Thursday, October 23, 2014

The Separate Accrual Rule in Copyright

In its decision today, the Seventh Circuit adopts a statue of limitations rule for copyright claims that many other courts have applied. The limitations test for copyright claims is not whether a lawsuit is filed by plaintiff within three years of discovery of an act of infringement. Rather, in copyright, a court looks to whether any claimed acts of infringement occurred within three years of filing the complaint. 

Today's opinion in Chicago Building Design, PC v. Mongolian House, Inc. deals with a pretty typical infringement claim relating to architectural plans. The plaintiff claims to have created architectural plans that the defendant copied and distributed as its own. Plaintiff had an inkling in 2008 that its plans were being infringed by defendant. Plaintiff saw what appeared to be a copy of its plans laying about at Chicago building permit offices, labeled with another architect's name. Plaintiff requested to see a copy of the suspect plans, but Chicago refused to provide a copy, claiming that the plans were exempt from disclosure. Plaintiff eventually filed its copyright infringement claim in 2012.

The statute of limitations for a copyright claim is three years. The district judge held that plaintiff was on inquiry notice in 2008, and that the statute of limitations began to run at that time. As such, the district judge ruled that the lawsuit was filed outside the three year window. The case was dismissed. But the Seventh Circuit disagreed, pointing out that the limitation analysis in copyright looks to whether acts of infringement occurred within three years of filing the complaint. The fact that an act of infringement occurred more than three years prior to commencement of the action is not the test. This is so because each act of infringement starts a new limitations period. And because plaintiff alleged that some acts of infringement occurred within three years of filing the complaint, the case should not have been dismissed.

The Seventh Circuit also determined that it is inappropriate to view a series of infringing acts as one, grand continuing infringement originating from a common, initial source. The fact that the initial act occurred outside of the three year look-back period does not prevent a copyright claim against related acts of infringement that occur within the three year period.

No comments: