In the
United States Court of Appeals
For the Seventh Circuit
No. 10-1738
N OVA D ESIGN B UILD , INC.,
Plaintiff-Appellant,
v.
G RACE H OTELS, LLC, et al.,
Defendants-Appellees,
v.
H IMANSHU J. M ODI,
Third-Party Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 08 C 2855—Samuel Der-Yeghiayan, Judge.
A RGUED O CTOBER 27, 2010—D ECIDED JULY 26, 2011
Before E ASTERBROOK, Chief Judge, and K ANNE and
W OOD , Circuit Judges.
W OOD , Circuit Judge. This case is about an architectural
agreement that went sour. The parties, Grace Hotels
LLC and Nova Design Build, Inc. (plus its owner,
2 No. 10-1738
Himanshu Modi) have been locked in a dispute over
the validity of Nova’s design copyright, Grace’s alleged
infringement, and the scope of an agreement relating
to the designs. After examining the complaint carefully,
we are satisfied that it arises under the Copyright
Act, 17 U.S.C. § 504, and thus that the district court’s
subject-matter jurisdiction was secure. On the merits,
we agree with the district court that Grace was entitled
to summary judgment.
I
In March 2006, Grace invited Modi and his company
Nova (collectively “Nova”) to participate in a project to
build a Holiday Inn Express in Waukegan, Illinois. In
their negotiations for Nova’s architectural services, the
parties also contemplated using Nova’s construction
affiliate to build the hotel. As part of the contract that
eventually emerged, they agreed that Grace would have
to pay Nova an additional $15,000, apart from the design
fees, if Grace elected not to use Nova’s construction
affiliate. Nevertheless, the agreement gave Grace the
right to use the designs for bidding, permit, and con-
struction purposes as long as Nova was paid in full. It
expressly stipulated that the architectural designs
would remain Nova’s intellectual property.
When it came time to award the construction contract,
Grace decided not to select Nova’s construction affiliate.
By this point, the parties’ relationship was becoming
strained. Nova thought that Grace was demanding work
that was not covered by the agreement; Grace froze Nova
No. 10-1738 3
out of some discussions with the city about the project;
Nova took the position that it had no further design
obligations; Grace refused to pay Nova what the latter
thought was due. After some haggling, Nova reluctantly
accepted an $18,000 payment from Grace in satisfaction
of a $28,000 alleged debt. Grace selected another con-
struction company, Infuz Ltd., and moved on with its
plan to erect the hotel.
In the meantime, Nova registered a copyright for the
designs that it had produced. As part of the registration
process, Nova was required to deposit with the Copy-
right Office copies of its designs. 17 U.S.C. § 408(b).
Unfortunately, however, some time between its develop-
ment of the designs and its registration of the copyright,
Nova’s offices were burgled and its computers, which
contained the only final copies of the designs, were
stolen. In order to produce the required deposit copies,
Nova had to engage in a laborious process of duplicating
its architectural designs by reference to its hard copies
and other copies of its computer-aided design files
(“CAD files”).
After registering its copyright, Nova brought suit
against Grace raising federal claims of copyright infringe-
ment and some supplemental state law claims. Nova
alleged that Grace and Infuz used Nova’s designs
without its permission to construct the Holiday Inn
Express and that this constituted infringement under
the Copyright Act, 17 U.S.C. §§ 501 et seq. The district
court granted Grace’s motion for partial summary judg-
ment on the copyright claims and dismissed the state
4 No. 10-1738
law claims, declining to exercise supplemental jurisdic-
tion over them. It reasoned that Nova had failed to
comply with the Copyright Office’s registration require-
ment, because the copies it provided to that office
were not bona fide. This was so, the court reasoned,
because the designs Nova deposited were not produced
by directly referring to the original designs, but in-
stead had been re-created through a complicated pro-
cess involving the use of memory. As a result, the court
thought, Nova did not possess a validly registered copy-
right and thus could get no relief for infringement. Al-
though we agree with the district court’s bottom line,
our rationale is different, as we now explain.
II
The first point we must address is one that the
parties never raised and the district court did not discuss:
subject-matter jurisdiction. At oral argument, the panel
raised the question whether jurisdiction is proper under
the federal-question and copyright statutes, 28 U.S.C.
§§ 1331, 1338, or if it is blocked by the doctrine of T.B.
Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir. 1964). Put
simply, that question boils down to whether this
is really a case about validity and infringement of the
copyright, or if it is about ownership or other rights
conferred in the agreement between the parties. As the
court noted in T.B. Harms, “an action ‘arises under’ the
Copyright Act if and only if the complaint is for a
remedy expressly granted by the Act . . . .” Id. at 828.
Applying that rule, the Second Circuit dismissed the
No. 10-1738 5
case before it because the question was whether one of
the defendants had assigned his interest in the copyright
to the plaintiff—that is, the dispute was about who
owned the copyright. Id. at 824. The plaintiff was not
asserting any claim of infringement, and thus was not
seeking any relief provided by the Copyright Act. Id.
Because there was no diversity of citizenship or other
independent ground of jurisdiction, the case had to be
dismissed.
In contrast, plaintiff Nova in the case before us has
squarely asserted that Grace infringed its copyrights
and thus that it has a remedy under 17 U.S.C. § 504. To
be sure, one of Grace’s defenses is that its use was
licensed, and state contract law will play a part in that
defense. But Grace’s defenses—whether based on federal
law or state law—do not affect jurisdiction under
sections 1331 or 1338. What does matter is whether “a
federal question is presented on the face of the plain-
tiff’s properly pleaded complaint.” Caterpillar Inc. v.
Williams, 482 U.S. 386, 392 (1987). Count I of Nova’s
complaint directly states that Nova “owns a valid and
registered copyright” on the designs and drawings, that
Grace unlawfully copied its copyrighted materials, that
Nova had been injured, and that it was seeking damages
under section 504 of the Copyright Act. That is enough
to show that this case arises under the Act. (Contrary to
a suggestion in Nova’s brief, a valid registration is not
essential to the court’s jurisdiction. See Reed Elsevier, Inc.
v. Muchnick, 130 S. Ct. 1237, 1245-46 (2010).)
6 No. 10-1738
III
Turning to the merits, we recall that this is an appeal
from a grant of summary judgment, and so our task is
only to decide whether the undisputed facts, taken in
the light most favorable to the non-moving party, require
judgment as a matter of law for Grace. Williams v. Waste
Mgmt. of Ill., 361 F.3d 1021, 1028 (7th Cir. 2004). To
prevail on a copyright infringement claim, Nova must
establish, first, that it owns a valid copyright and,
second, that Grace copied constituent elements of its copy-
righted work that were original. Schrock v. Learning
Curve Int’l, Inc., 586 F.3d 513, 517 (7th Cir. 2009). As
we have already noted, to register a copyright properly,
the Copyright Act required Nova (among other things)
to submit one complete copy of the designs for which
it was seeking protection. 17 U.S.C. § 408(b). The copy
submitted must be a bona fide copy—that is, “ ‘virtually
identical to the original and . . . produced by directly
referring to the original.’ ” Coles v. Wonder, 283 F.3d 798,
802 (6th Cir. 2002) (quoting Kodadek v. MTV Networks, Inc.,
152 F.3d 1209, 1212 (9th Cir. 1998)). The district court
thought that Nova failed to satisfy this requirement,
because the original designs had been on the computers
that were stolen in the burglary. It assumed that Nova’s
tedious reconstruction of the designs must have
involved some reference to memory and that this was
improper for the purposes of creating bona fide copies.
See id. at 802.
On appeal, Nova argues, in essence, that the district
court resolved a contested issue of fact adversely to it:
No. 10-1738 7
namely, that the copies it filed were not true replications
of the original designs. Although the risks the court
identified may have been real, Nova points out that it
still had hard copies of its designs even after the theft
of the computers. Those hard copies, cross-checked
against the restored CAD files, allowed it to produce an
identical, bona fide, copy of its original.
On this point, Nova is correct. Indeed, before the
digital world made exact copies common, many copies
may have had tiny discrepancies in them. There is no
hard evidence in the record supporting the district
court’s speculation that Nova had to resort to the
memories of its employees to re-create its designs. And
even if there were, Nova has pointed to evidence to the
contrary. With the hard copies and the restored CAD
files, Nova could meticulously and mechanically piece
together a copy of its original designs.
Even if Nova prevails on this point, however, another
hurdle remains. Before it could show infringement, it had
to raise a genuine issue of fact on the question of copying.
This, in our view, is where its case founders. It has
not introduced evidence that would allow a trier of fact
to find that Grace copied the original elements of Nova’s
work. We note as well that Grace insists that its use was
licensed, as it paid Nova $18,000 for its work and was
allowed to use Nova’s designs for bidding, permit, and
construction purposes. But we need not reach the latter
issue, since the failure to show copying of protectable
elements decides the case.
Because direct evidence of the copying of protectable
elements of a copyrighted work is usually unavailable,
8 No. 10-1738
copying may be inferred where the “defendant had
access to the [plaintiff’s] work and the [putatively in-
fringing] work is substantially similar to the [plaintiff’s]
work.” Incredible Techs., Inc. v. Virtual Techs., Inc., 400
F.3d 1007, 1011 (7th Cir. 2005). But before comparing the
two works, we must first identify “which aspects of the
[plaintiff’s] work, if any, are protectable by copyright . . . .”
Tiseo Architects, Inc. v. B & B Pools Serv. and Supply Co., 495
F.3d 344, 348 (6th Cir. 2007). The protectable elements are
those that possess originality. Schrock, 586 F.3d at 518-19.
Originality requires that the elements be independently
created and possess at least some minimal degree of
creativity. Id. at 519. After identifying these original,
protectable elements, we then proceed to analyze
whether the allegedly infringing work is “so similar to
the [plaintiff’s] work that an ordinary reasonable
person would conclude that the defendant unlawfully
appropriated” the protectable elements of the work.
Incredible Techs., Inc., 400 F.3d at 1011; see Tiseo
Architects, Inc., 495 F.3d at 348.
We think that Nova fails at the initial step: it has not
identified anything in these particular designs that was
original and thus protectable. Nova’s designs were,
for the most part, based on the Holiday Inn Express
prototype. Nova does not assert that it has the right,
either through contract or otherwise, to enforce Holiday
Inn Express’s copyright in its own plans. Instead, Nova
protests that it added features to the prototype, such as
an extra floor, a larger meeting area, different closet
and door placements in the rooms, and different pool,
exercise, and laundry areas, but that is not enough.
No. 10-1738 9
Though Nova’s designs do possess added features (and
these additions are the only elements that may be
protectable), they are devoid of originality. Merely
adding an extra floor, identical to the floor layout of the
prototype, is not original. The other features Nova men-
tions were specifically requested by Grace, mostly
through written requests accompanied by graphic de-
signs. In light of that, there was no creative element to
these features in Nova’s designs. See Tiseo Architects, Inc.,
495 F.3d at 347 (holding that architectural sketches that
incorporated owner’s suggestions and drawings, and
were limited by zoning requirements, did not possess
requisite originality for copyright protection). The
aspects of Nova’s designs that went beyond the Holiday
Inn Express prototype were insufficiently original to
qualify for copyright protection, and with that Nova’s
claim for copyright infringement must fail.
* * *
We therefore conclude that Nova’s federal claim
could not survive summary judgment. The district court
was also well within its rights to dismiss the supple-
mental state claims without prejudice. 28 U.S.C.
§ 1367(c)(3). We therefore A FFIRM the judgment of the
district court.
7-26-11