Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 1 of 41
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF KANSAS
`
`
`ENERGY INTELLIGENCE GROUP, INC.
`and ENERGY INTELLIGENCE GROUP
`(UK) LIMITED,
`
`
`
`
` vs.
`
`CHS McPHERSON REFINERY, INC.
`(F/K/A A NATIONAL COOPERATIVE
`REFINERY ASSOCIATION),
`
`
`
`
`
`
`
`
`
`
`Plaintiffs,
`
`Defendant.
`
`
`
` Case No. 16-1015-EFM-GLR
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`
`
`
`
`
`MEMORANDUM AND ORDER
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`Plaintiffs Energy Intelligence Group, Inc., and Energy Intelligence Group (UK) Limited
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`
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`(collectively “EIG”) have sued CHS McPherson Refinery, Inc. (“the Refinery”) for copyright
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`infringement. There are four motions pending before the Court. The Refinery has moved for
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`partial summary judgment (Doc. 52) seeking to limit EIG’s claims based on the three-year statute
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`of limitations and seeking to limit EIG’s request for statutory damages. In response to this motion,
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`EIG has filed a cross-motion for summary judgment (Doc. 67) regarding EIG’s statutory damages
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`request. In addition, EIG has moved for partial summary judgment (Doc. 100) seeking to dismiss
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`the Refinery’s affirmative defenses and has filed a Motion Challenging the Admissibility of Expert
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`Report and Testimony of William Rosenblatt (Doc. 86). For the reasons stated below, the Court
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 2 of 41
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`denies the Refinery’s motion for partial summary judgment, grants EIG’s cross motion for
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`summary judgment, grants in part and denies in part EIG’s motion for partial summary judgment,
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`and grants EIG’s motion to exclude the expert testimony and report of Rosenblatt.
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`I.
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`Factual and Procedural Background
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`A.
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`EIG’s Publications and Copyright Registrations
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`
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`EIG sells subscriptions to many publications, two of which include Oil Daily and
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`Petroleum Intelligence Weekly. EIG sells at least three types of subscriptions to its publications:
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`(1) a single subscription; (2) multiple subscriptions; and (3) a Global Enterprise License, which
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`includes up to 15 publications and six databases. In addition to its subscriptions, EIG allows
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`readers to access individual articles or issues on a pay-per-view basis.
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`
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`Within EIG, account managers are required to make periodic calls on their assigned
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`accounts to, among other things, look for opportunities to increase the number of subscriptions an
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`individual or company might hold. Account managers are assigned to both large and small
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`accounts. One of EIG’s account managers who specializes in small accounts is Derrick Dent.
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`Dent managed the Refinery’s account with EIG beginning in 2009.
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`
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`Since 2006, Deborah Brown—an account services manager at EIG—has filed EIG’s
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`copyright applications with the U.S. Copyright Office. During that time, EIG registered Oil Daily
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`using Form G/DN. From 2006 to 2008, Brown checked the “Compilation” box in the “Author’s
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`Contribution” section of Form G/DN, as well as the “text” and “editing” boxes in the group
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`applications. In 2008, she stopped checking the “Compilation” box but continued checking the
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`“text” and “editing” boxes. From 2004 to 2016, EIG registered Petroleum Intelligence Weekly as
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`a collective work using Form SE/Group.
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 3 of 41
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`B.
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`
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`EIG’s Copyright Enforcement
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`EIG began enforcing its copyrights and pursuing potential copyright infringement litigation
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`around 2005. At that time, EIG’s president, Tom Wallin, proposed copyright enforcement as a
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`potential revenue stream, comprised of both legal settlement and improved subscription revenues
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`due to better compliance by subscribers. In 2007, EIG ramped up its copyright enforcement tactics
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`by issuing copyright notices on its publications, implementing new procedures for monitoring and
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`enforcing its copyrights, and running “password abuse” reports designed to “pick out users with
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`the most suspicious behavior.” When EIG uncovered information indicating infringement by its
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`large clients, EIG believed that it should pursue remedies for that infringement, including
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`litigation. This aggressive approach was supported by EIG’s board of directors and ownership.
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`
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`In 2010, EIG hired John Hitchcock as managing director. On February 23, 2010, he
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`emailed his team a memorandum “which represented[ed] a ratcheting-up of [EIG’s] efforts to
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`thwart copyright abuse.” In the memorandum, EIG rolled out its bonus plan, calling upon the
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`“sales force and customer service representatives to act as another line of defense in identifying
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`incidents of unauthorized use among [its] customers.” The plan required all documented
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`information of suspicious activity or direct evidence of unauthorized usage to be reported
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`immediately to Hitchcock. Under these policies, if management determines that there are
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`ambiguous circumstances as to whether unauthorized copying occurred, the account representative
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`is instructed to contact the customer and ask them to confirm the scope of their usage of EIG’s
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`publications.
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`
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`If an EIG salesperson reports suspicious behavior to management and EIG initiates a
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`lawsuit based on such reporting, then EIG pays that salesperson $5,000. If the lawsuit leads to a
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`settlement or court-ordered award, EIG then pays the salesperson an additional $5,000. Since
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 4 of 41
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`2005, EIG has vigilantly protected its copyrights and aggressively enforced them after discovering
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`overt evidence of infringement.
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`C.
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`The Refinery’s Subscription to Oil Daily and Petroleum Intelligence Weekly
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`
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`The Refinery purchased a subscription to Oil Daily beginning in 1992 and renewed it
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`annually until it allowed the subscription to expire on or around May 15, 2015. The Refinery
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`received Oil Daily by print delivery until 1999 when it elected to receive it electronically. EIG
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`directed its subscription renewals to Galen Menard, who was the Refinery’s Vice-President of
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`Supply & Trading. Refinery employee LeAnn Flickinger, who was Menard’s assistant, received
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`the publication through an email sent by EIG with the publication attached. Flickinger forwarded
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`the email with the attached publication to Menard and other Refinery employees daily.
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`
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`The Refinery first subscribed to Petroleum Intelligence Weekly in 1982 and renewed it
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`annually until it allowed the subscription to expire on or around June 13, 2016. The Refinery
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`received the publication by print delivery until approximately 2002 when EIG moved from print
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`delivery to electronic delivery. From 2005 to 2011, EIG directed its renewal subscriptions to
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`Refinery employee Kathy Swanson. Swanson served as an assistant to James Loving, who was
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`the Refinery’s president. Swanson downloaded issues of Petroleum Intelligence Weekly and
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`distributed it to multiple Refinery employees including Loving. When Swanson retired in June
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`2012, her responsibilities regarding the publication were assumed by Deborah Ratzloff.
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`
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`Both Oil Daily and Petroleum Intelligence Weekly contained copyright notices and
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`warnings. In addition, EIG included a copyright notice and warning on the weekly emails it sent
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`notifying the Refinery that a new issue was available.
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`D.
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`Communications between the Refinery and EIG
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`On September 25, 2007, Menard sent an email to Loving, which stated:
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 5 of 41
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`The Oil Daily is produced by the same company as Energy [sic] Intelligence
`Weekly. Please note the copyright pronouncement below for the Energy
`Intelligence Group.
`
`We will need to discontinue the e-mailing of the Oil Daily until a decision is made
`as to our subscription and the cost of retaining service to the list that currently
`receives the publication.
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`
`Five months later, on February 26, 2008, Flickinger emailed 11 Refinery employees, including
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`Menard and Loving, stating: “I will no longer be forwarding the Energy Oil Daily report out every
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`morning due to Energy Oil Daily’s copyright policy.” That same day, in response to an inquiry
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`from a Refinery employee about Oil Daily’s ongoing availability, Menard told the employee that
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`he was going to attempt to negotiate with EIG regarding a group discount and that he would make
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`sure copies were available until the situation was resolved.
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`
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`The following day, on February 27, Menard emailed EIG Customer Service indicating that
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`he would like to discuss the costs associated with adding up to 10 users within the Refinery for Oil
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`Daily. EIG responded with a pricing schedule that indicated that five users would cost $7,863.00
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`annually and that 10 users would cost $14,708 annually. Menard then notified the Refinery
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`employees of the quoted prices and stated that he was reluctant to increase the Refinery’s
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`subscription because the prices were “highway robbery.” Menard further stated that he would
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`continue to negotiate with EIG for better rates but that EIG did not seem interested in lowering its
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`prices.
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`
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`Menard followed up with EIG on April 2, and again on April 3, requesting pricing for two
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`or three additional users. On April 17, the Refinery received a renewal notice from EIG for its
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`subscription to Oil Daily. The Refinery renewed that subscription on May 12.
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`
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`Almost four years later, on the morning of March 27, 2012, Flickinger forwarded Oil Daily
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`to Menard and three other Refinery employees. Later that day, she spoke with EIG account
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 6 of 41
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`manager Derrick Dent about the Refinery’s subscription to Oil Daily. After their conversation, she
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`sent Dent the following email:
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`As per our phone conversation, the Energy [sic] Oil Daily is forwarded to Galen
`Menard by me and if he is out it is forwarded to one of the other executives. I get
`the email since Galen is out of the office on occasions and then someone else in the
`Executive office can see the information.
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`Pursuant to EIG’s copyright infringement policy, Dent reported this information to Hitchcock.
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`Two days later, on March 29, the Refinery renewed its Oil Daily subscription. The next day, Dent
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`sent the following email:
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`Thank you for your recent renewal to Oil Daily. You are one of your [sic] valued
`subscribers and we appreciate your business. This is just a gentle reminder to
`inform you that our publications are licensed for use by the named authorized user
`as provided in the license (subscription) agreement for their sole use and are priced
`accordingly. All single user subscriptions such as yours are intended solely for the
`designated named recipient and not anyone else or any entire organization or group
`within it. A single user subscription cannot be shared by electronic means among
`multiple readers by forwarding or posting on an intranet, or by sharing of a log-in
`name and password. If access is required by other beyond the current subscription
`agreement, a multiple named user subscription could be purchased.
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`No further action was taken by Dent or EIG. The Refinery did not stop forwarding Oil Daily or
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`Petroleum Intelligence Weekly after receiving this email until June 2015.
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`
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`Three years later, on or about March 27, 2015, Dent contacted Menard for a routine sales
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`call. During that call, Menard informed Dent that Flickinger distributed Oil Daily to himself and
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`Loving. Dent contacted Menard after the two had spoken stating:
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`I would like to make clear that the terms of our subscription agreement with [the
`Refinery] for the Oil Daily publication do not permit the kind of usage you
`described during our phone call. Electronic forwarding of the publication creates
`copies that violate the terms of the subscription agreement and our copyrights in
`the publication.
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`Nonetheless, Dent offered to discuss a license that would “be in keeping with the usage [the
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`Refinery] is making of Oil Daily.”
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 7 of 41
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`
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`Menard responded on March 31, apologizing for the misunderstanding and requesting a
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`quote for additional users. Dent did not respond to Menard’s email. After conferring with counsel,
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`EIG began to treat the Refinery’s use of Oil Daily as a copyright infringement matter. On or about
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`November 10, 2015, EIG pitched its “Global Enterprise License” to the Refinery.
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`E.
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`
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`EIG Files Suit against the Refinery
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`EIG filed this lawsuit against the Refinery on January 18, 2016, and filed an Amended
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`Complaint on August 16. EIG claims that the Refinery engaged in copyright infringement by
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`allegedly copying Oil Daily and Petroleum Intelligence Weekly and distributing copies of these
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`publications to multiple Refinery employees in violation of the subscription agreements. The
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`Refinery disputes these allegations and contends that EIG’s claims are limited or barred by the
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`following affirmative defenses: (1) the three year statute of limitations set forth in 17 U.S.C. §
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`507(b); (2) EIG’s failure to mitigate damages; (3) the doctrine of copyright misuse; (4) the doctrine
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`of implied license; (5) EIG has an adequate remedy at law; (6) EIG’s claims fail to state a claim
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`upon which relief may be granted; and (7) EIG’s claims for statutory damages violate the due
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`process requirements of the Fourteenth Amendment and/or Fifth Amendment.
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`
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`On July 17, 2017, the Refinery filed a motion for referral to the Register of Copyrights and
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`a concurrent stay on the grounds that EIG knowingly included inaccurate information in its
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`copyright applications for Oil Daily that, if known at the time of registration, would have caused
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`the Register of Copyrights to refuse registration. The Court denied the Refinery’s motion in a
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`Memorandum and Order dated January 17, 2018. It concluded that the Refinery did not meet its
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`burden to show that EIG included inaccurate information in its copyright applications or that even
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`if EIG did include inaccurate information, it did not do so with knowledge that it was inaccurate.
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`The Refinery has now moved for partial summary judgment seeking to limit EIG’s claim
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`based on the statute of limitations and its statutory damages request based on the number of
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`registrations obtained versus the number of publications the Refinery received. In response, EIG
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`filed a cross motion for summary judgment on the statutory damages issue. In addition, EIG has
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`filed a motion for partial summary judgment on the Refinery’s affirmative defenses two through
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`seven listed above and a motion challenging the admissibility of the report and testimony of
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`Rosenblatt—the Refinery’s designated expert. All of these motions are ripe for the Court’s
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`consideration.
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`II.
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`Legal Standard
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`
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`Summary judgment is appropriate if the moving party demonstrates that there is no genuine
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`issue as to any material fact, and the movant is entitled to judgment as a matter of law.1 A fact is
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`“material” when it is essential to the claim, and issues of fact are “genuine” if the proffered
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`evidence permits a reasonable jury to decide the issue in either party’s favor.2 The movant bears
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`the initial burden of proof and must show the lack of evidence on an essential element of the claim.3
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`If the movant carries its initial burden, the nonmovant may not simply rest on its pleading but must
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`instead “set forth specific facts” that would be admissible in evidence in the event of trial from
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`which a rational trier of fact could find for the nonmovant.4 These facts must be clearly identified
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`through affidavits, deposition transcripts, or incorporated exhibits—conclusory allegations alone
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`1 Fed. R. Civ. P. 56(a).
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`2 Haynes v. Level 3 Commc’ns, LLC, 456 F.3d 1215, 1219 (10th Cir. 2006).
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`3 Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 851 (10th Cir. 2003) (citing Celotex Corp. v. Catrett, 477
`U.S. 317, 322-23, 325 (1986)).
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`4 Id. (citing Fed. R. Civ. P. 56(e)).
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 9 of 41
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`cannot survive a motion for summary judgment.5 The Court views all evidence and reasonable
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`inferences in the light most favorable to the party opposing summary judgment.6
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`Though the parties in this case filed cross-motions for summary judgment, the legal
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`standard remains the same.7 Each party retains the burden of establishing the lack of a genuine
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`issue of material fact and entitlement to judgment as a matter of law.8 Each motion will be
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`considered separately.9 To the extent the cross-motions overlap, however, the court may address
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`the legal arguments together.10
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`III. Analysis
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`The Refinery’s Motion for Partial Summary Judgment (Doc. 52) and EIG’s Cross
`A.
`Motion for Summary Judgment (Doc. 67)
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`
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`The Refinery seeks partial summary judgment on two grounds. First, the Refinery seeks
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`summary judgment on EIG’s copyright infringement claims occurring before January 18, 2013,
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`arguing that these claims are barred by the statute of limitations. Second, the Refinery seeks
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`summary judgment on EIG’s claim that if it is liable for copyright infringement it is entitled to
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`statutory damages for each individual publication infringed from 2004 to 2016. EIG has filed a
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`cross motion for summary judgment on the statutory damages issue.
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`5 Mitchell v. City of Moore, 218 F.3d 1190, 1197 (10th Cir. 2000) (citing Adler v. Wal-Mart Stores, Inc., 144
`F.3d 664, 671 (10th Cir. 1998)).
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`6 LifeWise Master Funding v. Telebank, 374 F.3d 917, 927 (10th Cir. 2004).
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`7 City of Shawnee v. Argonaut Ins. Co., 546 F. Supp. 2d 1163, 1172 (D. Kan. 2008) (citation omitted).
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`8 United Wats, Inc. v. Cincinnati Ins. Co., 971 F. Supp. 1375, 1382 (D. Kan. 1997) (citing Houghton v.
`Foremost Fin. Servs. Corp., 724 F.2d 112, 114 (10th Cir. 1983)).
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`9 Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000).
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`10 Berges v. Standard Ins. Co., 704 F. Supp. 2d 1149, 1155 (D. Kan. 2010).
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`1.
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`Statute of Limitations
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`A claim for copyright infringement must be brought “within three years after the claim
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`accrued.”11 The Tenth Circuit has long applied the discovery rule of accrual in the copyright
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`context, meaning that the claim accrues when the copyright owner has “knowledge of a violation
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`or is chargeable with such knowledge.”12 The Supreme Court, however, recently discussed the
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`limitations period in Petrella v. Metro-Goldwyn-Mayer, Inc., in an opinion holding that the
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`equitable defense of laches does not apply to claims for copyright infringement brought within the
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`statute of limitations.13 In discussing the applicable statute of limitations, the Supreme Court
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`applied the incident of injury rule, meaning that the claim accrues when the infringement occurs.14
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`The Supreme Court acknowledged that a majority of circuits use the discovery rule and noted that
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`the Court has “not passed on the question,” but proceeded to analyze the case under the incident
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`of injury rule.15
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`
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`Since Petrella, district courts have wrestled with its implication on the use of the discovery
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`rule in copyright infringement cases. Many of the district courts who have examined Petrella have
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`concluded that the Supreme Court did not intend to abrogate the discovery rule in that case.16
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`11 17 U.S.C. § 507(b).
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`12 Diversey v. Schmidley, 738 F.3d 1196, 1200 (10th Cir. 2013) (quoting Roley v. New World Pictures, Ltd.,
`19 F.3d 479, 481 (9th Cir. 1994)).
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`13 Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962, 1969 (2014).
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`14 Id.
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`15 Id. n.4.
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`16 See, e.g., Design Basics, LLC v. Windsor Homes, Inc., 2017 WL 1836893, at *2-3 (N.D. Ind. 2017); Energy
`Intelligence Group, Inc. v. Scotia Capital (USA) Inc., 2017 WL 432805, at *1-2 (S.D.N.Y. 2017); Cooley v. Penguin
`Grp. (USA), Inc., 31 F. Supp. 3d 599, 611 n.76 (S.D.N.Y. 2014).
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 11 of 41
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`Furthermore, in a subsequent case, SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods.,17
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`the Supreme Court made the following statement regarding Petrella:
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`While some claims are subject to a discovery rule under which the limitations
`period begins when the plaintiff discovers or should have discovered the injury
`giving rise to the claim, that is not a universal feature of statutes of limitations. . . .
`And in Petrella, we specifically noted that we have not passed on the question
`whether the Copyright Act's statute of limitations is governed by such a rule.18
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`This statement appears to confirm that the Supreme Court has not determined whether the
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`discovery rule or the incident of injury rule applies when calculating the statute of limitations in a
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`copyright infringement case. Neither party in this case has addressed Petrella or its applicability.
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`Because this Court is bound to apply Tenth Circuit law, it will apply the discovery rule in this case.
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` A copyright infringement claim accrues when the copyright owner has actual knowledge
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`or constructive knowledge of the infringement.19 It is easy to determine the limitations period
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`when a copyright owner has actual knowledge. Accrual begins with the acquisition of that
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`knowledge and is determined based on the passage of time. 20 But, in the absence of actual
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`knowledge, the question becomes “when a reasonably prudent person in the plaintiff’s shoes would
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`have discovered (that is, would have acquired an awareness of) the putative infringement.”21 The
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`defendant bears the burden of proof in this “fact-intensive inquiry.”22
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`17 137 S. Ct. 954 (2017). SCA Hygiene presented a similar question to Petrella—whether the equitable
`defense of laches brought within a statute of limitations period is valid, but in the context of the Patent Act. Id. at 959.
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`18 Id. (citations omitted).
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`19 See Diversey, 738 F.3d at 1200 (stating that a claim accrues when the copyright owner has knowledge of
`a violation or is chargeable with such knowledge).
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`20 Warren Freedenfeld Assocs. v. McTigue, 531 F.3d 38, 44 (1st Cir. 2008).
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`21 Beidleman v. Random House, Inc., 621 F. Supp. 2d 1130, 1134 (D. Colo. 2008) (quoting Warren Freefield
`Assocs., 531 F.3d at 44).
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`22 Id.
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`EIG filed its Complaint on January 18, 2016. The Refinery argues that EIG cannot recover
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`damages for any act of infringement three years before this date, i.e. January 18, 2013, because
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`EIG knew or should have known of the Refinery’s alleged infringement at least as early as 2008
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`and at the latest in 2012. According to the Refinery, EIG had constructive knowledge that it was
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`forwarding Oil Daily in 2008 and it had actual knowledge that it was forwarding the publication
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`in 2012. The Refinery also asserts that EIG had constructive notice that the Refinery was
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`forwarding Petroleum Intelligence Weekly at least as early as 2012.
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`a.
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`EIG’s Knowledge of the Refinery’s Use of Oil Daily in 2008
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`
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`The Refinery argues that when EIG received an email from Menard in 2008 asking how
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`much it would cost to increase his subscription by ten, EIG, acting as a reasonably diligent plaintiff
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`under the circumstances, should have investigated the Refinery’s use of Oil Daily. The Refinery
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`seeks to hold EIG to a higher standard of care than a reasonably prudent person. The Refinery
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`contends that EIG has specialized knowledge about what constitutes copyright infringement due
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`to its enforcement efforts that it established in 2005 and that it must exercise “a quantum of care
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`which is commensurate with the circumstances.” Thus, the Refinery argues that EIG, as a
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`company with specialized knowledge of copyright infringement, failed to act reasonably and
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`diligently when it did not investigate Menard’s request to increase the Refinery’s subscription.
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`The Court disagrees.
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`First, the Court declines to impose a more stringent standard other than that of a reasonably
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`prudent person. The Refinery has cited no case law in the copyright context indicating that EIG
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`should be held to have “special knowledge” about copyright infringement because of its
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`enforcement policies. The cases the Refinery relies on involve negligence during a skiing accident
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 13 of 41
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`and an illness contracted while manufacturing airplane instruments, not copyright infringement.23
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`If the Court were to apply this standard it would contravene well-established law regarding the
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`discovery rule.
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`
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`With regard to EIG’s knowledge in 2008, a reasonable fact-finder could conclude that
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`Menard’s email in 2008 was not sufficient to trigger a duty to investigate further. A customer’s
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`inquiry into increasing the number of subscriptions does not in and of itself provide a basis for
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`constructive knowledge of infringement.24 While Menard’s request may have been motivated by
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`his knowledge that the Refinery was forwarding Oil Daily beyond what was allowed in the
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`subscription agreement, this knowledge is not imputed to EIG simply from an email exchange
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`asking to increase subscriptions. Furthermore, even if Menard’s email triggered an investigation
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`by EIG, it is not likely that EIG would have discovered that the Refinery was forwarding Oil Daily
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`to employees beyond Menard. EIG had no access to the Refinery’s email system or computer
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`network. The only way EIG could have learned of the infringement would be if the Refinery told
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`it that it was copying and distributing Oil Daily to multiple employees. Thus, based on the
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`evidence before the Court, a reasonable fact-finder could conclude that a reasonably prudent
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`person in EIG’s shoes would not have discovered the Refinery’s infringement in 2008.
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`
`23 LaVine v. Clear Creek Skiing Corp., 557 F.2d 730, 734 (10th Cir. 1977); Johnston v. United States, 568 F.
`Supp. 351, 354 (D. Kan. 1983).
`
`24 Cf. Energy Intelligence Grp., Inc. v. Jefferies, LLC, 101 F. Supp. 3d 332, 342 (S.D.N.Y. 2015) (holding
`that allegations of a customer’s comments regarding the company’s need for additional subscriptions and the
`company’s subsequent reduction of the number of licenses was not sufficient to sustain a claim for copyright
`infringement).
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 14 of 41
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`b.
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`EIG’s Knowledge of the Refinery’s Use of Oil Daily in 2012
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`In the alternative, the Refinery contends that EIG had actual or at least constructive
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`knowledge of the Refinery’s alleged infringement in March 2012 when Flickinger emailed Dent
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`telling him that she received Oil Daily through her email account, that she forwarded the
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`publication to Menard daily, and on occasion, when Menard was gone, she forwarded it to another
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`Refinery executive. The Refinery claims that there are several critical facts that weigh in favor of
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`granting summary judgment, including (1) Dent’s reporting of Flickinger’s March 27, 2012, email
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`to EIG’s in-house counsel under EIG’s copyright enforcement policy; (2) Dent’s email to
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`Flickinger reiterating the terms of the Refinery’s subscription and warning her that electronic
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`forwarding of the publication violates the subscription agreement; and (3) Dent’s testimony that
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`EIG was placed on a potential litigation hold list in 2012.
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`EIG argues in response that there is a genuine issue of material fact regarding whether it
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`had actual or constructive knowledge in 2012. In response to Flickinger’s email regarding her
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`forwarding practices of Oil Daily, EIG offers evidence of its long-standing policy that access by
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`assistants for the purpose of sending a publication to a supervisor is not an unauthorized use. EIG
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`argues that practically speaking, it is not concerned with the number of readers of a single copy of
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`a given subscription, but the number of copies made. It also cites its policy that a printed copy of
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`a publication may be placed in a library and read by multiple individuals. Accordingly, EIG claims
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`Flickinger’s practice of forwarding Oil Daily to Menard did not violate the subscription
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`agreements. EIG also claims that Flickinger’s practice of forwarding Oil Daily to another
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`executive when Menard is absent conforms with the Refinery’s subscription because on those
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`days, only one subscribed copy would have been used by the Refinery—the copy that went to
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`Menard simply went to another executive.
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`
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`-14-
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`

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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 15 of 41
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`
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`EIG also offers the declaration of Thomas Wallin, EIG’s Executive Vice President and
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`Editor-In-Chief. Wallin explained that under EIG’s policy, customer service employees are
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`instructed to report any suspicious circumstance regarding a customer’s unauthorized use of a
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`publication. If the circumstances indicate unauthorized copying, the sales director will report them
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`to senior management who will decide what steps to be taken. If the circumstances are ambiguous,
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`the account representative is required to contact the customer and ask them to confirm their scope
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`of usage. If the customer confirms that they are using EIG’s publication in an authorized manner,
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`and there is no further evidence, then EIG concludes its investigation. Here, because Dent’s
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`inquiry to Flickinger showed nothing more than the fact that she normally emailed Oil Daily to
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`Menard, this concluded EIG’s investigation of the matter.
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`EIG also points out that although Dent testified that the Refinery was placed on a potential
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`litigation list, Dent also testified that he was not aware whether the Refinery was placed on that
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`list in 2012 or in 2015. Furthermore, Hitchcock stated in his declaration that no Potential Litigation
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`Hold Notice involving the Refinery existed before 2015.
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`Based on this evidence, the Court cannot conclude as a matter of law that EIG had actual
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`or constructive notice of the Refinery’s alleged infringement in 2012. “Generally, the
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`reasonableness of [the] plaintiffs’ actions, including the reasonableness of inquiring or failing to
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`inquire, is a fact question for the jury.”25 Flickinger’s email stated that she forwarded Oil Daily to
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`Menard daily and when he was absent she forwarded it to another Refinery executive. EIG claims
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`that based on its policies this conduct was not infringing and thus it had no reason to know of the
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`25 Energy Intelligence Grp., Inc. v. Kayne Anderson Capital Advisors, LP, 2016 WL 1203763, at *7 (S.D.
`Tex. 2016) (quoting Dodson v. Hillcrest Sec. Corp., 1996 WL 459770, *8 (5th Cir. 1996)).
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`-15-
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`Case 6:16-cv-01015-EFM Document 120 Filed 03/14/18 Page 16 of 41
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`Refinery’s alleged infringement. But, when Dent emailed Flickinger two days later, he informed
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`her that the publication is only licensed for use by “the designated named recipient and not anyone
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`else or any entire organization” and that the subscription could not be shared electronically by
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`forwarding. Thus, there is a genuine issue of material fact as to whether EIG knew or had reason
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`to know that infringement was occurring in March 2012. The Court denies summary judgment on
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`this issue as to the Refinery’s alleged infringement of Oil Daily.
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`EIG’s Knowledge regarding the Refinery’s Use of Petroleum Intelligence
`c.
`Weekly
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`Finally, the Refinery argues that EIG had constructive knowledge of the Refinery’s alleged
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`
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`infringement of Petroleum Intelligence Weekly based on Flickinger’s March 27, 2012, email to
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`Dent. But, Flickinger’s email is silent regarding Petroleum Intelligence Weekly, and throughout
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`its relationship with EIG, different Refinery employees accessed the publications. Moreover, as
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`discussed above, the Court could not conclude as a matter of law that EIG had actual or
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`constructive knowledge of Oil Daily based on Flickinger’s email, and thus this