Yesterday, the Supreme Court denied certiorari in Hearst Newspapers, LLC v. Martinelli, declining to determine whether the “discovery rule” applies in Copyright Act infringement cases and under what circumstances. As a result, most circuits will continue to apply the rule to determine when an infringement claim accrues for purposes of applying the Copyright Act’s three-year statute of limitations.
There has been a push at the state and federal level to regulate AI-generated deepfakes that use the voices and likenesses of real people without their approval. This legislative momentum stems from a series of high profile incidents involving deepfakes that garnered public attention and concern. Last year, an AI-generated song entitled “Heart on My Sleeve” simulated the voices of recording artists Drake and The Weeknd. The song briefly went viral before being pulled from streaming services following objections from the artists’ music label. Another incident involved an advertisement for dental services that used an AI-generated Tom Hanks to make the sales pitch. As AI becomes more sophisticated and accessible to the general public, it has raised concerns over the misappropriation of people’s personas. In recent months, several states have introduced legislation targeting the use of deepfakes to spread election-related misinformation. At the federal level, both the House and Senate are considering a federal right of publicity that would give individuals a private right of action. At the state level, Tennessee has become the first state update its right of publicity laws targeted towards the music industry, signing the Ensuring Likeness Voice and Image Security (the “ELVIS Act”) into law on March 21, 2024, which takes effect July 1, 2024.
Last week, a divided Supreme Court held in Warner Chappell Music, Inc. et al. v. Nealy et al. that a copyright plaintiff who timely files an infringement lawsuit based on the “discovery rule” may recover damages for infringements that occurred outside the Copyright Act’s three-year statute of limitations period.[1] A claim generally accrues when an infringing act occurs, but many circuits apply a “discovery rule,” pursuant to which a claim accrues when a plaintiff has (or with reasonable diligence should have) discovered the infringement, which could be many years later. Courts applying this rule have recently disagreed on how far back damages are available, with the Second Circuit holding that a copyright claimant may recover only three years’ of damages, even if the suit was otherwise timely under the discovery rule. The Supreme Court rejected that conclusion, holding that “no such limit on damages exists” in the Copyright Act, which “entitles a copyright owner to recover damages for any timely claim” no matter when the infringement occurred.
In an opinion issued December 4, 2023, the U.S. Court of Appeals for the Federal Circuit[1] reversed a lower court’s denial of Intel Corporation’s (“Intel’s”) motion for leave to amend its answer to assert a new license defense in a patent infringement suit brought by VLSI Technology LLC (“VLSI”). The decision paves the way for Intel to make the case that it received a license to VLSI’s patents when a company that Intel had an existing license with became affiliated with VLSI due to its acquisition by an investment management firm.
The U.S. Supreme Court affirmed the judgment of the Second Circuit in the case of Andy Warhol Found. for Visual Arts, Inc. v. Goldsmith in a 7-2 decision issued May 18, 2023, authored by Justice Sotomayor. The Court held that the first factor of the copyright fair use test favored respondent photographer, Lynn Goldsmith, rather than petitioner, Andy Warhol Foundation for the Visual Arts (“AWF”). The decision was limited to AWF’s commercial licensing of a silkscreen image of Prince, based on Goldsmith’s underlying photograph, to Condé Nast. Below, we have highlighted the key factual background in the case and some takeaways from the Court’s decision. For more information, please see Cleary Gottlieb’s client alert.