It’s one of those principles that should not need to be debated: people are entitled to equal protection under the law. Yet strangely, one Federal Court went out of its way to penalize a litigant, because they were a “sophisticated copyright litigator” causing the dismissal of the case. Now, the Second Circuit has reversed this erroneous decision, stating “[t]here is no ‘sophisticated plaintiff’ exception to the discovery rule or to a defendant’s burden to plead and prove a statute of limitations defense.” 1
The Plaintiff here is Michael Grecco Productions, Inc., the business arm of photographer Michael Grecco. In an appendix filed with the case, it was claimed that MGP had filed more than 100 copyright lawsuits. Why this matters is beyond me. Anyone with a clear mind knows that the internet is a cesspool of copyright infringing material, with photographers taking the brunt of the injuries. According to the website Torrent Freak, Google processed over one BILLION takedown notices in the first four months of 2024 alone. 2 One hundred lawsuits is not even a drop in the ocean.
This legal squabble arises because the defendant here claims that MGP’s lawsuit was filed too late and thus barred by the statute of limitations under Section 507(b). The question arose as to the proper time using the “discovery” rule. The Court below ruled that MGP’s “relative sophistication as an experienced litigator in identifying and bringing causes of action for unauthorized uses of Grecco’s copyrighted works leads to the conclusion that it should have discovered, with the exercise of due diligence, ‘Davis’s alleged infringement ‘within the three-year limitations period.’” 3
Rather than trying to amend its complaint, MGP stood by its original filing and the Court dismissed the case. MGP filed an appeal. The second Circuit made quick work of the District Court’s reasoning.
“Although the district court claimed to apply the discovery rule, its calculation actually employed the injury rule; it started the three-year clock when the infringement allegedly began, while also implying that some extension of time might be available if MGP was unable to discover the infringement within those three years. In essence, the calculation incorrectly reflected the discovery rule as an equitable extension and not the rule of accrual.” 4
“MGP filed its complaint on October 12, 2021. Thus, to be timely, MGP must have been unable, with the exercise of due diligence, to discover the infringing activity prior to October 12, 2018, three years before the complaint was filed. [Citation omitted] By contrast, the district court held that MGP “must have been unable, with the exercise of due diligence, to discover the infringing activity prior to August 16, 2020, three years after the infringing activity allegedly began.” 5
“Although the district court claimed to apply the discovery rule, its calculation actually employed the injury rule; it started the three-year clock when the infringement allegedly began, while also implying that some extension of time might be available if MGP was unable to discover the infringement within those three years. In essence, the calculation incorrectly reflected the discovery rule as an equitable extension and not the rule of accrual.” 6
In simpler terms, for purposes of the Copyright statute under the “discovery rule,” the three-year term runs from when the suit is filed and looks backward. Did the Plaintiff know, or with the exercise of due diligence, reasonably know, or should have known about the infringement more than three years from the date of filing of the lawsuit?
And (in the words of Frank Zappa) here’s the crux of the biscuit: does the sophistication of the Plaintiff matter at all in assessing the “should have known” portion of the test? The answer is no.
“In the context of the Copyright Act’s three-year limitations provision, the discovery rule is the rule of accrual, not an equitable tolling or estoppel doctrine. The discovery rule is not an exception to the injury rule that only applies to some infringement claims; it is not a benefit for which only some plaintiffs qualify. Rather, ‘the discovery rule, not the injury rule’ determines, in the first place, when a copyright infringement claim accrues.” 7
“This ‘sophisticated plaintiff’ rationale has no mooring to our cases. First, to the extent this rationale arose out of treating the discovery rule as an equitable doctrine for which only some plaintiffs in some circumstances will qualify, it is wrong. As already noted, because we have previously determined that the discovery rule is Congress’s intended rule of accrual for civil actions under the Copyright Act, it is the rule in every such action and not an equitable exception to the injury rule.” 8
“Second, to the extent the district court’s rationale recognizes the discovery rule as one of accrual, but nevertheless suggests different rules of accrual for different plaintiffs—the discovery rule for copyright holders not sophisticated in detecting and litigating infringements, but the injury rule for copyright holders who are—it also is wrong. We have never understood the Copyright Act to employ different rules of accrual for different plaintiffs. The Supreme Court has made clear that the Act’s “clock is a singular one.” 9
“Third, even if the district court’s ‘sophisticated plaintiff’ rationale is merely a presumption that sophisticated plaintiffs can discover infringements immediately or nearly so, such that the date of earliest diligent discovery would always be the date of injury (or approximately so), the rationale remains flawed. A plaintiff’s ‘sophisticated’ nature does not automatically relieve a defendant of her burden to plead and prove a Copyright Act limitations defense… A sophisticated plaintiff may well discover an infringement sooner than their less practiced neighbor. But the answer to the discovery question turns on due diligence—the fact-intensive inquiry of the copyright holder’s efforts to discover the infringement. An overly simplified ‘sophisticated plaintiff’ presumption is antithetical to the nature of the task.” 10
And there you go. Equal protection under the law.