Mention v. Gessell, 82-3249

Decision Date26 August 1983
Docket NumberNo. 82-3249,82-3249
Citation714 F.2d 87
Parties, 1983 Copr.L.Dec. P 25,568 Robert C. MENTION, et al., Plaintiffs/Appellees, v. Henry Brandt GESSELL, et al., Defendants/Appellants.
CourtU.S. Court of Appeals — Ninth Circuit

James H. Marvin, Schouboe, Marvin & Furniss, P.C., Portland, Or., for defendants/appellants.

James N. Westwood, Portland, Or., for plaintiffs/appellees.

Appeal from the United States District Court for the District of Oregon.

Before KENNEDY, TANG and POOLE, Circuit Judges.

TANG, Circuit Judge:

The Oregon architectural firm of Mention, Hanns, and Lindburg (MHL) alleged common law copyright infringement against Gessell, Smith, and Mosman (GSM) of Washington, based on GSM's copying and use of MHL's plans and drawings for construction of migrant labor housing. A jury found for MHL and awarded damages of $95,755. The district court denied GSM's motions for a judgment notwithstanding the verdict or new trial. We reverse, since MHL's claim was barred, in whole or in part, by the statute of limitations, and was preempted in part by the federal Copyright Act of 1976.

Background

Mention, Hanns, and Lindburg (MHL) are partners of a Salem, Oregon, architectural firm. MHL contracted in 1974 with the Marion County Housing Authority in Oregon to design migrant labor housing. The housing was financed by the Farmers Home Administration (FmHA). The contract was based on architectural plans and drawings developed by MHL in 1974-75. Thirty sets of plans were subsequently sent to various parties, including potential contractors and subcontractors, a copying service, plan exchange centers, several state and county agencies, municipalities, and the FmHA. The Marion County Project was completed in 1975.

Gessell, Smith, and Mosman (GSM) are partners of a Walla Walla, Washington, architectural firm. GSM contracted in 1974 with the Walla Walla County Housing Authority in Washington to design migrant labor housing, again financed by the FmHA. GSM's first two proposals in 1975 were rejected due to excessive cost factors. In February, 1976, GSM was furnished with a floor plan print for migrant labor housing during a Walla Walla County Housing Authority meeting. The print was from one of MHL's plan sets. The FmHA subsequently furnished GSM with one of the Oregon firm's complete plan sets. Both the Walla Walla County Housing Authority and the FmHA indicated that the prints represented projects acceptable in the past to the FmHA.

The Washington firm used the prints in preparing their third proposal, which was accepted in 1976 by the FmHA. This project is referred to as "Phase I," and was constructed by the County in 1976. The Walla Walla County Housing Authority again retained GSM in 1978 for "Phase II" of the housing project. The Phase I design work was used as a "schematic concept" in the application to FmHA for Phase II funds in the fall of 1978. Beyond that, the preliminary work for Phase II, which was done during work on Phase I, was later discarded due to a site change. The Phase II plans were based on the Phase I schematic design drawings, which consisted of clusters of fourplex units designed for privacy, efficiency, liveability, and to reduce building costs. GSM contends that the actual plans for Phase II were arrived at without reference to the Phase I plans. The FmHA accepted the Phase II proposal, and construction was begun in December, 1978.

In the summer of 1978, the Oregon firm learned of the Walla Walla project and GSM's design. MHL filed their 1979 action against GSM for common law copyright infringement in the U.S. District Court of Oregon. A jury returned a verdict for MHL, and awarded damages of $95,755. The trial court denied GSM's motions for JNOV or a new trial. We reverse the district court since we find that MHL's claim was barred, in whole or in part, by a statute of limitations defense, and was preempted in part by the federal Copyright Act of 1976.

Statute of Limitations

The statute of limitations issue has two components. Which statute of limitations applies? When did the statute commence running?

Since this is an action for common law copyright infringement, reference must be made to the applicable state statute of limitations. Oregon supplies that law since the copyright owner's domicile controls for choice of law determinations. See Granite Equip. Leasing Corp. v. Hutton, 84 Wash.2d 320, 525 P.2d 223 (1974); Buresh v. First Nat'l Bank, 10 Or.App. 463, 500 P.2d 1063 (1972). Both contract and tort statutes of limitations were presented to the district court. The court did not make a ruling as to which statute was applicable.

Appellees-MHL maintain there is no time bar problem, since the applicable statute is O.R.S. § 12.080, a six-year contract statute of limitations. Application of that statute requires that suit have been commenced by 1982, at the earliest; suit was filed herein in 1979. MHL argues that the contract statute governs this action since their claim was quasi-contractual, in that they sought damages under an unjust enrichment theory.

We disagree with MHL, and find that this action is governed by O.R.S. § 12.110, a two-year tort statute of limitations. Oregon recognizes that it is the gravamen or predominant characteristic of the action, not plaintiff's election of remedies, which governs whether an action is one in contract or tort for purposes of determining the applicable statute of limitations. Lindemeier v. Walker, 272 Or. 682, 538 P.2d 1266 (1975). The gravamen of this action is one for misappropriation of intellectual property rights, and is a tort. See 3 Nimmer on Copyright, § 12.05 n. 1 (1982).

We next must determine when the tort statute of limitations commenced to run. O.R.S. § 12.010 states that actions shall only be commenced "after the cause of action shall have accrued, except where a different limitations is prescribed by statute." The tort statute of limitations contains a "different limitation" only with respect to actions based upon fraud or deceit, which is not alleged herein. Thus, the question is when did the cause accrue? Appellees-MHL argue that the cause did not accrue until they had knowledge of the infringement in 1978, and thus the 1979...

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    ...competition/misappropriation); Crow v. Wainwright, 720 F.2d 1224 (11th Cir.1983) (crime of dealing in stolen property); Mention v. Gessell, 714 F.2d 87 (9th Cir.1983) (common law copyright and misappropriation); Smith v. Weinstein, 578 F.Supp. 1297, 1307 (S.D.N. Y.1984) ("plaintiff cannot m......
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