In a recent decision addressing when the clock begins to run on the statute of limitations for actions to enforce copyrights in building designs, the U.S. Court of Appeals for the First Circuit held that public visibility of the structure may not be enough—there must be “smoke” on the horizon (or its equivalent) to recognize the fire. Warren Freedenfeld & Assoc. v. McTigue, Case Nos. 07-1602, -1603 (1st Cir., June 20, 2008) (Selya, Sr., J).

The defendant, a veterinarian, engaged the plaintiff, an architectural firm, to design and build a veterinary hospital. The agreement provided that the architect would remain the owner of the copyrights in all designs. After the relationship soured, the parties went their separate ways and the defendant retained a different firm to complete the hospital. A year later, the building opened its doors. Four more years passed uneventfully before the plaintiff saw a drawing of the hospital’s floor plan in a veterinary trade publication. The plaintiff thereupon obtained a copy of the building plans and filed suit for copyright infringement, now roughly five years after the hospital’s opening. After Freedenfeld filed suit, the defendant moved to dismiss on the grounds that the claim was barred by the three-year statute of limitations governing copyright claims. The district court agreed, holding that under the “discovery rule,” the statute of limitations begins to run when a reasonably diligent person would have learned of the claim; which in this case the district court considered to be no later than the hospital’s public opening five years before. Freedenfeld appealed

The First Circuit reversed. Under the “discovery rule,” it explained, a claim accrues “when a plaintiff knows or has sufficient reason to know” of the conduct giving rise to the claim. The “easy cases,” it observed, are those involving actual knowledge. The analysis becomes more difficult, however, when, as here, the only contention is that the plaintiff “should have known” of the claim. In such a case, the Court held, the question is whether some event sufficient to trigger a duty of diligence had occurred: “The familiar aphorism teaches that where there is smoke there is fire; but smoke, or something tantamount to it, is necessary to put a person on inquiry notice that a fire has started.” Here, the Court found while it was “plausible” that the failed business relationship, public access to the building plans, and the completion of the hospital triggered a duty of diligence, such a conclusion was “not compelled.” “Architects have no general, free-standing duty to comb through public records or to visit project sites in order to police their copyrights.” Thus, the court held “in the absence of some triggering event — some sign of storm clouds gathering on the horizon — [the plaintiff] cannot be charged as a matter of law with inquiry notice.”

Practice Note: While an architect (and, presumably, all similarly-situated copyright owners) has no general duty to review publicly accessible records, the Court reiterated that determining when a claim accrues is “a fact-sensitive enterprise” that turns on “the idiosyncratic circumstances of each individual case.” Copyright owners should thus continue to take reasonable efforts to investigate potential claims and file suit as early as practicable.