$518K attorney fee award affirmed for Jasper homebuilder, against copyright ‘troll’

A Jasper homebuilder awarded more than $518,000 in attorney fees in a dispute with an “intellectual property troll” over the use of certain floor plans gets to keep that money, the 7th Circuit Court of Appeals affirmed in a Wednesday decision.

The panel of appellate judges concluded once again that Omaha, Nebraska-based Design Basics LLC did not prove an infringement claim against Kerstiens Homes & Designs Inc. The Nebraska company has brought more than 100 infringement suits against homebuilders in recent years, including dozens of Indiana homebuilders.

In 2018, Jasper-based Kerstiens prevailed in a lawsuit brought by Design Basics, a reputed “copyright troll” that sought $3 million in damages from the Jasper luxury homebuilder. Design Basics unsuccessfully alleged Kerstiens had infringed its copyrights on seven home designs and was ordered to pay $518,457.80 in attorney fees.

Design Basics failed in its appeal of that fees award, with the 7th Circuit affirming the dismissal of its copyright infringement suit against Kerstiens.

“Design Basics failed to show that its copyrighted designs and the allegedly infringing Kerstiens designs are ‘virtually identical.’ Design Basics cannot make a case of copyright infringement because the many similarities it points to are standard features not strongly protected by copyright,” Circuit Judge Michael Scudder wrote for the 7th Circuit.

Specifically, members of the panel described the Design Basics plans at issue as “basic, common, and standard designs entitled to very little copyright protection.”

In comparing Kerstiens’ 704 Plan, which Design Basics alleged infringes on its Duncan Plan, the 7th Circuit said it wasn’t concerning that both plans have a laundry room off the garage or feature three standard bedrooms on the second floor.

“No one would expect a house to have its kitchen on the second rather than the first floor,” it pointed out.

The floor plans have other distinctions, as well, the panel continued, pointing to the different room dimensions, fireplace and desk additions to the Duncan plan. Also, the 704 plan has an outside entry side door into the garage, a back patio and a second closet in the master bedroom, among other distinctions.

Noting that Design Basics offers more than 2,800 floor plans, the 7th Circuit concluded it would be hard-pressed to find a standard American home bearing no similarities to at least one of those floor plans.

“We could spill more ink explaining the standard similarities and the many differences across all of the allegedly infringing designs. But doing so is unnecessary. Just this one representative sample comparison suffices to show why the district court was right to reject Design Basics’s infringement claim at summary judgment,” Scudder wrote.

“A design that shares similar standard features, when taken together to form a whole, may look like potential infringement at first blush. Copyright law rewards original expression and innovation. It does not protect rent-seekers looking to score a quick settlement rather than compete,” the judge concluded.

The 7th Circuit therefore affirmed Kerstiens Homes’ award of $518,457.80, finding that the Indiana Southern District Court exercised sound discretion in awarding the costs and fees and in concluding that awarding fees would discourage Design Basics from manipulating the copyright laws to extract quick settlements. As such, there was no abuse of discretion in Design Basics, LLC, et al. v. Kerstiens Homes & Designs, Inc, et al., 18-3202, 19-3118 & 20-1515.

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