Design Basics LLC v. Campbellsport Building Supply Inc et al

Filing 246

ORDER signed by Chief Judge William C Griesbach on 1-24-17 granting in part and denying in part 243 Motion for Reconsideration. (cc: all counsel) (Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DESIGN BASICS, LLC,
Plaintiff,
v.

Case No. 13-C-560

DREXEL BUILDING SUPPLY, INC., et al.,
Defendants.

DECISION AND ORDER ON RECONSIDERATION

Before me presently is Plaintiff Design Basics’ motion for reconsideration of two rulings
contained within this Court’s October 4, 2016 decision. Design Basics first takes issue with this
court’s conclusion that Dr. Robert Greenstreet, an expert in architecture, should be permitted to
testify in the limited capacity set forth in the court’s decision.

In determining whether the

Defendants’ designs are substantially similar to the Plaintiff’s copyrighted material, the jury must
answer two questions. The first question is whether the Defendants copied the Plaintiff’s designs.
If the answer is “yes,” then the second question asks whether the material that was copied was
protected. I concluded that although expert testimony could not speak to this second issue (which
is sometimes called “improper appropriation”), such testimony could conceivably aid the jury in
answering the more basic question of whether the Defendants actually copied the Plaintiff’s designs.
(ECF No. 242 at 3-4.)
To prevail on a motion for reconsideration under Rule 59, the movant must present either
newly discovered evidence or establish a manifest error of law or fact. LB Credit Corp. v.

Resolution Trust Corp., 49 F.3d 1263, 1267 (7th Cir.1995). A “manifest error” is not demonstrated
by the disappointment of the losing party. It is the “wholesale disregard, misapplication, or failure
to recognize controlling precedent.” Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000)
(citation omitted).
Design Basics believes this court misapprehended controlling precedent by allowing
“dissection”—a disfavored approach to determining infringement—when in fact the analysis should
follow the simpler, ordinary observer test, which is a fact-based jury question. Although these are
close questions, Design Basics has not persuaded me that there is a “right” answer that must apply
across the board in copyright cases like this, much less that a manifest error of law was committed.
Id. What the cases demonstrate (as set forth in the court’s original opinion) is that there is no brightline rule either forbidding or requiring expert testimony in cases like this. Because there is clearly
no bright line rule in these cases, it is up to each district judge to determine whether to allow expert
testimony and how to cabin that testimony so that it does not stray into questions that are the sole
province of the jury. Here, my decision was clear to indicate that the expert may not testify about
whether the Defendants copied protected material, because that question relies on the ordinary
observer test. But that does not preclude an expert from testifying about the question of copying
more generally. As one court in this circuit has observed: “the so-called extrinsic test[] permits a
plaintiff to prove copying by showing, through analytic dissection and (if necessary) expert
testimony, that the similarities between the two works—when viewed in terms of their protectible
and nonprotectible elements—are so substantial as to warrant a finding that the defendant usurped,
at least, the plaintiff's ideas.” Stillman v. Leo Burnett Co., 720 F. Supp. 1353, 1358-59 (N. D. Ill.
1989).
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More concretely, an expert in a case like this may identify design ideas that are common to
many homes or styles: bathrooms placed near bedrooms, or dining rooms next to kitchens, the
essence of colonial or craftsman styles, and the like.

These are the “scenes a faire” of

architecture—the kinds of must-haves, or standard features, that are the architectural equivalent to
a villain in a tragedy, a maze in a video game, or a sand trap on a golf course. Incredible Techs.,
Inc. v. Virtual Techs., Inc., 400 F.3d 1007, 1015 (7th Cir. 2005). From that, the jury may infer that
the Defendants’ designs, which incorporate such features, were not copies of the Plaintiff’s but
merely an expression of the scenes a faire, i.e., the required and expected elements of home
architecture. It is true that some of this testimony may, of necessity, also touch on the question of
whether the Defendants copied protected material, but that does not render the testimony irrelevant
or prejudicial. In fact, Judge Stadtmueller has already relied on the testimony of Dr. Greenstreet,
who provided expert opinions in Design Basics LLC v. J & V Roberts Investments, Inc., 130
F.Supp.3d 1266 (E. D. Wis. 2015), and there is no indication in that opinion that anyone believed
the testimony was categorically improper.

Here, the Plaintiff may object if it believes Dr.

Greenstreet’s testimony has exceeded the scope of what is permissible.
It would be a different question if the Defendants had conceded that they copied the
Plaintiff’s work. Had they made such a concession, the Plaintiff would be correct that expert
testimony is irrelevant, because then the only remaining question would be whether the Defendants
wrongfully appropriated the Plaintiff’s protected material. Nash v. CBS, Inc., 704 F.Supp. 823, 826
(N.D. Ill. 1989). Here, however, to the extent copying is at issue, an expert may testify about that
more basic question to assist the jury in determining whether the Defendants copied the Plaintiff’s
work or instead simply relied on necessary and common elements of style and design. Accordingly,
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the motion for reconsideration will be denied.
The Plaintiff also moves for reconsideration on the question of whether it may recover
profits attributable to infringements occurring prior to 2007. Design Basics notes that because the
burden of proof is merely a preponderance of evidence, it should be allowed to proceed even though
there are no records of pre-2007 revenues. Although there are 108 alleged infringements for which
there are no financial records, Design Basics may nevertheless demonstrate lost revenues with
testimony elicited from the Defendants’ employees and other sources. The Defendants protest that
even with the testimony of Defendants’ employees, a jury would not reasonably be able to
extrapolate a lost revenues analysis for each of the 108 alleged infringements, which occurred a
decade ago or longer. In addition, they point out that the evidence we do have reveals a wide range
of possible revenues — between $27,000 and $92,000 per home — which suggests there is no
standard from which the jury could make a reasonable inference.
It remains true that the absence of records will hinder the Plaintiff’s ability to persuade the
jury that it is entitled to specific damage amounts. Even so, that is ultimately a factual question that
a jury is qualified to resolve; in short, I am now satisfied that the absence of records speaks more
to the weight to be given the evidence than its admissibility.

Moreover, if the court ultimately

concludes the jury’s award is not sufficiently founded in the evidence, it may revisit the question
upon motions after trial. The motion for reconsideration will therefore be granted on this point.
The motion for reconsideration is therefore GRANTED in part and DENIED in part, as set
forth herein.

SO ORDERED this 24th day of January, 2017.
/s William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court
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