Harris Custom Builders, Inc. v. Hoffmeyer, 95-2972

• Decision Date: 10 September 1996
• Docket Number: No. 95-2972,95-2972
• Citation: 92 F.3d 517
• Parties: 1996 Copr.L.Dec. P 27,552, 39 U.S.P.Q.2d 1787 HARRIS CUSTOM BUILDERS, INC., Plaintiff-Appellee, v. Richard HOFFMEYER, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 517

92 F.3d 517

1996 Copr.L.Dec. P 27,552, 39 U.S.P.Q.2d 1787

HARRIS CUSTOM BUILDERS, INC., Plaintiff-Appellee, v. Richard HOFFMEYER, Defendant-Appellant.

No. 95-2972.

United States Court of Appeals,

Seventh Circuit.

Argued March 29, 1996.

Decided Aug. 8, 1996.

Rehearing and Suggestion

for Rehearing En Banc

Denied Sept. 10, 1996.

James P. Hanrath (argued), Thomas R. Vigil, Vigil & Hanrath, Barrington, IL, for plaintiff-appellee.

Joseph A. Grear (argued), Rolf O. Stadheim, Stadheim & Grear, Chicago, IL, for defendant-appellant.

Before CUMMINGS, MANION, and EVANS, Circuit Judges.

TERENCE T. EVANS, Circuit Judge.

Harris Custom Builders, Inc. has accused Richard Hoffmeyer of infringing its copyright on a set of architectural plans. To say the least, the case was hard fought on several and shifting fronts in the district court. Ultimately Harris won. The primary issues we are considering are the district court's rulings on summary judgment that the copyright on the architectural plans was infringed and is not invalid. Our analysis is relevant only to cases, such as this one, which arise under the 1976 Copyright Act, prior to its amendment by the Berne Convention Implementation Act. For simplicity's sake, we will refer to the applicable law as the 1976 Act.

In 1983, an architect named Maxwin Heimann, who worked for Fernando Meana d/b/a FM Custom Designs, prepared a set of architectural plans for Harris Custom Builders. Harris used the plans to build a home it called the Mundhank House. The architectural plans were not published. Also in 1983, Harris published a brochure, advertising the Mundhank House. The brochure contained abbreviated and incomplete drawings based on the plans. The brochure did not contain a copyright notice and was not registered with the registrar of copyrights.

In 1988, Harris built another home, called Spring Creek, based on the 1983 architectural plans. In January 1989, Harris, claiming to be the author, registered the Spring Creek blueprints. The title of the work was English Manor. Harris' justification for claiming to be the author was that the plans--though drawn by Heimann--were made for Harris, which claimed that they were a "work made for hire." In addition, Harris claims that it, not Heimann or Meana, is the owner of the copyright by assignment, by quit-claim deed of copyright, by joint ownership, and by equitable ownership. Neither Heimann nor Meana make any claim to ownership of the copyright in the plans.

In late 1988 or early 1989, another brochure was prepared for Harris by Baird & Warner. This one was almost identical to the one prepared in 1983, and like that one, this one did not contain a copyright notice and was not registered.

After the registration of the copyright in the plans for English Manor, Richard Hoffmeyer built a house from blueprints, which the district court found to be substantially similar to the Harris blueprints as published in abbreviated form in the brochure. Hoffmeyer's architect, Nick DeLuca, acknowledges that in designing the house Hoffmeyer built, he used the Baird & Warner sales brochure to prepare his blueprints. DeLuca's blueprints are dated March 14, 1989, and the building permit for construction of the house was issued in July 1989.

There has been no finding that Hoffmeyer or DeLuca had access to the Harris plans themselves. The issue of access was twice the subject of summary judgment motions in the district court. In one, Hoffmeyer sought summary judgment contending that he used the Baird & Warner brochure, not the plans, in designing his house. That motion was denied, in part because there was a factual question as to whether Hoffmeyer had access to the plans. In a second motion, Hoffmeyer contended that he did not have access to the plans; that motion was also denied.

Next, the district court considered cross-motions for summary judgment. In connection with these motions, Harris, apparently changing its tactics, contended that Hoffmeyer's architect copied the brochure, and by so doing infringed the copyright. In its statement of undisputed material facts, Harris said:

When Nicholas DeLuca prepared the Schwartz working drawings he did so directly from the Baird & Warner brochure which he had before him and made constant reference to while preparing the Schwartz working drawings.

This statement compels the conclusion that Harris has abandoned any claim that DeLuca literally had access to the blueprints themselves.

The district court, however, concluded that because Hoffmeyer had access to the brochure, he "had access to the copyrighted material." The court then compared the Hoffmeyer blueprints to the Harris blueprints and found them to be substantially similar. A finding of infringement was entered. In addition, the district court found that the Harris copyright was not invalid. The court also refused to allow Hoffmeyer to present a defense that he was an "innocent infringer." These are the rulings which Hoffmeyer appeals.

This case arises, as we said, under the Copyright Act of 1976, which became effective January 1, 1978. 17 U.S.C. § 102. The 1976 Act was amended by the Berne Convention Implementation Act of 1988, which became effective March 1, 1989. Under § 13 of that Act, "[a]ny cause of action arising under title 17, United States Code, before the effective date of this Act shall be governed by the provisions of such title as in effect when the cause of action arose."

Copyright ownership vests in the author of the work. 17 U.S.C. § 201. As a general rule, the author is the party who actually creates the work. § 102. There is, however an allowance for "works made for hire." If the work is made for hire, the owner is the employer or other person for whom the work was prepared. § 201(b). The contours of the work for hire doctrine were restricted in Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989). It was no longer sufficient that the hiring party had a right to control the work. Courts were instructed to apply principles of the general common law of agency as a starting point for the analysis as to whether a work was a work made for hire. Prior to the decision in Reid, the law of this circuit was that the right to control and supervise an independent contractor brought the work within the definition of a work made for hire. Evans Newton, Inc. v. Chicago Systems Software, 793 F.2d 889 (7th Cir.1986), cert. denied, 479 U.S. 949, 107 S.Ct. 434, 93 L.Ed.2d 383.

The authorship of the "English Manor" plans plays a role in this case. For instance, Hoffmeyer contends that Harris' copyright registration is invalid because it listed Harris as the author, even though the plans were not a "work made for hire" under Reid. Harris says that the contention is irrelevant. Reid was not decided until four months after the registration had issued, and at the time, Harris' belief that the plans were a work made for hire was reasonable. Under these facts, we will not invalidate the copyright on this basis.

Ownership is also important to the infringement issue. In order to make out a valid claim of copyright infringement, Harris must show both ownership of a valid copyright and copying of constituent elements of the work that are original. Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502 (7th Cir.1994). Harris, therefore, must also have a copyright in order to assert a claim of infringement.

Turning to the relationship between the plans and the brochure, we note that under the 1976 Act, publication of a work without proper copyright notice tentatively puts the work into the public domain. However, to alleviate the harshness of that principle, the law provides cure provisions. Publication of a work without notice will not extinguish a copyright in the work if registration is made within five years after the publication without notice and a reasonable effort is made to add notice to all copies which are distributed to the public in the United States after the lack of notice is discovered. 17 U.S.C. § 405(a); Eastern Pub. & Adv. v. Chesapeake Pub. & Adv., 831 F.2d 488 (4th Cir.1987), remanded on other grounds, 492 U.S. 913, 109 S.Ct. 3234, 106 L.Ed.2d 582 (1989).

Under the 1976 Act, then, Harris' plans would remain copyrighted so long as they were unpublished, were published with notice, or if they were published without notice, so long as they were registered within five years and subsequently published with notice. 17 U.S.C. § 405. In this regard, many facts are undisputed. It is undisputed that the plans themselves in their original form remained unpublished until they were registered in 1989; that the brochures contained abbreviated versions of the plans and were published without notice; that the cure provisions do not apply because the first brochure was published in 1983 and the registration was not filed until 1989, more than five years later. It is also undisputed that the brochure containing the abbreviated drawings went into the public domain. What is hotly disputed is the meaning of that final fact.

As did the district court, Harris relies heavily on the principles of law involving derivative works to save its copyright. A derivative work is a work based on one or more preexisting works. 17 U.S.C. § 101. In general, publication of a derivative work does not affect the validity of a copyright in the preexisting work, despite the incorporation of the underlying work into the derivative work. Stewart v. Abend, 495 U.S. 207, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990). Thus, although the...