Chicago Building Design, P.C. v. Mongolian House, Inc.
770 F.3d 610
| 7th Cir. | 2014Background
- CBD (Chicago Building Design) designed and filed blueprints for a restaurant renovation (Plan B) in June 2006, completed work in 2007, and registered the blueprints in May 2009.
- In 2008 CBD discovered at the City’s offices blueprints appearing to be its designs but bearing architect Wilson’s name; CBD could not immediately confirm infringement and the City refused to release the 2008 set.
- Mongolian House allegedly copied CBD’s blueprints in 2008, had Wilson file them to obtain a “full” permit (issued May 8, 2009), and used the 2008 blueprints at inspections from July 2009 through January 2012.
- CBD sued in February 2012 for copyright infringement and related state-law claims; defendants moved to dismiss under the Copyright Act’s three-year statute of limitations (17 U.S.C. § 507(b)).
- The district court held CBD was on inquiry notice by Dec. 31, 2008, started the limitations clock then, and dismissed the federal claims as time-barred; state claims were relinquished. CBD appealed.
- The Seventh Circuit reversed and remanded, holding that Petrella’s separate-accrual rule requires assessing whether infringing acts occurred within the three-year look-back period and that CBD alleged such acts (inspections 2009–2012).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the § 507(b) limitations period start for copyright claims? | Limitations should run from actual or constructive discovery; inquiry notice did not definitively start the clock. | Limitations began when CBD’s employee saw allegedly copied blueprints in 2008 (inquiry notice). | Petrella controls: each infringing act accrues separately; focus is whether there are alleged acts within the 3‑year look-back. Inquiry notice alone is not the accrual trigger. |
| Were CBD’s post‑2008 distributions (to inspectors, 2009–2012) actionable infringements within the 3‑year window? | These distributions are discrete infringing acts under §106(3) falling within three years of suit. | Such distributions are a "limited publication" and thus not actionable under the Act. | The complaint plausibly alleges actionable post‑2008 acts; limited‑publication material does not categorically remove them from §106(3), and dismissal on statute grounds was improper. |
| Is the continuing‑violation doctrine applicable to extend the limitations period? | CBD alternatively argued infringement was continuing into the limitations period. | Defendants relied on lack of continuing violation to bar suit. | Petrella’s separate‑accrual rule disfavors applying a continuing‑violation theory to resurrect earlier barred acts; each act is discrete. |
| Did the district court properly resolve statute‑of‑limitations at Rule 12(b)(6) stage? | Complaint pleads acts within the 3‑year window; dismissal was premature. | District court found allegations showed untimeliness. | Reversal: a complaint should only be dismissed on limitations grounds if it plainly reveals untimeliness; here it did not. |
Key Cases Cited
- Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014) (Copyright Act’s §507(b) creates a separate‑accrual rule; each infringing act starts a new limitations period)
- Merck & Co. v. Reynolds, 559 U.S. 633 (2010) (statutory discovery requires actual or constructive discovery of facts constituting violation; inquiry notice alone does not start limitations)
- Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004) (Seventh Circuit recognition of a discovery rule in copyright cases)
- Bay Area Laundry & Dry Cleaning Pension Trust Fund v. Ferber, 522 U.S. 192 (1997) (limitations accrual principle: claim accrues when plaintiff has a complete and present cause of action)