Design Basics LLC v. J & V Roberts Investments, Inc.
130 F. Supp. 3d 1266
E.D. Wis.2015Background
- Plaintiffs Design Basics LLC and Plan Pros allege copyright and DMCA claims against J & V Roberts Investments, Inc. and James A. Roberts for eight architectural plans; copyrights were registered before first publication.
- Plaintiffs assert defendants posted accused plans on their website and used them in advertising and home construction; plaintiffs discovered the alleged infringements in Sept. 2011 but allege copying back to 2002.
- Defendants contend most accused plans were either licensed (via Wausau Homes) or custom-designed for them by independent contractors, denying wrongful copying.
- Two insurers intervened: ACUITY (policy years 2001–2005) and Wilson Mutual (multiple policies through 2015); both moved for summary judgment/declaratory relief about defense/indemnity obligations.
- District court denied defendants’ summary-judgment motion on copyright (factual disputes on access and substantial similarity), applied the Seventh Circuit’s discovery rule for accrual, granted ACUITY summary judgment (prior-publication exclusion bars coverage), and granted in part/denied in part Wilson Mutual’s motion (umbrella policies cover copyright injury not limited to advertising; other limits addressed).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs can prove copyright copying (access + substantial similarity) | Plaintiffs say defendants had access (catalogs, prior business contacts) and designs are substantially similar in arrangement/flow of rooms and features | Defendants say no direct copying; alleged similarities are unprotectable/common features or differ materially; some plans were licensed or custom-made | Denied summary judgment for defendants — material fact disputes on access and substantial similarity; case proceeds to trial |
| Whether pre-2011 claims are time-barred (statute of limitations accrual) | Discovery rule: limitations run when plaintiff discovered or should have discovered infringement | Defendants urge injury rule (Petrella) — accrual when infringement occurred | Court applies Seventh Circuit discovery rule (binding precedent); many pre-2011 claims may still be timely |
| Whether ACUITY must defend/indemnify under its CGL/Excess policies for Brookhaven-related advertising copyright claims | Plaintiffs accept ACUITY only covered alleged advertising infringement of Brookhaven during ACUITY policy periods | ACUITY asserts its prior-publication exclusion bars coverage because Brookhaven was first published in 2000 (before policy) | Granted ACUITY summary judgment — prior-publication exclusion (plain language) precludes ACUITY’s duty to defend or indemnify |
| Scope of Wilson Mutual umbrella coverage for copyright/DMCA claims (whether limited to advertising-caused injury) | Plaintiffs/insureds argue umbrella policy language covers copyright infringement without requiring it to be tied to advertising | Wilson Mutual contends its policies only cover advertising-related injury and seek declaratory limits (and argue no coverage for willful DMCA claims) | Wilson Mutual’s motion partially granted/partially denied: court holds umbrella policy definitions differ from underlying policies and umbrella provides broader coverage (not limited to advertising); Wilson’s argument on willful infringement undeveloped and denied relief |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment procedure)
- Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (copyright original-expression requirement)
- JCW Invs., Inc. v. Novelty, Inc., 482 F.3d 910 (7th Cir.) (access + substantial similarity framework)
- Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502 (7th Cir.) (ordinary observer test)
- Zalewski v. Cicero Builder Dev., Inc., 754 F.3d 95 (2d Cir.) (architectural works, filtering unprotectable elements)
- Gaiman v. McFarlane, 360 F.3d 644 (7th Cir.) (discovery rule in copyright cases)
- Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (Sup. Ct.) (injury rule discussion; declining to resolve discovery rule issue)
- T-Peg, Inc. v. Vt. Timber Works, Inc., 459 F.3d 97 (1st Cir.) (combination of standard features may be protectable)
- Capitol Indem. Corp. v. Elston Self Serv. Wholesale Groceries, Inc., 559 F.3d 616 (7th Cir.) (prior-publication exclusion interpretation)
- Taco Bell Corp. v. Cont’l Cas. Co., 388 F.3d 1069 (7th Cir.) (explaining purpose of prior-publication exclusion)