305 F. Supp. 3d 788
N.D. Ohio2018Background
- Design Basics, LLC (DB) licenses architectural plans and alleges Forrester Wehrle Homes and related defendants (FWH) copied 23 plans; suit filed April 6, 2015.
- DB discovered the alleged infringements on FWH's website in March 2013 when DB's senior designer identified similar designs; some infringing builds occurred 2000–2007.
- FWH moved for partial summary judgment arguing § 507(b)’s three-year limitations period (a "three-year look-back") bars damages for acts before April 6, 2012.
- FWH contends Petrella and related authority establish an "injury/incidence of injury" accrual rule (claim accrues when infringing act occurs) that abrogates the Sixth Circuit discovery rule.
- Alternatively, FWH argues DB was on inquiry notice of FWH’s conduct earlier (due to DB's active enforcement and bounty program) and thus claims are time-barred.
- The court denies summary judgment, holding the Sixth Circuit discovery-rule accrual standard controls and that a reasonable jury could find DB did not have inquiry notice before March 2013.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Petrella eliminated the discovery rule for copyright accrual | DB: Sixth Circuit discovery rule governs accrual (claim accrues when plaintiff knows or is chargeable with knowledge) | FWH: Petrella dictates accrual at the time of the infringing act (injury rule), barring pre-3-year damages | Court: Petrella did not abrogate discovery rule; Sixth Circuit discovery rule remains controlling |
| Whether Allied Erecting undermines the discovery rule | DB: Sixth Circuit discovery-rule precedent remains binding | FWH: Allied Erecting's discussion suggests separate-accrual makes discovery rule unnecessary | Court: Allied Erecting does not repudiate Sixth Circuit discovery-rule cases |
| Whether DB was on inquiry notice of FWH’s infringement before March 2013 | DB: No evidence put DB on inquiry notice as to FWH; FWH was a customer and sent catalogs | FWH: DB's aggressive enforcement, bounty program, and many suits mean DB should have discovered FWH earlier | Court: Viewing evidence for DB, a jury could find DB lacked reason to suspect FWH before March 2013; inquiry notice is defendant-specific |
| Whether damages for pre-look-back infringements are categorically unrecoverable | DB: If claims timely under discovery rule, damages may include earlier harm | FWH: Only damages within three-year look-back are legally cognizable | Court: Rejects defendant’s argument; cites precedent allowing recovery for damages incurred before three-year look-back when claim timely under discovery rule |
Key Cases Cited
- Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (Sup. Ct.) (discussing accrual and three-year retrospective relief; did not decide discovery rule question)
- Roger Miller Music, Inc. v. Sony/ATV Publishing, LLC, 477 F.3d 383 (6th Cir.) (adopts discovery rule: claim accrues when plaintiff knows or is chargeable with knowledge)
- SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (Sup. Ct.) (clarifies Petrella did not resolve discovery-rule question)
- Allied Erecting & Dismantling Co. v. Genesis Equip. & Mfg., Inc., 805 F.3d 701 (6th Cir.) (discusses single-claim vs separate-accrual rules in trade-secrets context)
- William A. Graham Co. v. Haughey, 568 F.3d 425 (3d Cir.) (allows recovery for damages predating three-year look-back where claim timely under discovery rule)
- Polar Bear Productions, Inc. v. Timex Corp., 384 F.3d 700 (9th Cir.) (similar rule on recoverable damages when discovery rule saves claim)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Sup. Ct.) (summary judgment standard)