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IP/Entertainment Case Law Updates

Frank Betz Associates, Inc. v. J. O. Clark Construction, L.L.C., et al.

In the context of a discovery order in a copyright infringement suit, a magistrate judge followed the “discovery rule” to determine when a copyright claim accrues and rejected the defendants’ request to apply the “injury rule.” Under the discovery rule, a copyright claim accrues when a plaintiff learns about the infringement, while under the injury rule, a copyright claim accrues when the infringement occurred.

The plaintiff served the defendants with written discovery, seeking documents and information related to houses the defendants built and sold in the last nine years. The defendants moved for a protective order to limit the scope of the plaintiff’s written discovery to the time period of three years prior to the filing of the lawsuit. The defendants argued that the injury rule should apply to the three year statute of limitations under the Copyright Act, and thus the plaintiff should be limited to discovery relating to alleged infringements within three years before the lawsuit was filed.

The magistrate noted in a footnote that none of the cases that the parties cited or that the court found addressed the Copyright Act’s statute of limitations issue in the context of a discovery dispute. However, in copyright cases, a majority of courts, including the Sixth Circuit, that have addressed the issue of the Copyright Act’s statute of limitations follow the discovery rule. In Bridgeport Music, Inc. v. Diamond Time, Ltd., 371 F.3d 883 (6th Cir. 2004), the Sixth Circuit held that a “cause of action accrues when a plaintiff knows of the infringement or is chargeable with such knowledge.” Even though the SDNY follows the injury rule, the magistrate concluded that a minority of courts, and no circuit courts, follow the injury rule.

The magistrate also held that since the motion is related to a discovery issue and not a dispositive issue, “it is more appropriate to permit a wider scope, if it is defensible and has legitimate underpinnings, leaving the dispositive issue to be resolved by the District Judge.”

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