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Exploring the latest in intellectual property law
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Jersey Boys Don’t Cry: No Copyright Protection for Facts “Based on a True Story”

by | Sep 16, 2020 |

The US Court of Appeals for the Ninth Circuit affirmed a district court’s grant of judgment as a matter of law finding that the musical Jersey Boys did not infringe a copyright held in an autobiography of band member Tommy DeVito. Donna Corbello v. Frankie Valli, et al., Case No. 17-16337 (9th Cir. Sept. 8, 2020) (Berzon, J.).

In the 1990s, Rex Woodard ghostwrote an autobiography of Tommy DeVito, one of the original members of the 1950s quartet the Four Seasons. Woodard and DeVito agreed to split the profits equally. However, shortly after finishing the book, and before finding a publisher, Woodard died. Donna Corbello, Woodard’s widow, became the successor-in-interest to the book, and she continued the search for a publisher. Almost 15 years later, Corbello still had not published the book.

DeVito’s autobiography reads as a straightforward historical account of the Four Seasons. At the beginning of the book, DeVito, as the narrator, describes his autobiography as a “complete and truthful chronicle of the Four Seasons,” and he promises not to let “bitterness taint the true story.” Corbello also sent letters to potential publishers emphasizing that the book provided a “behind-the-scenes” look at the Four Seasons. In all accounts, the book is a non-fiction, historical chronicle of events of the Four Seasons.

In 2005, the musical Jersey Boys debuted on Broadway. Jersey Boys also depicts the history of the Four Seasons from its origins in New Jersey to its induction into the Rock and Roll Hall of Fame in 1990. DeVito admitted to working with people involved in developing Jersey Boys and sharing the book with the individuals researching the history of the band.

In 2007, Corbello sued DeVito and 14 defendants, including the band members and the writers, directors and producers of Jersey Boys. The complaint included 20 causes of action, including various forms of copyright infringement. The district court granted summary judgment in favor of the defendants on most of the claims. Corbello appealed. The Ninth Circuit reversed the district court’s grant of summary judgment in favor of defendants, vacated its assessment of costs against Corbello, and remanded for further proceedings.

On remand, the case proceeded to a jury trial where the jury found that the musical infringed the book and that use of the book was not fair use. After the verdict, the district court granted the defendant’s motion for judgment as a matter of law, concluding that any infringement was fair use. Corbello appealed.

On appeal, the central disagreements were whether the musical was substantially similar to the book and whether the defendants copied any protectable portions of the book. The Ninth Circuit analyzed the similarities under the extrinsic test for substantial similarity. The appellate court found that each of the similarities failed because they involved only non-protectable elements of the book. Those non-protectable elements included DeVito depicting himself in the musical (a character based on a historical figure is not protected); Bob Gaudio arriving late to rehearsal, excited about a new song he just [...]

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No Remix: Copyright Act Preempts Right of Publicity Claim

by | Sep 9, 2020 |

The US Court of Appeals for the Second Circuit found that the federal Copyright Act preempts a state right of publicity claim when the latter is merely “a thinly disguised effort to exert control over an unauthorized [use of a copyrighted] work.” Jackson v. Roberts, Case No. 19-480 (2d Cir. Aug. 19, 2020) (Leval, J.).

Both parties in this case are famous hip-hop artists more commonly known by their stage names: the plaintiff, Curtis James Jackson III, is known as 50 Cent, and the defendant, William Leonard Roberts II, is known as Rick Ross. In 2015, Roberts released a free mix tape that included samples from many famous songs, including Jackson’s hit “In Da Club.” The mix tape track at issue was titled “In Da Club (Ft. 50 Cent)” and included Rick Ross rapping over the “In Da Club” instrumentals, a 30-second sample of 50 Cent singing the “In Da Club” refrain, and multiple references to Rick Ross’s upcoming album.

Jackson sued Roberts, claiming that the unauthorized use of his name and voice violated his right of publicity under Connecticut common law. Pursuant to a recording agreement with his former record label, Shady Records/Aftermath Records, Jackson did not own a copyright interest in the “In Da Club” recording and therefore could not sue for copyright infringement. The district court granted Roberts’s motion for summary judgment, finding that Jackson had surrendered his publicity rights via the recording agreement and that the right of publicity claim was preempted. Jackson appealed.

The Second Circuit agreed that federal law preempted the right of publicity claim, but for different reasons than the district court: the Second Circuit found the state claim preempted under the doctrine of implied preemption or, alternatively, statutory preemption. The Court explained that “generally . . . implied preemption precludes the application of state laws to the extent that those laws interfere with or frustrate the functioning of the regime created by the Copyright Act. Statutory preemption preempts state law claims to the extent that they assert rights equivalent to those protected by the Copyright Act, in works of authorship within the subject matter of federal copyright.”

The Second Circuit used a two-part test to determine whether the state law claim was subject to implied preemption, asking (1) whether the state right of publicity claim asserted a sufficiently substantial state interest, distinct from those interests underlying federal copyright law, and (2) whether the state law claim would potentially conflict with rights established by the Copyright Act. Given that Roberts did not use Jackson’s name or persona to falsely imply Jackson’s endorsement of Roberts’ music, nor did Roberts invade Jackson’s privacy or use his persona in a derogatory nature, the Court reasoned that Jackson was not seeking to vindicate any distinct and substantial state interest. Likewise, the Court held that the second element was satisfied because Jackson’s right of publicity suit had the potential to interfere with the copyright holder’s exclusive control of its rights: “Jackson’s attempt to [control the use of the [...]

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Not Your Grandfather’s Internet Royalties? DMCA Favorable Rates Might Apply to Internet Offerings

by | Sep 3, 2020 |

Reversing the Copyright Royalty Board’s determination that a favorable grandfathered royalty rate did not apply to internet streaming audio transmissions, the US Court of Appeals for the District of Columbia Circuit concluded that internet transmissions are not categorically excluded from the definition of “service” in the Digital Millennium Copyright Act of 1998 (DMCA). Music Choice v. Copyright Royalty Bd., Case No. 19-1011 (DC Cir. Aug. 18, 2020) (Rao, J.).

In the late 1990s, Music Choice, a company best known for its cable television genre-specific music channels, also offered some digital audio transmissions over the internet. These audio transmissions—and their alleged continuation through today—are the subject of this case.

Seeking to establish a new regime governing royalties for digital music services, Congress required in the DMCA that service providers pay copyright holders a market-based rate for playing digital music, but set a generally lower “reasonable rate” for certain preexisting subscription services. A preexisting subscription service—i.e., a service offering digital audio subscriptions for a fee before July 31, 1998—was entitled to the lower rate for its subscription transmissions “made in the same transmission medium used by such service on July 31, 1998.” The question here was whether those transmissions could be made over the internet.

In 2016, the Royalty Board held proceedings to set the preexisting royalty rates for 2018 to 2022, during which it referred the legal question of whether Music Choice’s internet transmissions qualified for the grandfathered rates to the Copyright Register. The Register concluded that, based on the DMCA’s legislative history, the grandfathered rates were intended to apply only to cable and satellite offerings. Accordingly, when the Royalty Board set rates for Music Choice’s offerings, it excluded its internet transmissions from the more favorable grandfathered rate.

Music Choice appealed, and the DC Circuit reversed the Royalty Board. The Court found nothing in the DMCA that required that the definition of “service” categorically exclude internet transmissions. As long as the entity existed as of July 31, 1998 (as Music Choice undisputedly did), internet transmissions could be eligible for the grandfathered rate so long as such transmissions were in the medium in existence on that date. The Court found that nothing in the clear and broad statutory definition of “transmission medium” excluded internet transmissions. The Court also concluded that the structure of the DMCA supported such a conclusion, because in other places it distinguished between particular types of transmissions, whereas in the grandfathered copyright rate at issue, the statute used language capturing all types of transmissions available before the key date.

Having concluded that the Royalty Board wrongly excluded internet transmissions per se, the DC Circuit remanded to the Board to consider “the extent to which Music Choice’s current internet offerings can be fairly characterized as included in the service offering Music Choice provided on July 31, 1998.”

Practice Note: It remains to be seen how narrowly the Royalty Board will define the service offered by Music Choice as of July 31, 1998. Regardless of what the Board finds, this case [...]

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Use of Infringing Product, Misappropriated Trade Secrets May Continue—for a Licensing Fee

by | Sep 3, 2020 |

The US Court of Appeals for the Sixth Circuit affirmed a district court’s stay of a permanent injunction against copyright infringement and trade secret misappropriation, permitting the infringer to continue use of an infringing product and misappropriated trade secrets but requiring the infringer to pay a licensing fee. ECIMOS, LLC v. Carrier Corp., Case Nos. 19-5436, -5519 (6th Cir. Aug. 21, 2020) (Boggs, J.).

Carrier sold HVAC systems. ECIMOS designed and sold a quality-control-testing system that assessed each HVAC unit at the end of Carrier’s assembly line. ECIMOS’s system consisted of a software program, associated hardware and a database that stored results of runtests performed by the system. Carrier paid ECIMOS to maintain and periodically upgrade its software system. ECIMOS licensed Carrier to use the system but prohibited unauthorized copying, distributing or creating derivative works based in whole or in part on the software.

Years into the relationship, ECIMOS upgraded its software to run on a new operating system. ECIMOS expected Carrier to agree to the proposed upgrade just as it had done previously. Unbeknownst to ECIMOS and without its consent, Carrier had already installed ECIMOS’s software directly onto the new operating system. Carrier started a venture with a third party, Amtec, to develop a new quality-control software and storage database to replace the ECIMOS system.

ECIMOS sued Carrier for violating the copyright on the ECIMOS system’s database, breaching the parties’ software-licensing agreement and misappropriating ECIMOS’s trade secrets. At trial, ECIMOS alleged that Carrier improperly shared ECIMOS’s copyrights and trade secrets with Amtec, allowing Amtec to develop a competing system. The jury agreed, finding that the competing system incorporated ECIMOS’s trade secrets. The jury determined that Carrier infringed the copyright on ECIMOS’s runtest database script source code, that ECIMOS held a trade secret in its software source code and its assembled hardware drawings and wiring diagrams, and that Carrier misappropriated those trade secrets by sharing them with Amtec. The jury awarded ECIMOS copyright and contract damages.

The district court also imposed a permanent injunction against Carrier’s use of the infringing Amtec database, but stayed the injunction until Carrier developed a noninfringing database. The court also enjoined Carrier from further disclosure of ECIMOS’s trade secrets, but did not enjoin Carrier from using those trade secrets. To the contrary, the district court appointed a special master to supervise the redesign and permitted Carrier to continue using the infringing database that incorporated ECIMOS’s trade secrets until the redesigned system was complete. The district court further required Carrier to pay ECIMOS the licensing fees that ECIMOS would have charged in the course of an ongoing, mutually agreeable licensing relationship. ECIMOS objected to the stay and appealed.

ECIMOS argued that the stay was an abuse of discretion, that the injunction should have prohibited Carrier from using (not just disclosing) ECIMOS’s trade secrets, and that the injunction should have prohibited Carrier’s disclosure and use of ECIMOS’s assembled hardware, not just the hardware drawings and wiring diagrams. The Sixth Circuit disagreed, affirming in full the district court’s [...]

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Liability for Copyright Infringement Attaches if Conduct Exceeds Scope of License

by | Sep 2, 2020 |

The US Court of Appeals for the Ninth Circuit revived a software owner’s copyright infringement suit because the district court erred in granting summary judgment of no infringement by failing to analyze whether the accused infringer exceeded the scope of a copyright license. Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company, Case No. 19-15506 (9th Cir. Aug. 20, 2020) (Smith, J.).

Oracle owns registered copyrights for Solaris software, including copyrighted software patches. Oracle requires its customers have a prepaid annual support contract, for each server they desire to be under support, to access the software patches. Customers under a support plan can access patches through an Oracle support website.

Hewlett Packard Enterprise (HPE) provides a “one-stop-shop” for support to its customers, including HPE servers running Solaris. HPE provides this support directly and through its partners. One of HPE’s partners is Terix Computer Company. Terix arranged for joint HPE-Terix customers to have Oracle support for all of their servers through a single server support plan. Terix accomplished this by downloading Solaris software patches, using the customer’s credentials (created using a Terix-supplied credit card), to make copies for servers that were not part of the support contract.

In 2013, Oracle sued Terix for copyright infringement. The court granted Oracle summary judgment, and Terix stipulated to a judgment on the claims without admitting liability. Oracle and HPE entered into an agreement, effective May 6, 2015, to toll the statute of limitations for any claims Oracle might assert against HPE.

In 2016, Oracle sued HPE for direct copyright infringement concerning HPE’s direct support customers, and for indirect infringement concerning joint HPE-Terix customers. Oracle also sued for claims of intentional interference and unfair competition under California state law. The parties did not dispute that the tolling agreement applied, so the court considered whether the copyright infringement claims were barred for conduct before May 6, 2012. The Copyright Act provides that a copyright infringement claim is subject to a three-year statute of limitations, which runs separately for each violation. Under Ninth Circuit law, a copyright infringement claim begins to accrue “when a when a party discovers, or reasonably should have discovered, the alleged infringement.” Importantly, actual or constructive knowledge triggers the statute of limitations. The Ninth Circuit has explained that suspicion of copyright infringement places a duty on the copyright holder to investigate further into possible infringement or lose the claim.

Oracle conceded that it had concerns about Terix and suspicions about HPE as early as 2010, but argued that HPE used fraudulent means to keep Oracle unaware of its actions, so it had no duty to inquire. The district court disagreed, finding that once Oracle had constructive knowledge, the doctrine of fraudulent concealment was no longer an option to toll the limitations. Because Oracle failed to investigate HPE, the court determined that HPE was entitled to summary judgment on the infringement claims for pre-May 6, 2012, conduct. Oracle appealed.

The Ninth Circuit explained that to prove indirect infringement, Oracle had to show that [...]

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Bugs in Space? Star Trek Plotline Does Not Infringe Tardigrade Video Game

by | Aug 27, 2020 |

The US Court of Appeals for the Second Circuit affirmed a district court’s pleadings-stage determination that certain Star Trek: Discovery characters and plotlines did not infringe copyrighted elements of a video game because there was not substantial similarity between protectible elements of the video game and the Discovery episodes. Abdin v. CBS Broad. Inc., Case No. 19-3160 (Fed. Cir. Aug. 17, 2020) (Chin, J.).

Between 2014 and 2017, Plaintiff Abdin posted videos and draft designs online for his sci-fi video game, Tardigrade, a puzzle-based game in which the human protagonist can travel through outer space in the warm embrace of a gigantic blue tardigrade. Tardigrades, also known as water bears, are microscopic animals capable of withstanding extreme climates—including the harsh vacuum and radiation of space. After a 2007 research study confirmed tardigrades’ spacefaring abilities, they became somewhat of a pop culture phenomenon, being featured in numerous literary works and television shows. In June 2018, Abdin registered a copyright for a distillation of his video game concept.

In the latest installment of the Star Trek series, the 2017 season of Discovery features a three-episode storyline involving a creature called Ripper that resembles a giant tardigrade. The crew of the USS Enterprise realizes that Ripper is able to act as a type of supercomputer to improve the performance of their space traveling equipment (the DASH Drive).

Abdin filed suit for copyright infringement against CBS in August 2018, alleging that the Discovery creators copied aspects of his video game, including space-traveling tardigrades. CBS filed a motion to dismiss, which was granted by the district court. The district court concluded that Abdin’s video game was not substantially similar to Discovery. Abdin appealed.

The Second Circuit reviewed the lower court’s dismissal de novo and affirmed the district court’s dismissal, finding that Abdin failed to plausibly allege substantial similarity between protectible elements of his video game and the Discovery episodes. The Court first looked to the two elements of a copyright infringement claim: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original. The Court explained that to satisfy the second element, Abdin must demonstrate that CBS actually copied Abdin’s work, and that a substantial similarity exists between CBS’s work and the “protectible” elements of Abdin’s work.

The Second Circuit identified three elements of Abdin’s video game that were not protectible under copyright law: facts and ideas, scènes à faire and generic character traits. First, the Court found that the scientific facts relating to tardigrades’ survivability are not copyrightable, and that Abdin’s idea of tardigrades moving through space was also unprotectible. While noting the distinction between an idea and its expression is elusive, the Court explained that Abdin’s space-traveling tardigrade was merely a generalized expression of a scientific fact. Second, the Court looked to whether any of Abdin’s otherwise protectible expressions were unprotected scènes à faire—indispensable “stock themes” in a given genre. The Court explained that space travel, supernatural forces and alien encounters are all generic themes that [...]

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Buzz-sawed: Give Copyright Credit or Face Statutory Damages, Fees, Costs

by | Aug 26, 2020 |

The US Court of Appeals for the Second Circuit affirmed a district court’s award of statutory damages where the defendant knowingly distributed a photograph without first getting permission to use the photograph. Gregory Mango v. BuzzFeed, Inc., Case No.19-446 (2nd Cir. Aug.13, 2020) (Park, J.).

Gregory Mango, a freelance photographer, sued BuzzFeed, an online media company, under the Digital Millennium Copyright Act (DMCA), for using one of his photographs in a news article without first obtaining his permission and crediting him. Mango asserted copyright infringement, alleging that BuzzFeed removed or altered the copyright management information (CMI), a violation under the DMCA. Mango sought statutory damages of $30,000 for his copyright infringement claim, $5,000 for his DMCA claim, and attorney’s fees. BuzzFeed argued that it could not be held liable under the DMCA because there was no evidence that it knew its conduct would lead to future, third-party infringement of Mango’s copyright.

The photo at issue was of Raymond Parker, who was the lead figure in a discrimination lawsuit filed by federal prosecutors in New York. The New York Post licensed the photo and published it, including Mango’s name in an attribution known as “gutter credit.” A few months later, BuzzFeed published an article about Parker and used Mango’s photo. The BuzzFeed journalist did not ask for permission to use the photo; instead, he listed the name of Parker’s attorneys’ law firm in the gutter credit. The journalist, a six-year veteran at BuzzFeed, had written more than 1,000 articles for the company, all of which included a photograph, and it was his custom to give credit to the photographers by “name or by photo outlet.” However, in this case, he asked the law firm for a photo of Parker but ultimately downloaded the photo from the New York Post website himself and attributed the photo to the law firm.

Prior to a bench trial, BuzzFeed stipulated to liability on the copyright infringement claim. The district court noted that under “Section 1202(b)(3) of the DMCA, plaintiffs must prove (1) actual knowledge … that CMI was removed and/or altered without permission and (2) constructive knowledge … that such distribution will induce, enable, facilitate or conceal an infringement.” The court found that Mango’s gutter credit constituted CMI and that BuzzFeed knew that the CMI had been removed and altered without permission, rejecting the journalist’s claims that he had believed he obtained permission and that BuzzFeed had reasonable grounds to know that such removal and distribution was infringement. The court found BuzzFeed liable on both claims and awarded Mango $8,750 in statutory damages and $65,132 in attorney’s fees. BuzzFeed appealed.

The Second Circuit determined that the district court correctly applied the DMCA in the case, finding that the journalist had distributed Mango’s photo knowing that his gutter credit had been removed or altered without Mango’s permission and distributed it with a gutter credit of the law firm, knowing that doing so would conceal that he did not have permission to use the photo.

BuzzFeed argued [...]

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Copyright Board Ordered to Take a New Look at Streaming Services Rate Structure

by | Aug 26, 2020 |

Reversing the Copyright Royalty Board’s (Board) determination of a revised rate structure governing musical works, the US Court of Appeals for the District of Columbia Circuit concluded that the Board reached a final structure without providing adequate notice. George Johnson v. Copyright Royalty Bd., Case No. 2019-1028 (D.C. Cir. Aug. 7, 2020) (Millett, J.).

Every five years, the Board holds a proceeding to determine the royalty rate and terms for reproducing and distributing musical works, where interested stakeholders are permitted to present evidence and argument. At issue in Johnson is the Board’s decision, made after a five-week evidentiary hearing, setting the compulsory rate for the right to reproduce and distribute recordings of copyrighted musical works, known as a mechanical license, through streaming services for the period of January 1, 2018, to December 31, 2022.

Before the Board’s determination, depending on the type of service provided, the service provider owed a royalty based on a formula that considered two factors: (1) the service provider’s revenue associated with the particular offering, known as the “revenue prong,” and (2) the royalties paid by the service provider to sound recording copyright holders, known as the “total content cost prong.” For some streaming service offerings, the royalty was subject to a mechanical floor, and for some, the total content cost prong was subject to a cap. The Board’s final determination uncapped the total content cost prong and decided to phase in, for all categories over five years, a 15.1% revenue rate and a 26.2% total content cost rate, both higher than prior rates. Streaming services Amazon, Google, Pandora and Spotify, along with copyright owners and pro se songwriter George Johnson, appealed various aspects of the ruling.

On appeal, the challenges ran the gamut of administrative arguments: among others, that the Board’s decision was improperly retroactive, that the Board failed to give proper notice before settling on the rate structure in its final determination and fixed rates arbitrarily and capriciously, that it rejected certain evidence without an adequate explanation, and that it made certain changes to its decision without statutory authority to do so.

Although the D.C. Circuit found most of these arguments unavailing, it was convinced of a few, warranting remand to the Board for further proceedings. Primarily, the Court concluded that the Board failed to provide proper notice that it would uncap the total content cost prong combined with a significant increase in the mechanical royalty license rate. Specifically, the Court held that the Board’s ultimate rate structure, while adopting pieces from various proposals (some of which were never even offered at or before the hearing), was not within the zone of reasonably contemplated outcomes. By eliminating the cap on total content cost for all categories and increasing the royalty rates, the mechanical royalty licenses would be subject to the copyright owners’ unchecked market power.

The D.C. Circuit found two other errors. First, the relevant stakeholders had a settlement history from which the Board could draw conclusions regarding an appropriate rate structure. Nonetheless, the [...]

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“Salacious” Content Doesn’t Bar Discovery in Copyright Infringement Suit

by | Jul 30, 2020 |

The US Court of Appeals for the District of Columbia Circuit preserved discovery options for copyright owners fighting online piracy when it reversed the district court’s refusal to allow a subpoena of an alleged online infringer’s internet service provider. The DC Circuit found that the district court abused its discretion by relying heavily on the copyright owner’s litigation history and the nature of its films rather than the relevant legal standards under the Federal Rules of Civil Procedure. Strike 3 Holdings, LLC v. John Doe, Subscriber Assigned IP Address 73.180.154.14 (DC Cir. July 14, 2020) (Rao, J.).

Strike 3 is a producer and online distributor of adult films. Like most of its industry peers, the company faces significant online piracy that is often facilitated by peer-to-peer file sharing. To combat this infringement, Strike 3 regularly files copyright infringement lawsuits against “John Doe” defendants based on the internet protocol (IP) address (and the associated physical address) tied to an online infringer’s illegal file sharing and downloads.

In 2018, Strike 3 filed a copyright infringement lawsuit against the IP address 73.180.154.14 John Doe subscriber located in the District of Columbia after the IP address was associated with 22 instances of infringement in the course of one year. To properly identify the defendant and serve the complaint, Strike 3 also filed a Rule 26(d)(1) motion seeking leave to subpoena Comcast, the subscriber’s internet service provider, for records identifying the John Doe IP address subscriber. But, in applying a multifactor balancing test adopted by the US Court of Appeals for the Second Circuit in Arista Records v. Doe, the district court denied Strike 3’s discovery motion on grounds that Strike 3’s need for the subpoenaed information was outweighed by defendant’s right to be anonymous, which the court found to be notably relevant given the risk of defendant misidentification and the “particularly prurient pornography” at issue.

On appeal, the DC Circuit acknowledged the district court’s broad discretion over the structure, timing and scope of discovery. In Strike 3’s case, however, the DC Circuit found that three aspects of the lower court’s analysis were an abuse of this broad discretion.

First, it was improper and “not supported by the relevant legal standards” for the district court to treat the pornographic content of Strike 3’s copyrighted works as relevant to its entitlement to early discovery. None of the supporting case law suggests that a potentially non-infringing defendant’s privacy interests vary depending on the content of the copyrighted work at issue. The Court warned that a plaintiff’s ability to defend its copyrights cannot turn on a court’s subjective view of the copyrighted material, and held that the content of a copyrighted work is per se irrelevant to a Rule 26(d)(1) motion seeking discovery to identify an anonymous infringer.

The district court’s second abuse of discretion was in its conclusion that, even if the discovery request was granted, Strike 3 could not “identify a copyright infringer who can be sued” for purposes of stating a plausible claim against the [...]

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Fifth Circuit Drills Down to Details in Drilling Database Disagreement

by | Jul 15, 2020 |

In a wide ranging opinion, the US Court of Appeals for the Fifth Circuit held that copying unimportant database schema from a proprietary database did not constitute infringement. The Court also held that where the technological measure that the defendant allegedly circumvented did not effectively control access to the work, there was no Digital Millennium Copyright Act (DMCA) violation. Moreover, the Court found error in not treating the defendant as the sole prevailing party on the copyright and DMCA claims for purposes of attorneys’ fees, notwithstanding plaintiff’s success on other claims. Digital Drilling Data Systems, LLC v. Petrolink Services, Inc., Case No. 19-20116 (5th Cir. July 2, 2020) (Duncan, J.).

Digital Drilling Data Systems (Digidrill) provides software used in oil drilling operations. Digidrill’s software collects data from underground sensors in order to help above-ground operators steer the drill. Digidrill’s systems compile the data into a database that is accessible through a variety of programs, including Digidrill’s DataLogger software. DataLogger includes a security feature that allows access only if a certain USB key is inserted in the computer running the software.

One of Digidrill’s competitors was Petrolink Services. Concerned about losing a large customer to Digidrill, Petrolink obtained a laptop running DataLogger along with the USB key. It soon realized that the database storing the data used by DataLogger was accessible without the USB key. Because Digidrill had not changed certain default settings, all that was required to gain access was a commonly known default administrator username and password. Petrolink then designed a program to copy data from the Digidrill database, including relevant portions of the database schema.

Digidrill sued Petrolink for copyright infringement, DMCA violation and unjust enrichment. The district court entered summary judgment against Digidrill on its copyright infringement and DMCA claims. The district court allowed the unjust enrichment claim to go to trial, where the jury awarded damages to Digidrill. Petrolink then sought fees and costs as a prevailing party under the Copyright Act and DMCA, which the district court denied because both parties had prevailed on some claims. Both parties appealed.

The Fifth Circuit affirmed the summary judgment against Digidrill on its copyright and DMCA claims. As for the copyright claim, the Court cited its own precedent and noted that “[T]o prove copyright infringement, a plaintiff must establish (1) ownership of a valid copyright; (2) factual copying; and (3) substantial similarity.” The only element at issue here was the third prong, substantial similarity.

Digidrill contended that even though Petrolink copied only 5% of DataLogger’s copyrighted schema, a reasonable trier of fact might nevertheless have found substantial similarity due to the “qualitative importance” of that small copied portion. The Fifth Circuit rejected Digidrill’s qualitative importance argument, concluding that there was no record evidence establishing the importance of the copied schema to the DataLogger program as a whole. Thus, “[W]hile the question of substantial similarity typically should be left to the factfinder, summary judgment may be appropriate if the court can conclude . . . that no reasonable juror [...]

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