### In the 

# United States Court of Appeals For the Seventh Circuit

____________________ No s. 23-1527 & 23-2566
UIRC

- GSA H OLDINGS , LLC , Plaintiff -Appellant ,

v.

W ILLIAM B LAIR & C OMPANY , L.L.C., and M ICHAEL K ALT , Defendants

- Appellees

.

____________________ Appeal s from the United States District Court for the Northern District of Illinois , Eastern Division. No. 15

- cv

- 9518 — Robert W. Gettleman , Judge

.

____________________
A RGUED O CTOBER 26, 2023

— D ECIDED J ANUARY 12, 2024

____________________

Before F LAUM , B RENNAN , and K IRSCH , Circuit Judges

. B RENNAN , Circuit Judge

. UIRC

- GSA Holdings acquires and manages properties occupied by the U.S. government

. William Blair is a financial services company

. Blair was helping UIRC with a bond offering when a third company undertook

a similar offering. Both UIRC and the third company us ed certain documents during the offering process. UIRC showed Blair its documents , which UIRC had copyrighted

. When UIRC learn ed that Blair was involved in the similar offering ,2 No s. 23-1527 & 23-2566

UIRC sued Blair for copyright infringe ment . Blair prevailed
at summary judgment and the district court awarded Blair attorneys ’ fees under the Copyright Act. UIRC now appeals, arguing the district court erred when it ruled that UIRC lacked the requisite originality for valid copyrights in the documents and by awarding fees to Blair

. UIRC did not independently draft much of the text in the documents, and the new text it drafted consists entirely of uncopyrightable material . T he district court was correct to grant Blair’s summary judgment motion , a nd t hat court did not abuse its discretion by awarding Blair fees.
I. Background UIRC acquires and manages properties leased to the U.S. General Services Administration. T o acquire these properties, UIRC needs to raise money. But finding outside sources of capital is challenging for UIRC , as government

- occupied rental property presents unique risks

. For example, although
t he government is unlikely to fail to pay its rent, it often occupies an entire building ; if it decides to leave, the building empties immediately

. UIRC came up with a strategy to pool a dozen GSA properties, use the pool as secur ity for a bond, then offer the bond to the market. By spreading the risks out across numerous properties , UIRC hoped the bonds would present a more appealing investment opportunity

. To facilitate the offering, UIRC produced two documents: a private placement memorandum (PPM) and an indenture of trust. PPMs advertise the bonds; trust indentures govern the bond issuer’s relationship with anyone who buys them. UIRC did not draft these offering documents from scratch.No s. 23-1527 & 23-2566 3

One of UIRC’s lawyers emailed UIRC executives a copy of offering documents prepared by the Idaho Housing and Finance Association (“Idaho”). The UIRC executives then used language from the Idaho documents in their own drafts

. When UIRC’s first transaction closed in the summer of 2012, UIRC submitted the corresponding PPM and indenture of trust to the U.S. Copyright Office

. The Copyright Office asked UIRC to clarify which parts of the bond documents reflected “ the author’s original text or substantial revisions tothe preexisting text,” noting that courts have limited copyrights in contractual agreements that way

. UIRC clarified it wanted a copyright only in the “additional and revised text” it drafted, not the “standard legal language.” The Copyright Office approved the application with the limiting language

. After a second, less successful, offering, UIRC decided tohire a placement agent to help it market the bonds. Enter William Blair. Blair worked with UIRC on the third and fourth transactions

. UIRC also copyrighted the additional and revised text in, as relevant here, the fourth transaction’s associated offering documents

. But trouble ensued

. While Blair and UIRC were working on the fifth transaction, another company hired Blair to draft bond documents and find investors for a similar transaction. According to UIRC, the bond documents the third party used were strikingly similar to UIRC’s documents from the firstand fourth transactions. They were so similar, in fact, that references to UIRC remained in the final documents. When UIRC learned about the similar transaction, it sued. Among its claims, UIRC alleged Blair copied original portions of the first and fourth sets of UIRC’s offering documents,4 No s. 23-1527 & 23-2566

infringing its copyrights in violation of the Copyright Act, 17 U.S.C. §§ 101 et seq. After discovery, Blair and UIRC moved for summary judgment . T he district court granted Blair’s motion , deciding that UIRC’s offering documents could not be subject to copyright protection. Key to the district court’s decision was that UIRC’s documents were “incredibly similar” to the Idaho documents. And the non

- trivial language UIRC added —facts, short phrases, and functional language

— could not be copyright ed

. After final judgment, Blair as the prevailing party moved
to recover its attorneys’ fees , permitted under 17 U.S.C. § 505. The district court applied the factors the Supreme Court endorsed for § 505 fees motions in Fogerty v. Fantasy, Inc. , concluding at least three of the four factor s weighed toward Blair

. See 510 U.S. 517, 534 n.19 (1994)

. So , the district court granted Blair’s motion.
UIRC filed separate appeal s from the summary judgment and fees order s, which w e have consolidated for consideration and decision.
II. Copyrightability A plaintiff must prove two elements to establish copyright infringement. First, he must demonstrate he owns “a valid copyright.” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co. , 499 U.S. 340, 361 (1991). Second, he must show the defendant copied “constituent elements of the work that are original.” Id. Because we resolve UIRC’s claim on the first element , we do not discuss the second.The Constitution empowers Congress to “secur[e] for limited Times to Authors ... the exclusive Right to theirNo s. 23-1527 & 23-2566 5

respective Writings ... .” U.S. C ONST

. art. I, § 8, cl. 8. Congress has exercised this copyright power, restricting the exclusive right of protection to “original works of authorship fixed in any tangible medium of expression ...

. ” 17 U.S.C. § 102(a) (2023).To qualify for copyright protection, a work must be original to the author. F eist , 499 U.S. at 345. Originality is the glue holding copyright law together

. An original work is one the author “independently created” and “possesses at least some minimal degree of creativity.” Id. But originality can not bind everything. Ideas, methods of operation, concepts, and the like, no matter how independent and creative , are not copyrightable

. See, e.g. , 17 U.S.C. § 102(b). UIRC did not independently create most of the language in the documents at issue . I nstead , it copied much of the language from the Idaho materials. We agree with the districtcourt that the language UIRC did draft lacks the creative expression required for copyright protection. It is either facts, fragmented phrases, or language dictated solely by functional considerations

. A.To support a valid copyright, a writing must be independently created. F eist , 499 U.S. at 345. T here must be “sufficient nontrivial expressive variation” in the writing in question, so as “to make it distinguishable from [an] underlying work in some meaningful way.” Schrock v. Learning Curve Int ’ l, Inc. , 586 F.3d 513, 521 (7th Cir. 2009) 1 ; see Nova Design

1 Schrock is a derivative

- use case. See id. at 518. When an author combines “preexisting material in which copyright subsists” and some “material contributed by the author,” the author’s additions can support a6 No s. 23-1527 & 23-2566

Build, Inc. v. Grace Hotels, LLC , 652 F.3d 814, 818 (7th Cir. 2011)

. Outright c opying , thus, obviates originality. Feist , 499 U.S. at 345. Independent creation is a short hurdle, but it still matters. For example , consider photograph s of Thomas & Friends train characters , which this court held were distinguishable from the characters themselves

. Schrock , 586 F.3d at 522. T he photographer’s “angle, perspective, lighting, and dimension” supplied the variation making them copyrightable

. Id. The copyright was “narrow, ” but it was a copyright nonetheless. Id.
An influential treatise uses a different visual art form

— painting

— to explain distinguishable variation. See 1 N IMMER
ON C OPYRIGHT § 2.01(A)(1). Suppose a n art student creates a master copy of a Rembrandt. His canvas mirrors the original to the last brushstroke ( an artistic accomplishment on its

own ) . But “he has not produced anything that ‘owes its origin’ to him ... .” Id. (quoting Burrow

- Giles Lithographic Co. v. Sarony , 111 U.S. 53, 58 (1884)). Authorship is what copyright demands. Id. Or, c onsider the Supreme Court’s tale of two poets. See Feist , 499 U.S. at 345

– 46. “[E]ach ignorant of the other,” the y write identical poems. Id. at 346. Both are copyrightable even though neither is novel. Unlike the Rembrandt imitator, the

copyright. 17 U.S.C. § 103( a ), ( b ) (2023). We do not discuss that nook of copyright law here . Instead, we end the analysis by holding that UIRC ’s copyright is invalid

. Regardless, for purposes of independent creation, the fact that Schrock is a derivative

- use case is not important

— “the originalityrequirement for derivative works is not more demanding than the originality requirement for other works ...

. ” 586 F.3d at 5 2 1.No s. 23-1527 & 23-2566 7

poets have established authorship by creating something entirely o f their own.
UIRC and Idaho are un like these two poets. UIRC has admitted to knowing the Idaho documents existed. And if Idaho is Rembrandt , UIRC is the art student: much of the language UIRC highlights in its copyrighted document s is indistinguishable from language Idaho created

. 2 Where they differ, most of UIRC’s nuances are “[]trivial ... variations ,” wholly unlike the toy photographer’s perspective and lighting. Schrock , 586 F.3d at 521.
Consider three highlighted sections from UIRC’s documents

. First, UIRC highlighted Article V, Section 5.01 in itsindenture of trust for the fourth bond offering. The only difference s (besides formatting) between Section 5.01 in Idaho’s indenture of trust and that same section in UIRC’s document

are nine substitutions of “Project” for “Properties” ; a change from “ Borrower ” to “ Issuer ”; and a new clause reading, “and initial funding of reserves for the Bonds.” Even the section number is the same.Second, in the final PPM for its fourth offering, UIRC highlighted Sections 3(b), 4, and 5 (among others) under “Pledge of Trust Estate.” Again, UIRC uses the highlighter to lasso every word composing these paragraph s. But here UIRC made only one change to Idaho’s version: it ended section 5 with a period , and Idaho used a semicolon.
Third , consider the “Application of Revenues” sections

— specifically, the paragraphs of UIRC’s PPM for its first

2 In its filings in the district court, UIRC used a highlighter to indicate the copyrighted sections of its documents.8 No s. 23-1527 & 23-2566

transaction concerning the order of payments

. In this section, UIRC describe s how the trustee will distribute money to the various accounts or funds and for what purposes and how thetrustee and issuer can use the remaining money. UIRC explains it had to draft th e payment flow exactly as it did to assure bondholders that “problem s at one of the

... properties would not materially affect” their security. Idaho has a similar section. As UIRC explains it, this is the most important aspect of its bond structure

. Although this is perhaps UIRC’s best claim to originality, it still fails. See also infra II(B). The trivial variations persist in the version of the Application of Revenues section in the PPM for UIRC’s first transaction . I n one paragraph, UIRC deletes one deadline ; switches
out “ following ” for “ after ” and “ with ” for “ in ”; and swaps a second deadline with its own. In another paragraph , it simply replaces “Expense Fund” with “Administrative Expense Fund” and “S&P” with “NAIC.”
Small variations aside, UIRC did contribute new, substantive material to this Application of Revenues section

. Rather than disqualify the whole document , copyright law may still protect what UIRC contributed

. Nova Design Build , 652 F.3d at 818; Pickett v. Prince , 207 F.3d 402, 405 (7th Cir. 2000) ; Merritt Forbes & Co. Inc. v. Newman Inv. Sec., Inc. , 604 F. Supp. 943, 951 , 953 (S.D.N.Y. 1985) (considering copyrightability of a bond document, but denying summary judgment motion because originality is genuine issue of material fact , and explaining that “new elements ” of a copied work are the only ones “ protected by copyright”)

. In Nova Design Build, Inc. v. Grace Hotels , a design company claimed that a hotel conglomerate infringed its copyrights in its architectural designs. 652 F.3d at 815 –16 . Grace Hotels andNo s. 23-1527 & 23-2566 9

Nova had agreed to work together on a new Holiday Inn Express, with Nova supplying the designs. Id

. at 815

. The agreement fell apart, and , a fter Grace built the hotel, Nova sued, alleging Grace used its designs anyway. Id. at 816. This court sided with Grace. Id. at 818. Nova’s designs were generally based on the Holiday Inn Express prototype. But some of its designs contained “added features,” such as an extra floor, which lacked originality . O ther features “were specifically requested by Grace .” The court concluded that “there was no creative element to these features ” warranting copyright protection. Id. This is the approach we take here. UIRC cannot use the highlighter to make Idaho’s contribution s disappear. But copied language does not de facto taint the whole work. Thus, wenext consider whether the Copyright Act can protect the uncopied material.

B.After excising the copied language, what remains is a mixture of fragmented phrases, facts, and language dictated solely by functional considerations. Fragmented phrases and facts are not copyrightable. Harper & Row , Publishers, Inc. v. Nation Enters. , 471 U.S. 539, 547 (1985) (facts); Alberto

- Culver Co. v. Andrea Dumon, Inc. , 466 F.2d 705, 711 (7th Cir. 1972) (short phrase s and expression s ). Language dictated solely by function is not copyrightable either. Publ ’ ns Int'l, Ltd. v. Meredith Corp. , 88 F.3d 473, 480, 481 (7th Cir. 1996).As above, we return to the Application of Revenues sections of the PPM for UIRC’s first transaction

. Some of UIRC’s more substantive contributions are facts or fragmented phrases . For example, it replaced some of Idaho’s language10 No s. 23-1527 & 23-2566

with “Mortgage,” “Assignment of Lease,” and “Collateral Assignment of Rents” in a list of legal documents in the opening paragraph of the section. Elsewhere, it added the phrase “the Loan Agreement obligates the Borrower to (and the Issuer shall cause the Borrower to)” to Idaho’s language in the firstparagraph of the section. Other contributions are more substantial. F or example, although UIRC used some of Idaho’s language for the payment order section discussed above, UIRC re

- sequenced the paragraphs, creating a different order. And the order matters.
But here , and wherever UIRC made substantive additions, it was not creative expression. Rather, UIRC was responding to the demands of function

. Two key cases illustrate how functional additions differ from creative additions

. First, in Publications Int ernational , Ltd. v . Meredith Corp. , a publisher argued that it had a copyright in a series of recipes , but the recipes amounted to a list of ingredients and step

- by

step instructions for making the dishes. See 88 F.3d at 475 , 480

. This alone could not support a valid copyright. Id. at 480. Without any “expressive elaboration upon [their] functional components ,” the recipes were “barebones,” nothing more than “the directions for producing a certain dish.” Id. at 48 0 , 481; s ee 1 N IMMER , supra , § 2A.13. Considering the definition of a “recipe,” th is court concluded that, at its most fundamental, a recipe is an uncopyrightable “‘ procedure, process, [or] system .’” Publ ’ ns Int'l

. , 88 F.3d at 481 (quoting 17 U.S.C. § 102(b)) (alteration in original)

. Had the publisher commented on the history of the recipe or provided wine pairings, for example, it could copyright the recipe

. See id.
So too here. UIRC includ ed no expressive elaborations, choosing instead to present its idea to potential investors withNo s. 23-1527 & 23-2566 11

the formal technicality common to bond documents. B ond documents are, at their foundation, barebones descriptions of the offering and terms and conditions. See, e.g. , Prospectus , B LACK ’ S L AW D ICTIONARY (11th ed. 2019); Indenture/corporate indenture , B LACK ’ S L AW D ICTIONARY (11th ed. 2019)

. 3 Without any elevating creativity, the documents consist of little more than an uncopyrightable “method of operation” or “process.” 17 U.S.C. § 102(b) (2023).
UIRC gives some insight into its drafting process. E venthough there were other ways UIRC could explain the payment of order flows provision, it wrote the provision exactly as it did to assure bondholders that their security would be safe. For example, when the second bond offering was less successful , UIRC cited “changes it made to its bond documents.”
A n author’s decision to phrase things one way may in some cases be evidence of creativ e expression. In American Dental Ass’n v. Delta Dental Plans Ass’n , for example, the creativity in a taxonomy of dental procedures was the author’s classification and explanation after “the fundamental scheme ha[d] been devised.” 126 F.3d 977, 979 (7th Cir. 1997). But in American Dental , and unlike here, functional demands did not constrain the taxonomist’s prosaic choice.
In t he second key case, Incredible Technologies, Inc. v. Virtual Technologies, Inc. , t his court rejected a copyright infringement

3 See also Boyle v. Stephens, Inc. , No. 97 C iv . 1351 (SAS), 1998 WL 80175, at *5 (S.D.N.Y. Feb. 25, 1998) (“[P]laintiff’s copyright does not preclude others from also describing ... fund characteristics ... . Otherwise, plaintiff could prevent competitors from fully describing the mutual fund concept in a prospectus or other selling materials

... .”).12 No s. 23-1527 & 23-2566

claim in the markings on an arcade cabinet’s control panel

. 400 F.3d 1007, 1014, 1013 (7th Cir. 2005). Incredible Technologies made the Golden Tee arcade game

. Id. at 1009. Virtual Technologies decided to make a competing arcade game

— PGA Tour Golf. Id. Virtual Technologies wanted to make a game very similar to Golden Tee

. Id. at 1010. So it purchased a Golden Tee cabinet and hired a firm to design a game that could fit seamlessly within IT’s preexisting system. PGA TourGolf’s control panel, unsurprisingly, turned out “nearly identical” to Golden Tee’s. Id. The panels consisted of a trackball in the center (a “golfer” “swings” by rolling it), arrows around the trackball , a horizontal graphic demonstrating flight paths (indicating the direction the “ball” would move), five buttons around the trackball, and textual instructions. Id. at 1010, 1013.
This court ruled that IT’s control panel was not subject to copyright protection because practical, non

- creative reasons governed I T’s choices. Id. at 1013

. First, the control panel’s layout was “dictated by functional considerations .” Id. at 1014. T he trackball must have be en in the middle so both left - and right

- handed golfers could use it. Second, IT situated the buttons “for purposes of convenience”; this choice “cannot be said to be expressive.” Third, an arrow is not “imaginative or creative,” even th ough “something other than an arrow could have been used to indicate direction.” Id. Here, UIRC may have chosen its language carefully, but as in Incredible Technologies , its choices were driven by convenience and function, not creativity. So, we hold that UIRC’s documents are not entitled to copyright protection

.No s. 23-1527 & 23-2566 13

C. Before turning to attorney’s fees, we review four final points

. First , UIRC’s bond documents could resemble advertisements, which “are clearly copyrightable.” 1 N IMMER , supra , § 2A.08(G)(4). Even if the bond documents we re advertisements, the fact that a writing advertises a product does not make it per se copyrightable. The question remains whether the work has some spark of creative expression. See id. ( whether content is dictated solely by functional considerations is still relevant issue in advertising context). As an advertisement or as a legal instrument, the uncopied parts of the bond documents are not creative enough.
Second , just as Publications International did not hold that recipes are per se uncopyrightable, we do not hold that bond documents are per se uncopyrightable. See 88 F.3d at 482. Legal documents could be copyrightable just as painting s are. See generally 1 N IMMER , supra , § 2A.11. And although legal documents are hardly works of art, the Supreme Court divorced meritoriousness and creativeness more than 100 years ago. See Bleistein v. Donaldson Lithographing Co. , 188 U.S. 239 , 251–252 (1903).
Third , UIRC relies on Seng

- Tiong Ho v. Taflove to argu e it can copyright the “arrangement, expression and manner of presentation” of its documents. 648 F.3d 489, 499 (7th Cir. 2011) (quotations omitted). In Taflove , a professor and a graduate student sued another professor and graduate student, claiming copyright infringement of a mathematical model. Id. at 493 –94. The plaintiffs in Taflove argued that the model’s equations and figures , a s well as the text describing the14 No s. 23-1527 & 23-2566

model, were subject to copyright protection

. Id. at 494, 500

. Because their idea c ould be expressed in only one way, a copyright over that expression is invalid, so the court ruled for the defendants. Id. at 498, 500.
But UIRC focuses on a different part of the opinion. The Taflove plaintiffs relied on a Seventh Circuit case ensuring authors protection over the “arrangement, expression and manner of presentation” of mathematical data. Id. at 499 ; see F lick

Reedy Corp. v. Hydro- Line Mfg. Co. , 351 F.2d 546, 548 (7th Cir. 1965). But t he Taflove court found th at case to be about the style of the writing, not its words

. Taflove , 648 F.3d at 499. A nd
t he Taflove plaintiffs did not argue that “the defendants appropriated their creative presentation” of their research, but that the defendants “copied the substance of the equations, figures and text.” Id. The same is true here. UIRC focuses not on “such aspects as the color or font” of its documents but on the language it used. Id. It cannot shoehorn substance into caselaw addressing style.
Fourth , UIRC points out that witnesses describe d the documents as “creative ,” which it bears as a stone and sling sure to outmatch our precedent. But “an expert may not offer legal opinions ,” so we need not consider this testimony further. Jimenez v. City of Chicago , 732 F.3d 710, 721 (7th Cir. 2013). Having decided that the district court did not err byawarding summary judgment to Blair, we turn to UIRC’s appeal of the district court’s fees decision.
III. Attorneys ’ Fees UIRC disagrees with the district court’s award of $1,531,611.75 in attorneys ’ fees to Blair under the Copyright Act’s fees provision. “In any civil action” under the CopyrightNo s. 23-1527 & 23-2566 15

Act, a court “in its discretion” may “award a reasonable attorney’s fee to the prevailing party ... .” 17 U.S.C. § 505 (2023). Accordingly, we will reverse only if the district court abuse s this discretion. Sullivan v. Flora, Inc. , 936 F.3d 562, 575 (7th Cir. 2019). An abuse of discretion is “an erroneous conclusion of law, a record that contains no evidence rationally supporting the court’s decision, or facts that are clearly erroneous as the district court found them.” LHO Chicago River, L.L.C. v. Rosemoor Suites, LLC , 988 F.3d 962, 967 (7th Cir. 2021). The Supreme Court has permitted courts to use four factors to “guide [their] discretion .” Fogerty , 510 U.S. at 534 n.19. The factors are: (1) the frivolousness of the suit; (2) the losing party’s motivation for bringing or defending against a suit; (3) the objective unreasonableness of the claims advanced by the losing party; and (4) the need to advance considerations of compensation and det errence. Live Face on Web, LLC v. Cremation Soc’y of Illinois, Inc. , 77 F.4th 630, 631 (7th Cir. 2023) ( ci ting Fogerty , 510 U.S. at 534 n.19)). Ultimately, “there is a strong presumption that prevailing defendants may recover costs.” Design Basics, LLC v. Kerstiens Homes & Designs, Inc. , 1 F.4th 502, 508 (7th Cir. 2021). Whe n we have reversed a district court’s entry of § 505 fees, we have done so because the district court failed to consider the Fogerty factors or reached an obviously wrong result when considering them

. See Mostly Memories, Inc. v. For Your Ease Only, Inc. , 526 F.3d 1093, 1099 (7th Cir. 2008); Eagle Servs. Corp. v. H2O Indus. Serv s., Inc. , 532 F.3d 620, 623 (7th Cir. 2008).16 No s. 23-1527 & 23-2566

The district court considered all four factors and did not abuse its discretion in awarding fees to Blair. First, the court held UIRC failed to rebut the presumption in favor of Blair on the first factor (frivolousness). Second, the court assumed that UIRC won the second factor (improper motive) without muchdiscussion. Third, the court sided with Blair on the third factor (objective unreasonableness of the claim). T he district
court found UIRC’s decision not to be forthcoming about the Idaho documents, either earlier in the litigation or before the Copyright Office , problematic

. Fourth , similarly, the courtsided with Blair on the fourth factor (advancing considerations of compensation and deterrence) because of UIRC’s failure to disclose

. Finally, Blair has requested that we extend the district court’s fee order to the attorneys ’ fees it incurred defending this appeal. We invite Blair to move for those fees with the appropriate substantiation with in 30 days of the date of this decision, after which UIRC will have 15 days to respond

. IV. ConclusionUIRC did not have a valid copyright in the bond documents it alleges Blair copied. Much of its language is indistinguishable from the language Idaho used in its documents, and the nontrivial additions are not copyrightable. To boot,
t he district court properly weighed the Fogerty factors, so it did not abuse its discretion in awarding fees to Blair.
We therefore A FFIRM the district court’s decision to enter summary judgment for Blair and to award Blair fees.