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Design Basics, LLC v. Landmark Communities, Inc.

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

August 21, 2019

Design Basics, LLC, Plaintiff,
v.
Landmark Communities, Inc., et al., Defendants.

          ORDER GRANTING PLAINTIFF'S MOTION FOR RELIEF OF COURT'S ORDER AND GRANTING IN PART AND DENYING IN PART MOTIONS FOR SUMMARY JUDGMENT

          Susan J. Dlott United States District Judge

         This matter is before the Court on Plaintiff's Motion for Relief of Court's [Summary Judgment] Order (Doc. 89). In the Summary Judgment Order (Doc. 85) dated June 4, 2019, the Court held that Plaintiff Design Basics, LLC had not offered sufficient evidence to establish that the Landmark Defendants had access to any of its seven copyrighted home designs (“the Copyrighted Works”), a necessary element for its copyright infringement claims. Accordingly, the Court granted summary judgment to the Landmark Defendants and denied as moot summary judgment to Design Basics. (Id.) Design Basics now submits additional evidence-an updated shipping invoice that was utilized in discovery, but inadvertently not filed with the summary judgment briefs-and seeks relief from the Summary Judgment Order as to only the Paterson and Lancaster Copyrighted Works.[1]

         For the reasons that follow, the Court GRANTS Design Basics relief from the Summary Judgment Order. The Court will admit the updated shipping invoice into evidence. Then the Court will reconsider Design Basics's Motion for Partial Summary Judgment (Doc. 65) and the Landmark Defendants' Motion for Summary Judgment (Doc. 66). Ultimately, the Court concludes that Design Basics is entitled to summary judgment on the issue of ownership of valid copyrights in the Paterson and Lancaster designs and on several affirmative defenses asserted by the Landmark Defendants.[2] The Landmark Defendants retain summary judgment on Design Basics's claims based on the five Copyrighted Works no longer at issue, but they are not entitled to summary judgment as to Design Basics's claims based on the Paterson and Lancaster Copyrighted Works.

         I. BACKGROUD

         The Court set out the complete procedural history and factual background in the Summary Judgment Order and will not repeat it here. It suffices to state that Design Basics has alleged that the Landmark Defendants copied and built houses using its copyrighted home designs. Design Basics filed an Amended Complaint against the Landmark Defendants on June 1, 2018 asserting nine claims for non-willful copyright infringement, willful copyright infringement, and violations of the Digital Millennium Copyright Act (“DMCA”), and the Landmark Defendants timely filed an Answer asserting thirteen affirmative defenses. (Docs. 58, 59.)

         Design Basics and the Landmark Defendants filed cross-Motions for Summary Judgment on March 1, 2019. Design Basics sought partial summary judgment only on the issues: (1) its ownership of valid copyrights in seven architectural home designs, (2) ten of the Landmark Defendants' purported affirmative defenses. The Landmark Defendants sought judgment as a matter of law as to the claims against them. As stated above, the Court held that Design Basics did not offer sufficient evidence to support a finding that the Landmark Defendants had access to Design Basics's Copyrighted Works, a necessary element to their claims. Therefore, the Court concluded that the Landmark Defendants were entitled to summary judgment on all claims against them. The Court had no reason to analyze whether Design Basics was entitled to summary judgment on the ownership issue or on the Landmark Defendants' affirmative defenses, and accordingly, it denied as moot Design Basics's Motion for Partial Summary Judgment.

         On July 2, 2019, Design Basics filed the pending Motion for Relief pursuant to Federal Rule of Civil Procedure 60(b). The matter is fully briefed and ripe for adjudication.

         II. OVERVIEW OF COPYRIGHT LAW

         The Copyright Act provides protection to copyright owners as follows:

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly....

17 U.S.C. § 106.

         To establish copyright infringement, a plaintiff must prove “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991); ATC Distrib. Group, Inc. v. Whatever It Takes Transmission & Parts, Inc., 402 F.3d 700, 705 (6th Cir. 2005) (quoting Feist Publ'ns). “Copyright protection subsists ... in original works of authorship . . . .” 17 U.S.C. § 102(a). A plaintiff can establish that copying occurred “by showing that the defendant had access to the copyrighted work and that the copyrighted work and the allegedly copied work are substantially similar.” Lexmark Int'l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 534 (6th Cir. 2004).

         Prior to 1990, copyright protection for architectural designs was provided only by the section protecting technical drawings under the statutory category of “pictorial, graphic and sculptural works” or “PGS.” 17 U.S.C. § 102(a)(5) (1989). PGS was defined to include “diagrams, models, and technical drawings, including architectural plans.” 17 U.S.C. § 101 (1989). As of December 1, 1990, following the enactment of the Architectural Works Copyright Protection Act (“AWCPA”), copyright protection was extended explicitly to “architectural works.” 17 U.S.C. § 102(a)(8). An architectural work is defined as follows:

[T]he design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings. The work includes the overall form as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features.

17 U.S.C. § 101. Copyright protection still extends to PGS after the AWCPA was enacted. 17 U.S.C. § 102(a)(5).

         Therefore, prior to the AWCPA, architectural designs and drawings were protected, but the physical design of the architectural work was not protected. A builder could construct a house identical to a copyrighted design without infringing the copyright protecting PGS, but the builder would violate the PGS protection if it copied the design, or if it copied the design and then used that copied design to construct a house. See Scholz Design, Inc. v. Sard Custom Homes, LLC, 691 F.3d 182, 189 (2nd Cir. 2012); Robert R. Jones Assocs., Inc. v. Nino Homes, 858 F.2d 274, 280 (6th Cir. 1988). After the AWCPA became effective on December 1, 1990, both the architectural designs and drawings, as well as the physical architectural work itself, are protected.

         III. MOTION FOR RELIEF FROM JUDGMENT

         A. Federal Rule of Civil Procedure 60

         Rule 60(b)(1) authorizes a district court to grant relief from a final judgment for “mistake, inadvertence, surprise, or excusable neglect.” Fed.R.Civ.P. 60. Rule 60(b)(1) is “intended to provide relief to a party in only two instances: (1) when the party has made an excusable litigation mistake or an attorney in the litigation has acted without authority; or (2) when the judge has made a substantive mistake of law or fact in the final judgment or order.” Cacevic v. City of Hazel Park, 226 F.3d 483, 490 (6th Cir. 2000) (citation omitted). It “does not allow a defeated litigant a second chance to convince the court to rule in his or her favor by presenting new explanations, legal theories, or proof.” Tyler v. Anderson, 749 F.3d 499, 509 (6th Cir. 2014). “The grant of relief under Rule 60(b) is circumscribed by public policy favoring finality of judgments and termination of litigation.” Id.

         B. Legal Standard for Access

         Although a district court does not resolve the substantive merits of an underlying claim on a Rule 60 motion, the Court will set forth the contours of the access issue to provide context. Design Basics alleges that the Landmark Defendants' Beech Creek house design infringes upon its Paterson design and that Defendants' Bedford house design infringes upon its Lancaster design. Design Basics must prove that the Landmark Defendants had access to the Paterson and Lancaster designs to prove copyright infringement. Proof of access to the Copyrighted Works is used to help establish the second Feist Publications prong of a copyright infringement claim, the “copying of constituent elements of the work that are original, ” when there is no direct evidence of copying. 499 U.S. at 361. The Landmark Defendants argued in the initial summary judgment briefing that they were entitled to summary judgment in part because Design Basics did not offer sufficient evidence to establish that they had access to any of the Copyrighted Works. The Court agreed and granted summary judgment to the Landmark Defendants primarily upon this basis.

         “Access is essentially [viewing] or having a reasonable opportunity to [view] the plaintiff['s] work and thus having the opportunity to copy.” Murray Hill Publ'ns, Inc. v. Twentieth Century Fox Film Corp., 361 F.3d 312, 316 (6th Cir. 2004) (internal quotation and citation omitted); see also Frank Betz Assocs., Inc. v. J.O. Clark Const., L.L.C., No. 3:08-CV-00159, 2010 WL 2253541, at *13 (M.D. Tenn. May 30, 2010) (same). Proof of access requires more than “mere speculation or conjecture.” Murray Hill Publ'ns, 361 F.3d at 316 (citation omitted). The plaintiff must provide probative evidence that the defendant had a “reasonable possibility” to view plaintiff's work. Id. (citation omitted). However, the access element “is intended to be easily established in light of the inherent difficulty of proving actual copying.” Frank Betz Assocs., 2010 WL 2253541, at *14 (going so far as to state that “it nonetheless appears fairly well established that all a plaintiff has to do to prove ‘access' is to show that the plaintiff distributes its marketing materials far and wide such that virtually everyone has access to them”).

         C. Summary Judgment Order

         In the Summary Judgment Order, the Court discussed the following evidence submitted by the parties relevant to whether the Landmark Defendants had access to the Paterson and Lancaster Copyrighted Works:

Design Basics submitted into evidence a shipping invoice indicating that Paul Berding on behalf of Landmark Communities ordered and received five building magazines (aka, plan catalogs) from Design Basics in August 1990. (Doc. 58-11 at PageID 524-525.) Paul Berding denied ordering the plan catalogs, but he admitted that one of his student co-op drafters could have used his credit card to order the plan catalogs. (P. Berding Aff., Doc. 60 at PageID 545; Doc. 74-1 at PageID 1037, 1040.) He also admitted that he did not know the process that his co-op drafters used to create home designs. (Doc. 74-1 at 1036-1037, 1039.) However, he testified that he never saw a plan book on a drafter's desk, nor did he see a drafter looking at other plans. (Id. at 1041.) [Footnote omitted.]
The shipping invoice is evidence that Landmark Communities received five plan catalogs from Design Basics in August 1990, but it is not sufficient to establish that the plan catalogs featured the Copyrighted Works. . . . Only the Paterson and the Lancaster Copyrighted Works had been published in August 1990.
Carl Cuozzo, the senior designer for Design Basics, asserted in his sworn Declaration that the Paterson was featured in the American Lifestyle Collection Vol. 3 and the Lancaster in the American Lifestyle Collection Vol. 5. (Doc. 72 at PageID 864.) He attached photocopies of the relevant pages from those publications to support that assertion. (Doc. 72-1 at PageID 867-871.) However, Cuozzo then pointed to the shipping invoice as evidence that Design Basics delivered American Lifestyle Collection Vols. 3 and 5 to Landmark Communities in August 1990, but the invoice does not support his assertion. (Doc. 72 at PageID 864 (citing Doc. 58-11 at PageID 525).) That is, the shipping invoice does not name the publications that Design Basics mailed to Landmark Communities in August 1990. Rather, the first page of the invoice states that one order was shipped, but in in the category of “Shipping Details” the invoice states only “DISPLAY ADS: BLDR MAG.” (Doc. 58-11 at PageID 524.) The second page indicates that an order for five separate items was pending in July 1990, but the items are unnamed. (Id. at PageID 525.) Finally, the third through seventh pages of the invoice contain only “#error” codes. (Id. at PageID 526-530.) Cuozzo simply did not establish the factual basis for his assertion that the publications shipped to Landmark Communities contained the Paterson and Lancaster Copyrighted Works. [Footnote omitted.]

(Doc. 85 at PageID 1229-1231.)

         D. ...


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