Design Basics, LLC v. Best Built, Inc.
| Decision Date | 08 December 2016 |
| Docket Number | Case No. 14–C–597 |
| Parties | DESIGN BASICS, LLC and Plan Pros, Inc., Plaintiffs, v. BEST BUILT, INC. and Craig A. Kassner, Defendants. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Dana A. Lejune, Dana Andrew Lejune Attorney at Law, Houston, TX, Hannah J. Yancy, Michael T. Hopkins, IP–Litigation US LLC, Milwaukee, WI, for Plaintiffs.
Christina L. Peterson, Stellpflug Law SC, De Pere, WI, Christopher S. Snyder, Epiphany Law LLC, Appleton, WI, Daniel J. Hurst, Dempsey Law Firm LLP, Oshkosh, WI, Mark M. Leitner, Laffey Leitner & Goode LLC, Milwaukee, WI, Robert J. Janssen, Janssen Law LLC, Green Bay, WI, for Defendants.
DECISION AND ORDER
In this action, Plaintiffs Design Basics, LLC and Plan Pros, Inc. allege Defendants Best Built Inc. and Craig Kassner infringed copyrights held by Plaintiffs in architectural works. Arising under federal law, their claims provide this court with jurisdiction under 28 U.S.C. §§ 1331 and 1338(a). The case is before the court on the parties' cross motions for summary judgment and partial summary judgment. Plaintiffs argue that they are entitled to partial summary judgment because they own valid copyrights, Defendants had access to Plaintiffs' protected works, and Defendants do not have a factual basis to support ten of their affirmative defenses. Defendants seek summary judgment on their affirmative defenses in which they contend that most of the alleged infringement at issue in the case is barred by the three-year statute of limitations or alternatively, that the case is subject to a release included in a settlement agreement entered into by Plaintiff Design Basics and a third-party. For the reasons below, Plaintiffs' motion will be granted in part and denied in part and Defendants' motion will be denied. The parties' motions to seal will be granted.
Design Basics LLC and Plan Pros Inc. are Nebraska companies engaged in the business of creating, publishing, and licensing architectural plans and designs. (Pls.' Proposed Undisputed Facts (PPUF) at ¶ 1, ECF No. 153.) Best Built Inc. is a Wisconsin company that markets, constructs, and sells residential homes. Craig Kassner is a vice president and former president of Best Built. (Defs.' Proposed Undisputed Facts (DPUF) at ¶ 2, ECF No. 161.)
Plaintiffs claim that on May 25, 2011, they became aware of Defendants' alleged infringement of nine of Plaintiffs' copyright-protected residential home plans. (PPUF at ¶ 9.) Specifically, Plaintiffs assert that Best Built's "Columbia" home plan infringes Design Basics' "Bancroft" plan; Best Built's "Hampton" plan infringes Design Basics' "Monterey" plan; Best Built's "Mayfield" plan infringes Design Basics' "Tyndale" plan; Best Built's "Rialto" plan infringes Design Basics' "Laverton" plan; Best Built's "Saratoga" plan infringes Design Basics' "Paterson" plan; Best Built's "Calgary" plan infringes Design Basics' "Plainview" plan; and Best Built's "Weaver" plan infringes Design Basics' "Weaver" plan. Plaintiffs also discovered that Defendants constructed three-dimensional copies of Design Basics' Laverton, Paterson, Sinclair, Tyndale, and Weaver designs as well as Plan Pros' Sadie design. (Id. at ¶ 10.) Each of the Plaintiffs' plans were registered with the U.S. Copyright Office. (Id. at ¶ 6.)
Plaintiffs assert that their plans have become "ubiquitous in the marketplace." (Id. at ¶ 5.) Since 1996, Design Basics has marketed its architectural work on its website, http://www.designbasics.com. A former Best Built employee testified in deposition that, although he could not recall the names of any websites specifically, it was his practice to go to other designers' websites when drafting Defendants' plans. (Id. at ¶ 22.) Plaintiffs also provided publications to the Brown County Homebuilders Association and to construction companies who purchased them. (Id. at ¶ 16.) Defendant Craig Kassner's brother, Steven Kassner, ordered fifty-two catalogs for his construction company from January 7, 1992 through June 9, 2000. (Id. at ¶ 17.) Craig Kassner worked for his father's company, James Kassner Construction, from 1988 to 1992. (Id. at ¶ 23.) During that time, the two construction companies shared office space. (Id. ) Defendants contend that they neither ordered Design Basics' home plan design books nor used the books purchased by Steven Kassner Construction. (DPUF at ¶¶ 10–11.)
However, through discovery, Plaintiffs learned that Defendants had access to Design Basics' "Weaver" design and Plan Pros' "Sadie" design. On April 19, 2016, Defendants produced their inventory of electronic plans. (PPUF at ¶ 24.) This production included a folder of designs for a home entitled "Weaver," which Plaintiffs contend is similar to Design Basics' copyright-protected plan also entitled "Weaver." (Id. at ¶¶ 25–26.) Defendants also produced a file containing a marked-up copy of Plan Pros' "Sadie" design. (Id. at ¶ 27.) Defendants concede that they had access to the "Weaver" and "Sadie" designs, but dispute that they had access to the Plaintiffs' other seven designs.
Defendants contend that the vast majority of the homes at issue in this case were built using architectural plans designed by another entity, Hoida Lumber & Components, Inc. a/k/a Hoida, Inc. and Hoida Design Services. (DPUF at ¶ 5.) Defendants seek partial summary judgment based on a settlement agreement entered into by Design Basics and a third-party, ProBuild Company LLC. (Id. at ¶ 13.) In 2010, Design Basics sued ProBuild, a national lumberyard, for widespread copyright infringement. On September 12, 2011, Design Basics and ProBuild entered into a confidential settlement agreement under which Design Basics released certain claims for infringement of its copyrights and agreed to license certain uses of its copyrights for plans drawn by ProBuild or its predecessors. (ProBuild Settlement Agreement (PSA), ECF No. 100–6.) Defendants assert that Hoida is a predecessor of ProBuild. (DPUF at ¶ 12.) As such, they argue many of Plaintiffs' claims against them are covered by the release and license included in the PSA.
Summary judgment is appropriate when the moving party shows that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). All reasonable inferences are construed in favor of the nonmoving party. Foley v. City of Lafayette , 359 F.3d 925, 928 (7th Cir. 2004). The party opposing the motion for summary judgment must "submit evidentiary materials that set forth specific facts showing that there is a genuine issue for trial." Siegel v. Shell Oil Co. , 612 F.3d 932, 937 (7th Cir. 2010) (citations omitted). "The nonmoving party must do more than simply show that there is some metaphysical doubt as to the material facts." Id. Summary judgment is properly entered against a party "who fails to make a showing sufficient to establish the existence of an element essential to the party's case, and on which that party will bear the burden of proof at trial." Parent v. Home Depot U.S.A., Inc. , 694 F.3d 919, 922 (7th Cir. 2012) (internal quotations omitted).
Defendants filed their motion for summary judgment on September 6, 2016. Yet, the parties were required to file their motions for summary judgment on September 5, 2016 in accordance with the scheduling order entered April 4, 2016. (ECF No. 132.) In their response to Defendants' motion for summary judgment, Plaintiffs requested that the Court strike Defendants' documents as untimely.
September 5, 2016, was Labor Day, a national holiday. Rule 6 of the Federal Rules of Civil Procedure provides that when the last day of the period of time within which a motion is to be filed falls on a Saturday, Sunday or legal holiday, "the period continues until the end of the next day that is not a Saturday, Sunday or legal holiday." Fed. R. Civ. P. 6(a)(1)(C). Defendants reasonably assumed that because September 5 was a holiday, its motion was not due until the following day, September 6. Plaintiffs argue, however, that Rule 6 does not apply because the Court ordered dispositive motions filed by a date certain instead of within a period of time.
While it may be true that Rule 6 does not literally apply, I am satisfied that it would be unreasonable to strike Defendants' motion under the circumstances. Had I known that September 5 was Labor Day when I set the date, I would have moved it to September 6, 2016. I frequently note in scheduling motions that in the event the date I set falls on a weekend or holiday, the motion is due on the first business day thereafter. That was not done here, but it was not my intent or expectation that the attorneys or their staff would work on Labor Day. Moreover, Plaintiffs have not been prejudiced by the delay, and it would make no sense to subject the parties, the Court and the members of the public who would be summoned for jury duty if there was nothing to try. For all of these reasons, Defendants' motion will not be stricken.
To establish copyright infringement, a plaintiff must show "(1) ownership of a valid copyright and (2) copying of constituent elements of the work that are original." JCW Invs., Inc. v. Novelty, Inc. , 482 F.3d 910, 914 (7th Cir. 2007). Defendants do not contest Plaintiffs' ownership to the copyrights at issue, and instead assert that Plaintiffs have failed to establish that they are the authors of the designs. Defendants claim that the documents that would have established authorship were destroyed after a roof leak in early 2010. (Defs.' Br. at 15, ECF No. 160.) Without citation to authority, Defendants assert that the evidence of document destruction after the flood is sufficient to rebut the presumption of validity and that Plaintiffs will be unable to present admissible evidence to prove the requisite element of authorship.
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