throbber
Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 1 of 13 PageID #:1938
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 1 of 13 PagelD #:1938
`
`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`
`EASTERN DIVISION
`
`LIMECORAL, LTD.,
`
`Plaintiff,
`
`V.
`
`CAREERBUILDER, LLC,
`
`Defendant.
`
`WVVVVVVVV
`
`N0. 15 C 7484
`
`MEMORANDUM OPINION
`
`SAMUEL DER-YEGHIAYAN, District Judge
`
`This matter is before the court on Plaintiff LimeCoral, Ltd’s (LimeCoral)
`
`partial motion for summary judgment, and on Defendant CareerBuilder, LLC’s
`
`(CareerBuilder) motion for summary judgment. For the reasons stated below,
`
`CareerBuilder’s motion for summary judgment is granted, and LimeCoral’s partial
`
`motion for summary judgment is denied.
`
`BACKGROUND
`
`In 2008, CareerBuilder allegedly contracted with LimeCoral to have
`
`LimeCoral create media files in exchange for CareerBuilder providing LimeCoral
`
`with a portion of CareerBuilder’s online design service orders. After the end of the
`
`formal agreement, CareerBuilder allegedly continued to seek such services from
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 2 of 13 PageID #:1939
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 2 of 13 PagelD #:1939
`
`LimeCoral. In 2014, CareerBuilder allegedly reduced the volume of online design
`
`service orders and LimeCoraI notified CareerBuilder that the license for use of
`
`LimeCoral’s works had been revoked. LimeCoral contends that CareerBuilder has
`
`continued to use LimeCoral’s products without permission and has exceeded the
`
`scope of the alleged licences. LimeCoral includes in its complaint a breach of
`
`contract claim (Count I), a copyright infringement claim (Count II), and an unjust
`
`enrichment claim (Count 111). LimeCoral moves for summary judgment on the issue
`
`of the ownership of the works at issue. CareerBuilder moves for summary judgment
`
`on ail claims.
`
`LEGAL STANDARD
`
`Summary judgment is appropriate when the record, viewed in the light most
`
`favorable to the non-moving party, reveals that there is no genuine issue as to any
`
`material fact and the moving party is entitled to judgment as a matter of law. Fed. R.
`
`Civ. P. 56(0); Smith v. Hope School, 560 F.3d 694, 699 (7th Cir. 2009). A “genuine
`
`issue” in the context of a motion for summary judgment is not simply a
`
`“metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co, Ltd. v.
`
`Zenith Radio Corp, 475 U.S. 574, 586 (1986). Rather, a genuine issue of material
`
`fact exists when “the evidence is such that a reasonable jury couid return a verdict
`
`for the nonmoving party.” Anderson v. Liberty Lobby, Inc, 477 U.S. 242, 248
`
`(1986); Insolia v. Phillip Morris, Inc., 216 F.3d 596, 599 (7th Cir. 2000). In ruling
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 3 of 13 PageID #:1940
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 3 of 13 PagelD #:1940
`
`on a motion for summary judgment, the court must consider the record as a whole, in
`
`a light most favorable to the non—moving party, and draw all reasonable inferences in
`
`favor of the non-moving party. Anderson, 477 US. at 255; Bay v. Cassens
`
`Transport Ca, 212 F.3d 969, 972 (7th Cir. 2000). When there are cross motions for
`
`summary judgment, the court should “construe the evidence and all reasonable
`
`inferences in favor of the party against whom the motion under consideration is
`
`made.” Premcor USA, Inc. v. American Home Assurance C0., 400 F.3d 523, 526-27
`
`(7th Cir. 2005).
`
`DISCUSSION
`
`1. Co
`
`ri ht Infrin ement Claim Count II
`
`LimeCoral contends in its partial motion for summaly judgment that it has
`
`ownership over the works in question. CareerBuilder has not disputed LimeCoral’s
`
`ownership of the works. (R LSF Par. 16). CareerBuilder argues, however, that
`
`during the years of its relationship with LimeCoral, LimeCoral failed to assert its
`
`ownership interest over the works, and that CareerBuilder acquired an implied
`
`nonexclusive license over LimeCoral’s works. The owner of a copyright possesses
`
`the “exclusive rights to copy or distribute copies of the work,” but the “[t]he
`
`copyright owner may authorize another person to do so through an exclusive written
`
`license, .
`
`.
`
`. or a nonexclusive oral or implied license.” Muhammad-Ali v. Final
`
`
`
`

`

`
`
`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 4 of 13 PageID #:1941
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 4 of 13 PagelD #:1941
`
`Call, Inc, 832 F.3d 755, 762 (7th Cir. 2016). The creator of a work may grant
`
`implied nonexclusive license by “permit[ting] the use of a copyrighted work in a
`
`particular manner.” IA.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996). Unlike
`
`with an exclusive license, “a nonexclusive license may be granted orally, or may
`
`even be implied from conduct.” Id. (internal quotations omitted)(quoting Melville B.
`
`Nimmer & David Nimmer, 3 Nimrner § 10.03[A] at 10—401); see also Beasley v.
`
`Commonwealth Edison Co, 2013 WL 4564857, at *7 (ND. Ill. 2013)(stating that
`
`“consent given in the form of mere permission or lack of objection is also equivalent
`
`to a nonexclusive license and is not required to be in writing”). A work-for—hire
`
`arrangement may give rise to an implied nonexclusive license. Kennedy v. Nat ’1
`
`Juvenile Der. Ass ’11, 187 F.3d 690, 694 (7th Cir. 1999). An implied nonexclusive
`
`license is deemed to have been extended when: “(1) the licensee requests the
`
`creation of a work; (2) the licensor creates the work and delivers it to the licensee
`
`who asked for it; and (3) the licensor intends that the licensee copy and distribute the
`
`work.” Id. The assertion of an implied nonexclusive license in response to a
`
`copyright infringement claim is an affirmative defense and the burden is on the
`
`defendant to establish the defense. Muhammad-Ali, 832 F.3d at 761; Shaver, 74
`
`F.3d at 775.
`
`It is undisputed that the parties entered into a written agreement in 2008 (2008
`
`Agreement) under which CareerBuilder hired LimeCoral for the creation of works.
`
`(R CSF Par. 842). It is undisputed that LimeCoral did in fact deliver the works to
`
`

`

`
`
`
`
`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 5 of 13 PageID #:1942
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 5 of 13 PagelD #:1942
`
`CareerBuilder and that LimeCoral understood that CareerBuilder was going to use
`
`the works in its business. (R CSF Par. 8-12). It is undisputed that the 2008
`
`Agreement even enabled CareerBuiider to create derivative works. (R CSF Par. 9).
`
`LimeCoral does not dispute that after the 2008 Agreement ended, LimeCoral agreed
`
`to continue its relationship with CareerBuilder, “regardless of any contract or not.”
`
`(R CSF Par. 14). It is further undisputed that LimeCoral continued its relationship
`
`with CareerBuilder until 2014 and provided works to CareerBuilder for its use. (R
`
`CSF Par. 19, 28). Based on the totality of the undisputed evidence, it is clear that
`
`CareerBuilder acquired an implied nonexclusive license to use the works provided
`
`by LimeCoral.
`
`LimeCoral argues vehemently that it never agreed to transfer its ownership
`
`interest in the works to CareerBuilder. (Resp. CSJ 2, 6-7). LimeCoral points out
`
`that it rejected a proposed agreement in 2012 under which LimeCoral would transfer
`
`ownership of the works to CareerBuilder. (LSAF Par. 20). LimeCoral also points to
`
`evidence that it contends shows that on certain occasions it asserted that it was the
`
`owner of its works. (Resp. CS] 2, 9). Even if LimeCoral could prove such facts,
`
`they do not negate the fact that an implied license existed. Under a license, the
`
`copyright owner merely authorizes another party to use the work. Muhammad~A 11',
`
`832 F.3d at 762. The Seventh Circuit has clearly stated that “an implied
`
`nonexclusive license .
`
`.
`
`. does not transfer ownership of the copyright to the
`
`licensee,” and that “[i]t simply permits the use of a copyrighted work in a particular
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 6 of 13 PageID #:1943
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 6 of 13 PagelD #:1943
`
`manner.” Id. (internal quotations omitted)(quoting Efiects Assocs., Inc. v. Cohen,
`
`908 F.2d 555, 558 (9th Cir. 1990)). In this case, the undisputed facts show a pattern
`
`of conduct by LimeCoral over a period of many years that conveyed to
`
`CareerBuilder that it was authorized to use the works in a certain manner.
`
`The undisputed facts also show that LirneCoral is attempting to gain an unfair
`
`benefit from the relationship it formed with CareerBuildcr, which is part of the
`purpose in the. law for the implied license. The implied license is intended to
`
`prevent a work creator from providing a work for use and then waiting until the
`
`recipient cannot feasibly compiete its business without the work. Fcad Consulting
`
`Grp., Inc. v. Azzalino, 270 F.3d 821, 835 (9th Cir. 2001). Such a result would
`
`effectively allow the creator of the work to hold the recipient “hostage” and extract
`
`an unjust benefit from the recipient because at some point in a project it would be
`
`too costly for the recipient to find another party to create the needed work. Id. The
`
`undisputed facts in this case show that Brian Schoenholtz (Schoenholtz), the
`
`principal for LimeCoral, did just what the implied license was intended to protect
`
`against. The undisputed facts show that LimeCoral knowingly helped CareerBuilder
`
`work itself into a corner by providing CareerBuilder with thousands of works for
`
`years and years. It is undisputed that in 2009, Schoenholtz began seeking legal
`
`advice for filing claims against CareerBuilder, and yet he continued LimeCoral’s
`
`relationship with CareerBuilder until 2014. (R CSF Par. 28). There is undisputed
`
`evidence showing that Schoenholtz allowed CareerBuilder to use LimeCoral’s works
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 7 of 13 PageID #:1944
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 7 of 13 PagelD #:1944
`
`and then later extract a sum from CareerBuilder under threat of litigation. (R CSF
`
`Par. 29). For example, in 2012, Schoenholtz sent a friend the following email:
`
`No contracts in place. No Work for Hire Agreement in place. I still classify
`as a CB employee (as crazy as it may sound). And then to top it all off, I will
`go after any/all design vendors (except Solanatel) or clients who use my work
`as well. Not to mention the hundreds of thousands of dollars in extra
`
`. and
`.
`revisions they own on, the licensing fees for future use of my files .
`then. a slew ofdamning evidence I have collected over the years. Watch and
`learn my friend. They caused me a lot of pain and I’m going to go Monte
`Cristo on them one day. He who laughs last, is he who wins.
`
`(R CSF Par. 29)(emphasis added). Schoenholtz admitted that “going Monte Cristo”
`
`essentially meant going in for the kill. (R CSF Par. 32). Yet even after apparently
`
`collecting “damning evidence” for years, Sehoenholtz continued his ongoing
`
`relationship with CareerBuilder. It is fithher undisputed that in March 2014, while
`
`LimeCoraI continued its relationship with CareerBuilder, Schoenholtz stated in an
`
`email the following:
`
`I have $100,000 set aside to go to battle with. My case is stronger than ever
`after several more mistakes they made. I’m going to wait a month or two to
`see what happens but eventually l’m going in for the kill.
`
`(R CSF Par. 3 l)(emphasis added). Schoenholtz admits that his reference to his case
`
`being stronger than ever meant that he believed that damages were accruing from
`
`CareerBuiider’s ongoing use of the works. (R CSF Par. 31). LimeCoral has not
`
`produced any evidence that would enable a reasonable trier of fact to conclude
`
`anything other than that LimeCoral laid in wait for years and years in anticipation of
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 8 of 13 PageID #:1945
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 8 of 13 PagelD #:1945
`
`a big pay day either by obtaining a judgement against CareerBuilder in litigation or
`
`by extorting a settlement from CareerBuilder.
`
`LimeCoral argues that even if an implied license existed, it was not
`
`necessarily an irrevocable license. However, LimeCoral has not pointed to evidence
`
`showing that any revocable term existed. Even if, for example, the court viewed the
`
`evidence in a manner favorable to LimeCoral and accepted Schoenholtz’s assertion
`
`that CareerBuilder agreed to provide LimeCoral with at least $35,000 of business per
`
`month, there is no evidence of an agreement tying that to a right of instant
`
`revocation of licenses for all works back to 2008. (R LSAF Par. 27). There is no
`
`evidence indicating that LimeCoral could take the drastic step of instantly revoking
`
`the authorization to use the thousands of previously—delivered designs merely
`
`because CareerBuilder might not have forwarded a certain level of online design
`
`service orders during one month. (R CSF Par. 46). Such a right to revoke would
`
`render the implied license meaningless, allowing LimeCoral to hold CareerBuilder
`
`hostage for the funds that Schoenholtz in his emails anticipated obtaining from
`
`CareerBuilder. LimeCoral admits that in 2014, it sought to revoke authorization to
`
`use any of the media files provided to CareerBuiider all the way back to 2008.
`
`(LSAF Par. 36). The undisputed facts also Show that CareerBuilder fully paid for
`
`LimeCoral’s works and there was not any ongoing performance required. Based on
`
`the above, no reasonable trier of fact could conclude anything other than that
`
`CareerBuilder acquired a nonexclusive implied license.
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 9 of 13 PageID #:1946
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 9 of 13 PagelD #:1946
`
`LimeCoral also argues that CareerBuilder exceeded the scope of any license
`
`by creating derivative works. However, it is undisputed that in the 2008 Agreement,
`
`CareerBuilder was authorized to create derivative works. LimeCoral admits that
`
`“[w]hen a designer provides editable files to a customer, the designer is giving the
`
`customer the right to edit those files.” (R CSF Par. 6). It is further undisputed that
`
`as LimeCoral continued its relationship with CareerBuilder, LimeCoral continued to
`
`provide editable files to CareerBuilder when asked until 2014. (R CSF Par. 58).
`
`These undisputed facts further illustrate that LimeCoral’s actions conveyed to
`
`CareerBuilder that it could use LimeCorai’s works in a certain manner. Based on
`
`the undisputed facts, no reasonable trier of fact could find other than that
`
`CareerBuilder has met its burden for its affirmative defense. Therefore,
`
`CareerBuilder’s motion for summary judgment on the copyright claim is granted and
`
`LimeCoral’s partial motion for summary judgment is denied.
`
`11. Breach of Contract Claim (Count I!
`
`LimeCoral argues that during its relationship with CareerBuilder, there were a
`
`series of informal oral contracts formed, and that CareerBuilder breached the terms
`
`of such contracts. (LSAF Par. 16-18). LimeCoral argues that there are disputed
`
`facts regarding the formation of the alleged oral agreements that can only be
`
`resolved by the trier of fact at trial. LimeCoral provides little more than
`
`Schoenholtz’s vague assertions as to oral agreements without any specificity as to
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 10 of 13 PageID #:1947
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 10 of 13 PagelD #:1947
`
`when or where or the precise terms of the alleged agreements. For example, when
`
`Schoenholtz was asked if he could recall any specific instance when someone with
`
`CareerBuiider agreed to renewal fees, Schoenholtz responded that he could not
`
`recall any such instance. (R CSF Par. 53). Another example is when Schoenholtz
`
`was asked about the alleged agreement that LimeCoral couid revoke the licenses.
`
`Schoenhoitz could not identify any specific instance when such an agreement was
`
`made orally. When asked about any oral agreement at his deposition, Schoenholtz
`
`responded: “I don’t recall.” (R CSF Par. 46); see also Gekas v. Vasiliades, 814 F.3d
`
`890, 896 (7th Cir. 2016)(stating that “summary judgment is the put up or shut up
`
`moment in a lawsuit, when a party must show what evidence it has that would
`
`convince a trier of fact to accept its version of events”)(internal quotations
`
`omitted)(quoting Johnson v. Cambridge Indus, Inc., 325 F.3d 892, 901 (7th Cir.
`
`2003)).
`
`Nor do the alleged oral agreements even match up with the undisputed facts
`
`concerning the pattern of conduct by LimeCoral. For example, although LimeCoral
`
`now contends that CareerBuilder was supposed to have been paying renewal fees, it
`
`is undisputed that for a period of over six years and two thousand projects,
`
`LimeCoral has not pointed to evidence showing that CareerBuilder ever paid any
`
`renewal fee or that LimeCoral asked for any renewal fee. (R CSF Par. 51-52).
`
`Similarly, although LimeCoral now seeks hundreds of thousands of dollars for
`
`supposed agreed revision fees, LimeCoral has not pointed to evidence showing that
`
`10
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 11 of 13 PageID #:1948
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 11 of 13 PagelD #:1948
`
`it ever referenced such fees in the many invoices it sent to CareerBuilder during the
`
`years and years of the relationship. (R CSF Par. 66). To the extent that LimeCoral
`
`laid in wait for years, intending to spring the alleged oral agreements on
`
`CareerBuilder, there was no meeting of the minds and no contract formed since
`
`CareerBuilder reasonably understood that the parties were operating under different
`
`terms. LimeCoral has failed to point to sufficient evidence that would enable a
`
`reasonable trier of fact to find in its favor on its breach of contract claim. The
`
`undisputed facts also show that LimeCoral has waived its right to assert any breach
`
`of contract claims at this juncture. There are undisputed facts that show that
`
`LimeCoral purposefiilly lured CareerBuilder into conduct that would enable
`
`LimeCoral to later hold CareerBuilder ransom. For example, it is undisputed that in
`
`2009, Schoenholtz sent an email stating the following:
`
`I say we seek legal advice on [CareerBuilder’s] breach of contract, I could see
`a settlement out of court for $200,000 or more. I have plenty ofproofthat
`could easily show the court that this is a simple matter of a large corporation
`preying on a smail business not to mention numerous breaches of agreement
`and possible copyright infringement.
`
`(R CSF Par. 27)(ernphasis added). Yet, despite Schoenholtz’s talk of “proof” of
`
`breaches of oral agreements in 2009, LimeCoral continued to do business with
`
`CareerBuilder until 2014. Based on the above, CareerBuilder’s motion for summary
`
`judgment on the breach of contract claim is granted.
`
`III. Unjust Enrichment Claim (Count 1111
`
`l l
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 12 of 13 PageID #:1949
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 12 of 13 PagelD #:1949
`
`LimeCoral argues that CareerBuiider has been unjustly enriched by its use of
`
`LimeCorai’s works. For an unjust enrichment claim, a plaintiff must show “that the
`
`defendant has unjustly retained a benefit to the plaintiff‘s detriment, and that
`
`defendant’s retention of the benefit violates the fundamental principles of justice,
`
`equity, and good conscience.” HP] Health Care Servs., Inc. v. Mt. Vernon Hosp,
`
`Inc., 545 N.E.2d 672, 679 (Ill. 1989). As explained above, the undisputed facts
`
`show that LimeCorai waited for years to pursue its claims, allowing CareerBuilder to
`
`use LimeCorai’s works in anticipation of a big payday in litigation. The undisputed
`
`facts show that CareerBuilder paid for what it used and complied with its
`
`understanding of the terms of its relationship with LimeCoral. No reasonable trier of
`
`fact could conclude that there is anything unjust in such conduct. The court also
`
`notes that the equities in this matter do not support funding a party that takes steps to
`
`foster the creation of its own legai injuries in order to obtain a financial reward in
`
`litigation. Therefore, CareerBuilder’s motion for summary judgment on the unjust
`
`enrichment claim is granted.
`
`12
`
`
`
`

`

`Case: 1:15-cv-07484 Document #: 64 Filed: 03/09/17 Page 13 of 13 PageID #:1950
`Case: 1:15-cv-O7484 Document #: 64 Filed: 03/09/17 Page 13 of 13 PagelD #:1950
`
`CONCLUSION
`
`Based on the foregoing analysis, CareerBuilder’s motion for summary
`
`judgment is granted and LimeCoral’s partial motion for summary judgment is
`
`denied.
`
`
`
`Samuel Der—Yeghiayan
`United States District Court Judge
`
`Dated: March 9, 2017
`
`13
`
`
`
`

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