Seventh Circuit: Addition to Architectural Plans Not Original, But Submission of Reconstructed Computer Plans Sufficient for Copyright Filing

In Nova Design Build Inc. v. Grace Hotels, LLC, 2011 WL 3084929 (7th Cir. July 26, 2011), the Seventh Circuit considered a case where an architectural design firm registered a copyright in improvements made to a Holiday Inn Express project. The builder got in a dispute with the architectural designer. The builder proceeded to use the plans, and claimed that the contract permitted the use. On summary judgment, the district court ruled for the defendant builder and against the plaintiff designer.

First, the court applied the T.B. Harms v Eliscu test to determine subject matter jurisdiction. Since the complaint alleged copyright infringement, the court had subject matter jurisdiction. The builder's allegation that the use was permitted by contact (licensed) was a defense - and defenses do not affect jurisdiction under 28 USC 1331 or 1338.

Second, the court overruled the district court's finding that Nova's reconstruction of its computerized designs to support its copyright filing relied on Nova's memory and thus was invalid. Nova's computers had been stolen, so the precise files were unavailable. In overruling, the Seventh Circuit found that Nova's reconstruction was based on hard copies and a meticulous recreation of the plan and that on summary judgment the district court's adverse ruling was not appropriate.

On this point, Nova is correct. Indeed, before the digital world made exact copies common, many copies may have had tiny discrepancies in them. There is no hard evidence in the record supporting the district court's speculation that Nova had to resort to the memories of its employees to re-create its designs. And even if there were, Nova has pointed to evidence to the contrary. With the hard copies and the restored CAD files, Nova could meticulously and mechanically piece together a copy of its original designs.


Practice Tip: This is a quote that copyright practitioners will want to keep in their back pockets.

Third, the Seventh Circuit found that Nova's additions to the Holiday Inn Express plans were not original and thus Nova could not satisfy a key element of copyright infringement.

We think that Nova fails at the initial step: it has not identified anything in these particular designs that was original and thus protectable. Nova's designs were, for the most part, based on the Holiday Inn Express prototype. Nova does not assert that it has the right, either through contract or otherwise, to enforce Holiday Inn Express's copyright in its own plans. Instead, Nova protests that it added features to the prototype, such as an extra floor, a larger meeting area, different closet and door placements in the rooms, and different pool, exercise, and laundry areas, but that is not enough. Though Nova's designs do possess added features (and these additions are the only elements that may be protectable), they are devoid of originality. Merely adding an extra floor, identical to the floor layout of the prototype, is not original. The other features Nova mentions were specifically requested by Grace, mostly through written requests accompanied by graphic designs. In light of that, there was no creative element to these features in Nova's designs. See Tiseo Architects, Inc., 495 F.3d at 347 (holding that architectural sketches that incorporated owner's suggestions and drawings, and were limited by zoning requirements, did not possess requisite originality for copyright protection). The aspects of Nova's designs that went beyond the Holiday Inn Express prototype were insufficiently original to qualify for copyright protection, and with that Nova's claim for copyright infringement must fail.


The Seventh Circuit thus affirmed the District Court's grant of summary judgment against the plaintiff designer.

A short, but important case illustrating how the Seventh Circuit is looking at copyright claims, copyright filings, and demonstrations of originality on a summary judgment motion.


Nova Design Build Inc v Grace Hotels

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Removal, Remand and Preemption

There are few procedural maneuvers in the practice of law so satisfying as removal.   "Removal" means simply filing a notice with a state court that the matter is being removed to state court.  Removal is authorized by 28 USC 1441(a).  

Removal is appropriate under certain circumstances where the federal district could had original jurisdiction.   If you don't like being removed, the remedy is a motion to remand.

The above video is a great introduction to the topic.

In copyright law, the complete preemption doctrine is said to apply.

Chapter 10 of Copyright Litigation Handbook:  Removal From State Court and Preemption deals with these topics in the unique context of this interplay of state/federal jurisdictions and the Copyright Act.

If you want to remove, you have to act very very quickly, the usual deadlines don't apply and by the time you've thought things through, it may be too late.

More on the Law of Avatars and preemption here.
 Purchase Copyright Litigation Handbook 2010 by Raymond J. Dowd from West here  

9th Circuit: Through the Brooklyn Lorgnette - EDNY USDJ Sez Copyright Application is "Registration"

"Lady Caroline Lorgnette" from Los Angeles Iptrademarkattorney.com

In Cosmetic Ideas, Inc. v. IAC, No. 08-56079 (May 25, 2020), USDJ David G. Trager from the EDNY (Brooklyn), wrote a thoughtful and sensible opinion that eliminates one of the major annoyances facing copyright litigants in a rush, but who don't want to pay the Copyright Office's spectacularly high "special handling" fees.   The case involved a cosmetic jeweler's case against the Home Shopping Network.

The issue, recently brought to the fore in the recent Supreme Court case Reed-Elsevier, Inc. v. Muchnick, ___ U.S.___, 130 S.Ct. 1237 (2010), was this:

If you file an application with the Copyright Office, but the Register of Copyrights hasn't registered it, can you file a lawsuit before you get the registration certificate?

SCOTUS noted in Reed-Elsevier, Inc. v. Muchnick that the Circuit courts were divided over the issue, but it wasn't the precise issue before them, so declined to resolve it. Reed-Elsevier, Inc. v. Muchnick decided that the Copyright Act 17 usc 411's requirement that a copyright claimant's claim be registered was a "claim processing rule" and did not implicate the court's subject matter jurisdiction.

Cosmetic Ideas, Inc. v. IAC, the Ninth Circuit analyzed seemingly conflicting provisions in the Copyright Act for clues, but didn't find the answer.  Relying on a common sense practical approach, it went with registration occurring upon the filing of the application.

I have had a couple of cases before Judge Trager, and he taught my brother at Brooklyn Law School.  He is liked and respected among the local bar and bench.

Let's hope that the Second Circuit follows the Brooklyn approach adopted by the Ninth Circuit.

Practical Implications:  In the Ninth Circuit (and those Circuits following the application rule), just apply and get proof of receipt by the Copyright Office.  With that in hand, you can sue.  For the rest of us, unless you want to be a test case, get your certificate through the Copyright Office's Special Handling Procedures (Copyright Litigation Handbook Chapter 4)

 Purchase Copyright Litigation Handbook from West here  

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In Reed Elsevier v. Muchnick, 08-103 (March 2, 2010) the U.S. Supreme Court, in a decision by Justice Clarence Thomas, held that a failure to register a copyright under Section 411 of the Copyright Act did not deprive a District Court of jurisdiction to approve a settlement agreement involving unregistered copyrights.   The decision is found here.

The case arose out of Tasini v. New York Times, a claim by freelance authors against the New York Times and other publishers, alleging that publishers infringed copyrights by including articles in which freelancers retained copyrights in electronic databases.  Irving Muchnik objected to a settlement in the wake of Tasini (affirming the claim of copyright infringement).  The Second Circuit vacated that portion of the settlement relating to unregistered copyrights, claiming that the district court lacked jurisdiction over the controversy (over the dissent of Judge Walker).  I agreed with Judge Walker's dissent in my blog post of December 2, 2007.



The language from the Court:

Subject to certain exceptions, the Copyright Act requires copyright holders to register their works before suing for copyright infringement. 17 U. S. C. A. §411(a) (Supp. 2009). In this case, the Court of Appeals for the Second Circuit held that a copyright holder’s failure to comply with §411(a)’s registration requirement deprives afederal court of jurisdiction to adjudicate his copyrightinfringement claim. We disagree. Section 411(a)’s regis-tration requirement is a precondition to filing a claimthat does not restrict a federal court’s subject-matterjurisdiction.

Importantly for copyright litigators, the Supreme Court did NOT address the split between the Circuits over whether judges may or are required to sua sponte dismiss copyright actions where a copyright registration certificate was not obtained prior to the filing date of the action.

Becase the subject matter of copyright is completely preempted by federal law, I think that the result is a correct one in the class action context.

SCOTUS: Does Failure to Register A Copyright Deprive a Court of Subject Matter Jurisdiction?

In re Electronic Database Litigation, 509 F.3d 116 (2d Cir. 2007) cert. granted March 2, 2009.

Does 17 U.S.C. §411(a) restrict the subject matter jurisdiction of the federal courts

over copyright infringement actions?

Section 411 is the "register before you sue" rule.

The U.S. Supreme Court has granted a petition for certiorari on this question.   The Second Circuit, over the dissent of Judge Walker, vacated a class action settlement that authors and media companies had entered into after four years of negotiations.

The Second Circuit found that since the settlement covered unregistered copyrights (most of the authors writing for these publications), the federal court did not have jurisdiction to settle these claims.  

I indicated my agreement with Judge Walker's dissent in my December 2, 2007 post here

If you are interested in the rights of freelancers and the pros and cons of various settlements, check out Irvin Muchnik's Freelance Rights blog here

Copyright Infringement Complaint: Selecting Defendants (Ch 6)

In a recent discussion of a major copyright infringement case with an attorney colleague, he expressed surprise that a corporate officer had been held personally liable for a copyright infringement that had been committed by a corporation.

Most of us in law school learn that the corporate shield will protect corporate officers from liability for most actions of officers, with possible exceptions such as liability for unpaid payroll, gross negligence or criminal activity. In the Copyright Litigation Handbook (West 2006), Chapter 6 deals with drafting a copyright infringement complaint. Section II covers drafting the caption and personal liability of corporate officers.

In a recent copyright infringement action, Riverdeep Interactive Learning, Ltd. v. MPS Multimedia, Inc., 2006 WL 3797962 (N.D. Cal.)(Slip Copy) 12/22/2006, a corporate officer was named personally as a defendant for copyright infringements seeking "damages against MPS and Chen for their knowing and willful infringement of RIL's copyrights." The allegations against the officer were contained in a single paragraph:

"Chen, as MPS' President and CEO, directs, controls and ratifies the actions of MPS including the unlicensed and unauthorized replication and distribution of Riverdeep software."

Mr. Chen brought a motion to dismiss pursuant to Rule 12(b)(6). He lost. The court accepted Plaintiffs argument that corporate officers "are personally liable for the corporation's copyright and trademark infringements when they are a 'moving, active conscious force' behind the corporation's infringement." (citing Novell, Inc. v. Unicom Sales, Inc., 2004 WL 1839117, *17 (N.D. Cal. 2004).

Practice Tip for Lawyers: Where an investigation reveals that there is sufficient evidence of copyright infringement to file a complaint, a plaintiff may include a very conclusory allegation such as the bolded text above to hold a corporation's top officer personally liable. Defendants who reflexively make 12(b)(6) motions should really think twice - not only may you lose, but your client may be tagged with your adversary's legal fees on the motion.

Postscript. The defendants brought a motion challenging federal subject matter jurisdiction pursuant to Rule 12(b)(1), raising a plausible argument that the case was a contract case that belonged in state court because it was a dispute between parties over a license agreement, rather than a copyright infringement case. The court engaged in the T.B. Harms analysis and rejected that argument. The defendant also brought a motion for a more definite statement under Rule 12(e) of the Federal Rules of Civil Procedure. He lost that, too. The court noted that the two instances in which a Rule 12(e) motion are proper are 1. when the claim is unintelligible or 2. where the complaint is so general that an ambiguity arises in determining the nature of the claim or the parties against whom it is being made." (citing Sagan v. Apple Computer, 874 F. Supp. 1072, 1077 (C.D. Cal. 1994).

Copyright Licensing Litigation - Motion in Limine and Summary Judgment (Ch 7,8, 14)

In Command Cinema Corp. v. VCA Labs, --- F. Supp.2d ----, 2006 WL 3357257 (S.D.N.Y.) 11/17/2006, a producer of adult films sued a film laboratory over loss of masters. Defendant VCA's motion to dismiss claims for conversion, breach of express contract and breach of implied contract was met with a cross-motion by Command Cinema for summary judgment on conversion. Simultaneously, VCA moved in limine to exclude evidence of Command's lost profits as a measure of damages and to preclude Command's claim for punitive damages. In a conference call, the court advised the parties that it was considering summary judgment on more claims than Command had requested and invited the parties to make additional submissions.

The court granted summary judgment on the breach of contract claims and dismissed claims that were duplicative or inconsistent with successful breach of contract claims (conversion, breach of implied contract). Simultaneously, the court granted in part and denied in part the Defendant's motion in limine. For one film, the court excluded evidence of lost asset value as a measure of damages, for another the court reserved the issue for trial but noted that the type of calculation - a comparison with comparable films - was "capable of determining damages with reasonable certainty." For both films, the court granted the motion in limine to the extent of precluding a request for punitive damages.

The action involves no claims under or citations to the Copyright Act. Command is a New York corporation and VCA is California-based, so the presumed subject matter jurisdiction would be diversity jurisdiction, but the opinion, which is supplemented by 105 endnotes, is silent on the jurisdictional question. Generally speaking, contracts involving copyrighted works do not belong in federal court unless they raise issues "arising under" the Copyright Act, or unless there is an independent ground for subject matter jurisdiction, such another federal question (28 U.S.C. Sec. 1331) or diversity jurisdiction (28 U.S.C. Sec. 1332).

Plaintiff copyright owner entrusted, pursuant to written contracts, Defendant laboratory with masters which were to be upgraded, duplicated as sub-masters and the original masters were to be returned to Plaintiff. Defendant returned the masters, which Plaintiff then destroyed. Following that, Defendant lost or misdelivered the sub-masters.

Applicable Rules of Procedure. Defendant's motion to dismiss was brought under Rule 12(b) of the Federal Rules of Civil Procedure. The cross-motion for summary judgment was brought under Rule 56. Motions in limine may be brought any time including during trial, usually under procedures governed by local rules or a judge's individual rules.

Practice Tip for Lawyers. Both parties wisely focused on the relevant issues: breach of contract and the scope of damages. Apparently after being warned by the judge of a possible grant of summary judgment, Defendant's lawyer made a motion in limine that reduced Defendants' potential liability and increased the chances for settlement. A motion in limine is a powerful tool to preclude or get evidence admitted prior to trial that should be seriously considered at the early stages of litigation.