United States District Court, N.D. Illinois, Eastern Division
DESIGN BASICS, LLC, and CARMICHAEL & DAME DESIGNS, INC. Plaintiffs,
WK OLSON ARCHITECTS, INC., WILLIAM K. OLSON, R&D CUSTOM HOMES, DANIEL DEVIVIO and STEVEN SPANO, Defendants.
OPINION AND ORDER
L. ELLIS, UNITED STATES DISTRICT JUDGE
Design Basics, LLC (“Design Basics”) and
Carmichael & Dame Designs, Inc. (“CDD”),
architectural design companies that create home plans and
sell design licenses, discovered home plans on Defendants WK
Olson Architects, Inc. (“WK Olson”) and R&D
Custom Homes' websites that appear to copy those of
Design Basics and CDD. To protect their copyrights,
Plaintiffs filed this suit against WK Olson, its controlling
shareholder William K. Olson, R&D Custom Homes, and its
controlling shareholders, Daniel DeVivo and Rocky Spano. In
their first amended complaint, Plaintiffs bring claims for
willful and non-willful copyright infringement in violation
of the Copyright Act, 17 U.S.C. § 106, vicarious
infringement against the controlling shareholders, and
violation of the Digital Millennium Copyright Act
(“DMCA”), 17 U.S.C. § 1202. WK Olson and
Olson move to dismiss the first amended complaint for failure
to state a claim pursuant to Federal Rule of Civil Procedure
12(b)(6). Because Plaintiffs have not met their pleading
burden, instead only setting forth conclusory allegations to
support their claims, the Court dismisses the first amended
complaint without prejudice.
Basics, a limited liability company, creates, markets,
publishes, and licenses the use of “architectural
works.” Doc. 31 at ¶ 2. CDD engages in similar
work to Design Basics, and indeed, one of its principals
purchased Design Basics with another individual in 2009.
Olson controls WK Olson, another corporation involved in
residential architecture and design.
Basics and CDD have created over 350 new home design plans
since 2009, which they have registered with the United States
Copyright Office. Design Basics and CDD offer single-build
licenses for their home designs for a fee ranging from $700
to $6, 000. Since 2009, they have generated over $6 million
in licensing revenue from over 8, 000 construction licenses.
Each of Plaintiffs' designs takes between 55 and 90 hours
to complete and involves creating a preliminary sketch, a
redline, and a plan, and then drafting construction drawings.
Plaintiffs have ample freedom to create whatever designs they
choose, aside from building code requirements such as hallway
width and window opening sizes.
addition to creating its own designs, Design Basics
advertises, markets, and facilitates the sale of several
other companies' designs, including CDD's. Design
Basics has used various methods to make its design plans
available to the public, including design catalogs, displays
at stores like Menards, conventions and shows, and websites,
including its own, www.designbasics.com. While Design Basics
has focused more on its online presence in recent years, it
previously heavily marketed its designs through catalog
distribution, sending them directly to businesses, including
Basics has found that, as its marketing has increased, so has
the piracy of its copyrighted home designs. For example, one
lumberyard's employees admitted to copying Design
Basics' works, and Design Basics also encountered a
builder that did not even bother changing the names of three
of Design Basics' plans that the builder used without a
license. This has led Design Basics to bring lawsuits to
discourage copyright infringement of its architectural works.
end of 2015, Paul Foresman, Design Basics' Director of
Business Development, was researching infringement cases in
Illinois and Indiana when he came across R & D Custom
Homes' website, rdcustomhomes.net. That website's
“Floor Plan” section directed him to another
webpage run by WK Olson, www.olsonplans.com. Foresman found
several designs on www.olsonplans.com that looked similar to
Design Basics' and CDD's designs. Specifically, these
plans, identified by plan number,  appeared to copy from eleven
of Design Basics' plans and one of CDD's
motion to dismiss under Rule 12(b)(6) challenges the
sufficiency of the complaint, not its merits. Fed.R.Civ.P.
12(b)(6); Gibson v. City of Chicago, 910 F.2d 1510,
1520 (7th Cir. 1990). In considering a Rule 12(b)(6) motion
to dismiss, the Court accepts as true all well-pleaded facts
in the plaintiff's complaint and draws all reasonable
inferences from those facts in the plaintiff's favor.
Anchorbank, FSB v. Hofer, 649 F.3d 610, 614 (7th
Cir. 2011). To survive a Rule 12(b)(6) motion, the complaint
must not only provide the defendant with fair notice of a
claim's basis but must also be facially plausible.
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct.
1937, 173 L.Ed.2d 868 (2009); see also Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d
929 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Iqbal, 556 U.S.
Copyright Infringement Claims (Counts 1-8)
state a claim for copyright infringement under 17 U.S.C.
§ 106, Plaintiffs must plausibly allege that (1) they
own a valid copyright, and (2) WK Olson copied
“constituent elements of the work that are
original.” Feist Publ'ns, Inc. v. Rural Tel.
Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113
L.Ed.2d 358 (1991). Here, Plaintiffs allege both willful and
non-willful copyright infringement. In the case of willful
infringement, the Copyright Act allows for an increased
statutory damage award under 17 U.S.C. § 504(c)(2).
Willful infringement occurs where a defendant “knows
that its conduct is an infringement or if the infringer has
acted in reckless disregard of the copyright owner's
right.” Wildlife Exp. Corp. v. Carol Wright Sales,
Inc., 18 F.3d 502, 211 (7th Cir. 1994) (citation
omitted). Plaintiffs also seek to hold Olson vicariously
liable for copyright infringement; however, they must first
“plead sufficient facts for a valid claim of direct
copyright infringement” against WK Olson. Hart v.
Amazon.com, Inc., No. 15-C-01217, 2015 WL 8489973, at *5
(N.D. Ill.Dec. 8, 2015).
although WK Olson and Olson acknowledge that Plaintiffs hold
valid copyrights, they argue that Plaintiffs' claims fail
to sufficiently set forth the required second prong of a
copyright infringement claim. Plaintiffs may demonstrate
copying of constituent elements in two ways: (1) through
direct evidence, such as an admission of copying by the
defendant; or (2) showing that the defendant had an
opportunity to copy the original, referred to as
“access, ” and that the works in question are
“substantially similar” to each other, or, in
other words, “that the two ...