United States District Court, N.D. Indiana, Fort Wayne Division
DESIGN BASICS, LLC; PLAN PROS, INC.; CARMICHAEL & DAME DESIGNS, INC.; and W.L. MARTIN HOME DESIGNS, LLC, Plaintiffs,
BIG C LUMBER CO. INC., Defendant.
OPINION AND ORDER
A. BRADY JUDGE
case, one of more than one hundred similar cases filed by
Plaintiff Design Basics, LLC and its related entities,
alleges that Defendant Big C Lumber Co., Inc. (“Big
C”) violated forty-five of Plaintiffs' copyrighted
single-family home design plans. Plaintiffs describe Big
C's actions as a “brazen” infringement scheme
whereby Big C used Plaintiffs' designs to sell building
supplies to homebuilders. Big C, on the other hand, claims
that the instant litigation is nothing more than another cog
in Plaintiffs' copywrite trolling machine and that all
the allegedly infringing plans were original creations of Big
C's drafters. The parties have filed cross-motions for
summary judgment, multiple motions to strike, and more than
one-hundred supporting and opposing evidentiary exhibits. The
Court having reviewed the parties' submissions, this
matter is now ripe for determination.
Design Basics' Business Model
Basics describes itself as a small residential design firm
founded in Omaha, Nebraska, in the 1980's. Design Basics
has designed thousands of home designs from scratch,
including more than 390 new designs since 2009. Design Basics
registers its architectural works with the United States
Copyright Office before or near the time they are published
and marketed. Design Basics also acts as an advertising,
marketing, and sales agent for other design firms, including
the remaining Plaintiffs in this case.
most of its existence, Design Basics' primary source of
income was in licensing its copyrighted designs. Design
Basics has more than 164, 000 customers across the country
that have purchased over 135, 000 construction licenses,
including more than 2, 500 licenses in the last three years
alone. Since many of the licenses were good for an unlimited
number of builds for the licensed plan, Design Basics states
that it is “no exaggeration to say that hundreds of
thousands-if not millions-of Americans live in homes designed
by” Design Basics. (ECF No. 53-1 at 3).
much of the time Design Basics was in the licensing business,
business was good. Design Basics' licensing fees range
from $700 to $6, 000. Since 2009, Design Basics has issued
more than 9, 200 licenses totaling more than $7, 135, 000.00
in licensing revenue. Design Basics has issued 834 licenses
for the forty-five designs at issue in this case since 2009,
for a total of $522, 576 in licensing revenue. At its peak in
the late 1990's and early 2000's, Design Basics was
earning more than $4, 000, 000 per year from licensing
Basics earned these kinds of revenues by making their designs
ubiquitous. Design Basics' marketing efforts included:
• Circulating more than 4.2
million of its more than 180 home catalogs;
• Distributing its own publications, such as HER Home
Magazine, featuring its designs;
• Placing its copyrighted designs in third-party
publications like Builder Magazine;
• Distributing its home plan publications at home shows,
conventions, and trade shows; and Displaying its copyrighted
designs across the internet, including on its own site,
Design Basics' Business Suffers in the Wake of the
between 2006 and 2008, Design Basics decided that it would be
easier and cheaper to cease its bulk mailing strategy and
instead to focus on marketing through the internet. To that
end, Design Basics invested $435, 000 in capital
improvements, including updating its database system,
purchasing and building two new websites, and working to
raise its internet profile through search engine optimization
(“SEO”). While these efforts succeeded in driving
internet traffic to Design Basics' website, they failed
in increasing licensing revenue. Instead, licensing revenue
dropped from $4 million in 2004, to $1 million in 2009.
Design Basics Blames Copyright Infringement for its
than attribute the decline in licensing revenue to the
precipitous decline in new home construction,  Design Basics
determined that its losses were due to “the ready
availability of [Design Basics'] copyrighted designs both
print and on the internet” which, Design Basics
asserts, resulted in “rampant” violations of
Design Basics' copyrights. (ECF No. 53-1 at 10). What
Design Basics did in response was either an
“intellectual property shakedown” and
“copyright trolling, ” Design Basics, LLC v.
Lexington Homes, Inc., 858 F.3d 1093, 1096-98 (7th Cir.
2017), or the vigorous protection of its copyrighted works
(ECF No. 53-1 at 12), depending on your point of view.
undisputed is that Design Basics set out on a concentrated
effort to uncover what it viewed as the violation of its
intellectual property rights. A large part of this effort was
turning its staff and even its independent contractors into
copyright detectives. Design Basics “compensated
employees or independent contractors . . . who discovered
incidents of infringement that led to settlements or
judgments by paying them a percentage of the amount recovered
from litigation.” (ECF No. 53-1 at 12). The detective
work was not limited to internet searches for offending
designs. Instead, Design Basics conducted multiple
“controlled buys” at different lumberyards to find
draftsmen who were copying Design Basics's plans.
(Id. at 11). Due to these investigative techniques,
Design Basics discovered four different instances where its
designs were being appropriated. (ECF No. 53-1 at 11).
result of its investigations, Design Basics has filed suit
against approximately 150 builders alleging copyright
infringement. This represents a lawsuit against 1 in every
300 builders in the United States. (ECF No. 53-1 at 13).
Forty of those lawsuits were filed in Indiana alone. Although
Design Basics has not tried one of these lawsuits to a jury,
Design Basics claims it does not settle cases for
“nuisance value, ” but instead states that its
“settlement revenue reflects defendants'
assessment of the risks of substantial infringement
verdicts.” (Id.) (original emphasis). Design
Basics' owners have recovered significant amounts from
these settlements, netting approximately $5 million in 2016
and 2017 alone. These amounts do not appear to have flowed to
the business, as gross revenues for Design Basics over those
same two years was approximately $2.5 million.
Design Basics Discovers Big C's Allegedly Infringing
16, 2013, Paul Foresman, Design Basics' Vice President
and Director of Business Development, visited the website of
Bayman & Rusk Builders, an Indiana homebuilder. On that
website was a plan that Foresman believed to have been copied
from Design Basics' Albany plan. The plan included a set
of construction drawings with the Big C title block. This led
Foresman to believe that Big C had re-drawn the Albany plan
for Bayman & Rusk.
on Foresman's suspicions, Design Basics hired Brett
Coppins of Coppins Investigative & Security Group in
October 2014 to investigate whether Big C's Granger,
Indiana location was copying Design Basics' plans.
Coppins went to the Granger, Indiana location on October 8,
2014. Upon his arrival, Coppins asked to speak with Kevin
Cullen, the individual in charge of Big C's drafting
department. Coppins presented Cullen with Design Basics'
Morgan plan and asked if Cullen could create construction
drawings from the plan.
indicated that Coppins had two options. First, Cullen could
re-draw the plan. Cullen said that this could present a
“potential copyright issue, ” but that the
chances of getting caught were “slim to none.”
(ECF No. 53-6 at 2). To address the copyright issue, Cullen
encouraged Coppins to considered making minor changes to the
Design Basics plan.
second option was to purchase the plans from Design Basics.
Cullen advised that the cost of purchasing the plans from
Design Basics would be comparable to the cost to have Big C
prepare the plans. However, Cullen stated that if Coppins
purchased the plans and building materials from Big C,
Coppins would receive a rebate on the plans. After
determining the available rebates, Cullen quoted $290.00 for
Big C to prepare the plans. Coppins agreed and asked Big C to
redraw the Design Basics' plan with two minor changes,
which Big C did utilizing its drafting software.
with the evidence from Coppins' investigation, Plaintiffs
filed the instant action. Through the course of discovery,
Plaintiffs allege that they have identified forty-five
different designs that were infringed upon by Big C. (ECF No.
37 at 3-5). From those designs, Plaintiffs allege that Big C
prepared one hundred different infringing designs.
(Id. at 7-18).
The Battle of the Experts
parties have retained experts for the purposes of comparing
the relevant plans. Big C's expert, Robert Greenstreet,
is an Oxford-educated architect and the current Dean of the
School of Architecture and Urban Planning at the University
of Wisconsin-Milwaukee. Professor Greenstreet submitted a
twenty-nine-page expert report, accompanied by a
seventy-eight-page appendix setting forth what he viewed as
the differences between Plaintiff's and Defendants'
Greenstreet recognizes a superficial similarity between the
plans but attributes the similarity to the nature of the
homes being designed rather than infringement.
The models, which fall squarely into the category of
conventional, modestly priced housing, are generated by
basic, functional and economic restrictions and a desire to
create a traditional, predicable and recognizably
conventional homes which satisfy market acceptability and
demand. Consequently, it should not be surprising that so
many designs in both Design Basics' portfolio and in the
work of other housing companies look familiar. They share a
common generic background in both layout and appearance that
is embedded in a traditional vocabulary that was pre-existing
before copyright protection or the advent of the AWCPA.
(ECF No. 50-3 at 18). Given the general similarity of
moderately priced, single-family dwellings, Professor
Greenstreet focuses on the details of the plans. As a result
of that focus, Professor Greenstreet concludes:
Despite general similarities normally anticipatable in the
traditional, conventional housing market, there are still
many differences detectable between the compared models
produced by Design Basics and Big C, specifically in their
respective square footage, dimensions, program, plan layouts,
massing, use of materials and appearance that reject the
notion of substantial similarity.
(Id. at 27).
be outdone, Plaintiffs submitted a two hundred
eighty-eight-page expert report from Matthew McNicholas, a
Notre Dame-trained architect and owner of his own
architecture firm. Unsurprisingly, McNicholas rejects the
opinion of Professor Greenstreet. In large part,
McNicholas' rejection of Professor Greenstreet's
report stems from his belief that the differences identified
by Professor Greenstreet are not differences in design, but
instead variations within the same design.
In my opinion, it is clear that the Big C plan are simple
variations on the Plaintiffs' plans, if not outright
copies. Any variations are only made to inconsequential and
unsubstantial elements of the designs, not the arrangement
and composition of spaces or overall form, which constitute
the expression of the idea for the design and lie at the
heart of what is protectable in an architectural work, as
stipulated by the AWPCA. As such, in my opinion, this proves
the Big C plans are effective copies of the Plaintiffs'
plans, with minor variations that are immaterial to the
question of copyright infringement, for example, changing a
closet location or rearranging the fixtures in a bathroom.
(ECF No. 58-22 at 36).
expounds on this critique in painstaking detail in Section 5B
of his report, where he specifically responds to each and
every difference identified by Professor Greenstreet. (ECF
No. 58-22 at 125-75). In large part, McNicholas'
responses fall into one or both of two categories: (1)
differences that are “immaterial” because they
involve “standard elements”; or (2) differences
that do not impact “the overall arrangement and
composition of the spaces.”
evaluation of the plans is both micro and macro in scope. In
Section 7B of his report, McNicholas resizes, reorients, and
overlays selected plans to demonstrate what he believes to be
the “supersubstantial similarity” between the
plans. Those overlays appear as follows (Plaintiffs'
design is in black, with Big C's design in blue):