Defendants, a church and its building committee, hired plaintiff Hanover Architectural Service, an architectural firm, to prepare a design and plans for the conversion of an existing warehouse into a church. The parties’ agreement provided that Hanover would evaluate whether the warehouse could be converted into a church and provide designs for the proposed building and its electrical, plumbing and fire protection systems. After defendants advised that they would not retain Hanover to oversee the warehouse conversion, Hanover registered a copyright for its designs of the building conversion project as “architectural work,” and advised defendants that its designs were copyright protected and could not be used or modified without a written agreement or payment of licensing fees. Counsel for the church advised Hanover that the church had exclusive rights in the renovation plans prepared by Hanover and other design professionals and because Hanover’s designs were insufficient for the town to award all the necessary construction permits, the church would not be using Hanover’s designs for the project.
After the project was complete and Hanover obtained a copy of the final designs, Hanover sued the church for, among other things, copyright infringement and violation of the Digital Millennium Copyright Act (DMCA). The church moved to dismiss, arguing, among other things, that Hanover had not stated a claim for copyright infringement or violation of the DMCA and that the church had an implied nonexclusive license to use Hanover’s drawings.
The court denied defendants’ motion to dismiss Hanover’s copyright infringement and DMCA claims. First, the court held that Hanover had properly pleaded copyright infringement, in that it alleged that it owned the copyrights to its designs, that the designs were registered, and that defendants infringed the copyright by copying the designs and using them in the warehouse conversion project.
Second, defendants did not adequately establish an implied nonexclusive license to use the plans. An implied nonexclusive license exists where (1) the licensee requests the creation of a work, (2) the licensor delivers the work to the licensee, (3) the licensor intends that the licensee copy and distribute the work. The court found that Hanover did not intend for the church to use or distribute the designs because the agreements entered into between the parties were for the purpose of the church obtaining a variance and complying with building codes, and Hanover had advised the church that the designs could not be otherwise used without an agreement and payment of a licensing fee.
Third, the court found that Hanover had adequately pleaded that the church violated Section 1202(b) of the DMCA, in that it removed or altered copyright management information (CMI) from the designs knowing, or having reason to know, that it would facilitate or conceal copyright infringement. The church argued that the designs did not contain CMI because the designs contained no “automated copyright protection or management system[,]’ [which] . . . are ‘technological measures that can control access and reproduction of works, and thereby manage the rights of copyright owners and users.” Acknowledging that the church’s definition of CMI was derived from the legislative history of the DMCA, the court followed the definition of CMI adopted by the Third Circuit, which included the types of information contained in Section 1202(c) such as information identifying the author of a work, without regard to whether the information is part of an automated copyright protection or management system.