76 F.4th 1116
8th Cir.2023Background
- Cornice & Rose (C&R) designed a building for McQuillen Place; C&R holds AWCPA copyrights in the plans and the building as the tangible embodiment of the design.
- Construction was ~90% complete when McQuillen filed bankruptcy; the building became part of the estate.
- The Trustee sold the unfinished building to First Security Bank (later assigned to Four Keys) under 11 U.S.C. § 363; the bankruptcy sale order (¶19) authorized the purchaser to "use and occupy," "develop," and "complete" the property so long as the purchaser did not use C&R’s copyrighted plans or drawings without arrangements satisfactory to C&R.
- C&R objected in the bankruptcy case, argued AWCPA rights prevented completion without payment/consent, sought reconsideration, and appealed; the appeal was dismissed under § 363(m) after the sale closed.
- C&R later sued the Bank, Four Keys, and contractors claiming (Count I) completion of the building created an infringing derivative work, (Count II) declaratory relief against rental/sale without permission, and (Count III) infringement of technical drawings; the district court dismissed Counts I–II (res judicata/§120(b)) and granted summary judgment on Count III (no copying/§120(b)).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the bankruptcy sale/order precludes C&R’s claims that completion infringed its architectural-work copyright | C&R: AWCPA gives exclusive reproduction/right to prevent completion without payment or consent; bankruptcy sale cannot authorize completion that infringes copyright | Defendants: Bankruptcy court authorized sale and completion; §363(m) renders the sale/order final and preclusive | Court: Preclusion applies; bankruptcy sale/order bars Counts I & II |
| Whether AWCPA §120(b) permits a purchaser to complete/alter an embodied architectural work without consent | C&R: §120(b) does not allow a purchaser to "complete" a partially built structure; completion would be an unauthorized derivative work | Defendants: §120(b) permits owners to alter/destroy (and thus complete) buildings without consent; completion does not create a copy | Court: Did not need to decide fully; affirmed dismissal. Concurring judge: §120(b) includes right to complete and completion did not amount to copying |
| Whether the district court abused its discretion by denying leave to file a sur-reply and whether summary judgment on Count III was improper | C&R: Supplemental affidavit raised new factual arguments; it needed an opportunity to respond before summary judgment | Defendants: Supplemental affidavit merely replied to C&R’s assertions; denial of sur-reply was discretionary and harmless; no evidence of copying | Court: Denial was not an abuse of discretion and was harmless; summary judgment affirmed for failure to prove copying (and §120(b) alternative defense) |
Key Cases Cited
- Feist Publications, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340 (1991) (copyright infringement requires ownership and copying)
- Taylor v. Sturgell, 553 U.S. 880 (2008) (preclusive effect of federal-court judgments governed by federal common law)
- Plough By & Through Plough v. W. Des Moines Cmty. Sch. Dist., 70 F.3d 512 (8th Cir. 1995) (claim preclusion/res judicata principles)
- Banks v. Int’l Union Elec., 390 F.3d 1049 (8th Cir. 2004) (issue preclusion requires full and fair opportunity to litigate)
- In re Veg Liquidation, Inc., 931 F.3d 730 (8th Cir. 2019) (§363(m) limits appellate review and preserves finality of bankruptcy sales)
- Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (2013) (first-sale doctrine limits copyright holder’s control after lawful first sale)
- Christopher Phelps & Assocs., LLC v. Galloway, 492 F.3d 532 (4th Cir. 2007) (sale of an object embodying copyrighted design does not create a copy)
- Frye v. YMCA Camp Kitaki, 617 F.3d 1005 (8th Cir. 2010) (derivative-work liability requires proof of copying)