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`UNITED STATES DISTRICT COURT
`
`MIDDLE DISTRICT OF FLORIDA
`
`ORLANDO DIVISION
`
`HOME DESIGN SERVICES, INC.,
`
`Plaintiff,
`
`-vs-
`
`Case No. 6:02-cv-637-Orl-28JGG
`
`Consolidated with
`
`Case No. 6:03-cv-595-Orl-28-JGG
`
`PARK SQUARE ENTERPRISES, INC.,
`SURESH K. GUPTA, BRAHAM RATTAN
`AGGARAWAL, ANIL DESHPANDE,
`
`Defendants.
`
`ORDER
`
`This cause is before the Court on the motion for summary judgment filed by
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`Defendants Park Square Enterprises, Inc. (“Park Square”), Suresh K. Gupta (“Gupta”),
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`Braham Rattan Aggarawal, and Anil Deshpande (collectively “Defendants”) (Doc. 156) and
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`the cross-motion for partial summary judgment (Doc. 160) filed by Plaintiff Home Design
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`Services, Inc. (“Home Design”). Home Design alleges that Defendants violated the federal
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`Copyright Act, 17 U.S.C. § 501 et_s_<ec1_;, by advertising, designing, constructing, and
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`participating in the construction of multiple residences which were largely copied from Home
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`Designs copyrighted architectural designs. Defendant Park Square has filed a two—count
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`counterclaim against Home Design alleging unfair competition and slander oftitle underthe
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`common law of Florida.
`
`

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`Defendants seek summaryjudgment on all of Home Design’s claims. Home Design
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`seeks partial summaryjudgment on both counts alleged in Park Square’s counterclaim, all
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`of Defendants’ affirmative defenses, and certain elements of its own claims. For the
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`reasons stated below, both sides’ motions must be granted in part and denied in part.
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`I. FACTS AND PROCEDURAL HISTORY
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`Home Design is an architectural design firm that designs and sells architectural plans
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`for residential homes. Park Square is a construction firm which develops and constructs
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`residential homes. Defendant Gupta is vice-president and 3% owner of Park Square and
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`a member of the company’s board of directors.
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`Home Design alleges that it is the owner of two copyrighted architectural plans, the
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`HDS—2089 and HDS—2680.‘ Home Design developed the HDS—2089 plan in 1991 for the
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`residential construction firm, Reiche & Silliman.
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`In an agreement which was eventually set
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`forth in a letter from the owner of Home Design, James Zirkel (“Zirkel”), to the owner of
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`Reiche & Silliman, Home Design assured Reiche & Silliman that it would not sell the HDS-
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`2089 plan to any other construction firm in the Orlando area.
`
`(Doc. 174, Ex. D). Home
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`Design developed the HDS—2680 plan for Beazer Homes in 1997. Pursuant to its agreement
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`‘ Home Design also claims that another of its designs, the HDS—1934, was infringed
`by Park Square’s “Juniper Springs” plan. During these proceedings, belated evidentiary
`disclosures raised substantial questions regarding the continued viability of this claim.
`Accordingly, on April 13, 2005, the Court ordered that the claim be severed from Home
`Design’s two other claims. Additionally, the Court denied both sides’ motions for summary
`judgment to the extent that the motions addressed Home Design’s HDS—1934 claim. (Doc.
`209).
`
`

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`with Home Design, Beazer Homes had the exclusive right to build homes using the HDS-
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`268O plan.
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`(Doc. 172, Ex. H).
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`Home Design claims that Park Square’s “Orchid lsland” plan infringes the HDS-2680
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`design and that its “Belaggio” (or “Seabreeze lsland”) design infringes the HDS—2089 design.
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`Home Design maintains that it was not aware of these alleged infringements until August
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`2001. The instant action was brought by Home Design in May 2002.
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`ll. SUMMARY JUDGMENT STANDARD
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`Summaryjudgment “shall be rendered forthwith ifthe pleadings, depositions, answers
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`to interrogatories, and admissions on file, together with the affidavits, if any, show that there
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`is no genuine issue as to any material fact and that the moving party is entitled to a
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`judgment as a matter of law.” Fed. R. Civ. P. 56(c). The moving party bears the burden of
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`establishing that no genuine issues of material fact remain. Celotex Corp. v. Catrett, 477
`
`U.S. 317 (1986).
`
`In ruling on a motion for summary judgment, the Court construes the facts and all
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`reasonable inferences therefrom in the light most favorable to the nonmoving party.
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`Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). However, summary judgment is
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`mandated “against a party who fails to make a showing sufficient to establish the existence
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`of an element essential to that party‘s case, and on which that party will bear the burden of
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`proof at trial.” Qglfi, 477 U.S. at 322.
`
`“[A]t the summary judgment stage, the judge’s
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`function is not himself to weigh the evidence and determine the truth of the matter but to
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`determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249.
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`

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`When faced with a “properly supported motion for summary judgment,
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`[the
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`nonmoving party] must come forward with specific factual evidence, presenting more than
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`mere allegations.” Gargiulo v. G.M. Sales, lnc., 131 F.3d 995, 999 (11th Cir. 1997). “The
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`evidence presented cannot consist of conclusory allegations or legal conclusions.” mg
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`Q-l_u_H, 932 F.2d 1572, 1577 (11th Cir. 1991); see also Fed. R. Civ. P. 56(e) (providing that
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`the nonmovant’s response “must set forth specific facts showing that there is a genuine
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`issue for trial”).
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`Ill. DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
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`Defendants argue, first,
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`that Home Design lacks standing to bring a claim of
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`infringement based on the HDS-2089 plan. Next, Defendants contend that both of Home
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`Design’s infringement claims are insufficiently supported by evidence in the record that any
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`original elements in the HDS-2089 or HDS-2680 plans were copied.
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`On the issue of damages, Defendants maintain that Home Design has failed to
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`produce any facts which tend to show a causal
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`link between Defendants’ alleged
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`infringements and the profits which they purportedly derived from such infringements.
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`Defendants also submit that Home Design has no basis under 17 U.S.C. § 412 for claiming
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`attorney’s fees or statutory damages for the alleged infringement of HDS-2089.
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`Finally, Defendants argue that Gupta cannot be held vicariously or personally liable
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`for any of the alleged copyright violations as he had no supervisory responsibilities at Park
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`Square.
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`

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`A. Ownership of HDS-2089
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`The Copyright Act provides that only the “legal or beneficial owner of an exclusive
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`right under a copyright” may “institute an action for any infringement of that particular right
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`while he or she is the owner of it.” 17 U.S.C. § 501 (b). Defendants argue that Home Design
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`transferred all ownership rights in the HDS-2089 design to Reiche & Silliman, thereby
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`relinquishing the right to sue for infringement of the design. The transfer of rights,
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`Defendants contend, is reflected in the following language contained in Zirkel’s letterto the
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`owner of Reiche & Silliman:
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`We will not sell the aforementioned plans to any builder within a fifty mile
`radius of the intersection of SR—50 and I-4, an area of approximately 7850
`square miles. This policy will cover all past, present and future designs from
`this date fon/vard.
`
`Doc. 156, Ex. A to Ex. 2.
`
`The critical flaw in Defendants’ argument, as Home Design points out, is the absence
`
`of any reference in Zirkel’s letterto the HDS-2089 copyright. While it is true that “[a] transfer
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`of copyright ownership” may “be satisfied by an oral assignment later ratified or confirmed
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`by a written memorandum of the transfer,” Imperial Residential Design, Inc.
`
`v. Palms
`
`Development Group, lnc., 70 F.3d 96, 99 (1 1th Cir. 1995) (interpreting requirement set forth
`
`under 17 U.S.C. § 204(a)2) (citation omitted), the memorandum should, at a minimum, make
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`mention of the copyright which is being transferred. E Radio TV Espanola S.A. v. New
`
`
`World Entm’t Ltd., 183 F.3d 922, 928 (9th Cir. 1999) (“[W]ithout language indicating finality,
`
`2 Section 204(a) provides that “[a] transfer of copyright ownership, other than by
`operation of law, is not valid unless an instrument of conveyance, or a note or memorandum
`of the transfer, is in writing and signed by the owner ofthe rights conveyed or such owner's
`duly authorized agent.”
`
`

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`§ 204(a) is not satisfied”); , 290 F. Supp. 2d 234, 240 (D.R.l. 2003)
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`(specifically requiring that the subject matter of the agreement be identified) (citing Saenger
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`Org., Inc. v. Nationwide Ins. Licensing Assocs., lnc., 864 F. Supp. 246, 250 (D. Mass. 1994),
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`fifjd, 119 F.3d 55 (1st Cir. 1997)). Because Zirkei’s letter makes no such reference and
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`othen/vise fails to evince an intent by Home Design to transferthe copyright in the HDS—2089
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`design, Defendants’ argument that Home Design lacks standing to bring its HDS—2089
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`infringement claim fails.3
`
`B. Copying
`
`In order to prevail on a copyright infringement claim, a plaintiff must show that the
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`defendant copied “constituent elements of the [copyrighted] work that are original.” Feist
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`Publ’ns v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). Where, as in this case, there is
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`no direct evidence of copying, it must be shown that the infringing work and copyrighted
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`work are “so substantially similar that .
`
`.
`
`. an average lay observer would recognize the
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`alleged copy as having been appropriated from the original work.” Calhoun v. Lillenas
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`mg, 298 F.3d 1228, 1232 (11th Cir. 2002).
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`Defendants submit that any similarities which their plans bear to those of Home
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`Design are due to a general commonality of certain architectural features and not to the
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`copying of any original elements in Home Design’s plans. Defendants’ argument may
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`ultimately prove persuasive. To consider it at this point, however, would require a weighing
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`3 Curiously, it is Defendants who argue that the parol evidence rule prohibits the use
`of extrinsic evidence “to import additional
`language into the terms of the agreement"
`between Home Design and Reiche & Silliman.
`(Doc. 156 at 6).
`
`-6-
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`

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`of facts which cannot be done in reviewing a motion for summaryjudgment. Thus, for now
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`at least, Defendants’ argument fails.
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`C. Profits Attributable to Infringement
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`Should Home Design ultimately prevail on its claims, Section 504(b) provides that it
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`shall be entitled to both actual damages as well as “any profits of the infringer that are
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`attributable to the infringement and are not taken into account in computing the actual
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`damages.” in establishing the extent of such profits, Section 504(b) further provides that
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`“the copyright owner is required to present proof only of the infringer's gross revenue.” It is
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`the infringer’s burden “to prove his or her deductible expenses and the elements of profit
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`attributable to factors other than the copyrighted work.”
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`Notwithstanding the plain language of Section 504(b), Defendants maintain that, to
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`survive summary judgment, Home Design must proffer “non—speculative evidence" which
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`supports a causal link between Defendants’ profits and the their alleged infringing activities.
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`As there is no basis here to depart from the plain language of a statute, Defendants’
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`argument fails.
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`In the event that Home Design’s claims succeed, the onus will
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`lie with
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`Defendants “to show both the netprofit (revenues less expenses) and the profit elements
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`attributable to factors other than use of the copyrighted work.”“ Home Design Servs., lnc.
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`4 Any effort by Defendants to limit their damages will likely “depend on [proof of]
`whether [Horne Design’s] plans are unique or, conversely, whether they are merely an
`adaptation of similar plans readily available in the marketplace.” Home Design Servs., Inc.
`v. Schwab Dev. CorQ., No. 6:03—cv—596, slip op. at 7 (M.D. Fla. Januaw 7, 2005).
`In other
`words, the “relative value” assigned to Home Design’s plans will depend on the basic
`principles of “supply and demand.” lcl_.
`
`

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`v. Schwab Dev. Corp., No. 6:O3—cv-596, slip op. at 7 (M.D. Fla. January 7, 2005) (citing Q
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`Davis v. The Gap, lnc., 246 F.3d 152, 159 (9th Cir. 2001).
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`Defendants’ alternative contention is that Home Design’s entitlement to damages
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`should be limited as a matter of law to 10-15% of what it would have cost to purchase the
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`two allegedly infringed house plans.5 In making this contention, Defendants rely on a
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`statement by Zirkel that the price of a home is generally determined by adding 10-15% to
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`building costs. This argument also fails.
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`Zirkel’s remarks merely concerned the standard method for calculating home prices.
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`As such, the remarks have no direct bearing on the degree to which architectural designs
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`generally factor into a builder's profits and even less bearing on the more precise issue of
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`what value to assign to Defendants’ alleged use of the HDS—2089 and HDS-2680 designs.
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`Once again, if a finding of infringement is made, Defendants will have an opportunity to
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`demonstrate what portion of Park Square’s revenue was actually attributable to the copying
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`of Home Design’s plans. Limiting damages to the extent the Defendants endeavorto here,
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`however, will likely require evidence far more probative than Zirkel’s testimony.
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`D. Statutory Damages & Attorney’s Fees
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`Home Design concedes that it has no grounds for claiming statutory damages or
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`attorney's fees on the basis of its HDS—2089 claim. Summaryjudgment is thus awarded to
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`Defendants to the extent of Home Design’s concession.
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`5 According to Defendants, the price of Home Design’s house plans ranges from
`$400 to $600. Thus, under Defendants’ theory, Home Design’s damages would be limited
`to $40 to $90 per plan.
`
`

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`E. Gupta’s Personal Liability
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`“An individual, including a corporate officer, who has the ability to supervise infringing
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`activity and has a financial interest in that activity, or who personally participates in that
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`activity is personally liable for the infringement." S. Bell Tel. & Tel. Co. v. Associated Tel.
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`Directom Publishers, P.A., 756 F.2d 801, 811 (11th Cir. 1985) (citation omitted). Underthis
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`standard of vicarious liability, a person may be held personally liable for the damages
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`resulting from copyright
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`infringement even if
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`that
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`individual was “ignorant of
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`the
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`infringement.” ld_.
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`As a 3% owner of Park Square, it is clearthat Gupta “had a financial interest” in the
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`alleged infringing activities. Thus, the issue of Gupta’s personal liability hinges on whether
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`he had “the ability to supervise [the] infringing activity.” Nothing in the record supports Home
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`Design’s contention that he did. C_f. Playboy Enters. v. StanNare Publ’g Corp., 900 F. Supp.
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`438, 441 (S.D. Fla. 1995) (finding that defendant “admitted that he had the ability to
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`supervise [the] infringing activity”). Indeed, the only evidence in the record bearing on this
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`issue—Gupta’s own testimony—indicates that Gupta had no duties at Park Square, was not
`
`involved in any of the company’s day—to—day operations, and, most critically, had no
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`oversight responsibilities in relation to architectural design.
`
`(Doc. 156, Ex. 8 at 6-9).
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`Given the absence of facts in the record which could form the basis for a reasonable
`
`inference that Gupta had the ability to supervise Defendants’ alleged infringing activities,
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`summaryjudgment is granted to Defendants on the issue of Gupta’s personal liability?
`
`6 Home Design argues that “proof of ownership is sufficient to establish both the right
`and ability to supervise and a direct financial interest.” (Doc. 174 at 22). This argument
`would, in essence, make owners of companies—even minority owners like Gupta—per se
`
`-9-
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`

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`IV. HOME DES|GN’S MOTION FOR PARTIAL SUMMARY JUDGMENT
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`Home Design contends, first, that there are no issues of material fact remaining as
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`to whether it has established prima facie ownership of the HDS—2089 and HDS—2680
`
`copyrights. Additionally, Home Design argues that Defendants should be bound to their own
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`experts’ determination ofthe amount ofgross revenue Park Square derived from the alleged
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`infringements. Finally, Home Design seeks summary judgment on all ten of Defendants’
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`affirmative defenses and on both counts alleged in Defendants’ counterclaim.
`
`A. Copyright Ownership
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`Home Design contends that it has produced uncontroverted evidence,
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`including
`
`certificates of registration and testimony from Zirkel, which establishes that it is the prima
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`facie owner of the HDS—2089 and HDS—2680 copyrights.
`
`In response, Defendants argue,
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`first, that Home Design’s prima facie case of copyright ownership in the HDS—2089 design
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`fails because the copyright forthe design was not properly registered. Second, Defendants
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`contend that issues of material fact remain both as to whether the HDS—2680 design was
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`co—authored and, even if it was not, whether Home Design transferred exclusive rights in the
`
`design to Beazer Homes.
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`vicariously liable for the infringing activities of their companies, regardless of whether they
`had any actual responsibility for, or even knowledge of, the infringing conduct. Home
`Design relies on the Fourth Circuit’s decision in Nelson-Salabes, Inc. v. Morningside Dev.,
`L, 284 F.3d 505 (4th Cir. 2002).
`in that case, however, the court simply found that the
`lower court was not clearly in error when it determined that the infringing company’s
`owner—another company—had the ability to control the construction of a real estate project.
`ld_. at 510 n.4, 514.
`In making this finding, the Fourth Circuit did not categorically hold that
`owners of companies are per se liable for the infringing activities of their companies.
`
`_10_
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`

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`1. HDS-2089
`
`The Copyright Act provides:
`
`In any judicial proceedings the certificate of a registration made before or
`within five years after first publication of the work shall constitute prima facie
`evidence of the validity of the copyright and of the facts stated in the
`certificate. The evidentiary weight
`to be accorded the certificate of a
`registration made thereafter shall be within the discretion of the court.
`
`17 U.S.C. § 410(c). As Defendants contend, the registration for the HDS-2089 copyright
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`reflects that it was first published on August 11, 1991 but was not registered until August 8,
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`2000. As such, the registration appears to fall short of the requirement under § 410(c) that
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`the certification of registration be made within five years afterthe first publication ofthe work.
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`Home Design has offered no evidence to the contrary. Under these facts, it cannot be
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`determined that Home Design has succeeded in establishing a prima facie case that it is the
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`owner of the HDS-2089 copyright. Accordingly, Home Design’s motion for summary
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`judgment on the issue of copyright ownership in the HDS-2089 design must be denied.
`
`2. HDS-26807
`
`A co—authored work “is a work prepared by two or more authors with the intention that
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`their contribution be merged into inseparable or interdependent parts of a unitary whole.”
`
`17 U.S.C. § 101. Defendants contend that, because the HDS-2680 plan is the product of
`
`multiple meetings with Beazer Homes, issues of material fact remain to be resolved as to
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`whetherthe plan was co—authored. The evidence which Defendants cite in support of their
`
`7 Defendants do not dispute that the registration of the HDS-2680 copyright satisfies
`the requirements under § 410(c) and, in fact, concede that the registration “provide[s] a
`minimum level of evidence” that Home Design has established prima facie ownership of the
`copyright.
`(Doc. 172 at 2).
`
`-11-
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`

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`argument does not, however, tend to show this. At best, their evidence merely suggests that
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`Beazer Homes provided criteria which informed Home Designs development ofthe design.
`
`E Doc. 156, Ex.
`
`1 at 39-42, 53, 59. This type of “involvement does not .
`
`.
`
`. ordinarily
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`renderthe client an ‘author’ of [an] architectural plan[].” M.G.B. Homes v. Ameron Homes,
`
`903 F.2d 1486, 1493 (11th Cir. 1986) (citation and internal quotations omitted). Rather,
`
`there must be some evidence that Beazer Homes made a contribution which became an
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`“inseparable or interdependent part of the final house drawings.” Id_. The record contains
`
`no such evidence.
`
`In support of their contention that Home Design granted Beazer Homes exclusive
`
`ownership rights in the HDS-2680 design, Defendants point to an agreementwhereby Home
`
`Design granted Beazer Homes the exclusive right to use the HDS-2680 design an “unlimited
`
`number oftimes to construct homes through—out [sic] the United States.” (Doc. 172, Ex. H).
`
`This agreement, however, evinces only Home Design’s intent to grant Beazer Homes
`
`exclusive use of the design, not an intent to relinquish all of its ownership interests in it. Any
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`doubt on this point is erased by reservations in the agreement which precluded Beazer
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`Homes from: (1) removing Home Design copyright notations from the design; (2) selling,
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`assigning, or granting the design to any other person or entity; (3) allowing any architect,
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`designer, or draftsman to use the design for derivative works; or (4) transferring its license
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`to use the design to any other entity or individual. These reservations make clearthat Home
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`Design intended to retain certain interests in the HDS-2680 design including, most notably,
`
`-12-
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`

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`an interest in preventing anyone but Beazer Homes from using it—the very interest which
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`Home Design now claims to have been violated by Defendants?
`
`As the foregoing analysis illustrates, Defendants have failed to raise issues of
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`material fact with regard to whether Home Design has established prima facie ownership of
`
`the HDS-2680 copyright. Accordingly, summary judgment must be awarded to Home
`
`Design on this element of its HDS-2680 claim.
`
`B. Gross Revenue
`
`As explained earlier in the order, Home Design only bears the burden of proof in
`
`showing its actual damages and the amount of Defendants’ gross revenue. With respect
`
`to the issue of gross revenue, Home Design simply argues that Defendants should be held
`
`to the calculations oftheir own experts.
`
`In response, Defendants do not, of course, dispute
`
`those calculations. Rather, Defendants argue, once again, that Home Design must establish
`
`a causal nexus between the infringements and revenue. For reasons already stated in this
`
`Order, that argument fails.
`
`There are, therefore, no issues of fact remaining as to the amount of gross revenue
`
`Defendants derived from the sale of homes which allegedly infringed upon the HDS-2089
`
`and HDS—268O designs.
`
`It should be noted that this determination does not mean that the
`
`issue of damages has been definitively resolved but merely that the burden now shifts to
`
`8 The analysis might have proceeded differently had Home Design sought to
`establish beneficial ownership ofthe copyrights solely on the basis ofa reversionary interest.
`See, e.g., Hearn v. Meyer, 664 F. Supp. 832, 840-44 (S.D.N.Y. 1987); see also 3 Nimmer
`on Copyright § 12.02[D] (“[A] mere contingent reversionary interest in a copyright
`is
`inadequate to confer standing .
`.
`.
`.”).
`
`-13-
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`

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`Defendants to “prove [their] deductible expenses and the elements of profit attributable to
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`factors other than the copyrighted work.” 17 U.S.C. § 504(b).
`
`C. Defendants’ Affirmative Defenses
`
`1. Defendants’ Seventh, Eighth, and Ninth Affirmative Defenses
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`Defendants assert, in the form of affirmative defenses, that Home Design’s claims
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`are based upon elements which do not constitute copyrightable material, that the copyright
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`registrations for the HDS—2680 and 2089 designs are fraudulent or invalid, and that any
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`protectable expression in the designs is not substantially similar to Defendants’ plans.
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`Home Design argues thatthese defenses are improperly designated as affirmative defenses
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`and, therefore, should be stricken.
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`Home Design is correct in its contention. “The elements of a copyright infringement
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`claim are (1 ) ownership of a valid copyright; and (2) copying of constituent elements of the
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`work that are original.” Egg, 499 U.S. at 361. Defendants’ seventh, eighth, and ninth so-
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`called affirmative defenses are essentially denials of these two elements. As such, the
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`defenses must be stricken to the extent that they have been asserted as affirmative
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`defenses.
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`2. Defendants’ First, Second, Third, Fourth, Fifth, Sixth, and Tenth Affirmative
`Defenses
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`In their remaining defenses, Defendants contend that: (1) Home Design’s claim is
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`barred by the applicable statute of limitations; (2) each count of Home Design’s complaint
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`fails to state a claim; (3) Home Design has not been injured as a result ofany act committed
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`by Defendants;
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`(4) Home Design’s claims are barred by the doctrines of laches and
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`equitable estoppel; (5) Home Design’s claims are barred by the doctrine of unclean hands
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`and inequitable conduct; (6) any elements in Defendants’ works which bear similarity to
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`those of Home Design are in the public domain and thus any copying of those elements
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`constituted fair use; and (7) Home Design’s claims are barred by the doctrine of copyright
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`misuse. Home Design does not dispute that these defenses are properly asserted as
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`“affirmative defenses” but has instead moved for summaryjudgment on the basis that each
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`defense lacks sufficient factual support in the record or is otherwise deficient as a matter of
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`law.
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`1. Defendants’ First Affirmative Defense: Statute of Limitations
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`The Copyright Act provides that “[n]o civil action shall be maintained under the
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`provisions of this title unless it is commenced within three years after the claim accrued.”
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`17 U.S.C. § 507(b). A copyright claim accrues “when the plaintiff learns, or should as a
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`reasonable person have learned that the defendant was violating his rights.” James W.
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`
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`Ross Inc. v. Cecil Allen Constr. lnc., No. 6:03—cv—792, 2004 WL 1146104, at *2 (M.D. Fla.
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`Apr. 26, 2004) (quoting Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir.), reh’ng and
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`reh’ng en banc denied (7th Cir. 2004)); see also Calhoun v. Lillenas Publ’g, 298 F.3d 1228,
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`1236 (11th Cir. 2002) (Birch, J., specially concurring).
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`Defendants assert that Home Design “was aware of [Park Square] using the designs
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`at issue since at least 1997 (and possibly 1990), and did not enforce its claimed copyright
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`until the filing of this lawsuit in 2002.”
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`(Doc. 160, Ex. L).
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`In making this contention,
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`Defendants point out that, during the period of the alleged infringing activity, Park Square
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`had promoted its products in the Parade ofHomes , conducted business with Home Design,
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`and maintained one of the larger building operations in Central Florida.
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`In its motion for
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`summaryjudgment, Home Design argues that Defendants’ statute—of-limitations defense
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`relies on the proposition—considered and rejected by the Court in James W. Ross—that an
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`owner of a copyrighted house plan must take extraordinary measures “to ensure that no
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`infringing houses are being built.” 2004 WL 1146104, at *3 (rejecting the notion that “every
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`owner of a copyrighted house plan would need to employ a full-time investigator to scour
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`public records and drive around every housing development to ensure that no infringing
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`houses are being built”).
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`While it is true that Home Design was not required to take extraordinary measures
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`to determine whether Defendants were infringing upon its designs, this determination alone
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`does not resolve the question of whether Home Design should have known that its plans
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`were being used. Defendants do not contend that Home Design was required to “employ
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`a full-time investigator” or routinely “drive around .
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`.
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`. housing development[s]” to police its
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`copyrighted house plans but argue instead that—given the scope and transparency of Park
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`Square’s building operations—Home Design reasonably should have known of the alleged
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`infringements. This argument raises questions of fact that cannot be determined at the
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`summaryjudgment stage. E id_. (denying summary judgment).
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`2. Defendants’ Second Affirmative Defense: Failure to State a Claim
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`In moving for summaryjudgment on this defense, Home Design focuses its argument
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`exclusively on the adequacy of its copyright claim.
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`In response, Defendants do not dispute
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`the sufficiency of Home Design’s copyright claim but instead suggest that the sole function
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`of their defense is to guard against the possibility that Home Design will later assert that its
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`complaint contains claims of unfair competition and unfair trade practices.
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`As Defendants seem to have conceded, Home Design has adequately stated a claim
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`for copyright infringement by alleging: (1 ) that it owns copyrights in the HDS—2089 and 2680
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`designs; (2) that the designs have been registered in compliance with the Copyright Act ; (3)
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`that the designs are original works; and (4) that Defendants improperly built homes using
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`the designs. S_ee Klinger v. Weekly World News, Inc, 747 F. Supp. 1477, 1481 (S.D. Fla.
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`1990). Home Design’s motion for summaryjudgment on Defendants’ affirmative defense
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`of failure to state a claim is, therefore, granted to the extent that it implicates the sufficiency
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`of Home Design’s copyright claims. As the issue has not been properly raised, the Court
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`expresses no opinion on whether Home Design has stated claims of unfair competition and
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`unfairtrade practices or whether Defendants have adequately raised an affirmative defense
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`of failure to state a claim as to those potential claims.
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`3. Defendants’ Third Affirmative Defense: Lack of Compensable Injury
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`Home Design moves for summaryjudgment on the basis of Defendants’ own expert
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`report which states that Home Design “receives between $220-to-$450" in fees for the use
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`of its designs. (Doc. 160, Ex. 4 to Ex. K). This concession, according to Home Design,
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`necessitates that Defendants’ lack—of-Compensable injury defense be stricken. Defendants
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`counterthat the only parties which can claim injury are Reiche & Silliman and Beazer Homes
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`since both firms had the exclusive right to build homes using Home Design’s plans during
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`the time that the alleged infringements occurred.
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