United States District Court, N.D. Indiana, Fort Wayne Division
OPINION AND ORDER
L. Miller, Jr. Judge
matter is before the court on Quality Crafted Homes'
motion for partial summary judgment. Quality Crafted Homes
argues that a three-year look-back period prevents plaintiffs
from claiming that Quality Crafted Homes infringed on
copyrights before February 3, 2013. The court disagrees.
Basics and Plan Pros allege that they're in the business
of designing and licensing architectural works and technical
drawings, and that they own copyrights protecting their
works. Quality Crafted Homes is in the business of creating,
publishing, and advertising home designs. On February 3,
2016, Design Basics and Plan Pros sued Quality Crafted Homes
for infringing on copyrights for seven of their home designs.
Crafted Homes asks for partial summary judgment, arguing that
claims based on alleged infringing acts before February 3,
2013 are time-barred.
Standard of Review
judgment is appropriate when the record demonstrates that
there are no genuine issues of material fact and the movant
is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
(1986); Protective Life Ins. Co. v. Hansen, 632 F.3d
388, 391-92 (7th Cir. 2011). The court construes the evidence
and all inferences that reasonably can be drawn from the
evidence in the light most favorable to the non-moving party.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986). The moving party bears the burden of informing the
court of the basis for its motion and identifying the parts
of the record that demonstrate the absence of any genuine
issue of material fact. Celotex Corp. v. Catrett,
477 U.S. at 323.
under the Copyright Act must be “commenced within three
years after the claim accrue[s].” 17 U.S.C. §
507(b). “[T]he limitations period generally begins to
run at the point when ‘the plaintiff can file suit and
obtain relief, '” which is “when an
infringing act occurs.” Petrella v.
Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962, 1969 (2014).
The equitable defense of laches doesn't apply to
infringement claims brought within the limitations period.
Id. at 1972. The Court expressly noted that its
decision doesn't address the “discovery rule,
” which nine courts of appeals have adopted “as
an alternative to the incident of injury rule.”
Id. at 1969 n.4; see also SCA Hygiene Prods.
Aktiebolag v. First Quality Baby Prods., LLC, No.
15-927, 2017 WL 1050978, at *7 (U.S. Mar. 21, 2017) (holding
that laches also isn't a defense in patent suits, and
again recognizing that Petrella didn't address
the discovery rule).
court of appeals adopted the “discovery rule” for
copyright claims. Gaiman v. McFarlane, 360 F.3d 644,
653 (7th Cir. 2004). Under the “discovery rule, ”
the “statute of limitations starts to run when the
plaintiff learns, or should as a reasonable person have
learned, that the defendant was violating his rights.”
Id. Quality Crafted Homes argues that the logic of
Petrella undermines our court of appeals'
acceptance of the discovery rule; regardless of when an
infringement is discovered, suit is time-barred if the
infringement occurred more than three years before the filing
date. Design Basics and Plan Pros argue that
Petrella only dealt with the laches defense and
expressly decided not to impact the lower courts'
discovery rules, so our court of appeals' decision should
Chicago Building Design, P.C. v. Mongolian House,
Inc., 770 F.3d 610 (7th Cir. 2014), our court of appeals
stated that “in light of Petrella, we now know
that the right question to ask in copyright cases is whether
the complaint contains allegations of infringing acts that
occurred within the three-year look-back period from the date
on which the suit was filed.” Id. at 616. The
court found possible infringement within the three-year
look-back period, so it didn't need to reach the question
of “whether Petrella abrogates the discovery
rule in copyright cases.” Id. at 618. Like the
Petrella Court, the court of appeals decided to
“express no opinion on that question today.”
court of appeals took a nuanced approach to Petrella
in Consumer Health Information Corp. v. Amylin
Pharmaceuticals, 819 F.3d 992 (7th Cir. 2016), where it
held that Petrella was limited to disputes about
copyright infringement. Id. at 996-997. Copyright
ownership claims, however, “‘accrue only once,
' when the claimant receives notice that his ownership
has been expressly repudiated or contested.”
Id. at 996. Despite clear language in
Petrella describing accrual, there might be good
reason to limit the decision to its context.
Petrella, our court of appeals might find reason to
continue applying the discovery rule in copyright
infringement actions. Unlike the discovery rule, laches is a
purely equitable defense that existed in copyright to
“fill[ ] a legislative hole” during a time when
there was no federal statute of limitations for copyright
claims. Petrella, 134 S.Ct. at 1968. Laches also
prevented forum-shopping for the state with the most
favorable limitations period. Id. The creation of a
federal limitations period standardized the time a plaintiff
had to bring an infringement claim, eliminating the need for
this equitable gap-filler. Id. at 1969.
discovery rule serves a different role. Petrella
impacted when an infringement claim “accrue[s].”
17 U.S.C. § 507(b). But the discovery rule might toll a
limitations period once the claim has already “accrued,
” see Taylor v. Meirick, 712 F.2d 1112, 1117
(7th Cir. 1983) (“Often . . . the statute of
limitations is tolled until the plaintiff learned or by
reasonable diligence could have learned that he had a cause
of action.”), or offer an alternative means of accrual.
However cast, with or without laches, a diligent plaintiff
still has a reasonable ...