NBA Teams Seek Supreme Court Intervention in Copyright Dispute
Eight NBA teams, including the Indiana Pacers, Denver Nuggets, Minnesota Timberwolves, New Orleans Pelicans, Orlando Magic, Portland Trail Blazers, Sacramento Kings, and San Antonio Spurs, have filed an amicus brief to the U.S. Supreme Court. The teams are urging the Court to reject the "discovery rule" in favor of the "injury rule" in copyright infringement cases. This move comes as part of their broader legal strategy to defend themselves against ongoing lawsuits over the use of licensed music in social media posts. The core issue at hand is that the alleged infringement by RADesign Inc., a fashion design company, began more than four years before the lawsuit was filed, exceeding the three-year statute of limitations under the Copyright Act. The U.S. Court of Appeals for the Second Circuit recently endorsed the discovery rule, prompting RADesign to seek a review by the Supreme Court.
The Discovery Rule vs. the Injury Rule
The discovery rule, which is not explicitly stated in the Copyright Act, dictates that the three-year statute of limitations for a copyright holder to sue for infringement starts only when the copyright holder discovers or should have discovered the infringement. In contrast, the injury rule starts the clock when the infringement actually occurs. The NBA teams, represented by attorneys Kian J. Hudson and Stephen R. Mick, argue that the discovery rule lacks statutory support and has been adopted by courts as a matter of practice. While the discovery rule was initially designed to protect "innocent plaintiffs" who might be late in discovering the infringement, the teams contend that it has been weaponized by "copyright trolls" to abuse the legal system.
The Problems with the Discovery Rule
One of the primary issues with the discovery rule, according to the NBA teams, is that it relies heavily on the plaintiff’s knowledge of the infringement. This reliance incentivizes plaintiffs to claim ignorance, leading to a "hear no evil, see no evil" approach. Although the "should have known" component of the discovery rule is meant to counteract this, the teams argue that courts often treat knowledge as a factual question that cannot be resolved through pleadings or summary judgment. Consequently, the mere possibility that a plaintiff "should have known" about the infringement is enough to keep a case on the docket, increasing litigation costs and exposing defendants to more extensive discovery processes.
The Impact of Social Media on Copyright Infringement
The rise of social media platforms like Instagram and TikTok has exacerbated the problems associated with the discovery rule. NBA teams often post short clips on these platforms that include brief snippets of music or images in the background. For example, a clip might contain just a few seconds of a "touchdown theme song" or an "arena anthem" celebrating a team’s victory. The teams assert that "sophisticated" copyright trolls use advanced computer technology to sift through vast amounts of social media content, hunting for these brief uses of copyrighted material to file threats or costly infringement claims. This practice can lead to significant financial burdens for sports organizations and other media entities that frequently share content online.
The Financial Implications of Copyright Infringement Claims
The financial implications of the discovery rule are particularly concerning for the NBA teams. The Copyright Act allows for statutory damages of up to $30,000 per work and up to $150,000 per work if the infringement is deemed willful. This means that even a brief, incidental use of copyrighted material can have a potential litigation value many times larger than its actual commercial value. The teams highlight a recent case against CNN and its affiliates, where the potential damages for unauthorized music use were estimated at over $11 million, far exceeding the actual license value of the music. The teams note that such disproportionate financial stakes often force defendants to settle quickly to avoid significant discovery costs and further legal expenses.
A Sports Example to Illustrate the Point
To drive home their argument, the NBA teams use a sports example, albeit not one from basketball. They reference a memorable YouTube video of former Red Sox designated hitter David Ortiz’s walk-off home run during the 2004 American League Championship Series. In the video, as Ortiz rounds the bases in triumph, a keen listener can hear the Fenway Park PA system playing "Dirty Water," a celebratory song played by the Red Sox after victories. The teams warn that under the discovery rule, those few seconds of background music could be the basis for a potential infringement claim with 20 years of accumulated damages. This example underscores the teams’ concern that the discovery rule can turn innocent and fleeting uses of copyrighted material into massive legal liabilities, ultimately stifling creativity and the sharing of content.
Conclusion
The Supreme Court is currently considering whether to review the case of RADesign v. Greco. If the justices agree to take it, the amicus brief filed by these eight NBA teams could play a pivotal role in shaping the Court’s decision. The teams’ arguments, grounded in practical and financial realities, highlight the need for a more balanced and fair interpretation of the statute of limitations in copyright infringement cases. By advocating for the injury rule, the NBA teams aim to protect themselves and other content creators from the potentially abusive practices of copyright trolls, ensuring that the legal system remains a tool for justice rather than an instrument of undue burden.
