme Court had not passed on. Petrella at n.4. Graham was also cited in Psihoyos
for the application of the discovery rule to infringement claims. Psihoyos at 125.
(v)

The Defendants Argument Has Been Rejected by Courts in Every Circuit

Likewise, the district courts in the remaining Circuits have all rejected the defendants
argument. See Castronuovo v. Sony Music Entertainment, 2013 WL 4597038 (M.D.Tenn. Aug.
29, 2013)(6th Cir.); Habersham Plantation Corp. v. Art & Frame Direct, Inc., 2011 WL
4005454, at *8 (S.D.Fla. Sept. 8, 2011)(11th Cir.); Torres-Negron v. Rivera, 2005 WL 1308675,
at *6 (D.P.R. May 18, 2005)(1st Cir.); Huebbe v. Oklahoma Casting Co., 2009 WL 3245404
(W.D.Okl. Sept. 30, 2009)(10th Cir.); Nutter v. Clear Channel Communications, Inc., 2007 WL
2773830 at * 2 (N.D.W.V. Sept. 21, 2007)(4th Cir.)(damages more than three years recoverable
but denied because plaintiff knew of the infringement more than three years prior to suit)(Rouse

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v. Walter & Associates, L.L.C., 513 F.Sup.2d 1041, 1067 (S.D.Iowa 2007)(8th Cir.)(same).
These Circuits have not taken up the issue since Petrella.
E. Defendants Argument is Nothing More than the Injury Rule in Disguise
The difference between the discovery and injury rule is the length of the statutory period
for bringing claims and recovering damages. See, Polar Bear at 706 (Thus, we have the general
rule that [a] plaintiff's right to damages is limited to those suffered during the statutory period
for bringing claims...). If damages are limited to three years prior to suit under the discovery
rule as defendants propose, then there is no difference whether the injury or discovery rule is
applied. Defendants simply propose that plaintiffs remain barred from recovering for claims
timely brought under the discovery rule that they would otherwise be barred from bringing under
the injury rule.2 Defendants proposition is the nothing more than the injury rule in disguise.
Damages coincide with the accrual of the claim under 507(b). Castronuovo v. Sony Music
Entertainment, 2013 WL 4597038 at *4 (M.D.Tenn. Aug. 29, 2013). Accordingly, they are not
so limited under the discovery rule as the former injury rule, where, by definition, damages are
automatically limited under Section 507(b) to three years prior to suit because the claim accrues
from the moment of the infringement. Repp v. Webber, 914 F.Supp. 80, 83 (S.D.N.Y. 1996). A
court applying the injury rule will dismiss all claims (and damages) occurring more than three
years prior to the filing of a lawsuit as a matter of law. Tufamerica v. Diamond, 968 F.Supp.2d
588, 609 (S.D.N.Y. 2013). Instead, under the discovery rule, more than three years of damages
are recoverable, because the claim accrues later than the date of infringement. Psihoyos v. John
Wiley & Sons, Inc., 2011 WL 4916299, at *5 (S.D.N.Y. Oct.14, 2011)(Rakoff, J.) affd 748 F.3d

Precluding damages for claims timely brought violates the general and indisputable rule, that where there
is a legal right, there is also a legal remedy, by suit or action at common law, whenever that right is invaded.
Franklin v. Gwinnett County Public Schools, 503 U.S. 60, 66, 112 S.Ct. 1028, 1033 (1992)(internal citation
omitted).
2

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120 (2d Cir. 2014); Armstrong v. Virgin Records, Ltd., 91 F.Supp.2d 628, 642 (S.D.N.Y. 2000)
Auscape Intern. V. National Geographic Soc., 409 F.Supp.2d 235, 241 (S.D.N.Y. 2004).

POINT III
PETRELLA IS INAPPOSITE
Defendants have cited dicta from Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962
(2014), to support their strained argument that plaintiff is foreclosed from recovering damages
beyond the three-year look-back period. Dicta in an opinion is not controlling authority,
however. See, B.V. Optische Industrie de Oude Delft v. Hologic, Inc., 925 F.Supp. 162, 164
(S.D.N.Y. 1996) (holding that discussion in a Second Circuit opinion is not controlling
authority because it is dicta); United States v. Sasbon, 2011 WL 867177, at *2 n. 2 (E.D.N.Y.
Mar. 8, 2011) (explaining that dicta from a Second Circuit opinion is not a controlling
decision); Dandong v Pinnacle Performance Ltd., 2012 WL 6217646, at *1 (S.D.N.Y. Dec. 3,
2012).
The look-back period at issue in our case was simply not present in Petrella because
the plaintiffs claims in that case were limited to the three years before she filed suit. In Petrella,
the plaintiff waited 18 years to bring her infringement claim based on the film Raging Bull cowritten by her father. She first renewed the copyright to the screen play Raging Bull in 1991.
Seven years later, in 1998, her attorney informed MGM that the film, Raging Bull, infringed the
screenplay and then repeatedly threatened to take legal action in letters exchanged with MGM
during the next two years. Despite her awareness of the infringement claim, and repeated threats
of legal action, the plaintiff in Petrella did not file suit until nine years later on January 6, 2009.

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Recognizing claims were barred by the statute of limitations as a result of the delay,
Plaintiff sought relief only for acts of infringement occurring on or after January 6, 2006. Id. In
fact, the Petrella complaint specifically sought only damages sustained as a direct and
proximate result of Defendants' acts of copyright infringement within the limitations period
prescribed by law. Petrella v. Metro-Goldwyn-Mayer, Inc., No. 09 Civ. 00072, Docket No. 28,
p. 8 (Levenson Decl., Exh. 2).3
The defendant, MGM, argued that although there was no dispute the claims more than
three years old were barred, in fact, all claims present and future should be barred by laches as a
result of the 18-year delay in bringing the suit. The district court agreed with MGM and
dismissed all claims, even those within three years of suit, as a result of laches. In its ruling, the
district court noted that, [i]t is essentially undisputed that plaintiff had knowledge of the
theories that she is asserting in this action 1990 or 1991... Petrella v. Metro-Goldwyn-Mayer,
Inc., No. 09 Civ. 00072, Docket No. 105, p. 6 (Levenson Decl., Exh. 3).
The Ninth Circuit adopted the district courts findings with respect to plaintiffs
knowledge (As the district court found, it is [u]ndisputed [Petrella] was aware of her potential
claims (as was MGM) since 1991) and affirmed the laches ruling. Petrella v Metro-GoldwynMayer, Inc., 695 F.3d 946, 952 (9th Cir. 2012). Petrella appealed the narrow issue relating to
laches and the Supreme Court granted certiorari to resolve a conflict among Circuits on the
application of the equitable defense of laches to copyright infringement claims brought within

The Court may take judicial notice of filings in other courts not for the truth of the matters asserted in
the other litigation, but rather to establish the fact of such litigation and related filings. Global Network Commc'ns,
Inc. v. City of New York, 458 F.3d 150, 157 (2d Cir. 2006) (internal quotation marks omitted); see also Mangiafico v.
Blumenthal, 471 F.3d 391, 398 (2d Cir.2006) (docket sheets are public records of which the court could take
judicial notice); Rothman v. Gregor, 220 F.3d 81, 92 (2d Cir.2000) (taking judicial notice of a court document as a
public record); Parker v. City of New York, 2010 WL 1693007, at *3 n. 2 (E.D.N.Y. Apr. 28, 2010) (taking judicial
notice of date of arraignment from state court record in determining whether statute of limitations had run on false
arrest claim); Brandon v Musoff, 2012 WL 135592, at *3 (S.D.N.Y. Jan. 17, 2012).

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the three-year look-back period prescribed by Congress. 134 S.Ct. 1972. The Supreme Court
reversed the Ninth Circuit and held that damages three years prior to suit could not be barred.
The Supreme Courts opinion contains a discussion of copyright damages, however, there
had been total agreement between the parties, the district court, and the appeals court that
plaintiff was aware of the infringements at least as early as 1991 and that her claims were limited
to the three-year period before she filed suit. There was no dispute that plaintiffs knowledge and
her inaction for approximately 18 years acted as a waiver for claims accruing more than three
years before she filed suit. The only question before the Supreme Court was whether the doctrine
of laches applied such that the waiver of earlier claims barred all plaintiffs claims.
The language defendants cite in Petrella ( 507(b)s limitations period allows
plaintiffs during that lengthy term to gain retrospective relief running only three years back from
the date the complaint was filed) is dicta because it was not necessary for the Supreme Courts
ruling on the laches issue before it. Even as dicta, the language cited by defendants is qualified
by the Courts express failure to consider whether, or how, to apply the discovery rule as an
alternative to the injury rule. Id. at n.4. The Supreme Court expressly stated it was not deciding
the question of whether the injury rule or the discovery rule should apply:
Although we have not passed on the question, nine Courts of Appeals have
adopted, as an alternative to the incident of injury rule, a discovery rule, which starts
the limitations period when the plaintiff discovers, or with due diligence should have
discovered, the injury that forms the basis for the claim. William A. Graham Co. v.
Haughey, 568 F.3d 425, 433 (C.A.3 2009) (internal quotation marks omitted). See also 6
W. Patry, Copyright 20:19, p. 2028 (2013) (hereinafter Patry) (The overwhelming
majority of courts use discovery accrual in copyright cases.).
Petrella, at 1969, n.4.
Since the decision, the Second Circuit and other courts have noted the limitation. See
Stockbridge-Munsee Community v. New York, 756 F.3d 163, 166 (2nd Cir. 2014)([Petrella]

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confined its ruling to the position that in the face of statute of limitations enacted by Congress,
laches cannot be invoked to bar legal relief.). Other courts have expressly declined to apply
Petrella beyond its limited holding on laches. See Lefkowitz v. McGraw-Hill Global Educ.
Holdings, LLC, 23 F.Supp.3d 344, 358, n.11 (S.D.N.Y. 2014)(Despite Petrella, Psihoyos
remains the law of the Second Circuit.); see Cooley v. Penguin Group (USA) Inc., 31 F.Supp.3d
599, n.76 (S.D.N.Y. 2014)(Kaplan, J.)(this Court is bound by Psihoyos). Similarly, Third
Circuit Courts have refused to discard discovery rule precedent based on Petrella, commenting
that the Supreme Courts comments on the injury rule were dicta, and that this Court cannot
find that a comment in a footnote overrules the standard in nearly every circuit in the country.
Grant Heilman Photography, Inc. v. McGraw-Hill Cos., 28 F.Supp.3d 399, 411 (E.D. Pa. 2014).

POINT IV
DEFENDANTS CASE LAW DOES NOT SUPPORT THEIR ARGUMENT
A. Psihoyos Marked the First Time the Second Circuit Applied the Discovery Rule to
Infringement Claims
Until [Psihoyos adopted the discovery rule], the Second Circuit had not determined the
appropriate accrual rule for federal copyright infringement claims. Lefkowitz v. McGraw Hill
Global Educ. Holdings, LLC, 23 F.Supp.3d 344, 357 (S.D.N.Y. 2014). Prior to Psihoyos, the
Second Circuit had only applied the discovery rule to copyright ownership claims. Stone v.
Williams, 970 F.2d 1043, 1048 (2d Cir. 1992)(The claim in this case is an entitlement to
renewal copyrights . . . The injury is deprivation of statutory entitlement.)4; Merchant v. Levy,
92 F.3d 51 (2d Cir. 1996).

Merchant expressly limited Stone to its highly idiosyncratic facts. Id. at 56.

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In Merchant, the Second Circuit applied the discovery rule, [a] cause of action accrues
when a plaintiff knows or has reason to know of the injury upon which the claim is premised to
the plaintiffs claim seeking a declaration of co-ownership rights. Id. at 56. In the same
opinion, however, the Court noted, [o]ur holding here does not disturb our previous rulings that
a copyright owners suit for infringement is timely if instituted within three years of each
infringing act for which relief is sought).5 Id. at n.8 (emphasis added). As a result, Merchant
established two concurrent rules in the Second Circuit. Ownership claims were governed by the
discovery rule and infringement claims were governed by the injury rule. See Sharp v. Patterson,
2004 WL 2480426 at *12 (S.D.N.Y. Nov. 3, 2004) ([t]he Second Circuit has made clear that
claims of infringement and co-ownership are distinct.).
On April 4, 2014, the Second Circuit put an end to the different accrual rules for
ownership and infringement when it adopted the discovery rule for ownership and infringement
claims in Psihoyos v. Wiley & Sons., Inc., 748 F.3d 120, 124 (2d Cir. 2014).6 The Court refused
to apply different accrual rules for ownership and infringement claims since both were
copyright claims governed by 507(b). The Court recognized that, [i]n doing so, we join every
Circuit to have considered the issue of claim accrual in the context of copyright infringement
claims. Id. at 124.
5
The injury rule was used in Mount v. Book-of-the-Month Club, Inc., 555 F.2d 1109 (2d Cir. 1977)(Any
infringement more than three years before commencement of the action . . . is barred by limitations.). Id. at 1111.

Defendants position that the Psihoyos court did not have authority to depart from the Second Circuits
use of the injury rules three year look back (Def. Memo, p. 10) is nonsensical given they concede in their brief,
Psihoyos put to rest uncertainty in the wake of the Supreme Courts decision in TRW Inc. v. Andrews, which
suggests that, absent a clear direction from Congress, federal claims accrue at the time of injury, not discovery.
Def. Memo, p. 9, n.3. The Court has such authority where where there has been an intervening Supreme Court
decision that casts doubt on our controlling precedent. Union of Needletrades, Indus. & Textile Employees v. INS,
336 F.3d 200, 210 (2d Cir.2003). The uncertainty noted by defendants is well established in the case law. See
Auscape Intern v. National Geographic Soc., 409 F.Supp. 2d 235, 244 (in the aftermath of TRW . . . it is uncertain
whether Stone and Merchant remain good law); Muench Photography, Inc. v. Houghton Mifflin Hardcourt Pub.
Co., 2013 WL 44640002 at *6 (S.D.N.Y. Aug. 21, 2013) the question [is] open as to which rule governs in this
Circuit after TRW.) The Second Circuit resolved the uncertainty in Psihoyos.
6

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B. Defendants Have Completely Misstated the Holding of UMG


Defendants completely misstate the holding of the only post-Petrella decision they cite.
In their brief, the defendants claim that in UMG Recordings Inc. v. Escape Media Grp., Inc.,
2014 WL 5089743 (S.D.N.Y. Sept. 29, 2014), at pages 18-19, the Court held all demands for
recovery predating three years prior the filing of suit were barred as a matter of law, even though
the action itself was timely. Def. Memo, p. 11. This is nowhere to be found. The decision
plainly states the opposite, [a]ccordingly, the court finds that plaintiffs timely filed suit and that
their claims are not barred by the statute of limitations. Id. at 19. (Levenson Decl. Exh. 7, p. 41).
C. The Other Cases Cited by Defendants Are Easily Distinguished
The remaining cases cited by defendants do not support their argument that under the
discovery rule copyright plaintiffs cannot pursue claims more than three years prior to suit.
Def. Memo, 6-7. The cases cited by defendants are all distinguishable because: (a) virtually all
predate Psihoyos; (b) virtually all were resolved on a full record after summary judgment or trial;
(c) in many cases, the court expressly noted that plaintiff became aware of the infringement and
failed to bring suit within three years; and (d) many expressly applied the injury rule.

Merchant v. Levy, 92 F.3d 51, 56 (2d Cir. 1996):


This copyright ownership case was decided after a trial in which [t]he
jury found that Plaintiffs were charged with knowledge of their claim as of 1961,
the year they attained the age of majority. Thus, Plaintiffs' claim accrued in 1961,
but they did not initiate suit until 26 years later.

Kregos v. Associated Press, 3 F.3d 656, 661 (2d Cir. 1993):


The court granted summary judgment where the AP used plaintiffs
pitching form from 1984 until October 1985 but did not file suit until 1989. The

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claim was therefore dismissed as untimely under the injury rule. The court did
not apply the discovery rule but noted Plaintiff confronted AP about using his
pitching form in 1984 but did not file suit until 1989.

Stone v Williams, 970 F.2d 1043, 1049-1050 (2d Cir. 1992):


Stone v. Williams does not support the defendants' proposition that Section
507(b) operates as an absolute bar to recovery for any acts of infringement
occurring more than three years prior to suit. In Stone, the Second Circuit upheld
the district court's determination on summary judgment that Stone's claims had
accrued by 1979. 970 F.2d at 1049. Stone brought suit in 1985, already more than
three years after accrual, and while the Second Circuit did not allow Stone to
recover on those claims that had already lapsed, it found Stone's suit ... timely
insofar as relief is sought for defendants' failure to remit to her a proportionate
share of royalties received within three years of suit. 970 F.2d at 1051.
Therefore, it was not an open question in Stone whether the plaintiff could recover
on claims arisingbut not accruingmore than three years prior to suit.

Mount v. Book-of-the-Month Club, Inc., 555 F.2d 1108, 1111 (2d Cir. 1977):
On summary judgement, the court applied the injury rule and dismissed
the first of two counts of infringement as foreclosed by limitations since the
[infringing] event occurred [and ended completely] in the Fall of 1955, almost
twenty years before this action was begun. Id.at 1110 (emphasis added). The
Court would not prolong the limitations period based because plaintiff knew
about the claim since 1956. Id.

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The court expressly applied the injury rule to the second count as well,
[a]ny infringement more than three years before the commencement of the action
. . . is barred by limitations . . . and limited plaintiff to sales within three years of
filing suit. Id. at 1111. The case was decided under the 1909 Copyright Act. Id. at
n.1 (We have no occasion to consider the proper limitations rule under the new
Copyright Act.).

Wu v. John Wiley & Sons, Inc., 2015 WL 5254885 (S.D.N.Y. Sept. 10, 2015):
Wu is a non-binding report and recommendation that was never adopted
by the District Court and is of no precedential value. While the Wu report
suggests limiting damages to three years from the time the complaint was filed,
the report can be distinguished because the operative complaint did not allege
when the infringing activity commenced. Norbert Wu Complaint, Docket No. 1.

EMI Entmt World, Inc. v. Karen Records, Inc., 603 F.Supp.2d 759 (S.D.N.Y. 2009)
On summary judgment, court ruled that, because EMI was aware that
Mas Romantico, Bomba 2000, and Grandes Exitos made use of its compositions,
EMI's cause of action accrued when those albums were released in 1999 and
2001, and the court limited the claim to infringing sales of those albums that
occurred during the limitations period. Id. at 769.

Felix the Cat Prods., Inc. v. Cal. Clock Co., 2007 WL 1032267 (S.D.N.Y. Mar. 30,
2007):
The look-back period was not at issue on motion to dismiss because
plaintiff sought relief only for infringement that occurred in the three years prior
to the filing of the Complaint. Id. at *2.

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Sharp v. Patterson, 2004 WL 2480426 (S.D.N.Y. Nov. 3, 2004)


The basis for the decision is unclear. The plaintiff alleged damages based
on the continued distribution of the infringing books to the public at the time of
suit and the defendant argued for a limitations dismissal based on plaintiffs
knowledge of infringements for more than three years. The decision does not
address whether plaintiff contested discovery of the infringement more than three
years prior to suit, however, it appears not given that the parties planned to
marry and the defendant was popular novelist James Patterson. Id. at *1. The
court relied on Repp v. Webber, 914 F.Supp. 80, 83-84 (S.D.N.Y. 1996) which
expressly applied the injury rule ([t]he period of limitations begins to run from
the moment the defendant commits an infringement), as well Auscape Intern. v.
National Geographic Soc., 409 F.Supp.2d 235, 241 (S.D.N.Y. 2004)

Byron v. Chevrolet Motor Div. of General Motors Corp., 1995 WL 465130


(S.D.N.Y. Aug. 7, 1995):
Court granted summary judgment on the grounds that plaintiff has not
put forth evidence raising any issue of fact as to the statute of limitations issue
and that all defendants are entitled to summary judgment on laches grounds
Id. at *5. See id. at *1 (the Court finds that because Byron waited some seven
years to bring this suit Byrons action is barred by . . . the statute of limitations.)

Galet v. Carolace Embroidery Prods. Co., 1994 WL 542275, *3 (S.D.N.Y. 1994):


The court denied plaintiffs motion to amend the complaint, long after
discovery had closed and extensive briefing on the motion for summary
judgment, to add a copyright infringement claim and deemed it explicit
admission that his Complaint did not allege a federal copyright violation.
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Rosette v. Rainbo Record Mfg. Corp., 354 F. Supp. 1183, 1194 (S.D.N.Y. 1973):
The Court expressly applied the injury rule: This litigation was
commenced on November 15, 1966 . . . Any infringement more than three years
before the commencement of the action (November 15, 1963) is barred by
limitation . . . The Court held damages coincided with claim accrual,
[defendants] will account for the period not time-barred . . . The case was
decided after a trial and under the former 1909 Copyright Act.

Gaste v. Kaiserman, 669 F.Supp. 583, 584 (S.D.N.Y. 1987):


The Court limited damages to three years relying on Mount v. Book-of-theMonth Club, Inc., 555 F.2d 1108, 1111 (2d Cir. 1977) which applied the injury
rule (see above). The discovery rule was not applied.

Kwan v. Schlein, 634 F.3d 224, 228 (2d Cir. 2011):


Copyright ownership case where court held on summary judgment that
author who claimed copyright ownership was aware of the dispute regarding her
rights to FIOL by January 1999, when the first edition was published, and
therefore, her ownership claim accrued at that time. Because [she] did not file suit
until December 2004, more than three years after the publication of the first
editionand indeed, more than three years after publication of the second
editionany ownership claim relating to FIOL is untimely. Id. at 229.

D. The Defendants Have Improperly Conflated the Discovery Rule with the
Continuing Infringement Doctrine
The defendants have conflated the continuing infringement doctrine (or continuing
wrong doctrine) with the discovery rule. Def. Memo, p. 8. See, Armstrong v. Virgin Records,
Ltd., 91 F.Supp.2d 628, 642, n.4 (S.D.N.Y. 2000) (permitting damages beyond three years under
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the discovery rule and rejecting the continuing infringement doctrine). Under the continuous
wrong doctrine, a claim is tolled until the wrongdoing at issue ceases. Def. Memo, p. 8. See
Taylor v. Meirick, 712 F.2d 1112, 1118 (7th Cir. 1983) (under the continuing wrong doctrine the
claim accrues only after the last infringing act). The key distinction is, under the discovery rule,
the relevant inquiry is when the plaintiff had notice of the claim, and it is immaterial for purpose
of accrual when the infringing conduct ceases. There is no dispute that this doctrine has been
rejected in the Second Circuit yet the defendants devote much of their brief improperly
conflating it with the discovery rule.
The cases relied on by defendants are specifically dealing with the holding in Taylor v.
Meirick, 712 F.2d 1112, 1119 (7th Cir. 1983). See Kregos at 662; EMI at 768; Byron at n.7;
Galet at n.2; Gaste at 584. In Taylor, the Seventh Circuit applied the continuing wrong
doctrine which held if any infringing act occurred within the statutory period, a plaintiff could
recover for all infringements back to the initial act, regardless of when the plaintiff discovered
the infringing activity. Id. The cases cited by defendants simply reflect the rejection of Taylor.
These decisions are unrelated to the application of the discovery rule and do not reflect the result
achieved by all Circuits that have determined damages under the discovery rule, or the law that
plaintiff asks this Court to apply. The plaintiffs in the cases cited by defendants asked the court
to apply the continuing wrong doctrine because their claims were otherwise barred by Section
507(b). To the contrary, in this case, plaintiff is entitled to recover all of the defendants profits
attributable to the infringement under 17 U.S.C. 504(b) because the action was timely brought
under 17 U.S.C. 507(b) within three years of accrual.

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POINT V
THE COPYRIGHT ACT IS CLEAR THAT DAMAGES ARE NOT LIMITED WHEN
THE ACTION IS COMMENCED WITHIN THREE YEARS OF ITS ACCRUAL
The Copyright Act is clear that damages are dependent on the accrual of a cause of action
in 507(b) because the remedies provision, 504(b), has no limitation.
The Copyright Act 17 U.S.C. 504 - Remedies for Infringement: Damages and profits
(b) Actual damages and profits - The copyright owner is entitled to recover the actual
damages suffered by him or her as a result of the infringement, and any profits of the
infringer that are attributable to the infringement.
The Copyright Act 17 U.S.C. 507- Limitations on actions
(b) Civil Actions - No civil action shall be maintained under the provisions of this title unless it
commenced within three years after the claim accrued.

The only statutory source for limiting damages in an infringement action is 507(b)
when the claim itself is time-barred for having been brought more than three years after actual or
constructive discovery of the infringement (accrual). Defendants implausibly argue that
regardless of accrual, Section 507(b) mechanically limits damages by counting back three years
from the date the complaint is filed. This is unpersuasive. When Congress wants to limit
damages based on when the complaint is filed it knows how to do so. The federal intellectual
property statutes, enacted before and after the Copyright Act, are replete with examples:
The Patent Act 35 U.S.C. 286 - Time limitation on damages
Except as otherwise provided by law, no recovery shall be had for any infringement committed
more than six years prior to the filing of the complaint or counterclaim for infringement in the
action
The Vessel Hull Design Protection Act 17 U.S.C. 1323 - Recovery for Infringement
(c) STATUTE OF LIMITATIONS No recovery under subsection (a) or (b) shall be had for any
infringement committed more than 3 years before the date on which the complaint is filed.
Judiciary and Judicial Procedure 28 U.S.C. 1498 - Patent and copyright cases
(b) Except as otherwise provided by law, no recovery shall be had for any infringement of
copyright covered by this subsection committed more than three years prior to the filing of the
complaint or counterclaim for infringement in the action.
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Case 1:16-cv-01215-VSB Document 63 Filed 08/17/16 Page 34 of 34

(emphasis added in each). These federal statutes demonstrate that, where Congress sought to
limit damages to a specified period, it did so expressly in the relevant statute. Psihoyos v. John
Wiley & Sons, Inc., 2011 WL 4916299, at *5 (S.D.N.Y. Oct.14, 2011)(no such Congressional
instruction appears in section 507(b)). The failure to include such limiting language in 507(b)
strongly indicates no desire on the part of Congress to limit damages under the Copyright Act to
three years from the filing of the complaint and courts have rejected imposing this interpretive
gloss on the statute. Armstrong, 91 F.Supp.2d at 642. To do so would plainly thwart the
design of Section 504(b) of preventing infringers from unfairly benefiting from their
wrongful acts. Abeshouse v. Ultragraphics, 754 F.2d 467, 472 (2d Cir. 1985).
Conclusion
For the reasons discussed herein, we respectfully request that the Court deny the
defendants motion to dismiss.
Dated: New York, New York
August 17, 2016

SCHWARTZ, PONTERIO, & LEVENSON, PLLC


Attorneys for Plaintiff
By:

/s Brian S. Levenson
__________________________
Brian S. Levenson
134 West 29th Street - Suite 1006
New York, New York 10001
Telephone: (212) 714-1200

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