United States District Court, N.D. Ohio, Eastern Division
Robert L. Stark Enterprises, Inc., et al., Plaintiffs,
Neptune Design Group, LLC, Defendant.
MEMORANDUM OF OPINION AND ORDER
PATRICIA A. GAUGHAN, United States District Judge
matter is before the Court upon Plaintiffs' Motion for
Summary Judgment on Copyright Infringement (Doc. 28). Also
pending is Plaintiffs' Motion for Summary Judgment on
DMCA Claim (Doc. 29). This is a copyright infringement case.
For the reasons that follow, the motions are GRANTED in PART
and DENIED in PART. Plaintiff is entitled to summary judgment
on all claims, with the exception of the copyright
infringement and corresponding declaratory judgment claims as
they pertain to defendant's allegation that plaintiff
emailed copies of certain plans to Bialosky.
Robert L. Stark Enterprises, Inc. and Yogurt Treats
(collectively “plaintiff”) bring this lawsuit
against defendant Neptune Design Group, LLC seeking a
declaratory judgment of non-infringement and further asking
that the Court declare that plaintiff did not improperly
remove Copyright Management Information (“CMI”).
Group, Inc. (“Menchie's”) started as a frozen
yogurt store located in California. The plans for that
location were prepared by another architect. The plans
include a circular pay counter and a curved wall of yogurt
machines. Mara Lubbell worked as a designer on the
Menchie's brand, including preparing the logo and
determining colors, shapes, characters, features, and other
design elements. By 2008, other Menchie's stores were
located in California. In October of 2008, Elisa Bayha and
Chris Neal, employees of defendant, met with a Menchie's
representative regarding the possibility of replacing
Menchie's previous architect. (Bayha Dep. 16-17).
Menchie's was looking to replace its “teams”
as it was not happy with any of the previous architectural
teams and was unhappy with the existing stores. (Bayah Dep.
16). After the meeting, Bayha and Neal again met with
Menchie's and toured certain store locations. (Bayha Dep.
18). After a subsequent meeting, Menchie's sent defendant
a number of materials including a “graphic designer
generated elevations for the Fallbrook store, ” a
“layout for the Fallbrook store, ” “the
same graphic designer developed rendered plan -- or layout or
elevation for the Valley Village store, ” and “a
set of drawings for Culver City.” (Bayha Dep. 20). In
addition, at some point Menchie's provided defendant with
construction documents for the Rendondo Beach store and 3-D
color renderings, i.e., color illustrations, of the
Valley Village store. (Neal Dep. 35, 53).
parties agree that the first project defendant submitted to
Menchie's involved the Woodland Hills store. (Bahya Dep.
123). Defendant and Menchie's entered into a design
services contract with respect to this store and all other
stores for which defendant provided services to Menchie's
franchisees. (“DS Contracts”). The DS Contracts
were either between Menchie's and defendant or defendant
and the franchisee. Those contracts provide, in relevant
Drawings, specifications, and other design documents, whether
written or electronic, prepared by [defendant] or [defendant]
consultants, are instruments of service used solely with
respect to this Project. [Defendant] and [defendant's]
consultants are deemed the authors and sole owners of their
respective instruments of service and shall retain all common
law, statutory, and other reserved rights, including
copyrights. [Menchie's] and [Menchie's] contractors
shall have no right to copy or use the data on other
projects, or for additions to this Project, without agreement
of and compensation to [defendant], and all of Client's
written agreement with its contractors shall reflect this
construction drawings for the Woodland Hills store are dated
November 14, 2008 and entitled “2008 MGI CD Set of
Plans.” (Hereafter, “2008 Plans”) (Neal
Depo. Ex. 26). The architect for the project was David Udkow.
(Bayha Dep. 24). Udkow was not employed by defendant and,
instead, was an independent contractor (Bayha Dep. 25). The
plans identify Udkow as the architect. (Neal Dep. Ex. 26 a
p.3). Udkow is a licensed architect who reviewed the plans
for approval and permitting. (Bahya Dec. 19). He did not
participate in the creation of any work for which defendant
received a copyright. (Bahya Dec. ¶ 19). In addition, the
Upon city approval and permit these plans have been reviewed
by Menchie's for its design consistency and conformity to
Menchie's strict design standards. Under no circumstances
shall these drawings be modified in any way without the
express written consent of both the architect and
Menchie's corporate office.
used the outcome of the Woodland Hills project as a template
for the next project. After the first few months of the
relationship, Menchie's and defendant agreed that
Menchie's would use defendant exclusively for the
development of all future franchises. (Bahya Dec. ¶ 6).
Thereafter, defendant created a document entitled “2009
[Menchie's] Design Guide” to assist franchisees and
building contractors. (Bahya Dec. ¶ 23). In addition,
for approximately four years, defendant created store
designs, floor layouts, and construction documents for
Menchie's stores. (Bahya Dec. ¶ 6). Ultimately,
defendant registered a number of copyrights correlating to
plans defendant prepared for various Menchie's stores,
although defendant did not disclaim any pre-existing material
in these registrations. Defendant obtained a copyright
registration from the Copyright Office on May 13, 2005. (Neal
Dep. Ex. 26).
2010, plaintiff began its relationship with Menchie's.
Plaintiff planned to build a number of stores quickly. (Neal
Depo. Ex. 11). Menchie's required plaintiff and defendant
to work together on the projects. To that end, plaintiff and
defendant entered into four DS Contracts for locations in
Ohio (“Ohio DS Contracts”). Defendant created and
delivered to plaintiff plans for those stores. Defendant
obtained copyright registrations for those materials.
further prepared some initial layouts for additional stores
plaintiff intended to open. Defendant sent those initial
layouts to Menchie's for review. (Bayha Dep. p. 79-80).
At some point in the process, plaintiff became frustrated
with defendant's work. Plaintiff inquired of
Menchie's as to whether plaintiff could utilize the
services of another architect for the remaining stores it
planned to open. It appears that Menchie's agreed.
(Regev. Dep. Ex. M)
end, plaintiff hired Bialosky Partners Architects, LLC
(“Bialosky”) to replace defendant. Plaintiff
continued to be bound by its obligations as a franchisee of
Menchie's. In other words, plaintiff had to operate under
the “Menchie's System, ” which included
utilizing certain design requirements imposed by
Menchie's. (Kleinberger Dep. Ex. C). As such,
Menchie's instructed one of its employees to send
plaintiff “2-3 full packages of new projects (make sure
you are using the most update [sic] package; new frames,
starlet, etc.') ....We provide the different plans to
make sure [plaintiff] has all items and can convert a full
set for CAD.” (Regev. Dep. Ex. L). In addition,
the agreement between plaintiff and Bialosky required
Bialosky to create site specific architectural plans
“based on Menchie's standard criteria
drawings.” (Rapport Dep. Ex. 27 at ¶ 1). The
agreement further provides that plaintiff “will be
provided with Autocad.dwg CAD files of the prototype drawings
that will be created by scanning existing drawings. The CAD
files that we are provided with will be created using our
standard layering system....” (Id. at §
sent plaintiff the drawings with instructions to have CAD
files created from the PDF files. (Deutsch Dep. Ex X).
Plaintiff forwarded to Bialosky plans for certain
Menchie's stores. The drawings had title blocks
containing defendant's name, as well as the name of the
architect. The drawings also had Menchie's name on them.
From this set, Bialosky selected drawings of a North Carolina
Menchie's store, along with several pages of the Westgate
store, to send to a CAD company. (Deutsch Dep. 164-67).
Bialosky also sent its “layering standards” to
create a “kit” that Bialosky could use in
designing the stores for plaintiff. Bialosky always receives
prototype drawings and puts them into its specific CAD
format. (Deutsch Dep. 151-52). At no point did any party
receive permission from defendant to use works copyrighted by
defendant and defendant was not included in the
communications between Menchie's and plaintiff.
Thereafter, Bialosky created a number of drawings used by
plaintiff in opening new Menchie's stores. Plaintiff
testified that all of the Menchie's franchises it opened
share a “very consistent” design.
also testified that it had received shell drawings prepared
by the architect of the buildings in CAD form from the
landlord. According to defendant, these drawings contain only
shell outlines of the space. Defendant incorporated the CAD
into its CAD in order to create a design for the
Menchie's store. (Bayha Dep. 51). Defendant indicated
that such a process is commonplace. (Bayha Dep. 141-42).
February of 2013, while working together on another project,
Menchie's sent defendant a confidentiality agreement.
That document provides that all “Confidential
Information, ” which is defined to include copyrights,
belongs to Menchie's. The document is missing the evenly
numbered pages, and the “Confidential
Information” provision is set forth on an evenly
numbered page. Nonetheless, the parties signed the document.
in October of 2013, defendant and Menchie's agreed to
part ways. (Neal Dep. 139-140). Defendant offered
Menchie's full ownership rights to its CAD files and
designs for two Menchie's franchise drawings, as well as
a set of “drive through” designs. Menchie's
responded that it did not believe it needed the design plans
for two stores or the drive-through designs. (Neal Dep. Ex.
20). As such, Menchie's inquired as to whether the price
for the CAD for one store would be $4, 500.00.
(Id.). It does not appear that any further
communication occurred. (Neal Dep. 146). One of Mechine's
employees testified that he understood the email to be an
offer to perform new work. (Regev Dep. 94). Menchie's
believes that it owns the rights to items such as “the
logo, colors, the curved wall and the circular bubble, the
signage, whether it's interior and exterior.”
(Kleinberger Dep. 245). This is so because these elements
were present in the first store. (Id.).
2015, counsel for defendant wrote to plaintiff alleging that
defendant owned certain copyrighted designs, including those
covered under the DS Contracts and others, and that plaintiff
had used those designs without defendant's permission. In
response, plaintiff filed this lawsuit asserting two claims
for declaratory relief. Count one seeks a declaration of
non-infringement and count two seeks a declaration that
plaintiff did not violate the Digital Millennium Copyright
Act (“DMCA”). Defendant filed a counterclaim
asserting ten claims for relief. Counts one through eight
assert copyright infringement claims. Count nine is a claim
for violation of DMCA and count ten is a claim for breach of
contract. The Court previously granted in part
defendant's motion to compel mediation and arbitration.
The Court determined that counts one and two, as well as
counterclaims one through nine, are subject to mediation and
arbitration to the extent they are based on copyrights
derived from work performed pursuant to the Ohio DS
Contracts. The Court further compelled mediation and
arbitration with respect to the breach of contract claim.
now moves for summary judgment with respect to the remaining
claims and defendant opposes the motions.
56(a) of the Federal Rules of Civil Procedure, as amended on
December 1, 2010, provides in relevant part that:
A party may move for summary judgment, identifying each claim
or defense-or the part of each claim or defense-on which
summary judgment is sought. The court shall grant summary
judgment if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to
judgment as a matter of law.
Fed .R.Civ.P. 56(a).
56(e) provides in relevant part that “[i]f a party
fails to properly support an assertion of fact or fails to
properly address another party's assertion of fact as
required by Rule 56(c), the court may ... consider the fact
undisputed for purposes of the motion ... [and] grant summary
judgment if the motion and supporting materials-including the
facts considered undisputed-show that the movant is entitled
to it.” Fed.R.Civ.P. 56(e).
Congress amended the summary judgment rule, the
“standard for granting summary judgment remain
unchanged” and the amendment “will not affect
continuing development of the decisional law construing and
applying” the standard. See, Fed.R.Civ.P. 56, Committee
Notes at 31.
summary judgment is appropriate when no genuine issues of
material fact exist and the moving party is entitled to
judgment as a matter of law. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986) (citing
Fed.R.Civ.P. 56(c)); see also LaPointe v. UAW, Local600, 8 F.3d 376, 378 (6th Cir. 1993). The burden of