Order Form (01/2005)

Case: 1:07-cv-02485 Document #: 93 Filed: 04/16/08 Page 1 of 3 PageID #:440

United States District Court, Northern District of Illinois

Name of Assigned Judge or Magistrate Judge

David H. Coar 07 C 02485

Sitting Judge if Other than Assigned Judge

CASE NUMBER CASE TITLE

DOCKET ENTRY TEXT

DATE

4/16/2008

James H. Anderson Inc. vs. Northwestern University, et. al.

Enter Summary Judgment for Defendants. For the reasons stated below, Motion for Summary Judgment (Document [42]) is GRANTED as to Northwestern University and all other Defendants who joined said motion first, as to the copyright infringement claim on the grounds that the claim is barred by 17 U.S.C. 507(b) and second, as to full costs and attorneys fees under 17 U.S.C. 505 and Federal Rule of Civil Procedure 54. All other pending motions are hereby moot and terminated. Civil case terminated. Parties are advised to adhere to Federal Rule of Civil Procedure 54 and all concomitant local rules.
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STATEMENT
Plaintiff James H. Anderson, Inc.s (Anderson) is suing Northwestern University (Northwestern) and several other defendants for copyright infringement under the Copyright Act, 17 U.S.C. 501 et. seq. Northwestern (and the other defendants via joinder) moves for summary judgment on the grounds that this action is barred by the three-year statute of limitations for claims of copyright infringement found at 17 U.S.C. 507(b). This action centers on Northwesterns purported unauthorized use of Andersons copyrighted materials in the construction of a building (the Ford building). 17 U.S.C. 507(b) Statute of Limitations Anderson filed this action on May 3, 2007. On April 14, 2004, three years and nineteen days before filing its complaint, Michael Meyers, Andersons former Executive Vice-President, informed an attorney representing a union that had filed an involuntary bankruptcy petition against Anderson that it had an asset that would be of interest to its creditors. That asset was a claim against Northwestern for alleged copyright infringement. That attorney then sent an email explaining the asset to Andersons counsel. The next day, Meyers appeared before the bankruptcy judge and explained in open court that Northwestern used Andersons copyrighted designs and drawings for the Ford Building without authority. Meyers left Anderson on or about September 1, 2003. There are several other facts, none of which are necessary to adjudicate the instant motion for summary judgement. For instance, Anderson alleges that prior to the bankruptcy proceedings, it had no reason to assume its copyrights were being violated because it had given Northwestern permission to use the copyrighted materials for the limited purpose of evaluating whether Andersons designs and drawings would allow Northwestern to build the Ford Center within budget. Furthermore, Anderson states that Northwestern concealed its unauthorized use of the copyrighted materials by never informing Anderson that it had indeed decided to use the materials. This information is irrelevant because, reading the facts in the light most favorable to Anderson, the events of April 14 and 15, 2004 demonstrate that the statute of limitations bars this action.
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07C02485 James H. Anderson Inc. vs. Northwestern University, et. al.

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Case: 1:07-cv-02485 Document #: 93 Filed: 04/16/08 Page 2 of 3 PageID #:441

STATEMENT

The Copyright Act provides that no civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued. 17 U.S.C. 507(b). A claim accrues under the Act when the copyright owner learns of the infringing conduct or should, as a reasonable person, have learned of the infringing conduct. Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir. 2004). August Pilati was an attorney of Anderson, who represented the company in the bankruptcy proceedings. He states in an affidavit that on April 14, 2004 he was given an email in which Meyers made the claims that Northwestern was using Andersons copyrighted material without authorization. Thus, on August 14, 2004, Andersons attorney had actual knowledge of the alleged infringement of Northwestern upon Andersons copyrights. At that point, the statute of limitations began to run. The complaint was filed on May 3, 2007, a full nineteen days outside of the three year period of limitations. Generally, an attorneys knowledge is attributable to his client. See Wycoff v. Motorola, Inc., 502 F. Supp. 77, 93 (N.D. Ill. 1980); see also Hollan v. Kepner, 130 N.E. 699, 701; 297 Ill. 332, 337 (Ill. 1921). Nineteen days may seem like a small span of time to trigger a consequence as harsh as barring a claim, but it is the intent of the statute of limitations provision of the Act to provide bright line boundaries within which litigants must position themselves in order to have their claims adjudicated. See Auscape International v. National Geographic Society, 409 F. Supp. 2d 235, 245 (S.D.N.Y. 2004). Anderson contends that its claim is not barred under the continuing wrong doctrine. In Taylor v. Meirick, the Seventh Circuit explained that infringement could occur over a series of acts or transactions making up a continuing wrong. 712 F.2d 1112, 1117 (1983). In such cases, only the last infringing act need occur within the three-year statutory period of limitations in order for a court to reach claims encompassing the entire series of acts. 1-12 Nimmer on Copyright 12.05[B][1][a]. There are two problems with using the continuing wrong doctrine with this case. First, the doctrine does not affect the point at which a claim accrues. See Taylor, 712 F.2d at 1118. The Seventh Circuit has stated unequivocally that the copyright statute of limitations starts to run when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his rights. Gaiman, 360 F.3d at 653. As explained earlier, it is undisputed that on April 14, 2004, Anderson became aware of Northwesterns unauthorized use of its copyrighted material. Second, even if the doctrine applied in this case, Anderson has not put forth any evidence or factual issues regarding the occurrence of a final act of infringement and it does not explain how or why this Court should infer some act of infringement occurred between May 3, 2004 and May 7, 2007. Anderson argues that there are genuine issues of material fact regarding the time at which Plaintiffs claim has accrued as well as the date on which [Northwestern] and the other Defendants committed their last act of infringement upon Andersons copyrighted design drawings. However, the undisputed facts demonstrate that Anderson knew of Northwesterns alleged infringement on April 14, 2004, which began the statutory limitation period, which ended on April 14, 2007, nineteen days before the filing of the complaint. Therefore, this copyright action is barred by Section 507(b) of the Copyright Act and summary judgment is GRANTED to Northwestern and all Defendants who joined this action. 17 U.S.C. 505 and Fed. R. Civ. Pro. 54 Costs and Attorneys Fees Both parties request this Court to award attorneys fees and costs to the prevailing party. Title 17 U.S.C. 505 authorizes a court, in its discretion, to allow the recovery of full costs by or against any party other than the United States or an officer thereof and it also allows a court to award reasonable attorneys fees to the prevailing party as part of those costs. Anderson is not a prevailing party and so will obviously not be awarded costs or attorneys fees. This Court concludes that Northwestern (and any of the other defendants who joined the motion for summary judgment) is entitled to costs and attorneys fees. In Woodhaven Homes & Realty, Inc. v. Hotz, the Court explained that there is a strong presumption towards awarding prevailing defendants reasonable attorneys fees. 396 F.3d 822, 823 (7th Cir. 2005). But that Court did not instruct courts to disregard the factors mentioned in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 (1994) as useful in determining whether a party should receive costs under Section 505 of the Act. Those factors were frivolousness of the claim; motivation behind the suit; objective unreasonableness in light of the factual and legal components of the claim; and the need, given the particulars of the case, to advance considerations of compensation and deterrence. Id. at 534 n19. In Assessment Techs. of WI, LLC v. Wire Data, Inc., the Seventh Circuit mentioned that the two most important considerations are the strength of the prevailing partys case and the amount of compensation the party otherwise obtained. 361 F.3d 434 (7th Cir. 2004).

07C02485 James H. Anderson Inc. vs. Northwestern University, et. al.

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Case: 1:07-cv-02485 Document #: 93 Filed: 04/16/08 Page 3 of 3 PageID #:442

STATEMENT

In both Woodhaven Homes and Assessment Techs., the actual merits of the copyright claim had been reached and decided. Here, the merits of the underlying claim will not be reached, so the Court cannot pass judgment on whether that claim is frivolous or objectively unreasonable or otherwise assess the strength of Northwesterns case. Moreover, there is nothing before the Court upon which the Court can judge Andersons motivation in bringing this suit. The Court assumes Anderson believes Northwestern violated their rights by using without authorization Andersons designs and drawings that were protected by registered copyrights. Here, this Courts hesitance in awarding attorneys fees stems from the fact that whenever a claim is denied because it is time-barred, the court does not actually reach the merits of the underlying claim. Yet, no one would seriously argue that in such cases, the defendant did not prevail. The Supreme Court has instructed that a prevailing party is one who secures a judgment on the merits or a court-ordered consent decree. Buckhannon Bd. and Home Care v. W.Va. Dept. of Health and Human Serv., 532 U.S. 598, 605 (2001). An order granting summary judgment denying a claim on statute of limitations grounds is a judgment on the merits for res judicata purposes. Plaut v. Spendthrift Farm, Inc., 514 U.S. 211, 228 (1995). Importing the standard from res judicata cases for use in the instant is not wholly appropriate given the differences between the purposes of res judicata and awarding attorneys fees. The purpose of the former is to foster finality and orderly adjudication of claims and avoid vexatious and repetitive litigation. The purpose of the awarding attorneys fees, however, (especially in the situations where defendants prevail) is to compensate parties for having to participate in the litigation where no other source of compensation is available and to also deter frivolous lawsuits. Assessment Tech., 361 F.3d at 436. However, Andersons claim for copyright infringement was borderline frivolous and its case objectively weak because the claim could not even be adjudicated given the applicable statute of limitations. In other words, while the merits of the underlying copyright claim are unknown, the merits of Andersons statute of limitations claims were borderline frivolous and objectively weak because Anderson knew that it was aware of its claim as of April14, 2004 but did not file until May 3, 2007. Furthermore, Northwestern has not gained any relief as the defendant. Lastly, this Court is mindful of the strong presumption towards awarding prevailing defendants reasonable attorneys fees in copyright infringement actions. Therefore, this Court concludes that Northwestern is entitled to attorneys fees and full costs under Section 505 of the Copyright Act because a summary judgment order is an order on the merits, Northwestern as the prevailing defendant could not obtain any relief from any other source, and Andersons case was objectively weak given that it is barred by a statute of limitations. As each of the following defendants successfully joined in Northwesterns motion for summary judgment, where the request for costs and attorneys fees was made, they too are entitled to the same under 17 U.S.C. 505 and Federal Rule of Civil Procedure 54. /s/ David H. Coar David H. Coar United States District Court Judge Dated: April 16, 2008

07C02485 James H. Anderson Inc. vs. Northwestern University, et. al.

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