IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

CHICAGO BUILDING DESIGN, P.C., an

Illinois corporation, and JEREMIAH

JOHNSON, an individual

Plaintiffs,

v.

MONGOLIAN HOUSE, INC. (d/b/a “Plan B

- Chicago), an Illinois corporation,

RYAN GOLDEN, an individual, MARK

PERRES, an individual, and JOHN A.

WILSON, an individual. 

Defendants.

)

) 

) 

)

)

) No. 12 C 1010

)

)

)

)

)

)

)

)

)

MEMORANDUM OPINION AND ORDER

Chicago Building Design (“CBD”) and its president, Jeremiah

Johnson, brought this suit as a result of a failed business

relationship with Mongolian House, Inc. (“Mongolian House”). 

Plaintiffs’ nine-count First Amended Complaint (“FAC”) names

Mongolian House, its owners, Ryan Golden and Mark Perres; and

John Wilson, an architect. Plaintiffs bring various breach of

contract claims against Golden and Perres (Counts I through IV);

copyright infringement claims against Wilson, Golden, and Perres

(Counts V through VII); a claim for quantum meruit against

Golden, Perres, and Mongolian House (Count VIII) and a claim of

fraud against Golden and Perres (Count IX). All Defendants have

brought motions to dismiss arguing that the copyright

infringement claims are time-barred. They also ask that I
decline to exercise supplemental jurisdiction over the remaining

state law claims or dismiss certain of those claims for failure

to state a claim upon which relief can be granted. For the

reasons that follow, the motions to dismiss are granted to the

extent that I find the copyright infringement claims time-barred.

I also decline to exercise supplemental jurisdiction over the

remaining claims. 

I.

According to Plaintiffs’ FAC, the allegations of which will

be accepted as true for the purposes of ruling on these motions

to dismiss, CBD and Johnson offer design, architecture and

construction services to bars, restaurants, and night clubs. 

Golden and Perres, who each had an ownership interest in

Mongolian House, retained Plaintiffs’ services to renovate the

premises at 1635 N. Milwaukee Ave. into a cocktail bar named Plan

B – Chicago (“Plan B”).

On April 17, 2006, CBD submitted a project proposal to

Golden and Perres for the architectural design of Plan B. CBD

submitted a revised proposal on May 4, 2006, which was signed by

Golden and Perres on May 9, 2006. The total price of the

architectural services was $15,000. This agreement (the “design

contract”) was eventually signed by all the parties. CBD

completed the architectural work on June 7, 2006, and on that day

2
delivered completed architectural blueprints to Golden and

Perres.

On June 26, 2006, CBD entered into a contract with Golden

and Perres for the performance of construction work related to

Plan B (the “construction contract”). Under the terms of the

contract, CBD was to be paid $259,100.00. Additionally, in

further consideration for the construction work, Johnson was to

receive a percentage of equity ownership in Plan B that would

entitle him to 15 percent of the profits. CBD completed the

construction work on March 17, 2007, and Plan B opened on that

date.

To date, Plaintiffs allege, CBD has received approximately

$11,000 of the $15,000 due on the design contract. CBD has

received approximately $45,000 of the amount due on the

construction contract, with $214,000 still owed. Johnson also

has not received the promised equity payments.

The copyright infringement counts, which are the basis for

this court’s jurisdiction over the matter, concern the

architectural blueprints. The blueprints are the subject of a

copyright issued to CBD and registered on May 1, 2009. (See Dkt.

No. 27-6.) Plaintiffs allege that on or about June 8, 2006, they

filed the blueprints with the City of Chicago along with an

application for a repair and replace permit. The city accepted

the application and issued the permit. 

3
Plaintiffs allege that sometime in 2008, an employee of CBD

visited the City of Chicago’s offices for the purpose of a zoning

review and “happened to witness the Blueprints. The CBD employee

examined the Blueprints and discovered they had been registered

by Wilson.” FAC, ¶ 31. Plaintiffs maintain that they never

authorized any of the Defendants to retain, copy, modify,

distribute or display the blueprints. They contend Defendants

modified or copied the blueprints, placed Wilson’s name on them,

and submitted them to the city with the intent to pass them off

as Wilson’s in order to secure a full building permit, rather

than the repair and replace permit that had been previously

issued. That full building permit allowed for interior

alterations and increased occupancy levels at Plan B. 

On May 8, 2009, the city issued a building permit based on

the blueprints. Customarily, after issuing a permit, the city

keeps one copy of the blueprints and permit, and distributes two

copies to the owner of the property or the architect. Based on

this, Plaintiffs believe that on May 8, 2009, the city

distributed two copies of the blueprints to Golden, Perres,

and/or Wilson. On July 27, 2009, the city inspected the premises

at Plan B, and it passed inspection. Blueprints must be reviewed

by an inspector during this process, so Plaintiffs allege on

information and belief that Golden and Perres used the blueprints

to facilitate the inspection. Also upon information and belief,

4
Plaintiffs allege that Defendants continued to use the blueprints

for city inspections until January 2012. Plaintiffs attempted to

obtain a copy of the blueprints from the city via the Freedom of

Information Act, but were told they were exempt from disclosure.

II.

Defendants move to dismiss under Fed. R. Civ. P. 12(b)(6)

for failure to state a claim upon which relief can be granted. 

To survive a Rule 12(b)(6) motion to dismiss, a complaint must

contain sufficient facts, accepted as true, “to state a claim for

relief that is plausible on its face.” Ashcroft v. Iqbal, 556

U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007)). Although a complaint's factual

allegations need not be detailed, they must provide more than

“labels, conclusions, or formulaic recitations of the elements of

a cause of action, and allege enough to raise a right to relief

above the speculative level.” Ruiz v. Kinsella, 770 F. Supp. 2d

936, 941–42 (N.D. Ill. 2011)(citing Twombly, 550 U.S. at 555). In

ruling on such a motion, the question is whether the facts,

accepted as true, “present a story that holds together.” Swanson

v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010). Although a

statute of limitations defense does not normally form the basis

for a motion to dismiss under Rule 12(b)(6), when the allegations

of the complaint reveal that relief is barred by the applicable

5
statute of limitations, dismissal is appropriate. Logan v.

Wilkins, 644 F.3d 577, 582 (7th Cir. 2011).

III.

Copyright protection “subsists . . . in original works of

authorship fixed in any tangible medium of expression . . . from

which they can be perceived, reproduced, or otherwise

communicated . . . .” McIntosh v. N. Calif. Univ. Enter. Co.,

670 F. Supp. 2d 1069, 1086 (E.D. Calif. 2009)(quoting 17 U.S.C. §

102(a)). Works of authorship include “architectural works,” see

17 U.S.C. § 102(a)(8), and there is no dispute that the plans at

issue in this case are subject to copyright protection.

There also is no dispute that copyright infringement claims

are governed by a three-year statute of limitations. 17 U.S.C. §

507(b). The key issues here are when Plaintiffs discovered the

alleged infringement, and whether the continuing violation

doctrine applies to make Plaintiffs’ copyright infringement

claims timely. 

Relevant to the instant case, the Copyright Act confers the

following rights on the owner of a copyright: 

(1) to reproduce the copyrighted work in copies or

phonorecords; (2) to prepare derivative works based on

the copyrighted work; and (3) to distribute copies or

phonorecords of the copyrighted work to the public by

sale or other transfer of ownership, or by rental, lease,

or lending.

6
17 U.S.C. § 106(1)-(3). Anyone who violates these exclusive

rights may be liable for copyright infringement. 17 U.S.C. § 501. 

Defendants contend that, accepting the allegations of the

FAC as true, any copyright infringement that occurred in this

case as a result of Defendants’ modifying the blueprints and

causing Wilson’s name to be placed on them was complete by the

end of 2008. Defendants point to Plaintiffs’ allegation that one

of their employees saw the blueprints at city offices some time

in 2008. As such, Defendants contend, Plaintiffs were on notice

of the alleged infringement by no later than Dec. 31, 2008, and

were required to file suit by Dec. 31, 2011. Plaintiffs filed

suit on Feb. 13, 2012, so the copyright claims are time-barred,

Defendants argue.

In response, Plaintiffs first argue that the statute of

limitations does not begin to run until they discovered, or

reasonably could have discovered, the infringement. Taylor v.

Meirick, 712 F.2d 1112, 1117 (7th Cir. 1983). In this case,

Plaintiffs argue, the fact that their employee saw the blueprints

registered to Wilson was not sufficient for them to determine

that there had been infringement. In an attempt to verify the

infringement, Plaintiffs requested a copy of the blueprints from

the City of Chicago, but were told they were not subject to

disclosure under the Freedom of Information Act. Plaintiffs

argue they continued to make good faith efforts to verify the

7
infringement by reviewing the Building Data Warehouse Report, but

that report did not reveal infringement until May 8, 2009, when

the city issued a permit based on the blueprints. Plaintiffs

contend that the statute of limitations began to run on this

date.

Additionally, Plaintiffs note that in an effort to determine

whether their copyright had been infringed, they filed a

complaint against Wilson with the Illinois Department of

Financial and Professional Regulation (“IDPR”) in order to compel

Defendants to disclose the blueprints. The IDPR sent Plaintiffs

a letter dated Feb. 20, 2009, acknowledging receipt of the

complaint, but Plaintiffs did not receive any further

correspondence from the IDPR. Plaintiffs also contend that they

attempted to talk with Golden and Perres about the blueprints,

but Golden and Perres rebuffed their attempts.

Plaintiffs’ arguments fail because actual knowledge of an

infringement is not required to trigger the running of the

statute of limitations. Rather, the statute began to run when

the Plaintiffs had knowledge that would have led reasonable

people to investigate the possibility that their legal rights had

been infringed. CSC Holdings, Inc. v. Redisi, 309 F.3d 988,

992–93 (7th Cir. 2002). Plaintiffs clearly were on inquiry

notice of a potential violation of their rights when their

employee saw the blueprints, which happened no later than Dec.

8
31, 2008. In fact, as outlined above, Plaintiffs did proceed at

that time to investigate the possibility that their copyright had

been infringed. The fact that Plaintiffs could not at that time

verify that infringement had occurred does not toll the running

of the statute of limitations. 

Nor does the doctrine of fraudulent concealment apply. Even

if, as Plaintiffs allege, Defendants took steps to conceal their

infringement by putting Wilson’s name on the blueprints or by

refusing to respond to Plaintiffs’ inquiries about the

blueprints, the doctrine of fraudulent concealment is

inapplicable when a party, through reasonable diligence, could

have discovered the existence of a claim within the limitations

period. See Hardaway v. CIT Group/Consumer Fin. Inc., 836 F.

Supp. 2d 677, 684–85 (N.D. Ill. 2011). Here, by their own

admissions, Plaintiffs were on inquiry notice of their

infringement claim by the end of 2008, regardless of any efforts

to conceal the allegedly infringing acts. Further, Plaintiffs

acknowledge that they knew of the infringement by May 8, 2009,

when the city issued a building permit based on the blueprints. 

This was well within the limitations period, and nothing

Defendants did prevented Plaintiffs from filing suit at that

time.

Next, Plaintiffs contend that their copyright infringement

claim is timely in light of the “continuing violation” doctrine,

9
and that this doctrine allows them to recover for all the acts of

infringement, including those in 2008 that would otherwise be

time-barred. As Plaintiffs view it, there were several acts of

alleged infringement: (1) when Wilson, with the assistance of

Golden and Perres, modified the blueprints by placing his name on

them and distributing them to the City of Chicago in 2008; (2)

when the City of Chicago issued the building permit and

distributed copies of the blueprint to Wilson in May 2009, with

Wilson ultimately giving the blueprints to Golden and Perres; and

(3) when Golden and Perres used the blueprints to pass annual

inspections at Plan B.

“A continuing violation exists when the first wrongful act

does not create a separate, complete action, but instead marks

the first step in a pattern of wrongful conduct.” Forster Music

Publisher, Inc. v. Price Stern Sloan, Inc., No. 93 C 4487, 1995

WL 239093, at *2 (N.D. Ill. April 21, 1995) (citing In re

Gaslight Club, 167 B.R. 507, 520 (Bankr. N.D. Ill. 1994)). 

Provided that at least one of the wrongful acts occurred during

the limitations period, the continuing violation doctrine allows

“plaintiffs to reach back in time and yank otherwise time barred

incidents (or their non-time barred effects) forward into the

limitations period.” In re Gaslight Club, 167 B.R. at 520. It

does not apply when the harm is “definite and discoverable,” and

the plaintiff knew or should have known of the violation, but

10
failed to file suit at an earlier time. Forster, 1995 WL 239093,

at *2 (citing Moskowitz v. Trustees of Perdue Univ., 5 F.3d 279,

282 (7th Cir. 1993)).

Plaintiffs rely on Taylor, 712 F.2d at 1118–19, to support

their theory of a continuing violation. There, an infringer

copied the plaintiff’s maps in 1976 and 1977, and either sold

those copies or allowed his dealers to sell them until 1979. Id.

at 1119. The Seventh Circuit held that although the first acts

of infringement occurred more than three years prior to the

filing of the suit, there had been a continuing violation, and so

the statute of limitations did not begin to run until the last

act of infringement. Id. at 1118–19. This rule was meant to

strike a balance between plaintiffs’ interest in not having to

file multiple, successive lawsuits to vindicate their rights, and

defendants’ interest in knowing with certainty whether they will

be sued during the statutory period. Id. at 1119.

As the Forster court noted, however, Taylor was based on

several rationales, including that the defendant fraudulently

concealed the infringement, and a reasonable person would not

have discovered the allegedly infringing acts within the statute

of limitations. 1995 WL 239093, at *2 (citing 712 F.2d at

1118–19). Although Taylor is still good law, the Seventh Circuit

has subsequently held that “a continuing violation is one that

could not reasonably have been expected to be made the subject of

11
a lawsuit when it first occurred because its character as a

violation did not become clear until it was repeated during the

limitations period”. Dasgupta v. Univ. of Wis. Bd. of Regents,

121 F.3d 1138, 1139 (7th Cir.1997); see KnowledgeAZ, Inc. v. Jim

Walters Res., Inc., 617 F. Supp. 2d 774, 792 (S.D. Ind. 2008)

(applying that rule in the context of a copyright infringement

action). 

There are several problems with Plaintiffs’ “continuing

violation” theory. First, Plaintiffs fail to provide a cogent

explanation of why they could not have sued for infringement

earlier, given that they were on notice of possible infringement

no later than the end of 2008. Additionally, they fail to

explain how the post-2008 acts constitute copyright infringement,

and thus fail to allege any acts of infringement within the

limitations period. The issuance of the building permit on May

8, 2009, was done by the City of Chicago, not Defendants, and

regardless it is not clear how this act infringed Plaintiffs’

exclusive rights under the copyright. See Lee v. Deck the Walls,

Inc., 925 F. Supp. 576, 580 (N.D. Ill. 1996) (explaining that a

person does not infringe a copyright by using a work in some

unauthorized manner outside of the copyright holder’s exclusive

rights).

Plaintiffs argue that Wilson must have received the

blueprints from the city following the issuance of the permit,

12
and then given them to Perres and Golden, who thereafter used

them to pass city inspections. These acts, Plaintiffs allege

without citation to authority, violated Plaintiffs’ exclusive

right of “distribution” under 17 U.S.C. § 106(3). 

The Seventh Circuit has held that right of distribution in

the Copyright Act is synonymous with the right of publication. 

Kennedy v. Nat’l Juvenile Detention Ass’n, 187 F.3d 690, 697 (7th

Cir. 1999). The statute defines publication using the same

language as used in § 106(3) to describe distribution. Id. 

Compare 17 U.S.C. § 101 (“‘Publication’” is the distribution of

copies or phonorecords of a work to the public by sale or other

transfer of ownership, or by rental, lease, or lending.”) with 17

U.S.C. § 106(3) (giving copyright holder exclusive right “to

distribute copies or phonorecords of the copyrighted work to the

public by sale or other transfer of ownership, or by rental,

lease, or lending.”); see 2-8 Melville B. Nimmer & David Nimmer,

Nimmer on Copyright § 8.11(B)(2)(a) (2012) (“Nimmer”) (noting

that the Copyright Act contains no definition of distribution,

but does define publication, “the term that undergirds the rights

accorded by Section 106(3).”).

Plaintiffs contend that the Wilson “distributed” the

blueprints to Golden and Perres after the city issued the

building permit, and that Golden and Perres then “distributed”

the blueprints to building inspectors, but “distribution” is a

13
term of art under the Copyright Act that requires more than the

an allegation that the documents changed hands. First, the

statute requires distribution “to the public,” which typically is

interpreted to mean a general distribution. See 2-8 Nimmer, §

8.11 (C)(1)(b) and n. 139 (noting that “a distribution made to a

limited group for a limited purpose and not to the public at

large” does not infringe the distribution right). Additionally,

in the publication context, courts have held that distribution of

architectural works to contractors, landlords, and building

authorities is not a publication, or is a “limited publication”

not covered by the Copyright Act. McIntosh, 670 F. Supp. 2d at

1097–98; Kunycia v. Melville Realty Co., Inc., 755 F. Supp. 566,

574 (S.D.N.Y. 1990); Schuchart & Assocs. v. Solo Serve Corp., No.

SA-81-CA-5, 1983 WL 1147, at *11 (W.D. Tex. June 28, 1983). 

Interpreting distribution as synonymous with publication, it

follows that the post-2008 actions complained of by Plaintiffs

also do not constitute a distribution under the Copyright Act. 

Plaintiffs have failed to allege any acts of reproduction,

preparation of a derivative work, or distribution to the public

within the limitations period, so their continuing violation

theory fails and their copyright claims are time-barred.

For these reasons, Plaintiffs’ copyright infringement claims

are dismissed with prejudice. All of the remaining claims are

state law claims over which I decline to exercise supplemental

14
jurisdiction. RWJ Mgmt. Co., Inc. v. BP Prods N. Am., Inc., 672

F.3d 476, 479 (7th Cir. 2012). As such, the portions of

Defendants’ motions to dismiss touching on those state law claims

is denied without prejudice, and this case is dismissed without

prejudice to those claims being refiled in state court.

IV.

For the reasons stated herein, Defendant Mongolian House and

Golden’s Motion to Dismiss (Dkt. No. 31) is granted to the extent

it contends that the copyright infringement claims are timebarred, as are Defendant Mark Perres’ pro se Motion to Dismiss

(Dkt. No. 28), and Defendant Wilson’s Motion to Dismiss (Dkt. No.

29). Defendants’ earlier filed motions to dismiss, which applied

to a prior version of Plaintiffs’ complaint, are denied as moot.

(Dkt. Nos. 16, 20.) Plaintiffs’ motion for a default judgment

against Perres (Dkt. No. 18) is denied.

 ENTER ORDER:

 ____________________________

 Elaine E. Bucklo

 United States District Judge

Dated: July 31, 2012

15