District Court Denies Dismissal Finding Separate Accrual Rule Applies To Copyright Infringement Claim | Practical Law

District Court Denies Dismissal Finding Separate Accrual Rule Applies To Copyright Infringement Claim | Practical Law

In Porter v. Combs et al., the US District Court for the Northern District of Illinois denied Combs's motion to dismiss Porter's amended complaint, holding that Porter's claims were not barred by the applicable statute of limitations because the amended complaint, on its face and construed in the plaintiff's favor, alleged a copyright infringement rather than copyright ownership claim. As a result, a number of the infringing acts alleged by Porter fell safely within the Copyright Act's three-year limitations under the separate accrual rule.

District Court Denies Dismissal Finding Separate Accrual Rule Applies To Copyright Infringement Claim

by Practical Law Intellectual Property & Technology
Published on 20 May 2015 • USA (National/Federal)
In Porter v. Combs et al., the US District Court for the Northern District of Illinois denied Combs's motion to dismiss Porter's amended complaint, holding that Porter's claims were not barred by the applicable statute of limitations because the amended complaint, on its face and construed in the plaintiff's favor, alleged a copyright infringement rather than copyright ownership claim. As a result, a number of the infringing acts alleged by Porter fell safely within the Copyright Act's three-year limitations under the separate accrual rule.
On May 15, 2015, in Porter v. Combs et al., the US District Court for the Northern District of Illinois denied Combs's motion to dismiss, holding, among other things, that Porter's amended complaint did not, on its face, plainly reflect that Porter's copyright claims were untimely under the three-year limitations period set out in the Copyright Act (No. 15-cv-0523, (N.D. Ill. May 15, 2015)).
This case was brought by Porter alleging Combs's copyright infringement of a sports logo he had designed for a lacrosse club owned by Combs. Porter asserted that Combs breached the parties' oral contract by using the logo on team merchandise without providing any payment to Porter. Combs responded by bringing a motion to dismiss asserting that the action was barred by the Copyright Act's three-year statute of limitations for civil infringement actions.
The court denied Combs' motion, ruling that:
  • Failure to comply with the statute of limitations is an affirmative defense and can only be the basis of a motion to dismiss if the complaint itself sets out everything necessary to sustain the defense.
  • Copyright infringement claims are subject to the Copyright Act's three-year statute of limitations (17 U.S.C § 507(b)).
  • Under the separate accrual rule the US Supreme Court enunciated in Petrella v. Metro–Goldwyn–Mayer, Inc., each alleged reproduction, distribution or other new act of copyright infringement gives rise to a discrete claim that starts a new three-year limitations period (134 S. Ct. 1962, 1969 (2014)).
  • The separate accrual rule does not apply to copyright ownership claims, with the result that, if Porter's allegations were properly construed as ownership claims, the statute of limitations would run from the date Porter knew of the contested ownership.
  • The separate accrual rule applies in this case because the allegations of the amended complaint must be construed in Porter’s favor and, when viewed in that light, claim unauthorized use rather than ownership of the copyrighted logo.
  • The amended complaint must therefore survive Combs' motion to dismiss because it:
    • alleges recent and continuing acts of infringement that fall within the limitations period under the separate accrual rule; and
    • does not set out on its face all the elements necessary to sustain Comb's statute of limitations defense.
The court also found that, even if Combs could establish that Porter's claims sound in copyright ownership rather than infringement, the statute of limitations may be equitably estopped based on the amended complaint's allegations that Combs's responses to Porter's attempts to collect payment for the logo were evasive and lulled Porter into refraining from filing suit.