2:14-cv-13992-GAD-RSW Doc # 47 Filed 10/28/15 Pg 1 of 15 Pg ID 936
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
`
`Case No. 14-cv-13992
`
`UNITED STATES DISTRICT COURT JUDGE
`GERSHWIN A. DRAIN
`
`UNITED STATES MAGISTRATE JUDGE
`R. STEVEN WHALEN
`
`FORD MOTOR CO., and FORD GLOBAL
`TECHNOLOGIES, LLC,
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`Plaintiffs,
`
`v.
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`THERMOANALYTICS, INC.,
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`Defendant.
` /
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`
`
`
`
`
`OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
`[25]
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`I. INTRODUCTION
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`Ford Motor Company and Ford Global Technologies, LLC (“Plaintiffs”), commenced
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`this action on October 16, 2014 against ThermoAnalytics, Inc. (“Defendant”). See Dkt. No. 1.
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`On August 14, 2015, Plaintiffs filed an Amended Complaint adding no new parties. See Dkt. No.
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`30. In the Amended Complaint, Plaintiffs contend that Defendant is liable for: (I) False
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`Designation of Origin under 15 U.S.C. § 1125(a); (II) Breach of Contract; (III) Promissory
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`Estoppel; and request (IV) Declaratory Judgment on the RadTherm Software. See id.
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`On July 29, 2015, Plaintiffs filed a Motion for Partial Summary Judgment on both the
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`False Designation of Origin claim and Breach of Contract. See Dkt. No. 25. For the reasons
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`discussed herein, the Court GRANTS Plaintiffs’ Motion for Partial Summary Judgment.
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`II. BACKGROUND
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`Beginning in 1994, Ford began collaboration with Michigan Technological University
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`(“MTU”)
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`to help develop a specialized computer-aided engineering program named
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`“RadTherm.” Dkt. No. 25 at 11, Pg. ID No. 277. RadTherm was designed to model the
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`distribution and transfer of heat over complex systems, such as automobiles. Id. Over the course
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`of about two years, Ford paid over $300,000 toward the development of RadTherm. At that
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`point, the latest version of the software was “RadTherm 3.0.” Id. at Pg. ID No. 278.
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`In 1996, Defendant ThermoAnalytics began operations and, according to Defendant,
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`acquired MTU’s intellectual property for the RadTherm software. Dkt. No. 33 at 5, Pg. ID No.
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`610. Ford paid ThermoAnalytics for the development of RadTherm under the terms of a
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`Software Development agreement through most of 1998. Dkt. No. 25 at Pg. ID No. 278. Ford
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`claims that the Software Development was a “Work for Hire” contract that granted them
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`ownership of whatever ThermoAnalytics produced. Id.; see also Dkt. No. 19-1 at 21, Pg. ID No.
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`137. This arrangement lasted until the end of 1998, and brought the software to Version 4.1.1. Id.
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`At the end of 1998, Ford and ThermoAnalytics entered into a License Agreement (“the
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`Agreement”). Dkt. No. 33 at Pg. ID No. 610. Under the terms of the Agreement, Defendant
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`would have an exclusive license to develop and commercialize the existing “FGTI Licensed
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`Software.” Id. The Agreement defined FGTI Licensed Software as “RadTherm” and “Fluid
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`Flow.”1 Id. In return, Defendant would pay royalties to Plaintiffs. The Agreement further
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`provided at Section 4.3:
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`As further consideration for the License granted herein, [ThermoAnalytics]
`hereby assigns and agrees to assign to FGTI all copyrights [ThermoAnalytics]
`acquires in original works of authorship included in additions, enhancements and
`improvements [ThermoAnalytics] is authorized to make as Derivative Works to
`FGTI Licensed Software, and to assign to FGTI and [ThermoAnalytics] jointly all
`copyrights [ThermoAnalytics] acquires in original works of authorship included
`in additions, enhancements, and improvements in Jointly Owned Software, but
`excluding such original works by [ThermoAnalytics] that form portions of
`Licensee Licensed Software.
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`Dkt. No. 25 at Pg. ID No. 304. The Agreement further provided:
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`1 The parties are not disputing any rights or terms regarding “Fluid Flow.”
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`FGTI represents and [ThermoAnalytics] acknowledges that title to FGTI Licensed
`Software, and all copies made in connection with this Agreement or Derivatives
`Works created based on FGTI Licensed Software shall belong to FGTI and that
`FGTI. . . shall have ownership of all copyright, trade secret, patent, trademark and
`other intellectual or industrial property rights therein or associated therewith.
`
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`Id. at Pg. ID No. 306. The Agreement also included a post-termination clause which required
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`ThermoAnalytics to “deliver source code and object code for joint works,” and to pay royalties
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`to FGTI until ThermoAnalytics ceased “to market, Sell, and support the FGTI Licensed
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`Software, Licensee Licensed Software or Jointly Owned Software.” Additionally, the Agreement
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`provided a “Trademark Notice” clause at Section 12:
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`All trademarks and trade names identifying FGTI Licensed Software or FGTI or
`Ford businesses are, and will remain the exclusive property of FGTI and Ford
`respectively. [ThermoAnalytics] shall not take any action that jeopardizes the
`Marks, and acquires no rights in the Marks except in the limited use rights
`specified below. [ThermoAnalytics] shall be limited to using the Marks
`exclusively to advertise and promote FGTI Licensed Software.”
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`Id. at Pg. ID No. 311.
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`
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`In the year 2000, Defendant released “RadTherm 5.0.” Dkt. No. 33 at Pg. ID. No. 638.
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`Defendant claims that this version of RadTherm “was an entirely new software product and not a
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`derivative of RadTherm 4.1.1, and it was not the licensed software under the License
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`Agreement.” Id. According to ThermoAnalytics, RadTherm 5.0 was a modified version of
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`software called MuSES, created under programs with the United States Army. Id. at Pg. ID No.
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`638–639. ThermoAnalytics claims that RadTherm 5.0 rendered prior versions of RadTherm
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`obsolete. Id. at Pg. ID No. 639. ThermoAnalytics further claims that all subsequent versions of
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`RadTherm starting in 2000 were derived from the MuSES source code, and not the RadTherm
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`4.1.1 source code that was subject to the Licensing Agreement. Id. Despite these updates
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`however, the new software retained the name RadTherm. ThermoAnalytics maintains that they
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`discussed the change “openly with Ford” in 2000. Id. Ford disputes this. Dkt. No. 25 at Pg. ID
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`No. 284.
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`In 2012, the Agreement was amended to Ford Global’s change in name and address.
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`Those were the only changes made to the Agreement. The First Amendment stated:
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`Except as specifically modified or amended by the terms of this AMENDMENT,
`the LICENSE AGREEMENT and all provisions contained therein are, and shall
`continue, in full force and effect and are hereby ratified and confirmed.
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`Dkt. No. 25-10 at Pg. ID No. 387. The document was signed by both parties. Id.
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`Ford claims they were not aware of any software changes until they received a letter from
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`ThermoAnalytics in November of 2013 claiming that their ownership interest in RadTherm was
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`terminated. Id. ThermoAnalytics, in response, has pointed to an email exchange between the two
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`parties, where ThermoAnalytics denied Ford’s request for source code updates because the
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`software was different and subject to specific “restrictions.” Dkt. No. 33 at Pg. ID No. 683.
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`
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`Despite allegedly changing the software completely and retaining the original name,
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`ThermoAnalytics still partially performed under
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`the Licensing Agreement. Although
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`ThermoAnalytics has not provided the RadTherm source code since 2000, they continued to pay
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`royalties to Ford over an additional 13 years. Dkt. No. 25 at Pg. ID No. 284.
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`
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`In November of 2013, the Defendant sent the Plaintiffs a Termination Notice, effective
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`March 1, 2014. Id. The last royalty was paid to Plaintiffs in March of 2014. ThermoAnalytics has
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`still not provided any source code to the new versions of RadTherm (now called TAITherm). Id.
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`III. LEGAL STANDARD
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`Federal Rule of Civil Procedure 56(a) empowers the Court to render summary judgment
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`“if the pleadings, depositions, answers to interrogatories and admissions on file, together with the
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`affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
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`party is entitled to judgment as a matter of law.” See Redding v. St. Eward, 241 F.3d 530, 532
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`(6th Cir. 2001). The Supreme Court has affirmed the Court’s use of summary judgment as an
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`integral part of the fair and efficient administration of justice. The procedure is not a disfavored
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`procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Cox v.
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`Kentucky Dept. of Transp., 53 F.3d 146, 149 (6th Cir. 1995).
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`
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`The standard for determining whether summary judgment is appropriate is “‘whether the
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`evidence presents a sufficient disagreement to require submission to a jury or whether it is so
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`one-sided that one party must prevail as a matter of law.’” Amway Distributors Benefits Ass’n v.
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`Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc.,
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`477 U.S. 242, 251–52 (1986)). The evidence and all reasonable inferences must be construed in
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`the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith
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`Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). “[T]he mere
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`existence of some alleged factual dispute between the parties will not defeat an otherwise
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`properly supported motion for summary judgment; the requirement is that there be no genuine
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`issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also
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`National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).
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`If the movant establishes by use of the material specified in Rule 56(c) that there is no
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`genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing
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`party must come forward with “specific facts showing that there is a genuine issue for trial.”
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`First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v. 988011
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`Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in the non-
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`movant’s pleadings will not meet this burden, nor will a mere scintilla of evidence supporting the
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`non-moving party. Anderson, 477 U.S. at 248, 252. Rather, there must be evidence on which a
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`jury could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing Anderson, 477
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`U.S. at 252).
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`A. False Designation of Origin
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`IV. DISCUSSION
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`Trademarks are typically protected by the Lanham Act. 15 U.S.C. § 1125. A trademark is
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`“any word, name, symbol, or device, or any combination thereof used by a person to identify and
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`distinguish his or her goods, including a unique product, from those manufactured or sold by
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`others and to indicate the source of the goods, even if that source is unknown.” Two Pesos, Inc.
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`v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992) (quotations omitted). Under the Lanham Act, a
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`plaintiff will have a claim for false designation of origin if a defendant uses a trademark in a way
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`that “is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,
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`connection, or association of such person with another person, or as to the origin, sponsorship, or
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`approval of his or her goods, services or commercial activities by another person . . .” 15 U.S. C.
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`§ 1125(a)(1)(A). Where the use of a trademark has been licensed to a licensee, “use by a licensee
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`which is outside the scope of the license is both trademark infringement and a breach of contract.
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`And continued use by an ex-licensee after the license has been terminated is an act of trademark
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`infringement.” 4 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR
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`COMPETITION § 25:30 (4th ed. 2015).
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`Plaintiffs allege in their Motion that the Defendant exceeded the scope of the Licensing
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`Agreement in its use of the RADTHERM trademark. Dkt. No. 25 at Pg. ID No. 300. Plaintiffs
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`argue that the terms of the Agreement demonstrate Plaintiffs’ ownership of the mark, as well as
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`the limited scope of Defendant’s license to use the mark. Plaintiffs assert that the Agreement
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`required Defendant to “cease all use of the RadTherm trademark” upon the Agreement’s
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`termination. Id. But despite the termination of the Agreement, and a written demand to cease use
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`of the mark, Defendant continued its use.
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`Defendant concedes that it continued to use the mark, RADTHERM, until April of 2015,
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`a couple of years after Defendant terminated the Agreement. Dkt. No. 33 at Pg. ID No. 628.
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`However, Defendant argues that Plaintiffs never had a proprietary interest in the mark at all. Id.
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`Defendant argues that its use of the mark prior to the Agreement, as well as its registration of the
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`mark with the United States Patent and Trademark Office in 2002—years after the Agreement
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`was executed—without any objection from Plaintiffs, demonstrate that Defendant alone has sole
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`ownership of the mark. Id. Defendant further argues that the Agreement did not assign any
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`trademark rights to Plaintiffs because the language of the contract does not refer to the
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`RADTHERM trademark. Id. at Pg. ID No. 629–630. Defendant also asserts that if there was an
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`assignment, the assignment would be invalid as an improper “naked assignment” of a mark
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`without its goodwill. Id.
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`a. The Language of the Agreement Assigned the RADTHERM Trademark to
`Plaintiffs
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`Trademarks are property that can be bought, sold and licensed. 3 J. THOMAS MCCARTHY,
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`MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 18:1 (4th ed. 2015). An assignment
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`of a mark “is an outright sale of all rights in that mark.” McCarthy § 18:15. “[A]fter a valid
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`assignment, the assignee acquires all of the legal advantages of the mark that the assignor
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`enjoyed, including prior use.” Id.
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`Defendant argues that the Agreement did not make any assignment to Plaintiffs, and at
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`most, “confirms Ford’s ownership of its then-existing intellectual property rights.” Dkt. No. 33 at
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`Pg. ID No. 629. But that argument is not persuasive.
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`The language of the Agreement is plain. Section 12, the “Trademark Notices” of the
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`Agreement, in relevant part states, “[a]ll trademarks and trade names identifying FGTI
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`Licensed Software or FGTI or Ford business (the “Marks”) are, and will remain the exclusive
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`property of FGTI and Ford respectively.” Dkt. No. 25-1 at 10, Pg. ID No. 311 (emphasis added).
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`In Exhibit 1 of the Agreement, “RadTherm” is listed as “FGTI Licensed Software.” Id. at Pg. ID
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`No. 315. Section 8.1, titled “Ownership of Software,” states that “FGTI, or its licensees or
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`assigns shall have ownership of all copyright, trade secret, patent, trademark and other
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`intellectual or industrial property rights therein or associated [with FGTI Licensed
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`Software].” Id. at Pg. ID No. 306 (emphasis added). When Section 12, Section 8 and Exhibit 1
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`are read together, it appears the text of the Agreement clearly grants ownership of the
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`RADTHERM mark to Plaintiffs. Laborers Pension Trust Fund-Detroit and Vicinity v. Interior
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`Exterior Specialists Co., 824 F. Supp. 2d 764, 770 (E.D. Mich. 2011) (“if the language is ‘clear
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`and unambiguous,’ the Court need look no further”) (citing Haywood v. Fowler, 190 Mich. App.
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`253, 475 N.W.2d 458, 461 (1991)).
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`Defendant’s alternative argument, that the assignment is an invalid “naked assignment,”
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`is similarly undercut by the language of the Agreement. Defendant correctly states that an
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`assignment of a trademark without its goodwill is not valid. Liquid Glass Enterprises, Inc. v.
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`Liquid Glass Indus. of Canada, Ltd., 1989 WL 222653 at *4 (E.D. Mich. 1989). However, their
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`argument is puzzling given that Section 8 granted Ford all “other intellectual or industrial
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`property rights.” Dkt. No. 25-1 at Pg. ID No. 306. Although it is not clear from their brief,
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`ThermoAnalytics apparently is pointing to the fact that the Agreement does not expressly grant
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`goodwill along with the trademark. However, while goodwill may not be explicitly spelled out
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`within the terms of the Agreement, it is certainly captured impliedly by the broad property grant
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`of Section 8. See Ferrellgas Partners, L.P. v. Barrow, 2005 WL 1736276 at *4 (11th Cir. 2005)
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`(“Where the entire stock of a business is purchased and the business continued under its original
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`name, it must be presumed that the purchaser acquired the goodwill of the business together with
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`the commercial symbols of that goodwill, the business’ trademarks and trade names.”); see also
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`Holly Hill Citrus Growers’ Ass’n v. Holly Hill Fruit Products, Inc., 75 F.2d 13, 15 (5th Cir.
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`1935) (“[Trademarks] attach to and pass with the good will of a business, and, as appurtenant to
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`it, they are freely and easily sold. No particular form of words is necessary to transfer them; they
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`inhere in and pass with good will.”); see also McCarthy § 18:37.
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`Accordingly, the language of the Agreement created a valid assignment of the
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`RADTHERM trademark to Plaintiffs. Therefore, whether Plaintiffs had ownership rights in the
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`mark prior to the Agreement is no longer a relevant question, and any arguments regarding
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`original ownership and prior use of the mark are moot. Upon the execution of the Agreement, the
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`mark was assigned to Plaintiffs and licensed back to Defendant.
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`b. ThermoAnalytics Infringed on the Trademark by Exceeding the Scope of the
`Licensing Agreement
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`“The Lanham Act creates a private cause of action to protect trademarks and trade dress
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`where there is a likelihood of confusion between the defendant’s mark and the plaintiff’s
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`protected mark.” Innovation Ventures, LLC v. N2G Distributing, Inc., 763 F.3d 524, 534 (6th Cir.
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`2014); see also 15 U.S.C. § 1125(a). Typically, where an ex-licensee continues to use the
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`licensed trademark, the continued use by itself creates a likelihood of confusion under the
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`Lanham Act. U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1190 (6th Cir. 1997)
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`(“We . . . hold that proof of continued, unauthorized use of an original trademark by one whose
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`license to use the trademark had been terminated is sufficient to establish “likelihood of
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`confusion.”); see also Sunsport Inc. v. Barclay Leisure Ltd., 984 F. Supp. 418, 422 (E.D. Va.
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`1997) (“As a former licensee who continues to use the licensor’s mark, Sunsport has to
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`overcome the presumption that it has infringed.”) (citing Burger King Corp. v. Mason, 710 F.2d
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`1480 (11th Cir. 1983)).
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`Here, Defendant terminated the License Agreement on March 1, 2014. Dkt. No. 25 at Pg.
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`ID No. 284. Section 11.1 of the Agreement, “Effects of Termination,” states “the obligation to
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`pay Royalties to FGTI shall survive until Licensee ceases to market, sell, and support the FGTI
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`Licensed Software, Licensee Licensed Software or Jointly Owned Software.” However, despite
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`sending its last royalty payment in March of 2014 and being given a written demand to cease use
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`of the Trademark in February of 2014, Dkt. No. 25-13 at 1, Pg. ID No. 390, Defendant continued
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`to use the RADTHERM mark until April of 2015. Dkt. No. 33 at Pg. ID No. 638. In fact, during
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`oral argument, Plaintiffs revealed to the Court that, despite “officially” changing the name of the
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`software to TAITHERM, Defendant still uses the original name, RADTHERM, as a reference
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`for its newly branded software on Defendant’s website.2 It’s even used in the URL. Therefore,
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`Plaintiffs have provided clear and substantial evidence of unauthorized use to establish liability.
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`Defendant has brought no evidence or defense sufficient to raise a genuine issue of material fact
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`as to liability. Accordingly, the Court will grant Plaintiffs’ Motion with regard to this Count.
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`B. Breach of Contract
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`Plaintiffs have also moved for Summary Judgment on their Breach of Contract claim.
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`Their argument focuses primarily on the payment of royalties and the status of their ownership
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`rights to the source code of the latter versions of RadTherm.
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`2 The website can be found at: http://www.thermoanalytics.com/products/taitherm-radtherm
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`a. The Language of the Contract Requires that the New Software be a Derivative
`Work in Order for Copyrights to be Captured by the Agreement
`According to the Agreement, ThermoAnalytics was required to pay royalties on the
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`marketed software and turn over source code within thirty days of every release of a new version
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`of the FGTI Licensed Software. Dkt. No. 25-1 at Pg. ID No. 304. Further, in Section 4.3,
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`ThermoAnalytics agreed to assign to Plaintiffs:
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`[A]ll copyrights Licensee acquires in original works of authorship included in
`additions, enhancements and improvements Licensee is authorized to make as
`Derivative Works to FGTI Licensed Software, and to assign to FGTI and
`Licensee jointly all copyrights Licensee acquires in original works of authorship
`included in additions, enhancements, and improvements in Jointly Owned
`Software, but excluding such original works by Licensee that form portions of
`Licensee Licensed Software.
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`Id. (emphasis added). Additionally, in Section 11.1, upon termination of the Agreement,
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`ThermoAnalytics agreed to “assign copyrights, grant licenses to inventions, [and] deliver source
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`code and object code for joint works,” (emphasis added) as well as to continue to pay royalties
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`for as long as ThermoAnalytics continued to “market, sell, and support . . . Jointly Owned
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`Software.” Id. at Pg. ID No. 311.
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`The Agreement also provides definitions for many of these terms:
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`1. Jointly Owned Software: defined by the Agreement as being “FGTI and Licensee owned
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`software and derivative works based thereon or compilations thereof described in Exhibit
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`I hereto.”3 Id. at Pg. ID 303.
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`2. Derivative Works: defined by the Agreement as “a work of authorship based on one or
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`more preexisting works including, without limitation, a translation, condensation,
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`transformation, expansion or adaptation, which, if prepared without authorization of the
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`3 As stated above, RadTherm is listed as FGTI Licensed Software. Dkt. No. 25-1 at Pg. ID No. 315.
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`owner of the copyright of such preexisting work, would constitute a copyright
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`infringement.” Id.
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`3. Joint Works: defined by the Agreement as being “all works of authorship created or
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`derivative works created with respect to Jointly Owned Software under this
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`Agreement.” Id. at Pg. ID No. 307 (emphasis added).
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`With these definitions in mind, it appears Defendant was required to 1) assign the copyrights and
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`2) continually turn over the source code for every new version of RadTherm4 and any derivative
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`works, as well as 3) pay royalties for as long as the software was marketed by the Defendant.
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`i. The New Software is a Joint Work
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`Neither party disputes that RadTherm 4.1.1 (“the Original Software”) is subject to the
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`Agreement. Whether the latter versions of RadTherm (“the Disputed Software”) are subject to
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`the Agreement is the issue before the Court.
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`Defendant claims that the software they marketed starting in 2000 was not similar to the
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`original RadTherm programs, but was instead an original work of authorship that did not
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`constitute a “derivative work.” If the new software is not a derivative work and is truly different,
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`the argument follows, then it would fall outside of the parameters set by Sections 4.3 and 11.1.
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`However, this argument mischaracterizes the scope of the Agreement.
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`As stated above, under the Agreement:
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`The Parties agree that all works of authorship created or derivative works created
`with respect to Jointly Owned Software under this Agreement shall be deemed
`“joint works” under the Copyright Act and that all copyrights for such works of
`authorship shall jointly belong to FGTI and Licensee . . .
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`Dkt. No. 30-1 at Pg. ID No. 530 (emphasis added). While Defendant has addressed the definition
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`of derivative works, Defendant’s argument essentially reads out all of the language that precedes
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`4 Or at least the code that is captured by the agreement.
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`it. Under Michigan law, “contracts must be construed as a whole: if reasonably possible, all parts
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`and every word should be considered; no part should be eliminated or stricken by another part
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`unless absolutely necessary.” Workmon v. Publishers Clearing House, 118 F.3d 457, 459 (6th
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`Cir. 1997).
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`The word “or” signals to the Court that there is a difference between “works of
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`authorship” and “derivative works.” The Court finds that the Agreement extends to “all
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`derivative works created with respect to Jointly Owned Software” (e.g. the Original Software)
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`and “all works of authorship created with respect to Jointly Owned Software.” Therefore, the
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`Agreement covers the Disputed Software if it was created with respect to the Original Software.
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`Despite Defendant’s contention that the Disputed Software was wholly original, the
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`evidence points to the contrary. At oral argument, Defendant’s counsel stated the inspiration for
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`the Disputed Software was the Original Software. The Disputed Software served the same
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`function as the Original Software. Dkt. No. 33-2 at Pg. ID No. 639 (“The software that was the
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`subject of the License Agreement was made obsolete with the release of RadTherm 5.0.”).
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`Defendant held out the Disputed Software as being a new and improved version of the Original
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`Software for over a decade. Dkt. No. 30 at Pg. ID No. 504. Defendant even represented to the
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`general public that the Disputed Software was owned by Plaintiffs. Id. Finally, in 2012,
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`Defendant re-affirmed the Agreement when it signed the Amendment, confirming that Sections
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`4.3 and 11.1 of the Agreement still applied to the Disputed Software.
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`Defendant has brought evidence demonstrating that the Disputed Software was not
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`derivative. But Defendant has not brought evidence demonstrating that the Disputed Software
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`was created without respect to the Original Software. Accordingly, the Court finds that the
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`Disputed Software is covered by the Agreement as a joint work.
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`-13-
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`2:14-cv-13992-GAD-RSW Doc # 47 Filed 10/28/15 Pg 14 of 15 Pg ID 949
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`ii. The Defendant breached the Contract
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`As stated above, Section 11.1 clearly states that upon termination of the Agreement,
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`Defendant is to “assign copyrights, grant licenses to inventions, [and] deliver source code and
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`object code for joint works.” Dkt. No. 30-1 at Pg. ID No. 534. The Court has found that the
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`Disputed Software is a joint work, but Defendant has neither provided the source code, nor
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`assigned the relevant copyrights. Therefore, the Defendant has breached the contract.
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`b. ThermoAnalytics Breached the Contract when it Infringed on the Trademark
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`The primary focus of Plaintiffs’ brief with regard to this Count is the status of the source
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`code to the latter versions of RadTherm. However, Defendant’s counterargument to this claim
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`leads inexorably to an alternate breach of contract.
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`Defendant argues that the Disputed Software, being of almost entirely new/original
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`source code, is not subject to the contract because it is not a derivative work, and therefore they
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`did not breach when they ceased the payment of royalties and refused to turn over the source
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`code. See Dkt. No. 33 at Pg. ID No.614–626. Even if Defendant’s interpretation of the contract
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`is true, it doesn’t explain why Defendant continued to use the mark, RADTHERM, on the new
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`software. Despite contending that they had stopped marketing the relevant code near the turn of
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`the century, the Defendant used the RADTHERM mark continuously until April 2015.5 Section
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`12 of the Agreement states, “Licensee shall be limited to using the Marks exclusively to
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`advertise and promote FGTI Licensed Software.” Dkt. No. 25-1 at Pg. ID No. 311 (emphasis
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`added). It has already been determined that “the Marks” include the name, RADTHERM. Thus,
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`accepting Defendant’s argument also requires accepting the fact that Defendant used the
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`RADTHERM trademark beyond the limitations provided in the Agreement. Accordingly, even
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`5 As stated above, ThermoAnalytics is currently still using the name RadTherm on their website. The website can be
`retrieved at: http://www.thermoanalytics.com/products/taitherm-radtherm
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`2:14-cv-13992-GAD-RSW Doc # 47 Filed 10/28/15 Pg 15 of 15 Pg ID 950
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`taking Defendant’s counterarguments as true, the Defendant has breached for an additional
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`reason.
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`V. CONCLUSION
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`For the reasons discussed herein, the Court GRANTS the Motion for Partial Summary
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`Judgment.
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`IT IS SO ORDERED.
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`Dated: October 28, 2015
`Detroit, MI
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`s/Gershwin A. Drain
`HON. GERSHWIN A. DRAIN
`United States District Court Judge
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`-15-