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Design Basics, LLC v. Forrester Wehrle Homes, Inc.

United States District Court, N.D. Ohio, Western Division

March 30, 2018

Design Basics, LLC, Plaintiff,
Forrester Wehrle Homes, Inc., et al. Defendants.


          James G. Carr Sr. U.S. District Judge

         This is a copyright-infringement case.

         Plaintiff Design Basics LLC, (DB), creates and licenses architectural plans for single-family homes. It accuses defendants, the home building companies Forrester Wehrle Homes, Inc., and Wehrle Development, Ltd. (collectively, FWH) of copying, manufacturing and selling “three-dimensional infringing copies (houses)” of its copyright-protected designs. (Doc. 89, ID 3488).

         Three motions are pending.

         First is plaintiff's motion for summary judgment regarding: the validity of the copyrights at issue; its ownership of the copyrights; and defendants' alleged access to the protected works. (Doc. 83). Second is plaintiff's motion to exclude defense expert John Gugliotta's report, which FWH cites in response to DB's summary-judgment arguments. (Doc. 84). Defendants oppose both motions. (Docs. 87, 88).

         Third is defendants' objection to an affidavit submitted by plaintiff's counsel, James Rogers, “the materials attached thereto, ” combined with a motion to strike “Plaintiff's argument based thereon.” (Doc. 100, ID 4103). Plaintiff opposes the motion. (Doc. 104).

         For the reasons below, I grant plaintiff's motion to exclude Gugliotta's report in part, and deny it in part, overrule defendants' objection to Rogers' affidavit and deny their motion to strike plaintiff's “argument based thereon” in its entirety, and grant plaintiff's motion for summary judgment in part, and deny it in part.

         Number of Designs

         Before reaching the substance of DB's copyright claims, I resolve a threshold matter: determining exactly how many copyrighted design plans are at issue. DB's conflicting positions make this task harder than it should be.

         Relying on the second amended complaint (see Doc. 58), I noted in previous orders that DB accused FWH of infringing its copyrights in twenty-three architectural design plans. See Design Basics, LLC v. Forrester Wehrle Homes, Inc., (Design Basics I), 2017 WL 5467152 (N.D. Ohio); Design Basics, Inc. v. Forrester Wehrle Homes, Inc., (Design Basics II), 2017 WL 5444569 (N.D. Ohio). They are: the “Kaiser, ” the “Kendall, ” the “Shannon, ” the “Sherburne, ” the “Newlin, ” the “Bermier, ” the “Tollefson, ” the “Monte Vista, ” the “Lancaster, ” the “Franklin, ” the “Harrisburg, ” the “Chandler, ” the “Galvin, ” the “Carrington, ” the “Paisley, ” the “Ambrose, ” the “Kincaid, ” the “Gabriel Bay, ” the “Tilmer's Run, ” the “Crimson Creek, ” the “Kirby Farms, ” the “Ashton” and the “Albany.” (Doc. 58, ID 1222).

         DB clarified that Counts I through VIII of its second amended complaint, alleging traditional copyright infringement claims, did not apply to the Ashton and Albany plans, which DB had licensed to FWH in 2014. (Doc. 58, ID 1226; Doc. 83-25, ID 3248).

         Plaintiff did not, however, explicitly exclude the Ashton or the Albany from Count IX of the complaint, alleging a violation of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 1201 et seq., and claiming that defendants “intentionally removed and omitted DB's copyright . . . information from copies of DB's works”-an act that could violate the DMCA notwithstanding a valid license. See 17 U.S.C. § 1202(b)(1). I therefore inferred that Count IX included a claim related to these two designs-a supposition plaintiff later confirmed in its brief opposing defendants' motion for summary judgment on substantial similarity. (See Doc.118).

         To succeed on a DMCA claim, however, a copyright holder still bears the burden of proving two of the elements essential to a traditional copyright infringement claim: (1) that it owns the copyright; and (2) that the defendant had access to it. See 17 U.S.C. § 1202(b)(1) (“No person shall, without the authority of the copyright owner or the law . . . intentionally remove or alter any copyright management information” (emphasis added)); see also Granger v. Dethlefs, 2014 WL 2475979, *6-7 (E.D. Pa.) (Plaintiff “cannot prove that Defendants violated the DMCA because if there is not enough evidence to show copyright ownership, it cannot be proved that any copyrighted material was altered or removed.”); Design Basics, LLC v. Lexington Homes, Inc., 2016 WL 8116897, *5 (E.D. Wis.) (“Without evidence of access to the copyrighted works, there is no genuine dispute of material fact as to whether Defendants intentionally removed copyright management information from the same copyrights as required for Plaintiffs to prove their claim under the [DMCA].”).

         And at present, DB does not move for summary judgment on its ownership of a copyright in, or defendants' access to, the Ashton or the Albany.

         DB “moves for summary judgment on . . . Plaintiff's ownership of the valid copyrights in the 21 works at issue, ” rather than the twenty-three works it named in the second amended complaint. (Doc. 83-1, ID 2861 (emphasis omitted)). Plaintiff did not submit certificates of copyright registration or deposit materials for the Ashton or the Albany as exhibits to its motion, [1] and did not include them among its list of the twenty-one designs “at issue.” (Id. at 2860). Thus, to the extent DB had intended to raise any arguments concerning its ownership of, and FWH's access to, the Ashton or the Albany, plaintiff waived them by failing to discuss them in its principal summary-judgment brief. See Scottsdale Ins. Co. v. Flowers, 513 F.3d 546, 553 (6th Cir. 2008).

         DB's counsel evidently caught this mistake when drafting plaintiff's reply. There, plaintiff asserts that it owns “valid copyrights in the twenty-three (23) architectural works at issue, ” and contends defendants had access to all of them, bringing the Ashton and the Albany back into the mix. (Doc. 98, ID 3751, 3768 (emphasis added)). That it cannot do.

         A reply is a not a vehicle for DB to correct the omissions in its initial brief. Hunt v. Big Lots, Inc., 244 F.R.D. 394, 397 (N.D. Ohio 2007). “[R]eply briefs reply to arguments made in the response brief-they do not provide the moving party with a new opportunity to present yet another issue for the court's consideration.” Scottsdale, 513 F.3d at 553 (quoting NovoSteel SA v. Untied States, 284 F.3d 1261, 1274 (Fed. Cir. 2002)). “As a matter of litigation fairness and procedure, then, ” I treat issues raised for the first time on reply “as waived.” Id. (quoting NovoSteel, 248 F.3d at 1274); see also Hunt, 244 F.R.D. at 397.

         Accordingly, because plaintiff waived its arguments concerning the Ashton and the Albany, I deny DB's motion for summary judgment on ownership and access insofar as it relates to these designs.

         Further, because I have already dismissed DB's claims concerning defendants' alleged infringement of plaintiff's Kincaid, Bermier, and Paisley designs (Doc. 129, ID 4950), my analysis herein concerns only the eighteen remaining designs still at issue.

         Gugliotta's Report

         A second threshold matter is whether, and to what extent, I may consider certain expert testimony in resolving plaintiff's arguments concerning validity, ownership, and access.

         In an earlier order, I granted plaintiff's motion to exclude defense expert Richard Kraly's initial report insofar as it expressed legal opinions characterizing DB's designs as too unoriginal to warrant copyright protection. Defendants evidently assumed first, that I required witness advice on matters of copyright law, and second, that Kraly, an architect with no legal education or training, was somehow qualified to provide it. See Design Basics I, 2017 WL 5467152 at *4 (citation omitted).

         This time, they rely on an actual attorney.

         Specifically, in opposing DB's summary judgment motion, FWH offers an expert report penned by John Gugliotta, Esq., a lawyer defendants bill as “an expert in . . .copyright law.” (Doc. 88-1, ID 3438).

         “Admittedly, ” at the summary judgment stage, the “parties are not required to submit evidence . . . in a ‘form that would be admissible at trial.'” Shazor v. Prof. Transit Mgmt., Ltd., 744 F.3d 948, 960 (6th Cir. 2014) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). But their materials “must still comport with the rules of evidence”-including those governing expert testimony. Id.; see also Fed. R. Civ. P. 56(c)(2) (“A party may object that the material cited to . . . cannot be presented in a form that would be admissible in evidence.”).

         I have already explained that “I have an independent ‘gatekeeping' duty to ensure that expert testimony is admissible under Fed.R.Evid. 702.” Design Basics I, 2017 WL 5467152 at *4 (citing Kuhmo Tire v. Carmichael, 526 U.S. 137, 147 (1999)). “That duty includes maintaining ‘vigilant' guard against expert testimony that ‘embraces actual legal conclusions.'” Id. (citation, brackets, and ellipsis omitted). “Generally, an expert may not state his or her opinion as to legal standards nor may he or she state legal conclusions drawn by applying the law to the facts.” United States v. Gordon, 493 Fed.Appx. 617, 626-27 (6th Cir. 2012) (citation omitted).

         Gugliotta goes out of his way to do both.

         First, Gugliotta opines that five of DB's designs are “ineligible for copyright protection as a matter of law” based on their dates of creation. As for the others, he explains that “Plaintiff does not have any claim of infringement for an architectural work” and “Plaintiff's allegations of copyright infringement . . . fail[] to sufficiently plead the nature of the copyrighted material.” (Doc. 88-1, ID 3459-3465, 3468).

         Gugliotta also repeats Kraly's assertion that DB's “works are not copyrightable because there are no original design elements present.” (Id. at 3468 (citing Kraly report)). I previously excluded this portion of Kraly's report because Kraly's “belief that DB's designs do not merit copyright protection is a legal conclusion-and a subject on which I ‘do not need the judgment of witnesses.'”Design Basics I, 2017 WL 5467152 at *4 (quoting Gordon, supra, 493 Fed.Appx. at 626). I now exclude this portion of Gugliotta's report for the same reason.[2]

         “However, ” as I said with respect to Kraly's report, “the inclusion of such opinions does not render [Gugliotta's] entire report and/or testimony inadmissible.” Id. (citation and ellipsis omitted).

         An individual with specialized knowledge may offer testimony or opinion as a lay witness so long as he has personal knowledge of the facts he discusses. Harris v. J.B. Robinson Jewelers, 627 F.3d 235, 239-41 (6th Cir. 2010); United States v. Wells, 211 F.3d 988, 998 (6th Cir. 2000); see also Fed. R. Evid.701(a) (testimony “rationally based on the witness's perception” is lay testimony). Here, apart from his legal advocacy, Gugliotta recounts personally observable facts relevant to FWH's defenses, such as his claim that he “review[ed] the records” at the United States Copyright Office and “was unable to find any” proof that Design Basics, Inc. (plaintiff's predecessor in interest and the original copyright registrant) transferred ownership of its copyrights to DB. (Doc. 88-1, ID 3440).

         Though Gugliotta cannot render a legal conclusion based on this fact, defense counsel can rely on it to dispute DB's assertion that it owns the copyrights originally registered to Design Basics, Inc. “The distinction, though subtle, is nonetheless important.” See Berry v. City of Detroit, 25 F.3d 1342, 1353 (6th Cir. 1994).

         Accordingly, I disregard Gugliotta's legal conclusions, but consider the facts he relays to the extent that they bear on FWH's arguments regarding ownership, validity, and access.

         Rogers' Affidavit

         The final preliminary issue is FWH's objection to the affidavit of plaintiff's counsel, James Rogers, “the materials attached thereto, ” and its motion to strike “Plaintiff's argument based thereon.” (Doc. 100, ID 4103).

         In his affidavit, Rogers attests that in the course of discovery, defense counsel, Robert Stoffers, sent him the “original Design Basics plan books” in his “clients' possession” as of June 22, 2016. (Doc. 98-10, ID 3847). The affidavit and its exhibits do not state whether these “original Design Basics plan books” were in defendants' “possession” because FWH specifically ordered them, or received them through a more passive means, such as unsolicited advertisement. Other evidence in the record, however, shows that one of the defendant entities-Forrester Wehrle Homes, Inc.-ordered “Design Basics plan books” directly from Design Basics, Inc. in 1993, 1996, 2002 and 2003. (Doc. 83-25).[3]

         Rogers attests that he “personally reviewed each page” of the plan books and “made a note of every page that had handwriting, paper clips, dog ear pages [i.e., folds at the upper corner], and any other physical alterations.” (Doc. 98-10, ID 3848). He copied these pages and “drafted a document summarizing” their alterations. (Id.).

         The “materials attached thereto” Rogers' affidavit include: (1) the letter from Stoffers stating that the “original Design Basics plan books” were in FWH's “possession”; (2) Rogers' copies of the altered pages; (3) Rogers' notes summarizing the alterations; and (4) a letter indicating that Rogers returned the plan books to Stoffers following his review. (Docs. 98-11, 98-12, 98-13, 98-14).

         DB relies on Rogers' affidavit and these exhibits to demonstrate access-i.e., that one or more defendants saw or “ha[d] a reasonable opportunity” to see plaintiff's copyrighted designs “and thus ha[d] the opportunity to copy” them. Jones v. Blige, 558 F.3d 485, 491 (6th Cir. 2009) (citation omitted). This is the “argument based thereon” defendants move to strike as part of their evidentiary objection.

         To that end, FWH contends that Rogers' affidavit is insufficient to authenticate his copies of the “original Design Basics plan book” pages. This is so, it argues, because Rogers lacks personal knowledge of “the DB books, ” including “their source, their creation, their retention, their content, or that they are what they purport to be.” (Doc. 100, ID 4107). And although Stoffers signed the letter representing that the documents he produced were indeed “original Design Basics plan books . . . [then] in [his] clients' possession, ” (Doc. 98-11, ID 3849-50), he now insists that his representation is also insufficient to authenticate them, because he can “express nothing more than [his] belief that the papers are those described” in Rogers' discovery request. Fisher v. United States, 425 U.S. 391, 413 (1976).

         But DB need not resort to Rogers' (or Stoffers') personal knowledge “to produce evidence sufficient to support a finding” that the plan book pages are what DB claims they are. See Fed. R. Evid. 901(a). Rather, as promotional materials “that contain a company logo, ” the Design Basics plan book pages are self-authenticating documents pursuant to Fed.R.Evid. 902(7). Alexander v. CareSource, 576 F.3d 551, 561 (6th Cir. 2009) (citing Pass & Seymour, Inc. v. Hubbell, Inc., 532 F.Supp.2d 418, 438 (N.D. N.Y. 2007)).

         For example, many of the plan book pages feature illustrations of homes in close proximity to a “Design Basics, Inc.” logo, copyright symbol, or web address. Several plan book cover pages also declare that they are “published by Design Basics, Inc.” (Doc. 98-15, ID 3883; Doc. 98-16, ID 3931; Doc. 98-18, ID 3935), or are “a Design Basics, Inc. Publication.” (Doc. 98-14, ID 3860; Docs. 98-19, 98-20). One, in fact, identifies itself as a booklet of “Design Basics Home Plans.” (Doc. 98-19, ID 3935). On top of that, a number of the plan book titles-“Gold Seal Home Plans, ” “Nostalgia Home Plans Volume II, ” and “Neighborhood in a Box”-are similar, if not identical to, the names of the DB plan books Forrester Wehrle Homes, Inc., ordered from Design Basics, Inc. in years past. (Compare Docs. 98-15, 98-18, 98-20, with Doc. 83-25, ID 3245-46).

         Because these documents bear “[a]n inscription, sign, tag, or label purporting to have been affixed in the course of business and indicating origin, ownership, or control, ” they require “no extrinsic evidence of authenticity in order to be admitted.” Fed.R.Evid. 902(7); see also Alexander, supra, 576 F.3d at 561.

         Defendants alternatively contend that even if the plan book pages are admissible, the handwritten notations on the pages are not, because the “source(s)” of the marks, paper clips and dog ear folds “are not known, ” (Doc. 106, ID 4348), and neither Rogers' affidavit, nor Stoffers' letter “demonstrates that the markings . . . were made by Defendants.” (Doc. 100, ID 4110).

         True enough. “But the fact that the author of the ‘handwritten notes remains unknown' does not extinguish the document[s'] authenticity.” Hardin v. Dadlani, 221 F.Supp.3d 87, 102 (D. D.C 2016) (quoting Lexington Ins. Co. v. W. Pa. Hosp., 423 F.3d 318, 329 (3d Cir. 2005)).

         “Rule 901(a) does not require the document to be probative of a particular fact.” Lexington Ins., 423 F.3d at 329-330. Nor does it require the proponent to “rule out all possibilities inconsistent with authenticity, or to prove beyond any doubt that the evidence is what it purports to be.” United States v. Dhinsa, 243 F.3d 635, 658 (2d Cir.2001). All DB must do is introduce evidence sufficient “for a jury to conclude that the document ‘is what its proponent claims it to be.'” Lexington Ins., 423 F.3d at 330 (citation omitted). DB has done at least that.

         Based on the foregoing evidence, a reasonable juror could conclude that one or more employees at Forrester Wehrle Homes, Inc., are responsible for the handwritten marks and alterations on the Design Basics plan books Forrester Wehrle Homes, Inc. ordered and admittedly kept in its “possession.” See e.g., Hardin, 221 F.Supp.3d at 102 (employment application with the handwritten note, “blond girl” admissible against employer despite plaintiff's failure to “show who made the ‘blond girl' notation, ” where the “application was in the defendants' possession . . . and there was ample evidence that [the defendant supervisor] said he wanted to hire blond girls”).

         Defendants' insistence that there are “other conceivable explanations” for the handwritten marks (Doc. 106, ID 4350), goes to the weight of this evidence, not its admissibility. See United States v. Crosgrove, 637 F.3d 646, 658 (6th Cir. 2011) (defendant's claim that his cohort “may have hidden (or even written)” a disputed letter “go to the weight the jury should afford the evidence, ” not authentication).[4]

         I overrule defendants' objection and deny their motion to strike DB's access argument.

         Standard of Review

          Summary judgment is appropriate under Fed.R.Civ.P. 56 where the opposing party fails to show the existence of an essential element for which that party bears the burden of proof. Celotex, supra, 477 U.S. at 322.

         The movant must initially show the absence of a genuine issue of material fact. Id. at 323. Once the movant meets that burden, the “burden shifts to the nonmoving party [to] set forth specific facts showing there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). Rule 56 “requires the nonmoving party to go beyond the [unverified] pleadings” and submit admissible evidence supporting its position. Celotex, supra, 477 U.S. at 324.

         I accept the non-movant's evidence as true and construe all evidence in its favor. Eastman Kodak Co. v. Image Tech. ...

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