Donald A Gardner Architects, Inc. et al v. Vanderpool et al, No. 5:2008cv00590 - Document 86 (E.D.N.C. 2011)
Court Description: ORDER denying 54 Motion for Summary Judgment and granting 58 Motion for Partial Summary Judgment. Signed by Senior Judge Malcolm J. Howard on 3/22/2011. (Heath, D.)
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Donald A Gardner Architects, Inc. et al v. Vanderpool et al Doc. 86 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION 5:08-CV-590-H DONALD A. GARDNER ARCHITECTS, INC., and ALLORA, LLC., Plaintiffs, v. ORDER CAMBRIDGE BUILDERS, INC., and CAMBRIDGE BUILDERS OF JOHNSTON COUNTY, INC., Defendants. This matter is before the court on defendants' motion for summary judgment and plaintiff Allora LLC's motion for partial summary judgment. filed, and the Appropriate time for responses further and replies have been filings has expired. This matter is ripe for adjudication. STATEMENT OF THE CASE Plaintiffs and 2008, Allora, Donald A. LLC ("Allora") alleging ("Cambridge" ), plaintiffs' Gardner Architects, that filed this defendants Bryan Vanderpool, action Cambridge December Builders, 3, Inc. copyrighted home designs either without a license or Copyright subsequently on ("Gardner") and Tommy Dees copied and used in excess of the license granted to Cambridge, the Inc. Act, 17 allowed U.S.C. to amend §§ 101 their et ~ complaint in violation of Plaintiffs to correct were the Dockets.Justia.com name of one defendant and to add William C. Builders of Johnston County, action. On March 26, defendants were dismissal. Inc. 2010, dismissed ("CBJC") Dees and Cambridge as defendants to the the claims against upon Presently before the the parties' court are for summary judgment and plaintiff Allora' s the individual stipulation defendants' of motion motion for partial summary jUdgment. STATEMENT OF THE FACTS Plaintiffs Gardner and Allora are engaged in the business of creating, designing, producing, distributing, original architectural working drawings. to this action, home design designing, defendants and Carolina area. At all times pertinent Cambridge and CBJC were residential construction building, and marketing companies and selling homes in the business in the Goldsboro, of North Cambridge had been in business for twenty-five years and CBJC had been in business for eight years. Presently both Cambridge and CBJC are out of business following the death of their president. Defendants constructed multiple structures that plaintiffs contend infringe upon their copyrights in Gardner single-family home designs #265 ("The Georgetown"), Ingraham"), ("The Hawthorne"), #463 ("The #286 ("The Tipton"), Fairethorne"), and an Allora design 2 for a and #332 multi-family #393 ("The townhouse ("The Allora Triplex").' the product defendants of Plaintiffs assert that the designs are their used the independent, designs original either without excess of the license granted to them. the designs are generic designs work a and license that or in Defendants contend that typical of other third-party plans for similar-sized homes and are not copyright protected. COURT'S DISCUSSION I. Standard of Review Summary judgment is appropriate pursuant to Rule 56 of the Federal Rules material of fact Civil exists Procedure and the judgment as a matter of law. 477 U.S. bears 242, the 247 (1986). initial burden when moving no genuine party is issue of entitled to Anderson v. Liberty Lobby, Inc., The party seeking summary judgment of demonstrating genuine issue of material fact. the Celotex Corp. absence v. of Catrett, a 477 U.S. 317, 325 (1986). Once the moving party has met its burden, party may not rest on the allegations or the non-moving denials in its pleading, Anderson, 477 U.S. at 248, but "must come forward with 'specific trial.'" facts showing that there is a genuine issue for Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 'The Allora Copyright Office to by plaintiffs Apr. 26, 2010 [DE Triplex is registered with the United States as Allora design #0205-A but is also referred as Allora design #8001. (Finley Decl. dated #62-4] ~ 2.) 3 U.S. 574, 587 judgment is (1986) not a factual issues. 125 (E.D.N.C. (quoting Fed. R. vehicle for Faircloth v. 1993). P. 56 (e». Summary court the civ. to resolve disputed United States, Instead, 837 F. Supp. 123, a trial court reviewing a claim at the summary judgment stage should determine whether a genuine issue exists for trial. In making inferences favorable Inc., this drawn Anderson, 477 U.S. at 249. determination, from the the underlying to the non-moving party. 369 U.S. 654, 655 (1962) court facts must in the view light most United States v. (per curiam). the Diebold, Only disputes between the parties over facts that might affect the outcome of the case properly 477 Anderson, preclude at U.S. the 247-48. entry of summary Accordingly, the judgment. court must examine "both the materiality and the genuineness of the alleged fact issues" in rUling on this motion. Faircloth, 837 F. Supp. at 125. II. principles of Copyright Law Copyright authorship U.S.C. § protection fixed 102(a). in any extends tangible to "original medium of expression." standard classifiable copyrightable, of 17 Architectural designs are among those works of authorship protectable by federal copyright law. individual works as features ideas an or and concepts architect's 4 Id. " [W] hile architectural elements are original not themselves combination or arrangement of such elements may be." v. Canterbury Estate Homes, Inc., Intervest Constr., 554 F.3d 914, 919 Inc. (11th Cir. 2008) . prevail To on their copyright infringement claim, plaintiffs must establish (1) ownership of a valid copyright in one or more of the home designs at issue; and (2) unauthorized copying by the defendants. See Feist Publ'ns, Inc. v. Rural Tel. Servo Co., 499 U.S. 340, 345 (1991). III. Defendants' Motion for Summary Judgment Defendants contend that summary judgment because plaintiffs are unable to show that copyright in their home plans. is warranted they hold a valid Alternatively, defendants maintain that certain claims of alleged infringement are barred by the statute of limitations and entitled only to actual damages that plaintiffs sustained as a would be result of any claims that are not so barred. A. Plaintiffs' Ownership of Valid Copyrights In order to meet valid copyright, their burden of proving ownership of a plaintiffs must show their architectural works are original and in compliance with the statutory requirements of the Copyright Act. This burden may be met by presenting copyright registration certificates issued by the United States Copyright Office. validity of a Registration creates a presumption as to the party's copyright. 5 O'Well Novelty Co. V. Offenbacher, Inc., No. 99-1949, 2000 WL 1055108, at *3 2000) . The burden then shifts to the party (4th Cir. challenging the copyright to show either that the work was not original or that the copyright registration was invalid. Defendants do not certificates of dispute that plaintiffs have they argue that the designs are not original or, alternatively, that designs entitled only infringe. number of are compilations to In "thin" support home plans, of their designs. presented Rather, the registration for Id. common, protection of their which motion, functional elements defendants did defendants purportedly obtained from the not present a internet, which they contend are similar in layout to plaintiffs' designs. Defendants assert that the similarity in low-cost, house plans is "strong evidence that such a single-floor configuration is functional in nature, as there are only so many ways to arrange common rooms and elements." (Dfs.' Mem. Supp. Mot. Summ. J. [DE#551at8.) The standard for originality under copyright law requires that a work be "independently created by the author (as opposed to copied from other works), and that it possess[] at least some minimal degree of creativity." Feist, 499 U.S. at 345 M. §§ Nimmer & D. "[T]he requisite Nimmer, Copyright, 2.01 [A], (citing 1 [B] level of creativity is extremely low; slight amount will suffice. (1990)). even a The vast majority of works make the 6 grade quite easily, matter how crude, (quoting 1 M. as they possess some humble or obvious' Nimmer D. & creative spark, it might be." Nimmer, Copyright, 'no at 346 rd. 1.08 [C] [1] § (1990)) . Plaintiffs have produced registration certificates showing that each of establishing a submitted designs who are has presumption of deposition architects designs the their the and declarations averring and 3; see also therefore, Culhan Decl. [DE not McClain Declo 3; #62 -1] ~ of the that the [DE #59-2] [DE #59-6] Plaintiffs 5.) also compilations, (Culhan Dep. copies or derivatives of other works. ~I have sworn creations [DE #59-5] Plaintiffs thereby designs, home original at 45; Gardner Declo registered,' validity. testimony created been ~ have, presented prima facie proof of the validity of their copyrights in the designs. Relying on what they contend is identical designs defendants assert protectable works or from that works numerous compilations elements. (Dfs.' defendants' evidence [archi tectural] plaintiffs' they must of Mem. of "the prevalence of nearly designs either be unprotectable Supp. Summ. "similar" cannot be derivatives ideas J. designers, " at designs and 7.) by original of other functional However, third-party 'Each of the Gardner designs is registered both as a technical drawing and as an arc hi tectural work. The Allora Triplex design is registered as an architectural work. 7 designers fails to establish, as a matter of law, that plaintiffs' designs are either unauthorized derivatives of other works or compilations elements. ) Therefore, of unprotectable defendants are ideas or not entitled functional to summary judgment on this basis. B. Statute of Limitations Defendants next contend that any acts of alleged infringement that occurred prior to December 3, 2005, are barred by the statute of limitations. The statute applicable to copyright violations bars claims brought more than three years after the claim accrued. Circuit, 17 U.S.C. § 507(b). In the Fourth "[a] cause of action for copyright infringement accrues when one has knowledge of a violation or is chargeable with such knowledge." Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199, 202 (4th Cir. 1997). Plaintiffs have presented sufficient evidence to withstand summary jUdgment on this basis. Jean Finley, Gardner's According to the affidavit of copyright specialist, plaintiffs first learned of defendants' allegedly infringing acts in the fall of 2008: 'As set forth below, the court concludes that plaintiffs have established the validity of The Allora Triplex design. The court does not determine whether the evidence conclusively establishes the validity of plaintiffs' copyrights in the Gardner designs as that issue is not presently before the court. 8 They came to my attention through discussions with a North Carolina plan designer who had admitted to copying some Gardner home designs. This designer provided me with a list of her clients, and Cambridge Builders was on the list as a builder/developer who had purchased one of the designs that was a copy of a Gardner design. I then found the Cambridge Builders website online, and saw that it had photographs and floor plans of houses and photographs of townhouses that appeared to have been constructed from the Gardner and Allora designs at issue in this lawsuit. (Finley Declo dated Mar. 19, 2010 was in filed limitations December period. The [DE #59-7] 2008, well court, therefore, , 2.) within This action the three-year denies defendants' motion for summary judgment on this ground. C. Damages Defendants next contend they jUdgment on the issue of damages. are entitled to summary Title 17, United States Code, section 504, provides as follows: In General. Except as otherwise provided by this title, an infringer of copyright is liable for either - (a) the copyright owner's damages and any additional profits infringer, as provided by subsection (1) (2) statutory damages, subsection (c). actual of the (b); or as provided by (b) Actual Damages and Profits. The copyright owner is entitled to recover the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages. In establishing the infringer's profits, the copyright owner is required to present proof only of the 9 infringer's gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work. Defendants argue that because plaintiffs are in the business of selling house plans, and not in the business of constructing homes, can be no more received if their than "actual damages, that Defendants revenue Plaintiffs had purchased a each of the homes constructed." if any, set would have of plans for (Dfs.' Mem. Supp. Summ. J. at 20.) Defendants' recoverable for "actual damages." argument misses copyright the point. violation Indeed, both § are The not damages limited 504(a) and (b) to expressly authorize the recovery of the profits attributable to the infringement in addition to the recovery of the copyright holder's actual damages. damages (b) and additional profits ("actual damages suffered infringer" not any See 17 U.S.C. in their right to of (emphasis added)), The fact that plaintiffs are selling homes disgorge ("actual . and any profits of the (emphasis added)). the business 504(a) § does defendants of not any foreclose profits attributable to the infringement of their home plans. See Christopher Phelps & Assocs. v. Galloway, 492 F.3d 532, 539 (4th Cir. 2007) (concluding that 10 the court correctly instructed the jury that the plaintiff architectural firm "would be entitled to both actual damages for infringement and. all profits of the infringer" resulting from the infringement of the firm's home design). To impose such a limitation upon the damages recoverable under only encourage copyright violations because § 504 would the infringer would never be liable for more than the copyright holder's licensing fee. Defendants' motion for summary judgment on the issue of damages is, therefore, denied. IV. Plaintiff Allora'B Motion for Partial Summary Judgment Also before the court summary jUdgment on the alleged infringement of is Allora's issue of motion CBJC's for liability The Allora Triplex design. partial for At its issue here is CBJC's construction of a number of duplex and quadraplex townhome structures in the multi-family residential development of "Lawndale acknowledged Gardner was Townes" that a used to in Garner, multi-family build the North home Lawndale Carolina. design Townes CBJC purchased from units. 4 CBJC 'There can be no doubt that the Lawndale Townes units were constructed based upon one of Allora's designs, as the construction plans submitted by CBJC to the City of Garner's permit office bear the Allora name and logo and further reference Allora's computer document path name. 11 denies liability, however, arguing that it possessed a multi-use license that authorized its construction of the buildings. s Allora has made a prima facie showing that it owns a valid copyright in The Allora Triplex design, see supra at 5-8, the to court evidence finds to particular that rebut CBJC the has failed presumption Thus, copyright. the of present validity question plaintiffs have shown, as a matter of law, sufficient as here and to is this whether that CBJC copied the Allora design without plaintiffs' authorization. A plaintiff may prove copying by direct or circumstantial evidence. may not between Where direct evidence of copying exists, avoid the liability protected by work pointing and Wieland Homes & Neighborhoods, H, 2004 WL 2108675, *5 the Inc. v. (W.D.N.C. out the 2004). [issue]." copy." No. that M. Kramer Mfg. Co. v. Andrews, John 3:03-CV-168 "If there proof of actual copying by the defendants, the dissimilarities infringing Poovey, "a defendant [is] clear is the end of 783 F.2d 421, 445 (4th Cir. 1986). Where there is no direct evidence of copying, a plaintiff establish may presumption a of copying by SCBJC also asserts that there exists a genuine issue of fact as to whether the plan CBJC used in constructing the Lawndale Townes units was The Allora Triplex design or some other Allora plan. However, CBJC has failed to produce any evidence to rebut plaintiffs' proof that The Allora Triplex design was the plan sold to Tommy Dees, a vice-president of both Cambridge and CBJC, in December 2004. The court, therefore, rejects this argument. 12 demonstrating that the defendant had access work and that the defendant's Universal Furn. thereto. work Inc. Int'l, is v. to the copyrighted substantially similar Collezione Europa USA, Inc., 618 F.3d 417, 435 (4th Cir. 2010). Of course, must also copyright prove is holder must the to succeed on a scope the subject copying to a Hardware Eng'g its the not license, defendant's Inc., the plaintiff authorized. Storage license. Consulting, & was nonexclusive establish that of copyright claim, Where the copying Tech. copyright was beyond v. Corp. 421 F.3d 1307, the Custom 1315-16 (Fed. Cir. 2005). In support tending to license to of establish build Triplex design. multi-use license, Before the its a motion, that one single Allora of the structure While defendants argue has presented defendants 6 based that evidence purchased upon The a Allora they purchased a the evidence does not support their argument. court are a bill of both in the name of "Tommy Dees, of sale is dated December 29, sale and a license Cambridge Builders." 2004, agreement, The bill and evidences the purchase of CAD drawings on CD-Rom and a presentation print of The Allora Triplex design. The licensing agreement, also dated December It is not clear from the record whether the license, which is non-transferrable, was purchased on behalf of Cambridge or CBJC. It is for this reason that plaintiffs assert that CBJC's use of The Allora Triplex design was either without a license or in excess of the license granted. 6 13 29, 2004, and signed by Mr. Dees on January 4, provides that it is a "limited license one building (Licensing Agt. from these [DE #58-4] Defendants' argument plans ~ 2005, expressly to construct only and this plan purchase." 3.) that their purchase of the CD-Rom entitled them to construct multiple buildings based on the plan is not borne out by the evidence. express language of the In fact, it is refuted by the licensing states "[t] hat the computer disk agreement, . is . which for the limited purposes of making modifications and producing a final construction documents to build this building one time" (emphasis added)) and that the licensee further "will pay a set of (id. ~ 2 reuse fee each time [it] want[s] to build an additional building" and will "notify Allora building" (id . LLC ~ prior 4). to beginning Finally, construction of the the declaration of plaintiffs' copyright specialist, Jean Finley, puts to rest any notion that plaintiffs granted Triplex design. of time, anyone an unlimited license to The Allora Ms. Finley acknowledges that for a brief period "some Gardner plans provide [d] build license' upon the purchase of a CD-Rom. an 'unlimited However, this unlimited build license never referred to the Allora plans" and did not commence until late 2007, whereas The Allora Triplex design at issue in this case was purchased in December 2004 or 14 (Finley Declo January 2005. dated Apr. 26, 2010 [DE #62-4] ~ 4 .) Allora has made out a prima facie infringement as to The Allora Triplex design. case of copyright Although CBJC may have possessed a license to use the plan for the construction of one building, the uncontroverted evidence establishes that CBJC exceeded scope the of any such structures based on the plan. genuine favor issue of material of Allora is license by building multiple Allora having shown there is no fact as warranted to as this claim, to CBJC's judgment liability in for infringement of The Allora Triplex design. CONCLUSION For motion the for foregoing summary reasons, judgment [DE the court #54] and DENIES GRANTS defendants' plaintiff Allora's motion for partial summary judgment [DE #58]. This 2..2- /"t. day of March 2011. Senior United States District Judge At Greenville, NC #31 15
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