Opinion
Case No. 6:00-cv-896-Orl-31KRS
April 24, 2001
ORDER
This cause comes before the Court on Plaintiff's Motion and Memorandum for Partial Summary Judgment on the Issue of Copyright Validity (Doc. No. 67, filed February 5, 2001); Defendants' Response to Plaintiff's Motion for Partial Summary Judgment on the Issue of Copyright Validity and Counter-Motion for Partial Summary Judgment and Memorandum of Law (Doc. No. 75, filed March 1, 2001); and Plaintiff's Opposition to Defendants' Motion for Summary Judgment (Doc. No. 83, filed April 1, 2001). Upon review of the record and briefs of counsel, the Court concludes that the Plaintiff is entitled to summary judgment as a matter of law on the issue of copyright validity.
I. BACKGROUND
The information contained in the Background section was largely obtained from this Court's prior Order Denying Plaintiff's Motion for a Preliminary Injunction (Doc. No. 30, filed September 6, 2000). A full transcript of the hearing, relied on almost exclusively by the parties' in support of summary judgment, may be found in the record at docket number 31.
Plaintiff, Superchips, Inc., ("Superchips") makes and sells computer chips designed to enhance the performance of automobile engines. The manufacturing process is common to the industry and may be summarized as follows: Automobile engines are controlled by on-board computers that regulate various parameters including maximum speed, fuel usage, and shift points. The engine computer needs two things to function: a software program and a data table. A data table contains predetermined, factory-set values that the software program reads and acts upon to control the engine.
Superchips undertakes dynamic testing of automobile engines to determine optimum performance characteristics unique to a specific engine. Superchips downloads a factory-set data table to its own computer, changes a number of values within the data table, uploads the modified data table to a computer chip, and places the chip inside a "module" designed to attach to engine computers. By changing the values within the data table, Superchips changes the fuel curve, engine timing, transmission shift points, and response time to achieve optimum performance levels. Superchips does not write a new computer program; it only adjusts the values in the data table. The architecture of the Ford computer program controls and limits the nature and extent of any adjustments.
At issue in this litigation is Superchips' modification of a copyrighted data table of the Ford Motor company.
Superchips markets over 2,000 lines of its automotive computer modules containing the computer codes and sells the computer modules retail, directly out of its place of business, and through authorized dealers. Consumers may then purchase modules with chips designed to achieve particular results for their specific automobile (e.g., higher maximum speed, more horsepower, etc.). When attached to the engine computer, the module effectively disables the factory data table and instructs the computer to use the module's data table instead. In industry parlance, data tables are known as "codes."
In 1997, Superchips entered into a joint venture with Defendant Street Performance Electronics, Inc. ("S P"). In addition to distributing Superchips' modules, S P purchased from Superchips the equipment required to create its own codes and paid Superchips for instruction on how to use it. Over the next few years, the parties collaborated to create and test many new codes through a process of trial and error. In February 2000, the parties' relationship ended when Superchips terminated Defendant's distribution rights and access to Superchips' codes.
In May 2000, a third party allegedly gave Superchips a module that it acquired from Defendant Bully Dog. After downloading and reviewing the code from the subject module, Superchips determined that it was identical to its XLE4HORS code which was designed for Ford automobiles. In June 2000, Superchips submitted a copyright application for its XLE4HORS code. Upon receipt of the application, an Examiner in the Literary Section of the Copyright Office requested confirmation that the object code deposit contained copyrightable authorship and advised Superchips that any registration would be issued under the rule of doubt. (Doc. No. 75, Ex. B at 8-9). In response, Superchips informed the Examiner that the deposit contained "hex code" rather than "object code" and that registration should therefore not be issued under the rule of doubt. (Id. at 7-8). Despite this assertion, however, the Examiner later confirmed by letter that the registration of the XLE4HORS was issued under the rule of doubt. (Id. at 10).
Superchips submitted a redacted copy of the code as part of its application, ostensibly to protect its trade secrets. The unredacted portions of the code consist primarily of the original Ford factory code.
Shortly after Superchips' copyright issued on June 20, 2000, it filed this action alleging claims for copyright infringement and theft of trade secrets. All parties now move for partial summary judgment on the issue of copyright validity. Specifically at issue is whether Superchips is the sole owner of the copyrighted material and whether the material has a sufficient modicum of originality to merit copyright protection.
II. ANALYSIS A. Summary Judgment Standard
Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The party moving for summary judgment bears the initial burden of "identifying those portions of the record that demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). An issue of fact is material if it is a legal element of the claim, as identified by the substantive law governing the case, such that its presence or absence might affect the outcome of the suit. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue of fact is genuine if the record taken as a whole could lead a rational trier of fact to find for the nonmoving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
Once the moving party meets this initial burden of demonstrating the absence of a genuine issue of material fact, summary judgment is then appropriate as a matter of law against the nonmoving party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. "In making a sufficient showing, the nonmoving party must go beyond the pleadings and by affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial." Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th Cir. 1992) (internal quotations and citations omitted). If, viewing the evidence in the light most favorable to the nonmoving party, a rational trier of fact could return a verdict in favor of the nonmoving party, summary judgment is inappropriate. See Celotex, 477 U.S. at 252.
B. Copyright Infringement
Defendants argue that the XLE4HORS computer module is not entitled to copyright protection for two reasons. First, Defendants claim that the changes made to the Ford program were not sufficiently original to support a valid copyright. Second, Defendants assert that there is a genuine issue of material fact on the issue of ownership. Resolution of these issues begins with an analysis of the law of copyright, particularly with respect to the copyrightability of computer programs or codes.
1. Computer Programs
In Montgomery v. Noga, 168 F.3d 1282 (11th Cir. 1999), the Eleventh Circuit Court of Appeals set forth the basic principles of copyright law with respect to computer programs:
The Copyright Act of 1976, 17 U.S.C. § 101 et seq. (1994), provides protection for computer programs. The Act defines a computer program as "a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." 17 U.S.C. § 101 (1994). For original computer programs and other original works of authorship created after 1977, copyright automatically inheres in the work at the moment it is created without regard to whether it is ever registered. In order to bring an action for copyright infringement, however, the author must first register the copyright.Id. at 1288. (non-statutory internal quotations and citations omitted)
2. Proving Copyright Validity
In order to prevail on a copyright infringement claim, a plaintiff must prove "ownership of a valid copyright" and "copying of constituent elements of the work that are original." Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). Although the plaintiff in a copyright infringement action initially bears the burden of proving ownership of a valid copyright, a plaintiff may benefit from a rebuttable presumption of validity by producing a certificate of copyright registration. See Donald Frederick Evans Assoc., Inc. v. Continental Homes, Inc., 785 F.2d 897 (11th Cir. 1986). A copyright registration certificate constitutes prima facie evidence in favor of a plaintiff on the issue of originality and copyrightability of the subject matter. See id. Production of the certificate of registration will then shift the burden to the defendant to demonstrate that "the work in which copyright is claimed is unprotectable (for lack of originality) or, more specifically, to prove that . . . the copyrighted work actually taken is unworthy of copyright protection." Montgomery v. Noga, 168 F.3d at 1289 (quoting Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1541 (11th Cir. 1996)
There is, however, an exception to this general framework of shifting burdens on the issue of copyright validity for registration certificates issued under the so-called "rule of doubt." The Copyright Office utilizes its rule of doubt for submissions of computer programs in machine readable code form because its examiners cannot interpret such a code to determine if there has been copyrightable authorship. Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d Cir. 1983), cert. dismissed, 464 U.S. 1033 (1984); Compaq Computer Corp. v. Procom Tech., Inc., 908 F. Supp. 1409 (S.D. Tex. 1995). Accordingly, plaintiffs who produce registration certificates issued under the rule of doubt do not benefit from a rebuttable presumption of copyright validity and retain the burden of proving that issue throughout the case.
Program code for a computer is written in two forms — object code which is machine readable and source code which is readable by humans. See Quinn v. city of Detroit, 988 F. Supp. 1044, 1054 (E.D. Mich. 1997).
In the instant case, Superchips maintains that whether the registration certificate was properly issued under the rule of doubt is a fact in dispute. The letter from the Copyright Examiner, however, clearly states that the registration certificate was issued under the rule of doubt because Superchips chose to use object code on the application form. Therefore, the Court concludes that Superchips is not entitled to a presumption of validity from its registration certificate, and the burden of proof remains with Superchips to support its claim of a valid copyright.
Even if the dispute as to this issue were genuine and material, the Court would nevertheless be obligated to construe this fact in favor of the Defendants as the parties against whom partial summary judgment is entered.
The Examiner's letter states in pertinent part:
Based on your statement confirming that the object code listing deposited for this work contains copyrightable authorship, we have proceeded with registration . . . Since you preferred to deposit the work in object code alone, we have followed our usual practice and completed registration under the "rule of doubt."
(Doc. No. 75, Ex. B at 10).
3. Nature of the Work
Under the Copyright Act, the nature of the work determines the level of copyright protection it receives. See Warren Publ'g, Inc. v. Microdos Data Corp., 115 F.3d 1509, 1515 n. 16 (11th Cir. 1997). Creative works are entitled to the most protection, followed by derivative works, and finally by compilations. See id. Here, Superchips contends that its computer module is a derivative work while Defendants assert that the module is an unoriginal compilation of facts. A derivative work is "[a] work consisting of editorial revisions, annotations, elaborations, or other modifications [to a preexisting work] which, as a whole, represent an original work of authorship. . . ." 17 U.S.C. § 101. A work will not be deemed derivative unless it has copied substantial portions from a prior work. See 1 Melville B. Nimmer David Nimmer, Nimmer on Copyright § 3.01 (1999) [hereinafter Nimmer]. If it satisfies the requirements of originality, a derivative work qualifies for a separate copyright, but copyright protection does not extend to preexisting material used in the derivative work. See Montgomery v. Noga, 168 F.3d at 1290.
Section 103(a) of the Copyright Act also provides protection for compilations. A compilation is "a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. . . ." 17 U.S.C. § 101. While a derivative work is derived from pre-existing matter capable of copyright protection, a compilation is a combination of facts or data that are not otherwise capable of copyright protection. See Nimmer § 3.02.
In the Court's view, Superchips' computer module is more appropriately identified as a derivative work than a compilation. Although Superchips admits that it used Ford's copyrighted program in creating its product, Superchips has significantly altered the program to achieve optimum performance from a specific automobile engine. Even if the Court concluded, as Defendants urge, that the XLE4HORS chip is a compilation of raw data, that finding alone would not be dispositive of the issue of copyright validity. Copyright protection is available for both derivative works and compilations alike, provided the work or compilation displays sufficient originality to qualify as an "original work of authorship."See Matthew Bender Co., Inc. v. West Publ'g Co., 158 F.3d 674 (2d Cir. 1998). Thus, originality, and not the nature of the work, is the gravamen of copyright protection.
4. Originality
As stated supra, copyright protection exists only in "original works of authorship." 17 U.S.C. § 101 et seq. "With regard to the requirement of originality, all that must be shown is that the work `possesses at least some minimal degree of creativity . . . To be sure, the requisite level of creativity is extremely low; even a slight amount will suffice.'" Montgomery v. Noga, 168 F.3d at 1290 (quoting Feist, 499 U.S. at 345). Generally, in determining whether a derivative work has the necessary quantum of originality to qualify for copyright protection, courts consider whether there is a distinguishing variation between the derivative and underlying work and whether that variation is more than "merely trivial." Sherry Mfg. Co. v. Towel King of Fla., Inc., 753 F.2d 1565, 1568 (11th Cir. 1985).
In support of its contention that its computer chip is an original work of authorship and not a mere mechanical arrangement of facts, Superchips has submitted the declarations of David A. Workman, Ph.D. and Steven Madole. According to Mr. Madole, Superchips' code does not involve "merely changing a single lookup table value to increase performance." (Decl. of Steven Madole, Doc. No. 85 at ¶ 3). Rather, Mr. Madole details the substantial ingenuity and skill involved in creating the computer chips at issue:
Mr. Workman is an Associate Professor of Computer Science at the University of Central Florida, School of Electrical Engineering and Computer Science. (Workman Decl., Doc. No. 84 at ¶ 1). Mr. Madole, who is Superchips' Chief Engineer, has worked as a computer design engineer for over 20 years. (Madole Decl., Doc. No. 85 at ¶ 1).
The look-up tables are numerous and control different aspects of the automobile. Look-up tables control such things as intake runner manifold control, rate of acceleration control, speed control, RPM control, power delays, power reductions, solenoid operations, solenoid control for waste gates, ignition timing and fuel control, among others. When Superchips tunes a car, it alters some or all of the variables, depending on the output desired. Each tuning design is for a specific application, such as high performance or increased horsepower. As we tune, we must take into consideration a myriad of factors, including engine tolerances, fuel efficiency and the interplay between each of the controlled elements . . . [N]o two tuners would "tune" or write the programs in exactly the same way, despite attempting to achieve the same end result.
(Id. at ¶ 4).
Notably, the Defendants did not submit any affidavits, declarations, or other evidence to refute the conclusions of Superchips' experts on the issue of originality. Instead, Defendants maintain, through bare allegations and arguments of counsel, that because Superchips' adjustments to the data tables occur within the parameters of the original Ford computer program, such effort does not demonstrate the minimal degree of creativity required to warrant copyright protection. Although Defendants dispute that the creation of computer chips for the tuning of specific automobile engines is original, the testimony of S P's owner, John Boveia, belies this assertion. Indeed, Mr. Boveia's testimony reveals that S P actively promotes its own chips as superior in terms of performance, thereby portraying the computerized tuning of automobiles as a creative skill. (Doc. No. 31 at 96-97).
In opposition to summary judgment on the issue of originality, Defendants rely entirely on the testimony given at the preliminary injunction hearing.
Furthermore, in support of its position that performing code changes to a tuning chip is a unique and original expression, Superchips has also provided the Court with advertisements from a competitor's website:
[T]he performance of the DiabloChip is unsurpassed . . . [T]he DiabloChip radiates superior performance and quality on every level . . . The DiabloChip is a state-of-the-art high performance tuning chip, which advances the timing, optimizes the air/fuel ratio and remaps the transmission shift points (in automatic transmissions) Unlike other "tuners," DiabloSport's programming is performed in very small increments throughout the entire RPM range, for a smoother, wider and a more predictable power delivery.
DiabloSport website, www.diablosport.com/prodocts ford chip.htm, (Ex. to Doc. No. 83 at 3).
As Defendants have failed make a sufficient showing to establish a genuine issue of material fact on the issue of originality, that issue is ripe for summary disposition. The Court concludes from the record that Superchips' act of changing numerical values in Ford's data table to achieve optimum engine performance is not one which is "so mechanical or routine as to require no creativity whatsoever." Feist, 499 U.S. at 362. Accordingly, Superchips has met its burden of showing that the modifications it made to the Ford program were sufficiently original to support a valid copyright.
Cf. Secure Serv. Tech., Inc. v. Time and Space Processing, Inc., 722 F. Supp. 1354, 1363 (E.D. Va. 1989) (finding that facsimile machine manufacturer was not entitled to copyright protection for its minor reordering or variance of binary signals in machine's "handshake protocol" because the manufacturer was able to make only minor changes which did not require significant choice or selection but were dictated by the need to communicate with other machines).
5. Ownership
In addition to showing originality, a plaintiff must also prove ownership to prevail on a copyright claim. See Feist, 499 U.S. at 361. To establish an ownership interest in the copyright, the plaintiff must show personal authorship, a transfer of rights, or some other relationship between the author and the plaintiff evidencing ownership. See Bell v. Combined Registry Co., 397 F. Supp. 1241 (N.D. Ill. 1975). Superchips claims that its engineers designed and developed the copyrighted computer code and that S P has no ownership interest in it. S P. on the other hand, claims that the copyrighted work is a product of joint authorship because the parties "jointly contributed to the data field adjustments" and "freely shared information and jointly worked on projects." (Def's Resp. to Mot. for Summ. J., Doc. No. 75 at 18). In support of this claim, S P relies on the testimony of its owner, John Boveia, who testified at the preliminary injunction hearing. The transcript, however, does not support S P's contention that it co-authored the XLE4HORS code. At the hearing, Mr. Boveia testified that S P helped Superchips design most of the menus used in the creation of their programs. (Doc. No. 31 at 84-88). However, when questioned specifically concerning S P's contribution to the development of the XLE4HORS code, Mr. Boveia testified that he was not certain that S P had aided Superchips in the code's development. Therefore, S P has failed to demonstrate that a genuine issue of material fact exists on the issue of ownership which would defeat summary judgment.
At the preliminary injunction hearing, Steven Madole, Chief Engineer for Superchips, testified that S P has no proprietary interest in Superchips' computer programs:
Q. Are only authorized users allowed to descramble the [Superchips] program?
A. Right. Only authorized users have our software to use.
Q. Is Street Performance an authorized dealer?
A. They were at one time.
Q. Are they now?
A. No, they're not.
Q. Are they authorized to use your program?
A. Not now.
Q. Do they own your program?
A. No, they don't.
(Doc. No. 31 at 30).
Employing statistical guesswork and sweeping generalities, Mr. Boveia testified:
A. [W]e helped [Superchips] design many, many, many — in fact, 90 percent-plus of all the menus that they used for two solid years from all the Ford programs came from us (sic). . . .
Q. Would that apply to the XLE Ford program that's at issue?
A. I can't specifically say yes because, like I said, it wasn't a hundred percent. I would say it was 90 percent. In all probability . . . and as I understand it, yes, it was . . . Now, the one that we re in court over, I have never seen. We don't know where it came from . . . This module that [Superchips] read in and supplied to the Court never came from our company.
(Doc. No. 31 at 88).
III. CONCLUSION
The Court concludes that the issue of copyright validity is appropriate for summary determination as a matter of law. Based upon the record evidence before the Court, the Court finds that Superchips' development of the XLE4HORS computer chip involved a sufficient quantum of originality to be entitled to copyright protection and that Superchips has demonstrated that it alone has ownership rights in the chip. Accordingly, it is
ORDERED and ADJUDGED that:
(1) Plaintiff's Motion for Partial Summary Judgment on the Issue of Copyright Validity (Doc. No. 67) is GRANTED;
(2) Defendants' Counter-Motion for Partial Summary Judgment on the Issue of Copyright Validity (Doc. No. 75) is DENIED.DONE and ORDERED