In Urbont v. Sony Music Entertainment, the key issue was whether the injury rule or the discovery rule should apply to determine when an infringement claim accrues under the Copyright Act of 1976. Under the injury rule, a claim accrues at each act of infringement, regardless of the copyright holder's knowledge of the infringement. Under the discovery rule, which is applied by most federal courts in other districts, a claim accrues when the plaintiff knows or has reason to know of the injury forming the claim's basis. Determining when a claim accrues is necessary for assessing whether the claim is timely under the Act. Under the limitations provision of the Act, an infringement claim must be commenced within three years of the accrual of the claim.

In this case, Jack Urbont sued Dennis Coles, a former member of the group the Wu-Tang Clan, Sony Music Entertainment and Razor Sharp Records, LLC, alleging infringement of his copyrighted musical composition and sound recording of the "Iron Man Theme." Urbont alleged that Coles's 2000 album copied the Iron Man Theme musical composition and sound recording.

On June 30, 2011, Urbont filed a complaint in the US District Court for the Southern District of New York asserting, among other claims, infringement of the Iron Man Theme musical composition under the Copyright Act of 1976. Under the limitations provision of the Act, a copyright infringement action must be commenced within three years after the claim accrued. In response, the defendants, asserting that the injury rule determines the accrual of a claim, moved to dismiss the infringement claims under the Copyright Act that arose from alleged acts of infringement before May 21, 2007, the date three years before the date (May 21, 2010) that the parties entered into a tolling agreement that stopped the running of the statue of limitations. Urbont argued in response that the discovery rule should apply. Urbont implied that he first learned of the alleged infringement in late 2009 or early 2010.

Urbont also asserted common law claims for infringement of the Iron Man Theme sound recording. The sound recording claims were asserted under common law because the Copyright Act does not currently apply to sound recordings created before February 15, 1972.

The court granted the defendants' motion to dismiss Urbont's infringement claims under the Copyright Act as time-barred for acts of infringement occurring before May 21, 2007 (three years before the effective date of the tolling agreement), holding that the injury rule applied to determine the date the claims accrued.

Applying a three-year statute of limitations for injury to property under New York law, the court found that Urbont's common law claims were time-barred to the extent that they related to acts occurring more than three years before the date of the tolling agreement.

In reaching its decision on the federal claims, the court, in a detailed memorandum and order by US District Judge Naomi Reice Buchwald, considered:

This case's detailed analysis and outcome is significant for litigants engaged in the pursuit or defense of copyright infringement claims in the Southern District of New York, as there is now greater certainty that the injury rule applies to determine when an infringement claim accrues for determining the start of the limitations period under the Copyright Act.