Federal Court In Wisconsin Finds In Favor Of Harley-Davidson Logo Designer On Procedural Matters
by Jerry Glover
August 8, 2012
A federal district court in Wisconsin recently ruled that Wayne Peterson, the designer of two Harley-Davidson logos, could proceed in his copyright infringement claim against Harley-Davidson (“Harley”) for continuing use of those same logos following expiration of a license between the parties despite Harley’s claim that the designer had waited too long to file his complaint and that much of the infringement occurred outside of the statute of limitations. Peterson v. Harley-Davidson, Inc., 2012 WL 3113184 (E.D. Wis. July 31, 2012).
Here are the designs:
Peterson created the logos in 1985 and 1991 and allegedly granted Harley a “one time one run” license for each design. He claimed that Harley continued to use the designs after expiration of the license “on hundreds if not thousands or runs of products, packaging material and marketing material.” Harley moved to dismiss Peterson’s complaint under FRCP 12(b)(6) claiming two defenses: laches and expiration of the three-year statute of limitations.
A complaint cannot be dismissed simply because the defendant asserts defenses since a plaintiff cannot be expected to anticipate the assertion of those defenses and plead around them/ But the court noted that an exception to this rule allows dismissal of a complaint if the plaintiff admits all of the requirements of that defense. The court determined that Peterson had not admitted the requirements of either defense.
Laches means that the plaintiff unduly delayed filing a complaint and that delay prejudiced the defendant. The court admitted that Peterson had waited a long time to file his complaint but added that waiting a long time alone does not mean that the delay was unreasonable. As a matter of fact, the court noted that Peterson’s complaint, which could not be required to anticipate defendant’s assertion of laches, did not contain sufficient facts to determine at this early stage of the litigation whether the wait had been undue.
Harley had also claimed that the three-year statute of limitations barred Peterson’s infringement claims for many of the alleged infringements. Peterson argued that Harley engaged in a continuous line of infringement for years. The continuing wrong doctrine (also called the continuing violation doctrine) allows a plaintiff to recover damages for an entire course of conduct; it is not limited to damages only for acts that occurred during the last three years.
The court noted a seeming conflict in recent statute of limitations rulings from the U.S. Court of Appeals for the Seventh Circuit, the appellate court governing Wisconsin among other states. Citing a Seventh Circuit sexual harassment case, Limestone Development Corp. v. Village of Lemont, Ill., 520 F.3d 797 (7th Cir. 2008), the trial court noted that the appeals court ruled that “until a series of offensive acts [which singly might not be actionable as sexual harassment] accumulates into an actionable case of harassment, the plaintiff has no claim. But once the claim accrues [the sexual harassment continues until it reaches the harassment level], the continuing-violation doctrine allows the plaintiff to seek damages for the entire series of harassing behavior” even if some of those acts occur outside the statute of limitations. Citing Taylor v. Meirick, 712 F.2d 1112 (7thCir. 1983), the trial court noted that the Seventh Circuit in the copyright context had also ruled that the statute of limitations does not begin to run until the entire series of continuing violations is complete.
The district court stated, however, that more recent Seventh Circuit cases invoking the continuing-violation doctrine seem to require the conclusion that the doctrine would not apply in this case.
Those cases state that Peterson’s claim accrued when he first learned, or should as a reasonable person have learned, that Harley had infringed his copyrights citing Gaiman v. McFarlane, 360 F.3d 644 (7th Cir. 2004). The court referenced another Seventh Circuit case, CSC Holdings, Inc. v. Redisi, 309 F.3d 988 (7thCir. 2002), noting that appeals court had held that each infringement was a separate and discrete statutory violation. The court noted that just because a defendant made it a habit to violate the Copyright Act on a regular basis did not convert those multiple violations into one long continuing wrong.
The district court ultimately determined that Taylor had not been overruled and that it was bound by that decision. As a result, the court ruled that Peterson should be allowed to seek damages for Harley’s entire course of infringement even if some of those infringing acts occurred more than three years ago.