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LimeCoral, Ltd. v. CareerBuilder, LLC

United States Court of Appeals, Seventh Circuit

May 8, 2018

LimeCoral, Ltd., Plaintiff-Appellant,
v.
CareerBuilder, LLC, Defendant-Appellee.

          Argued November 1, 2017

          Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:15-cv-07484 - Samuel Der-Yeghiayan, Judge.

          Before Manion, Kanne, and Rovner, Circuit Judges.

          Rovner, Circuit Judge.

         Graphics-design firm LimeCoral, Ltd., sued the job website CareerBuilder, LLC, for breach of copyright and breach of an alleged oral agreement to pay LimeCoral for each annual renewal of a graphic design that LimeCoral prepared for a job posting on CareerBuilder's website. The district court entered summary judgment in favor of CareerBuilder, finding that CareerBuilder had an irrevocable, implied license to use LimeCoral's designs that was not conditioned upon any agreement to pay LimeCoral renewal fees. We affirm.

         I.

         CareerBuilder operates the online employment website www.careerbuilder.com, where employers list job openings and job seekers can post their resumes, browse job openings by category, and submit employment applications. Employers pay CareerBuilder to post their job openings, and one option that CareerBuilder offers is a "premium job branding" that incorporates customized HTML and static and animated graphics into a job posting. As relevant here, job postings were sold for a one-year term.

         LimeCoral was a small design firm that prepared media files incorporating customized graphic designs for premium job brandings on the CareerBuilder website from 2008 through 2014. Brian Schoenholtz, a former employee of CareerBuilder, was LimeCoral's principal.

         LimeCoral entered into an Independent Contractor Agreement with CareerBuilder on October 1, 2008 (the "2008 Agreement"), pursuant to which LimeCoral agreed to prepare custom graphic designs on behalf of CareerBuilder's employer clients and CareerBuilder agreed to pay LimeCoral for those designs pursuant to a schedule of fees set forth in an exhibit to be attached to the agreement. CareerBuilder committed in this agreement to give LimeCoral 50 percent of its orders for online design services. The agreement was for a term of six months. The agreement specified that all graphic designs created for CareerBuilder (included within the scope of "Confidential Information" as defined in the contract) would constitute the sole and exclusive property of CareerBuilder. The agreement said nothing about LimeCoral's entitlement to renewal fees when a CareerBuilder client renewed a job posting.

         By its terms, the 2008 Agreement expired at the end of six months. The evidence indicates that the parties were unable to come to terms on a new agreement. CareerBuilder, in particular, was no longer willing to promise any particular percentage or dollar amount of its design business to LimeCoral as LimeCoral wished. (Later proposed agreements ran into the same impasse.) LimeCoral and CareerBuilder nonetheless agreed to continue doing business with one another, albeit without a written agreement. Over the course of the next six years, the relationship between the parties went on largely as before. LimeCoral continued to prepare media files incorporating custom graphic designs (more than 2, 000, all told) at the request of CareerBuilder in exchange for a design fee- typically $3, 000 for each new design. However, as there was no longer a written agreement transferring ownership of the copyright on the designs to CareerBuilder, LimeCoral retained ownership of the copyright and, as discussed below, implicitly granted CareerBuilder a license to use the designs. What the parties dispute is whether the license was unconditional and irrevocable, or subject to CareerBuilder's alleged agreement to pay LimeCoral an annual renewal fee for every design that CareerBuilder continued to use beyond the initial period of one year.

         In practice, when an employer renewed a job posting with CareerBuilder, it would pay a fee to CareerBuilder-$10, 000 or more, according to LimeCoral. If the employer wanted an entirely new design for its posting, then CareerBuilder would commission LimeCoral or one of its other vendors to prepare the design, without regard to who had designed the original. If, however, the employer wanted to stick with the original design but make revisions to it (to incorporate a new company logo, for example), CareerBuilder routinely would, for the sake of efficiency, have the vendor who prepared the original design make the changes, and the vendor would be paid for those changes. Thus, whenever revisions to a LimeCoral design for a renewed job posting were called for, CareerBuilder would pay LimeCoral a flat fee for those modifications (typically $1500), however large or small the degree of work required.

         The parties disagree as to the import of the revision fees. LimeCoral characterizes them as a practice of CareerBuilder paying it a fee for any renewal, given that it received the same fee even when the requisite revisions involved only an insignificant amount of work. CareerBuilder, on the other hand, insists that it only paid LimeCoral a fee when revisions were required in connection with a renewal, such that the fees were genuinely tied to the revisions rather than the renewals.

         There is evidence in the record that confirms Career-Builder's understanding of the practice. In his deposition, Schoenholtz said he "believe[d]" it to be the case both that LimeCoral had never sought a renewal fee when revisions to the original design were not called for and that CareerBuilder had never paid it a fee on renewal in the absence of revisions. R. 32-1 at 59, Schoenholtz Dep. 230-31. Additionally, email correspondence between Schoenholtz and CareerBuilder makes explicit the connection between fees and revisions to renewed postings. In a January 2012 email to Schoenholtz, CareerBuilder's production manager, Molly Bendell, wrote:

Thanks for reaching out, Brian. Go ahead and start the revisions so as not to hold anything up. In the meantime, I'll have a conversation with Hyemi and Loren about when to pay designers for revisions. Personally, I've always paid once the client has renewed and requested edits. If we get more money then you get more money for the work you do. If it's just a minor revision and not ...

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