Justia U.S. 7th Circuit Court of Appeals Opinion Summaries

The Kerstiens family runs companies that build single-family homes out of Jasper, Indiana. Plan Pros and Prime Designs are home design companies that license their plans through Design Basics, which acts as a broker, serving as an intermediary between home builders and design firms. Design Basics markets the thousands of plans it holds copyrights to through trade publications, promotional materials placed in home improvement stores, and national builder associations and “has become a serial litigant,” having filed more than 100 infringement suits against home builders.In affirming the dismissal of Design Basic’s suit against the Kerstiens, the Seventh Circuit referred to “intellectual property trolls,” enforcing copyrights not to protect expression, but to extract payments through litigation. Design Basics has thin copyright in its plans because they consist largely of standard features found in homes across America. View "Design Basics, LLC v. Kerstiens Homes & Designs, Inc" on Justia Law

Design Basics is a copyright troll and holds registered copyrights in thousands of floor plans for suburban, single-family tract homes. Its employees trawl the Internet in search of targets for strategic infringement suits of questionable merit, hoping to secure “prompt settlements with defendants who would prefer to pay modest or nuisance settlements rather than be tied up in expensive litigation.” The Seventh Circuit has previously (Lexington Homes) held that Design Basics’ copyright in its floor plans is thin. The designs consist mainly of unprotectable stock elements—a few bedrooms, a kitchen, a great room, etc. Much of their content is dictated by functional considerations and existing design conventions for affordable, suburban, single-family homes. When copyright in an architectural work is thin, only a “strikingly similar” work gives rise to a possible infringement claim.Design Basics sued Signature Construction for copying 10 of its registered floor plans for suburban, single-family homes. The district court granted Signature summary judgment based largely on the reasoning of Lexington Homes. The Seventh Circuit affirmed. For this category of claims, only extremely close copying is actionable as unlawful infringement. That standard is not satisfied in this case. View "Design Basics, LLC v. Signature Construction, Inc." on Justia Law

Apple owns Madison, Wisconsin vitamin stores. Knott, a former Apple employee, was fired in 2017. Knott founded his own vitamin shop, Embrace Wellness, in Middleton, Wisconsin. Embrace allegedly shared design features and a similar layout with Apple’s locations and carried comparable products. Apple sued, alleging infringement of its trademark, trade dress, and copyrights. The defendants filed counterclaims for tortious interference and retaliation. Apple sought a preliminary injunction on the trademark and trade dress claims, which the court denied, explaining that Apple had failed to show a likelihood of irreparable harm. Apple then moved to dismiss its own claims without prejudice. Because the defendants had already expended resources litigating an injunction, the court ordered Apple to withdraw its motion or accept dismissal with prejudice, expressing its opinion that no party’s claim was strong. Apple agreed to dismiss its claims with prejudice.The court subsequently denied defendants’ motion for fees; they appealed with respect to the copyright claims. The Seventh Circuit affirmed. Apple’s copyright claims were frivolous—common-law copyright was abolished in 1976—but the totality of the circumstances did not warrant fees. There was no evidence that Apple had filed suit with an improper motive, and no need to deter future frivolous filings. The case was primarily about trademark and trade dress. no motions were filed related to copyright. Apple dismissed the copyright claims voluntarily before defendants had to argue against them. View "Timothy B. O'Brien LLC v. Knott" on Justia Law

Sullivan, a graphic design artist, produced 33 illustrations for Flora, an herbal supplement company, to use in two advertising campaigns. Upon noticing that Flora was using the illustrations in other ads, Sullivan brought suit for copyright infringement and opted to pursue statutory damages to maximize her potential payout by classifying each of her 33 illustrations as “one work” within the meaning of section 504(c)(1) of the Copyright Act. Flora argued that the illustrations were part of two broader compilations. The district court instructed the jury that Sullivan could recover separate awards of statutory damages for 33 acts of infringement on 33 separate illustrations. The jury returned a statutory damages award of $3.6 million. The Seventh Circuit vacated. The district court committed error in permitting separate awards of statutory damages unaccompanied by any finding that each or any of the 33 illustrations constituted “one work” within the meaning and protection of section 504(c)(1). View "Sullivan v. Flora, Inc." on Justia Law

Narkiewicz‐Laine, an artist, rented space from the defendants in 2004. About six years later, the defendants cleared the rental space and discarded most of his property, including his only records of the stored property. Narkiewicz‐Laine filed suit, citing the Visual Artists Rights Act, 17 U.S.C. 106A. For certain visual art, the Act confers upon artists rights to attribution and integrity, including the right to prevent the work’s destruction. Narkiewicz‐Laine added claims for trespass, conversion, and negligence under Illinois law. He sought $11 million for his losses. The defendants presented evidence that Narkiewicz‐Laine had missed multiple rent payments and stopped paying for the property's utilities, and testified that, before emptying the space, they saw nothing resembling art or valuable personal property. The defendants introduced Narkiewicz‐Laine's prior conviction for lying to an FBI agent. The jury awarded $120,000 in damages under the Act plus $300,000 on the state law claims, reflecting the loss of all the belongings stored at the unit. The court reduced the total award to $300,000 to avoid an improper double recovery, reasoning that Narkiewicz‐Laine’s common law claims necessarily included the loss of his artwork. The court concluded did not award Narkiewicz‐Laine attorneys’ fees under the Copyright Act. The Seventh Circuit affirmed, first upholding the decision to allow Narkiewicz‐Laine’s 2003 conviction into evidence. Narkiewicz‐Laine is not entitled to recover twice for the same property, so the actual damages attributed to specific art must be subtracted from the jury’s award of actual damages for all destroyed property. View "Narkiewicz-Laine v. Doyle" on Justia Law

Bell sued Vacuforce for copyright infringement, accusing it of publishing his photograph of the Indianapolis skyline on its website without a license. Vacuforce hired attorney Overhauser. The parties quickly settled; the federal lawsuit was dismissed with prejudice. Overhauser then moved to recover attorney fees from Bell, arguing that because the settlement produced a dismissal with prejudice, Vacuforce was the “prevailing party” for purposes of fees under the Copyright Act, 17 U.S.C. 505. The district court denied Overhauser’s as motion frivolous and misleading and ordered monetary sanctions against Overhauser: one under Federal Rule of Civil Procedure 11 and another under 28 U.S.C. 1927. The Seventh Circuit affirmed the sanctions, rejecting an argument that a party can “prevail” for purposes of a fee-shifting statute by paying a settlement and obtaining a dismissal with prejudice. The district court did not abuse its discretion by imposing the section 1927 sanction. “Objective bad faith” will support such a sanction. A lawyer demonstrates objective bad faith when she “pursues a path that a reasonably careful attorney would have known, after appropriate inquiry, to be unsound.” The district court found that Overhauser’s legal contentions were baseless and that he failed to disclose the proper factual foundation necessary to evaluate his legal argument. View "Overhauser v. Bell" on Justia Law

Fryer and the Alliance for Water Efficiency collaborated on a study about drought. The Alliance worked on funding. Fryer circulated a draft of the report. The Alliance expressed concern with the methodology and sued Fryer under the Copyright Act, 17 U.S.C. 101. Under a settlement Fryer agreed to turn over his data from public utilities in exchange for $25,000. If any utility had disclosed data with a confidentiality agreement, the Alliance was required to secure a release. Each party could publish a report, but could not acknowledge the other’s involvement. The parties have litigated ever since. The district court concluded that the Alliance was entitled to specific data and that Fryer was bound by the settlement to refrain from acknowledging disputed organizations unless they contacted him first and asked to be recognized. The judge required the Alliance to provide those organizations with Fryer’s contact information. The Seventh Circuit reversed solely on the acknowledgment issue. Fryer returned to the district court, seeking restitution for injuries caused by the court’s erroneous injunction and attorney’s fees under section 505 of the Copyright Act for having prevailed in the first appeal. The Seventh Circuit affirmed denial of both motions. Fryer does not present genuine claims for restitution; he seeks to relitigate unrelated claims for breach of the settlement. He did not prevail on the Alliance’s copyright claim. View "Alliance for Water Efficiency v. Fryer" on Justia Law

The initial six-month agreement between LimeCoral and CareerBuilder specified that all graphic designs created for CareerBuilder would constitute the exclusive property of CareerBuilder and said nothing about renewal fees. After six months, LimeCoral continued to prepare media files incorporating custom graphic designs, typically receiving $3,000 for each new design. As there was no longer a written agreement transferring ownership of the copyright, LimeCoral retained ownership and implicitly granted CareerBuilder a license to use the designs. CareerBuilder argued the license was unconditional and irrevocable; LimeCoral claimed it was subject to CareerBuilder’s alleged agreement to pay an annual renewal fee for every design that CareerBuilder continued to use. LimeCoral sued, alleging breach of copyright and breach of an alleged oral agreement to pay an annual renewal. The district court granted CareerBuilder summary judgment, finding that CareerBuilder had an irrevocable, implied license to use LimeCoral’s designs that was not conditioned upon any agreement to pay LimeCoral renewal fees. The Seventh Circuit affirmed. There was no evidence that would permit the factfinder to conclude that there was an agreement between LimeCoral and CareerBuilder that LimeCoral would be paid a fee for each renewal, and that the implied license LimeCoral granted to CareerBuilder to use the job brandings was subject to that agreement. View "LimeCoral, Ltd. v. CareerBuilder, LLC" on Justia Law

Design Basics claims rights to about 2700 home designs and sued Lexington for copyright infringement, contending that Lexington built homes that infringed four Design Basics’ designs. The district court granted Lexington summary judgment, finding no evidence that Lexington ever had access to Design Basics’ home plans. The Seventh Circuit affirmed, agreeing that Design Basics has no evidence of access and stating that no reasonable jury could find that Lexington’s accused plans bear substantial similarities to any original material in Design Basics’ plans. The court noted that its owner acknowledged in his deposition that “potential copyright infringement cases influence[d his] decision to become an owner of Design Basics.” He testified that proceeds from litigation have become a principal revenue stream for Design Basics. “Design Basics’ business model of trawling the Internet for intellectual property treasures is not unique.” View "Design Basics, LLC v. Lexington Homes, Inc." on Justia Law

Plaintiff sued Amazon, claiming that it permitted third parties to advertise counterfeit copies of books, Vagabond Natural and Vagabond Spiritual, that the plaintiff wrote and self‐published, detailing his experiences as a vagabond homeless man. He says Amazon refused repeated requests to remove the advertisements, although Amazon did eventually remove them. He insists that legitimate sales would have generated “millions of dollars for Amazon” and allowed him “to end homelessness,” but that Amazon “forcefully exploited” his books by counterfeiting them. He claims to have examined copies of each book purchased through Amazon by his cousin and determined that all were unauthorized reproductions because genuine copies would bear his fingernail indentations on the covers. The district judge dismissed. The Seventh Circuit affirmed, noting that the books at issue are hard copies, rather than online copies, and are almost certainly Hart’s self‐published books because they are identical to those books. Only six copies were sold by Amazon. There is no plausible allegation that, even if the books sold by Amazon are counterfeits, Amazon was aware of the fact. Counterfeiting cannot be presumed; Hart’s claims did not meet even a minimum standard of plausibility. View "Hart v. Amazon.com, Inc." on Justia Law