An architecture firm (KFA) held registered copyrights in several building plans and technical drawings. In 2016, the firm licensed certain works to a development company (AHV) for use in the Austin, Texas area, with explicit requirements to include KFA’s copyright management information (CMI) on any displays or copies. KFA later worked directly with third-party graphics companies to create floorplans and renderings, again requiring its CMI be included. However, the floorplans and renderings produced by these companies did not contain KFA’s CMI. When AHV and its affiliates used these images for a new housing development’s online marketing, KFA sent notices of default and, after noncompliance, terminated the licensing agreement and demanded the return of its materials.

KFA then sued AHV and the Creekside defendants in the United States District Court for the Western District of Texas, alleging violations of the Digital Millennium Copyright Act (DMCA), copyright infringement, conversion, and seeking specific performance. The district court dismissed the DMCA and conversion claims, and parts of the infringement claims, but allowed others to proceed. KFA then voluntarily dismissed its remaining claims with prejudice to facilitate an appeal.

The United States Court of Appeals for the Fifth Circuit first addressed whether it had jurisdiction, given that the district court’s dismissal under Rule 41(a)(2) was erroneous because it only dismissed part of the action. The appellate court held that this error did not deprive it of jurisdiction. On the merits, the Fifth Circuit affirmed dismissal of the DMCA claims, holding that failure to include CMI on newly created images is not “removal” or “alteration” under the statute. However, it vacated the dismissal of the copyright infringement claims, ruling that the district court erred in applying a statutory exemption beyond its scope and remanded those claims for further proceedings. View “Flores v. AMH Creekside” on Justia Law