United States District Court, N.D. Indiana
OPINION AND ORDER
THERESA L. SPRINGMANN UNITED STATES DISTRICT CHIEF JUDGE
matter comes before the Court on the Motion for Partial
Summary Judgment [ECF No. 25] filed by the Defendants, W R
Birkey & Associates, Inc. and Wayne Birkey, d.b.a. Birkey
Homes and W.R. Birkey Realty, on November 18, 2016. In that
Motion, the Defendants argue that the statute of limitations
provision in the Copyright Act bars Plaintiff Design Basics,
LLC's claims based on infringing acts that occurred prior
to March 31, 2013 (the “Look-Back Date”). This
matter is fully briefed and ripe for review.
Plaintiff is a Nebraska company that creates, markets,
publishes and licenses the use of architectural works and
technical drawings. The Defendants are an Indiana company
that builds homes, and the owner of that company. On May 31,
2016, the Plaintiff filed a Complaint [ECF No. 1] against the
Defendants for “publish[ing], distribut[ing],
market[ing], and advertis[ing] certain architectural designs
for single family residential homes” that infringe the
Plaintiff's copyrighted works. (Compl. ¶¶
13-24, ECF No. 1.) The Defendants “built homes based on
floor plans named in Plaintiff's Complaint for twenty
years prior to March 31, 2016” lawsuit, spanning both
before and after the Look-Back Date. (Def.'s Br. in Supp.
of Mot. Summ. J. 4, ECF No. 26.) The Defendants filed its
Answer [ECF Nos. 10-11] on June 6, 2016. On November 18,
2016, the Defendants moved for Partial Summary Judgment. The
Plaintiff filed its Response to the Defendants' Motion
[ECF No. 33] on December 16, 2016, and the Defendants'
Reply [ECF No. 37] was filed on December 27, 2016.
judgment is warranted when “the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.”
Fed.R.Civ.P. 56(a). Summary judgment is the moment in
litigation where the nonmoving party is required to marshal
and present the court with evidence on which a reasonable
jury could rely to find in that party's favor.
Goodman v. Nat'l Sec. Agency, Inc., 621 F.3d
651, 654 (7th Cir. 2010). A court should only deny a motion
for summary judgment when the nonmoving party presents
admissible evidence that creates a genuine issue of material
fact. Luster v. Ill. Dep't of Corrs., 652 F.3d
726, 731 (7th Cir. 2011) (first citing United States v.
5443 Suffield Terrace, 607 F.3d 504, 510 (7th Cir.
2010); then citing Swearnigen-El v. Cook Cty.
Sheriff's Dep't, 602 F.3d 852, 859 (7th Cir.
2010)). A court's role in deciding a motion for summary
judgment “is not to sift through the evidence,
pondering the nuances and inconsistencies, and decide whom to
believe. [A] court has one task and one task only: to decide,
based on the evidence of record, whether there is any
material dispute of fact that requires a trial.”
Waldridge v. Am. Heochst Corp., 24 F.3d 918, 920
(7th Cir. 1994). Material facts are those that are outcome
determinative under the applicable law. Smith v.
Severn, 129 F.3d 419, 427 (7th Cir. 1997). Although a
bare contention that an issue of material fact exists is
insufficient to create a factual dispute, a court must
construe all facts in a light most favorable to the nonmoving
party, view all reasonable inferences in that party's
favor, see Bellaver v. Quanex Corp., 200 F.3d 485,
491-92 (7th Cir. 2000), and avoid “the temptation to
decide which party's version of the facts is more likely
true, ” Payne v. Pauley, 337 F.3d 767, 770
(7th Cir. 2003).
Court has original jurisdiction over copyright claims
pursuant to 28 U.S.C. § 1338(a). The Copyright Act
states that “[n]o civil action shall be maintained
under [its] provisions . . . unless it is commenced within
three years after the claim accrued.” 17
U.S.C. § 507(b) (emphasis added). The Defendants argue
that the recent Supreme Court decision in Petrella v.
Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014),
determined that a copyright claim “accrue[s]” at
the time of the infringing act. The Plaintiff argues that
Petrella did not change the Seventh Circuit
“discovery rule” that a claim accrues when the
injured party discovers or should have discovered with due
diligence that an infringing act occurred. The Court must
decide which party's interpretation of the law is
concerned the classic film Raging Bull, the
copyright to which the plaintiff possessed and which she
claimed MGM infringed by marketing and distributing it for
roughly three decades. 134 S.Ct. at 1970-71. The question
before the Supreme Court was limited to the
“application of the equitable defense of laches to
copyright infringement claims brought within the three-year
look-back period.” Id. at 1972. In discussing
the Copyright statute as a whole, the Supreme Court stated
that in an infringement suit “the limitations period
generally begins to run at the point when ‘the
plaintiff can file suit and obtain relief.'”
Id. at 1969. “A copyright claim thus arises or
‘accrue[s]' when an infringing act occurs.”
Id. But in a footnote, the Supreme Court noted that
“nine Court of Appeals have adopted, as an alternative
to the incident of injury rule, a ‘discovery rule,
' which starts the limitations period when ‘the
plaintiff discovers, or with due diligence should have
discovered, the injury that forms the basis for the claim,
” and that it would “not pass on the
question” of which one was correct. Id. at
1969 n.4. Accordingly, the Supreme Court did not purport to
change any accrual laws in its Petrella opinion.
recent Supreme Court decision confirms this reading of
Petrella. See SCA Hygiene Prods.
Aktiebolag v. First Quality Baby Prods., LLC, 137 S.Ct.
954 (2017). SCA Hygiene presented the same
question-whether the equitable defense of laches brought
within a statute's limitations period-but in the similar
context of the Patent Act. Id. at 959. The
respondent argued that “the accrual of a claim, the
event that triggers the running of a statute of limitations,
occurs when a plaintiff knows of a cause of action.
Id. at 961. The Supreme Court noted that such a
is not ordinarily true. As we wrote in Petrella,
“[a] claim ordinarily accrues ‘when [a] plaintiff
has a complete and present cause of action. . . .'
” While some claims are subject to a “discovery
rule” under which the limitations period begins when
the plaintiff discovers or should have discovered the injury
giving rise to the claim, that is not a universal feature of
statutes of limitations. . . . And in Petrella, we
specifically noted that “we have not passed on the
question” whether the Copyright Act's statute of
limitations is governed by such a rule.
Id. at 962 (citations omitted). SCA Hygiene
confirms that the Supreme Court has not weighed in, one way
or another, on when a cause of action accrues for
purposes of a copyright claim.
Seventh Circuit follows the “discovery rule” for
accrual purposes. Gaiman v. McFarlane, 360 F.3d 644,
653 (7th Cir. 2004). Two Seventh Circuit opinions since
Petrella confirm that the Supreme Court's
decision did not abrogate the discovery rule within this
Circuit. Like Petrella, Chicago Building Design,
P.C. v. Mongolian House, Inc., 770 F.3d 610 (7th Cir.
2014), involved a defendant's infringing acts that
occurred within the “three-year lookback period.”
Id. at 616. To determine if the plaintiff's
complaint was time barred, “the right question to ask .
. . [wa]s whether the complaint contain[ed] allegations of
infringing acts that occurred within the three-year lookback
period from the date on which the suit was filed.”
Id. However, the court “express[ed] no
opinion” as to whether “Petrella
abrogate[d] the discovery rule in copyright cases, ”
id. at 618, and thus it was not central to its
holding. In Consumer Health Information Corp.
v. Amylin Pharmaceuticals, Inc., 819 F.3d 992 (7th Cir.
2016), the Seventh Circuit considered a “dispute over
copyright ownership.” Id. at 995. The
Seventh Circuit stated that “when the gravamen of a
copyright suit is a contest over copyright ownership, the
claim accrues when the claimant has express notice of a
competing claim of ownership.” Id. at 996.
This rule for a copyright ownership claim was distinguished
from an infringement claim, the latter of which accrued
“at the time the wrong occur[ed].” Id.
(citing Petrella, 134 S.Ct. at 1969). The Court did
not discuss Petrella further or its impact upon the
the discovery rule may be abrogated within this Circuit
someday, this Court is “bound to follow Seventh Circuit
precedent.” Frerck v. Pearson Educ., Inc., 63
F.Supp.3d 882, 887 n.3 (N.D. Ill. 2014) (holding same). As
that precedent stands today, the discovery rule controls the
determination of when a copyright infringement claim accrues,
and Petrella does not instruct otherwise.
Accordingly, the Plaintiff's claims regarding infringing
acts that occurred more than three-years ...