NBA Teams Ask SCOTUS to End ‘Discovery Rule’ in Copyright Law

Eight NBA teams that are being sued over their use of licensed music in social media posts filed an amicus brief to the U.S. Supreme Court on Monday. They urge the Court to reject the “discovery rule”—which doesn’t start the three-year statute of limitations clock for a copyright holder to sue for infringement until they discover or, with due diligence, should have discovered infringement—and endorse the “injury rule,” which starts the clock when infringement occurred.

The brief filed by the Indiana Pacers, Denver Nuggets, Minnesota Timberwolves, New Orleans Pelicans, Orlando Magic, Portland Trail Blazers, Sacramento Kings and San Antonio Spurs is in support of RADesign Inc. (fashion designer Ruthie Davis), which has been sued by Michael Grecco Productions for copyright infringement over publication of a photo of model Amber Rose wearing a pair of Ruthie Davis shoes. The relevant issue for NBA teams is that RADesign’s  alleged infringement began more than four years before the lawsuit was filed and the Copyright Act requires that infringement claims be brought within three years. Last year the U.S. Court of Appeals for the Second Circuit endorsed the discovery rule, which has led RADesign to ask the Supreme Court to review.

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In a brief authored by attorneys Kian J. Hudson and Stephen R. Mick, the teams note that they are defendants in an infringement case over the use of licensed music in social media posts “that,” the teams stress, “are in some cases more than a decade old.” Last year Kobalt Music Publishing and other companies that own or have licensed interests in songs sued 14 NBA teams over their use—without the plaintiffs’ permission—of songs sung by Britney Spears, Justin Bieber, Doja Cat, Bad Bunny and other well-known artists.

The teams stress that the discovery rule is not stated in the Copyright Act, and thus lacks statutory support. Instead, courts have adopted the rule as a matter of practice. The teams maintain that while the discovery rule was created for a worthwhile reason—namely to protect “innocent plaintiffs” who are late in discovering infringement—it has become used as a “powerful weapon” by “copyright trolls” to abuse copyright law.

One problem with the discovery rule, the teams insist, is that its availability turns on the plaintiff’s knowledge. That approach rewards plaintiffs to “profess no knowledge” and an incentive to know less. While the “should have known” element of the discovery rule should discourage a “hear no evil, see no evil” tactic, the teams argue that courts regard knowledge to be a question of a fact that can’t be addressed on the pleadings or in summary judgment. In other words, whether the plaintiff “knew” or “should have known” becomes a reason for a court to keep a case on the docket, which increases litigation costs for defendants and subjects them to a more extensive discovery.

The teams also point out that with the rise of Instagram and TikTok, trolls seek to capitalize on social media posts that contain mere “snippets of music or images in the background.” Those clips might include several seconds of a “touchdown theme song or arena anthem celebrating a team’s victory.” The teams argue that “sophisticated” trolls use computer technology to “sift through oceans of social media content” in hopes of finding a brief use of copyrighted material that can “form the basis of a threatening and costly infringement claim.”

Another alleged problem connected to the discovery rule is that the Copyright Act’s damages provision incentivizes plaintiffs “to accumulate dozens or hundreds of small claims.” Each claim can be worth up to $30,000 per work and, with willful infringement, $150,000 per work. This arrangement, the teams argue, can make a “brief, incidental infringement” have a potential litigation value “hundreds of times larger than the commercial value of the use.”

To illustrate the point, the teams cite litigation against CNN and its affiliates for over $11 million in potential damages over music whose “actual license value” is worth only a fraction of $11 million. “No one was surprised,” the teams write, “when CNN settled” the litigation “prior to significant discovery.”

The NBA teams conclude either brief by providing a sports example, but not one about basketball. Instead, they refer to a YouTube video that will bring a smile to Boston Red Sox fans:

The video captures former Red Sox designated hitter David Ortiz’s memorable walk-off home run from the 2004 AL Championship Series and—the teams insist—“perfectly illustrates the danger of the unchecked discovery rule.” As Ortiz rounds the bases in celebration of the Sox defeating the New York Yankees, “a careful listener can hear the Fenway Park PA system in the background playing Dirty Water, a celebratory song that is played (under license) by the Boston Red Sox after victories.”

The teams warn that under the discovery rule, it’s possible that “those few seconds of background music are a potential infringement claim with 20 years of accumulated damages.”

The Supreme Court is currently weighing whether to take RADesign v. Greco. If the justices agree to take it, eight NBA teams—and perhaps a video of “Big Papi”—might have played a key factor.

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