IP Law Daily, COPYRIGHT—D. Nev.: An electrical subcontractor’s infringement claims against former employees and general contractor dismissed, (Aug 20, 2026)

By Linda O’Brien, J.D., LL.M.

An electrical engineering company lacked standing to pursue copyright infringement of an electrical design template because a related company owned the copyright registration that did not timely disclose the assignment of its right and failed to identify protectable elements in its electrical plans.

An electrical engineering company in its lawsuit against two former employees, general contractor, and building site owner alleging that they engaged in copyright infringement by using the company’s copyrighted electrical design template and electrical plans in several building projects lacked standing to pursue copyright claims regarding the template, the federal district court in Las Vegas, Nevada has ruled. A related but independent company owned the copyright and a previously undisclosed intercompany agreement licensing the copyright registration could not confer standing retroactively. Thus, the contractors’ motion for summary judgment was granted and the electrical engineering company’s motion for summary judgment was denied (Interior Electric Incorporated Nevada v. T.W.C. Construction, Inc., No. 2:18-cv-01118-JAD-MDC (D. Nev. Aug. 13, 2026)).

Mark Beverly owns several related commercial electrical engineering companies, including Interior Electric Incorporated Nevada (IE-NV) and Interior Electric Inc. California (IE-CA). About 30 years ago, someone within the companies developed an AutoCAD template for electrical engineering plans. IE-CA registered the template’s copyright with the USPTO and obtained the registration number VAUI-336-906 (‘906 registration), while IE-NV registered its individual electrical plans.

Prologis, L.P., an industrial real estate company that constructs and leases commercial distribution centers in Las Vegas, hired T.W.C. Construction, Inc. (TWC) as its general contractor for several projects. TWC retained IE-NV as the electrical design build contractor for four Prologis projects and five other projects. While working on those projects, two key IE-NV employees, Gus Baquerizo and Clifford Anderson, left to start their own electrical subcontracting business, BAMM. The relationship between TWC and IE-NV terminated as a result of the departure and TWC engaged Baquerizo and Anderson as consultants to finish the projects. At the time of the termination, IE-NV had started electrical plans for each project using its template. Baquerizo obtained copies of some of the plans, which had IE-NV’s logo, name, and address, and submitted very similar electrical plans to TWC and Prologis who used the plans to complete their projects.

In 2018, IE-NV filed suit against TWC, Prologis, Baquerizo, Anderson, and two electrical contracting entities (Power On and BAMM), alleging copyright infringement and 18 state law claims broadly alleging breach of contract. Specifically, IE-NV claims that the two former employees stole the copyrighted AutoCAD template and copies its electrical plans for those nine projects. TWC filed a countersuit against IE-NV and IE-CA, claiming IE-NV submitted fraudulent labor affidavits, thereby absolving TWC of its performance obligation. Before the court were the parties’ cross-motions for summary judgment.

Copyright infringement. IE-NV lacked standing to pursue copyright infringement of the template because IE-CA owned the copyright and assigned it to IE-NV too late and without disclosing the assignment, the court found. Under the Copyright Act, only the legal or beneficial owner of an exclusive right under a copyright has standing to sue for infringement of that right. The related but independent company IE-CA owned the ‘906 registration, not IE-NV. IE-NV revealed for the first time in response briefs a previously undisclosed 2024 intercompany agreement exclusively licensing the ‘906 registration, assigning any accrued causes of action, and backdating the license to 2004. The nondisclosure violated Federal Rule of Civil Procedure 26(a)(1)(A)(ii) and such agreement could not confer standing retroactively. IE-NV’s argument that it thought the intercompany agreement was irrelevant, and standing was not an issue was rejected. IE-NV knew of the agreement and understood its importance to standing as the agreement explicitly referenced this pending litigation by name. The very existence of the agreement was inexplicable without IE-NV being aware that standing may be an issue. Further, the late disclosure was not justified or harmless and it hindered the ability of the defendants to challenge the agreement’s authenticity, whether the arrangement was actually exclusive, and whether it was consistent with IE’s prior positions, the court noted.

The copyright infringement claims related to the electrical plans failed since an infringement claim requires more than just copying. Electrical plans receive “very thin” copyright protection as “unprotectable external factors heavily dictate their design” and IE-NV failed to identify what specific protectable elements in the defendants’ plans were unlawfully copied. Some of IE-NV’s plans were similar when placed side by side with the purportedly copied plans. While there appeared to be some copying, the defendants’ plans also contained additional sheets, architectural revisions, and items that were removed, and it could not be inferred that whatever was protectable was copied. It was also unclear that what was copied was protectable. IE-NV’s lack of evidence identifying what specifically was unique in its plan layouts, what was copied, and acknowledgement that several of the defendants’ plans were totally different supported a finding that IE-NV failed to carry its burden on its copyright claims or create a genuine dispute, the court stated.

State law claims. Since there were no federal claims remaining to establish jurisdiction, the state law claims should be dismissed without prejudice to be refiled in state court. Those claims were between largely non-diverse parties – two Nevada corporations and several Nevada residents - and raised complex and novel issues of state law. Finally, the factors of judicial economy, convenience, fairness, and comity favored declining the exercise of supplemental jurisdiction, the court concluded.

The Case is No. 2:18-cv-01118-JAD-MDC.

Judge: Dorsey, J.

Attorneys: Collin M. Jayne (Marquis Aurbach Coffing) for Interior Electric Inc. Nevada. Michael V. Infuso (Greene Infuso, LLP) for T.W.C. Construction, Inc.

Companies: Interior Electric Inc. Nevada; T.W.C. Construction, Inc.

Cases: Copyright NevadaNews