Sinclair and Associates of Greenville LLC v. CresCom Bank
2:16-cv-00465
D.S.C.Jan 2, 2018Background
- Sinclair, a design firm, created and copyrighted engineering and architectural plans (the "Works") for a pool and amenity center for Summerville Homes; Sinclair licensed the Works only to Summerville Homes and never sold the Works.
- Summerville Homes transferred the Baker Plantation property to CresCom Bank; CresCom (and later Antler Road and Crescent Homes) obtained copies of the Works and used them to construct the pool and amenity center.
- Sinclair sued, asserting direct and contributory copyright infringement, conversion (state law), and previously a SCUTPA claim (later dismissed).
- Defendants moved for partial summary judgment (preemption of conversion), separate motions for summary judgment, a motion in limine, and to bifurcate trial; Sinclair moved for discovery sanctions against Terry.
- The court denied all summary judgment and in limine motions, denied bifurcation, found Sinclair’s conversion claim not preempted by the Copyright Act, found genuine fact disputes on originality and licensing, and granted Sinclair’s sanctions motion ($1,030 attorneys’ fees) for Terry’s inadequate discovery responses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preemption of state-law conversion by federal Copyright Act | Sinclair: conversion alleges wrongful possession/retention of physical Works—an extra element avoiding preemption | Defendants: conversion simply restates copyright violations and is therefore preempted | Denied preemption; conversion survives because allegation of wrongful possession of physical materials is an "extra element" distinct from copyright claims |
| Copyrightability (originality/creativity of the Works) | Sinclair: Works are original and registered; presumption of validity | Defendants: plans are utilitarian/mandated by building codes and lack requisite creativity | Denied summary judgment — question of minimal creativity is factual and requires expert/disputed evidence |
| License / Intended use (implied or waived license to use Works) | Sinclair: only Summerville Homes was licensed; no implied license to defendants | Defendants: communications/emails show Sinclair provided Works to CresCom to market the project, implying permission to use | Denied summary judgment — factual disputes about whether an express or implied license existed remain for jury |
| Distribution/reproduction by Crescent Homes (liability) | Sinclair: Crescent used and distributed the Works (to Park Investors/Sample) and benefited from use | Crescent: did not reproduce, distribute, or authorize use of the Works | Denied summary judgment — disputed facts about who gave Works to Sample and Crescent’s role preclude summary judgment |
Key Cases Cited
- Tire Engineering & Distribution, LLC v. Shandong Linglong Rubber Co., 682 F.3d 292 (4th Cir. 2012) (holding conversion not preempted where defendant unlawfully possessed physical blueprints)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment standard and allocation of burdens)
- Anderson v. Liberty Lobby, 477 U.S. 242 (U.S. 1986) (genuine issue of material fact standard at summary judgment)
- Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (U.S. 1991) (originality requirement and minimal creativity standard for copyrightability)
- Rosciszewski v. Arete Assocs., Inc., 1 F.3d 225 (4th Cir. 1993) (state-law claims preempted when they do not contain an extra element qualitatively different from copyright claims)
- United States ex rel. Berge v. Board of Trustees of the Univ. of Ala., 104 F.3d 1453 (4th Cir. 1997) (conversion not preempted when plaintiff alleges unlawful retention of physical object embodying the work)
- Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc., 618 F.3d 417 (4th Cir. 2010) (copyright registration creates presumption of originality but is rebuttable)