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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`GENERAL MOTORS LLC., ET AL.,
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`Plaintiffs,
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`Case No.: 15-12917
`Honorable Victoria A. Roberts
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`v.
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`DORMAN PRODUCTS, INC., ET AL.,
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`Defendants.
`__________________________________/
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`ORDER DENYING DEFENDANTS’ PARTIAL MOTION TO DISMISS
`PLAINTIFFS’ SECOND AMENDED COMPLAINT [DOC. 20]
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`I.
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`INTRODUCTION
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`In August 2015, Plaintiffs General Motors LLC and GM Global Technology
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`Operations LLC (“Plaintiffs” or “GM”) filed suit against Defendants Dorman Products Inc.
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`(“Dorman”) and Electronics Remanufacturing Company LLC (“ERC”; collectively
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`“Defendants”), alleging copyright infringement under the Copyright Act, 17 U.S.C. 101 et
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`seq., and unlawful circumvention under the Digital Millennium Copyright Act, 17 U.S.C.
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`1201 et seq.
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`In September 2016, this Court granted in part Defendants’ Motion to Dismiss
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`Plaintiffs’ Amended Complaint because the complaint did not meet Rule 12(b)(6)’s
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`plausibility standards. The Court also granted Plaintiffs an opportunity to cure the
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`deficiencies. Plaintiffs submitted a Second Amended Complaint in October, adding two
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`more counts (trade secret misappropriation and unlawful trafficking under the Digital
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`Millennium Copyright Act).
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 2 of 11 Pg ID 263
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`Defendants filed another Motion to Dismiss, currently before this Court, seeking
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`to dismiss Count I (copyright infringement) with respect to four out of Plaintiffs’ five
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`copyrighted works, and Count II (illegal circumvention of security measures) in its
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`entirety.
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`Defendants’ Partial Motion to Dismiss Plaintiffs’ Second Amended Complaint
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`(ECF No. 20) is DENIED.
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`II. FACTUAL BACKGROUND
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`For the purposes of a Rule 12(b)(6) motion, “the complaint is viewed in the light
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`most favorable to the plaintiff, the allegations in the complaint are accepted as true, and
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`all reasonable inferences are drawn in favor of the plaintiff.” See Bassett v. Nat'l
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`Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). Plaintiffs, automobile
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`manufacturers, have registered valid copyrights in the software and computer files
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`which run on the control modules installed in their vehicles, and allege that Defendants
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`are illegally stealing and reselling this software. (Plaintiffs include copies of five of their
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`copyright registrations as an exhibit with their complaint; it may be considered as part of
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`the pleading for purposes of a motion to dismiss. See Commercial Money Ctr., Inc. v.
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`Illinois Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (“documents attached to the
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`pleadings become part of the pleadings and may be considered on a motion to
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`dismiss.”))
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`GM alleges that Defendants Dorman and ERC worked together to violate
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`copyright law by: (1) illegally stealing GM’s copyrighted software; and (2) installing it into
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`blank control modules, and then reselling the modules to the general public, allowing
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`users to avoid paying GM for the software. GM believes that Dorman purchases blank
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`2
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 3 of 11 Pg ID 264
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`control modules from an authorized GM distributor and then sends these modules to
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`ERC. Individuals associated with ERC created accounts on websites owned by GM,
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`which allow paid subscribers to access GM software. ERC copies this software from
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`GM’s websites in violation of user agreements. GM says ERC then programs Dorman’s
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`modules with unauthorized and infringing copies of GM’s copyrighted software and
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`sends the programmed modules back to Dorman, which resells them to the general
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`public, advertising them as “pre-programmed.”
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`Dorman also manufactures, advertises, and sells a product called a “Software
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`Transfer Tool.” GM alleges this tool allows users to access, copy, and transfer GM’s
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`copyrighted software to other modules, circumventing GM’s technological protection
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`measure in violation of law.
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`GM acquired both a pre-programmed module and a Software Transfer Tool from
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`Dorman. By inspecting and testing the module, GM confirmed that it contained an
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`unauthorized copy of GM software, covered by copyright registration number TXu-1-
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`917-502. By testing the Software Transfer Tool, GM confirmed that it allows users to
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`bypass security measures to illegally transfer copyrighted software.
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`III.
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`Legal Standard
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`A complaint must contain “a short and plain statement of the claim showing that
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`the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Defendants seek to dismiss the
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`majority of Count I and the entirety of Count II under Fed. R. Civ. P. 12(b)(6). To survive
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`a 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter,
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`accepted as true, to state a claim that is plausible on its face.” R.S. Scott Associates,
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`Inc. v. Timm Const. Co. LLC, 2014 WL 7184448 at *3 (E.D. Mich. 2014). “A claim has
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`facial plausibility when the plaintiff pleads factual content that allows the court to draw
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`the reasonable inference that the defendant is liable for the misconduct alleged.”
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`Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
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`544, 556, 570). While the court is required to take all factual allegations as true and
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`view the complaint in the light most favorable to the plaintiff, the court does not have to
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`accept legal conclusions as true. Id. Legal conclusions must be backed by plausible
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`factual assertions.
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`To establish a plausible claim of copyright infringement, a plaintiff must allege: 1)
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`ownership of a valid copyright, and 2) copying of constituent elements of the
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`copyrighted work that are original. Ford Motor Company v. Autel US Inc., 2015 WL
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`5729067 at *3; see also Ross, Brovins & Oehmke, P.C. v. Lexis Nexis Group, 463 F.3d
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`478, 482, 2006 WL 2639749 (6th Cir.2006). While other courts in this district have held
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`that copyright infringement claims require a heightened pleading standard under
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`National Business Development Services, Inc. v. American Credit Education &
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`Consulting, Inc., 299 F. App’x 509 (6th Cir. 2008), this Court has interpreted National
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`Business as consistent with the plausibility standard set forth in Twombly and Iqbal.
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`Accordingly, the “Twiqbal” standard governs; the two elements of a copyright
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`infringement claim must have facial plausibility as described in Ashcroft, supra.
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`With regard to the illegal circumvention claim, 17 U.S.C. 1201(a)(1)(A) provides
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`that “no person shall circumvent a technological measure that effectively controls
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`access to a work protected under [copyright law].” No courts within the Sixth Circuit
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`have analyzed the sufficiency of a pleading under this provision yet.
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`IV.
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`Analysis
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 5 of 11 Pg ID 266
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`A.
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`Deficiencies In Plaintiffs’ Original Pleading
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`This Court previously found that Plaintiffs’ copyright infringement claim was
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`deficient in that it “fail[ed] to forge any sort of connection between [Plaintiffs’] list of six
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`copyrighted works and the control modules installed in Plaintiffs’ vehicles.” While
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`Plaintiffs alleged generally that Defendants infringed on copyrighted software by
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`installing it into control modules, they failed to identify specifically how the six mentioned
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`copyrights were involved in Defendants’ actions. Without further clarification, “a party
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`could plead the first element of a claim of copyright infringement merely by citing to a
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`laundry list of copyright registrations…without any effort to identify which of the party’s
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`copyrighted works were involved in the defendant’s allegedly infringing activities.”
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`Next, this Court agreed with Defendants that screenshots taken of Defendant
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`Dorman’s website, where Dorman describes modules as “pre-programmed” with a
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`“plug-and-play design,” were insufficient to support a plausible inference that
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`Defendants had pre-programmed the modules with Plaintiffs’ copyrighted software.
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`The Court found that Plaintiffs’ allegation that they purchased a module from
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`Dorman and found that it contained an unauthorized copy of Plaintiffs’ copyrighted
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`software was sufficient to support a plausible inference that Defendants copied the
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`protected software.
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`Finally, this Court found that Plaintiffs’ claim of unlawful circumvention of a
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`technological protection measure was deficient because Plaintiffs alleged that their
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`technological protection measure protected access to their vehicle control modules, not
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`to their copyrighted software or any other works protected by copyright.
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 6 of 11 Pg ID 267
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`The Court granted Plaintiffs leave to amend their complaint in order to cure these
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`deficiencies, bringing us to Defendants’ current Motion to Dismiss Plaintiffs’ Second
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`Amended Complaint.
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`B.
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`Revisions in Second Amended Complaint
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`Defendant seeks to dismiss Count I with respect to four out of the five copyright
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`registrations provided by Plaintiffs. Defendants say Plaintiffs did not cure the
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`deficiencies in their first pleading: they still fail to connect the copyright registrations to
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`the control modules at issue. Defendants seek to dismiss Count II in its entirety on the
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`grounds that Plaintiffs’ allegations regarding the Software Transfer Tool still fail to
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`establish a plausible inference that Defendants themselves circumvented any of
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`Plaintiffs’ technological measures--even if they did create and sell a tool that allows
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`others to do so.
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`a. Count One: Copyright Infringement
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`In their first complaint, Plaintiffs merely provided a list of six copyright
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`registrations, then concluded that Defendant Dorman had offered to sell modules with
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`GM’s software. This Court asked Plaintiffs to cure this deficiency by specifying which of
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`their copyrighted works are installed on control modules found in their vehicles. Plaintiffs
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`complied by removing one of the registrations named in their original pleading, and
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`clarifying that the remaining five copyright registrations cover software that is installed
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`on GM control modules.
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`Defendants claim that Plaintiffs are required to allege specifically which software
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`is associated with which copyright registrations. Plaintiffs did so for one copyright
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`registration: TXu-1-917-502. This covers the software for GM’s Transmission Electro-
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`6
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 7 of 11 Pg ID 268
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`Hydraulic Control Module. Defendants’ say Plaintiffs’ failure to specify what software is
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`covered by the other four registrations is fatal to their allegations of infringement.
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`However, Defendants cite no legal authority, other than Twombly and Iqbal, to
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`suggest that a software copyright infringement claim requires Plaintiffs to plead “detailed
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`factual allegations,” not typically required at the pleading stage. Twombly at 555. On the
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`contrary, “relevant case law counsels a court to view the individual allegations in [the]
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`context of the whole complaint.” R.S. Scott Assocs., Inc. v. Timm Const. Co. LLC, 2014
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`WL 7184448 at *5 (E.D. Mich. 2014). And “determining whether a complaint states a
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`plausible claim for relief [is] … a context-specific task that requires the reviewing court
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`to draw on its judicial experience and common sense.” Ashcroft at 679.
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`Plaintiffs have shown that one of their copyright registrations (TXu-1-917-502)
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`covers software installed on a module sold by Defendant Dorman. Just because they
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`cannot yet show that Defendants have copied software covered by the other four
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`copyright registrations does not mean that allegations regarding those four registrations
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`are insufficiently plausible to survive a motion to dismiss. Plaintiffs went above and
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`beyond the plausibility standard required for the TXu-1-917-502 copyright registration--
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`but that doesn’t obligate them to meet that same heightened standard for the other four
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`copyrights. Plaintiffs are not required to continue attempting to purchase modules from
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`Dorman until they acquire one that corresponds to each copyrighted work. Viewed in
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`the context of the complaint as a whole, and using common sense, it is plausible to infer
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`that, if the software covered by TXu-1-917-502 was found on a Dorman module, then it
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`is more likely that software covered by GM’s other copyright registrations may also be
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`found on additional Dorman modules. “The plausibility standard “does not impose a
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`probability requirement at the pleading stage; it simply calls for enough fact to raise a
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`reasonable expectation that discovery will reveal evidence of illegal [conduct].”” Gabay
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`v. Park W. Galleries, Inc., 2010 WL 5391464, at *4 (E.D. Mich. 2010) (quoting Twombly,
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`550 U.S. at 556). Despite not pleading in detail that the other four GM copyright
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`registrations cover software found on Dorman modules, Plaintiffs allege enough facts to
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`raise a reasonable expectation that discovery will reveal Dorman modules containing
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`more of GM’s copyrighted software.
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`Defendants’ motion to dismiss Count I with respect to four out of five of Plaintiffs’
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`registered copyrights is denied.
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`b. Count Two: Unlawful Circumvention
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`Plaintiffs allege that Dorman’s production and distribution of their Software
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`Transfer Tool violates the provision of the Digital Millennium Copyright Act. It provides
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`“no person shall circumvent a technological measure that effectively controls access to
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`a work protected under [copyright law].” 17 U.S.C. 1201(a)(1)(A). This Court previously
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`found that Plaintiffs’ allegations were deficient because the technological measures
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`cited in Plaintiffs’ complaint protected access to GM control modules, not to Plaintiffs’
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`copyrighted software.
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`Plaintiffs attempt to remedy this deficiency by alleging in their Second Amended
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`Complaint that “GM uses a technological protection measure to protect access to the
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`software contained on its vehicle control modules.” Specifically, Plaintiffs allege that GM
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`uses a technological protection measure or “Security Access” that “includes a software-
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`based lock to effectively control access to (and unauthorized programming of) original
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`GM software that is installed on vehicle control modules in GM vehicles.” The Security
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`Access lock is “designed to prevent people from accessing GM’s software contained on
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`the module and making unauthorized copies of it.” Plaintiffs believe that “Defendants
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`have defeated and are defeating this security measure and accessing the software
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`contained on the modules in order to program the modules with unauthorized copies of
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`GM’s copyrighted vehicle control software” either by “making an illegal copy of the
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`software-based security key” or by otherwise “hacking through or circumventing” the
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`software-based lock to gain access to the module’s software. Plaintiffs allege that the
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`tool “circumvents GM’s technological protection measure so that Service Technicians
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`and other users of the tool can access, copy, and transfer [GM]’s copyrighted software
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`and data files contained on [GM]’s vehicle modules.”
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`Defendants seek to dismiss this claim on the grounds that Plaintiffs allegations
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`involving the Software Transfer Tool essentially accuse Defendants not of illegally
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`circumventing the technological protection measure themselves, but of creating a
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`device that allows others to do the circumventing. In Defendants’ view, this is not a
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`violation of 17 U.S.C. 1201(a)(1)(A), and the allegations regarding the Software
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`Transfer Tool are better suited to Count III (Trafficking in Illegal Means for
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`Circumvention of Security Measures).
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`While the allegations regarding the Software Transfer Tool also support Count III,
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`it is not so far-fetched for this Court to infer that Defendants themselves must have also
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`circumvented GM’s technological measures at some point. Taken as true and viewed in
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`the context of the complaint as a whole, Plaintiffs’ factual allegations do support a claim
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`that Defendants must have circumvented GM’s Security Access feature-- whether
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 10 of 11 Pg ID 271
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`during the development and distribution of the Software Transfer Tool, or prior to that,
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`when Defendants were allegedly copying the software onto blank modules themselves.
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`Courts within this District have found that courts may view a complaint as a
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`whole, considering all the factual allegations contained in the complaint (not just under
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`one count), in determining whether a plausible claim for relief has been established.
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`See In re: Packaged Ice Antitrust Litig., 723 F. Supp. 2d 987, 1005-06 (E.D. Mich.
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`2010); see also Empire Home Services, L.L.C. v. Empire Iron Works, Inc., 2006 WL
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`2269507 at *4 (E.D. Mich. 2006). Plaintiffs’ factual allegations are somewhat
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`disorganized. But considering the allegations under Count II in conjunction with those
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`under Count I’s copyright infringement claim, they do constitute a reasonable
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`expectation that discovery will reveal that Defendants circumvented GM’s technological
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`protection measures at some point.
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`V.
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`Defendants’ motion to dismiss Count II is DENIED.
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`Conclusion
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`When considering a motion to dismiss, a court is required simply to use its
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`common sense and experience to determine if plaintiffs allege sufficient facts to create
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`a plausible claim for relief. A claim is plausible if the court can draw a reasonable
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`inference that the defendant is liable for the misconduct alleged. See Ashcroft, supra.
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`Although Plaintiffs have not pled with specificity the details of how their software was
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`allegedly copied, their factual allegations, taken as true and viewed both in a light most
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`favorable to the Plaintiffs and in the context of the complaint as a whole, are sufficient to
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`create a reasonable inference that Defendants are liable for circumventing GM’s
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`2:15-cv-12917-VAR-EAS Doc # 25 Filed 03/01/17 Pg 11 of 11 Pg ID 272
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`technological protection measures and infringing upon GM’s copyrighted software.
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`Discovery in this case may answer any remaining questions.
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`Defendants’ motion is DENIED.
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`Dated: March 1, 2017
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`S/Victoria A. Roberts
`Victoria A. Roberts
`United States District Judge
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`The undersigned certifies that a copy of this
`document was served on the attorneys of
`record by electronic means or U.S. Mail on
`March 1, 2017.
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`s/Linda Vertriest
`Deputy Clerk
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`11
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