My Damages Are What?! Potential Damages Exposure for Copyright Infringement

*Mason Rademacher

Let’s begin with a few brief illustrations. Visualize a small business that operates in a downtown area. A beautiful mural was recently painted on a brick wall outside of your business, paid for by the city and painted by a local artist. The small business owner sees dozens of people every day taking pictures in front of the mural and posting them on their own Instagram accounts highlighting their time downtown, or even shopping at your store. Seeing this, the store owner sends out two employees to pose as models in front of the mural promoting both the store and some of the merchandise they sell. The image is taken and posted on social media for promotion purposes.

Consider another example. The very same small business owner has a subscription to a music licensing service allowing them to play the music in their store. Unbeknownst to them, the credit card they had on file expired and they failed to update their account with the new information. However, they continued playing the music in the store for three months before realizing their mistake.

A final example. A newspaper publisher in a small town which circulates only a few thousand copies of their weekly edition wrote a story on a local elementary school student’s battle with cancer. In the newspaper piece, they highlighted a Go Fund Me that was created by local residents to support the student. In doing this, the publisher used the same generic looking picture that the Go Fund Me account used.

In each of these instances, the small business owner unknowingly and unintentionally committed copyright infringement, even though they were completely unaware a copyright of those works existed. What is even scarier, is the large lookback period available to copyright plaintiffs.

The civil action statute of limitations is three years from the date the “claim accrued.”¹ The Supreme Court has recognized accrual begins, and thus the three-year statute of limitations also begins, when “the plaintiff can file suit and obtain relief.”² As if this was not unclear enough, the Court subsequently stated accrual occurs when the “plaintiff has a complete and present cause of action.”³ From these cases, two competing rules of accrual has emerged¾the violation/injury rule and the discovery rule.⁴

Under the violation/accrual rule, a claim arises when the “plaintiff has a cognizable claim, i.e., the date on which the violation of an exclusive right occurs.”⁵ The Fourth Circuit has argued the violation approaches removes judicial ‘guesswork’ and creates a clear-cut boundary of when exactly the statute of limitations begins to accrue.⁶ Additionally, each infringing action under the violation rule constitutes separate infringement and the restarting of the statute of limitations.⁷

Conversely, under the discovery approach, the statute of limitations does not begin to run until the plaintiff has acquired actual knowledge, or should have acquired actual knowledge, of the alleged infringement.⁸ As the Eight Circuit has stated, “a cause of action accrues and the statute of limitations begins to run when the plaintiff discovery, or with due diligence should have discovered, the injury which is the basis of the litigation.”⁹ The following case is an illustration of the discovery rule.

In William A. Graham Co. v. Haughey, the plaintiff developed and copyrighted an insurance manual to be used by insurance agents when communicating with clients.¹⁰ After being terminated from employment in 1991, the defendant nonetheless kept the manual and proceeded to use it when selling policies for his new employer.¹¹ The defendant first infringed upon the plaintiff’s copyright in 1992 and over the next thirteen years¾1992 through 2005¾ the defendant, and his employer, infringed on the copyright hundreds of times.¹² Due to the defendant’s practice of keeping their policy proposals secret, the plaintiff did not learn of the infringement until late 2004.¹³ Thus, the court was faced with addressing whether the look back period was limited to early 2002¾under the violation rule¾or whether the look back period can go all the way back to the first act of infringement in 1991¾under the discovery rule.¹⁴

After extensive discussion, the court opted to adopt the discovery rule reasoning that “the text and structure of the Copyright Act actually favor use of the discovery rule.”¹⁵ Thus, under the discovery rule, a cause of action does not accrue until “the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim.”¹⁶

Under civil copyright infringement, two types of damages are available for the plaintiff to select from: the copyright owner’s actual damages coupled with profits of the infringer, or (b) statutory damages.¹⁷ Profits are calculated after the plaintiff presents evidence of the defendant’s gross revenue and the infringer then ha the burden to prove their deductible expenses and outline which profits are and are not attributable to the use of the copyrighted work.¹⁸

Regarding statutory damages, a copyright holder may be entitled to anywhere between $200 to $150,000 depending on the conduct of the infringer.¹⁹ In instances of willful infringement, the court has the discretion to increase the aware of statutory damages up to $150,000.²⁰ However, this may be reduced significantly if there if the infringer¾who holds the burden of proof¾can establish they were not aware and had no reason to believe their acts constituted copyright infringement.²¹ In such cases, the award may be reduced down to $200.²²

Finally, under 17 U.S.C. § 504(c)(1) “the copyright owner may elect, at any time before final judgement is rendered” to seek an award for statutory damages or actual damages stemming from the infringement. This creates a potential scenario where the defendant, even while the jury is deliberating, has no idea what exactly their potential exposure is since the plaintiff has the statutory ability to change their damages claim up until the very moment when the final judgement is rendered.

With these damages structures outlined, the only question remaining is how far back can a court look to calculate damages. The Supreme Court in Warner Chappel Music, Inc. v. Nealy, held there is “no time limit on monetary recovery” and that a plaintiff is entitled to an unlimited lookback period when a timely copyright infringement claim is brought.²³ There, the plaintiff recorded and released multiple songs that were then licensed, without his consent, to other artists.²⁴ The song at issue was released in 1983 and, unknown to the plaintiff, was licensed multiple times over subsequent years.²⁵ In 2018, two years after learning of the infringement, the plaintiff brought suit seeking damages looking back ten years.²⁶

Ultimately, the Court ruled, in circuits that embrace the discovery rule, that there is no separate three-year period applies to limit damages available to plaintiffs.²⁷ Specifically, the Court noted “[t]here is no time limit on monetary recovery. So a copyright owner possessing a timely claim for infringement is entitled to damages, no matter when the infringement occurred.”²⁸ Thus, despite the fact the plaintiff was seeking damages dating back ten-years from the date of infringement, because their claim was timely under the discovery rule, they were entitled to damages dating so far back.²⁹

When combining the statute of limitations discovery rule with the never-ending lookback period outlined by The Court, what we are left with is a very plaintiff friendly landscape that leaves copyright infringers, particularly those who infringe unknowingly, in precarious situations. For these reasons, it is critical businesses do all they can to avoid unintentional infringement as their damages can be quite extensive.

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*Mason Rademacher, J.D. Candidate, University of St. Thomas School of Law Class of 2025 (Symposium Editor).

1. 17 U.S.C. § 507(b)(2). Conversely, the statute of limitations in a criminal proceeding is 5 years “after the cause of action arose.” 17 U.S.C. § 507(b)(1). ↩︎
2. Wallace v. Kato, 549 U.S. 384, 388 (2007). ↩︎
3. Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 670 (2014). ↩︎
4. See 6 Patry on Copyright 20:17 (2025). ↩︎
5. Id. ↩︎
6. Hamilton v. 1st Source Bank, 928 F.2d 86, 88 (4th Cir. 1990) (stating, “[o]ne can never be sure exactly when on that continuum of awareness a plaintiff knew or should have known enough that the limitations period should have begun.”). ↩︎
7. See Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 671 (2014). ↩︎
8. 6 Patry on Copyright § 20:18 (2025). ↩︎
9. Comcast of Illinois X v. Multi-Vision Electronics, Inc., 491 F.3d 938, 944 (8th Cir. 2007); see also Union Pac. R.R. Co. v. Beckham, 138 F.2d 325, 330 (8th Cir. 1998). ↩︎
10. 568 F.3d 425, 428 –29 (3d Cir. 2009). ↩︎
11. Id. at 429. ↩︎
12. Id. ↩︎
13. Id. ↩︎
14. Id. at 433–37. ↩︎
15. Id. at 437. ↩︎
16. Id. at 438 (internal quotations omitted). ↩︎
17. 17 U.S.C. § 504(a)(1)(2) (2010). ↩︎
18. Id. ↩︎
19. See 17 U.S.C. § 504(c) (2010). ↩︎
20. 17 U.S.C. § 504(c)(2) (2010). ↩︎
21. 17 U.S.C. § 504(c)(2) (2010). ↩︎
22. Id. ↩︎
23. 601 U.S. 366, 372 (2024). ↩︎
24. Id. at 368–69. ↩︎
25. Id. As the court outlined, the plaintiff was unaware of the licensing action due to two separate prison stints running from 1989 to 2008 and again from 2012 to 2015. Id. at 368. ↩︎
26. Id. at 369. Given the applicable circuit’s adoption of the discovery rule, the suit was deemed to be timely since it was filed within three years of when the plaintiff learned of the infringement. Id. at 370. ↩︎
27. Id. at 371. ↩︎
28. Id. ↩︎
29. Id. at 374. ↩︎