Nova Design Build, Inc. v. Grace Hotels, LLC
652 F.3d 814
| 7th Cir. | 2011Background
- Nova and Grace dispute over Nova's Holiday Inn Express designs for Waukegan project; Nova registered a copyright for the designs and alleged Grace copied them.
- Burglary damaged Nova's computers containing final design copies; Nova recreated the copies using hard copies and restored CAD files to deposit with the Copyright Office.
- Grace paid $18,000 to Nova for use of the designs and authorization to use them for bidding, permitting, and construction; Grace selected a different builder for the project.
- District court granted Grace partial summary judgment on copyright claims, ruling Nova's deposited copies did not meet bona fide requirement; state-law claims were dismissed without prejudice.
- Nova argued the district court erred in its factual analysis of copies and that the case properly arises under the Copyright Act; Seventh Circuit agreed jurisdiction exists and addressed substantive issues.
- Court ultimately affirmed district court’s judgment, holding Nova failed to show protectable original elements or copying by Grace; thus no infringement liability and state claims properly dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case arises under the Copyright Act jurisdictionwise | Nova asserts federal-question copyright jurisdiction under 1331/1338. | Grace argues ordinary contract/common-law defenses but not jurisdictional defects; T.B. Harms issue considered. | Yes; the action arises under the Copyright Act; jurisdiction proper. |
| Whether Nova's deposited copies were bona fide copies for registration | Nova had hard copies and restored CAD files to recreate identical copies. | District court relied on memory-based reconstruction as not bona fide. | Nova presented evidence supporting bona fide copies; issue remains for factual resolve but not dispositive here. |
| Whether Grace copied protectable, original elements of Nova's designs | Nova argues Grace copied Nova's protected elements. | Grace's use was licensed and largely dictated by the client; copying not shown. | Nova failed to identify any original, protectable elements; lack of copying defeats infringement. |
| Whether Nova's designs possessed sufficient originality to be protected | Nova added features beyond the Holiday Inn Express prototype. | Additions were not independently original and largely driven by client specifications. | Designs lacked sufficient originality; no protectable elements. |
| Whether the district court properly dismissed the state-law claims | Nova seeks coexistence of federal and state claims. | State claims should be dismissed under 28 U.S.C. § 1367(c)(3) or related rules. | District court properly dismissed state claims without prejudice. |
Key Cases Cited
- Schrock v. Learning Curve Int'l, Inc., 586 F.3d 513 (7th Cir. 2009) (copyright infringement requires ownership and copying of protectable elements)
- Coles v. Wonder, 283 F.3d 798 (6th Cir. 2002) (bona fide copies must be virtually identical and produced by reference to the original)
- Kodadek v. MTV Networks, Inc., 152 F.3d 1209 (9th Cir. 1998) (copying requires direct reference to originals for registration copies)
- Incredible Techs., Inc. v. Virtual Techs., Inc., 400 F.3d 1007 (7th Cir. 2005) (infringement may be inferred from access and substantial similarity)
- Tiseo Architects, Inc. v. B & B Pools Serv. and Supply Co., 495 F.3d 344 (6th Cir. 2007) (protectable elements require originality and minimal creativity)
- Caterpillar Inc. v. Williams, 482 U.S. 386 (Supreme Court 1987) (federal-question jurisdiction depends on the face of the complaint)
- Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (Supreme Court 2010) (registration validity not essential to subject-mmatter jurisdiction)