Case: 1:05-cv-01519-LW Doc #: 321 Filed: 07/19/12 1 of 28. PageID #: 7184
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`IN THE UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF OHIO
`EASTERN DIVISION
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`CASE NO. 1:05 CV 1519
`
`JUDGE LESLEY WELLS
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`MAGISTRATE JUDGE
`WILLIAM H. BAUGHMAN, JR.
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`REPORT & RECOMMENDATION
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`))))))))))
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`AUTOMATED SOLUTIONS
`CORPORATION,
`
`Plaintiff,
`
`v.
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`PARAGON DATA SYSTEMS, INC.
`
`Defendant.
`
`Introduction
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`Before me by referral1 in this matter involving a claim of copyright infringement2 is
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`a motion for summary judgment, including supporting exhibits,3 filed by defendant Paragon
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`Data Systems, Inc. (Paragon). Plaintiff Automated Solutions Corporation (ASC) has filed,
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`under seal, its opposition to the motion, including exhibits.4 Paragon, in turn, has replied to
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`that opposition.5
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`For the reasons that follow, I recommend that Paragon’s motion be granted in part and
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`denied in part.
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`1 ECF # 303.
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`2 ECF # 5.
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`3 ECF # 315.
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`4 ECF # 316.
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`5 ECF # 318.
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`
`
`IN THE UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF OHIO
`EASTERN DIVISION
`
`CASE NO. 1:05 CV 1519
`
`JUDGE LESLEY WELLS
`
`MAGISTRATE JUDGE
`WILLIAM H. BAUGHMAN, JR.
`
`REPORT & RECOMMENDATION
`
`))))))))))
`
`AUTOMATED SOLUTIONS
`CORPORATION,
`
`Plaintiff,
`
`v.
`
`PARAGON DATA SYSTEMS, INC.
`
`Defendant.
`
`Introduction
`
`Before me by referral1 in this matter involving a claim of copyright infringement2 is
`
`a motion for summary judgment, including supporting exhibits,3 filed by defendant Paragon
`
`Data Systems, Inc. (Paragon). Plaintiff Automated Solutions Corporation (ASC) has filed,
`
`under seal, its opposition to the motion, including exhibits.4 Paragon, in turn, has replied to
`
`that opposition.5
`
`For the reasons that follow, I recommend that Paragon’s motion be granted in part and
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`denied in part.
`
`1 ECF # 303.
`
`2 ECF # 5.
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`3 ECF # 315.
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`4 ECF # 316.
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`5 ECF # 318.
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`A.
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`Overview
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`Facts
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`Recommending an adjudication of
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`the present motion requires
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`that
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`the
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`recommendation be properly set within the context of the larger proceedings.6 That context,
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`in turn, involves understanding a matter which ranges over related state court proceedings
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`as well as more than 300 filings submitted in this case since May of 2005 to four separate
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`federal judicial officers by – at one time or another – nearly 30 attorneys and was described
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`by United States District Judge Lesley Wells as “this contentious and long-standing
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`copyright infringement matter.”7 Accordingly, I will here make no attempt at extensive
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`detailing (which has already substantially been set forth in an exhaustive earlier order by
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`Judge Wells)8 but will seek to present only the necessarily relevant facts to the motion.
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`B.
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`Original relationship between ASC and Paragon/first state court action
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`Essentially, as noted in Judge Wells’ prior order, this case arises from a 2001
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`agreement between ASC and Paragon to jointly develop, own, and license Single Copy
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`Distribution System (SCDS) computer software for use by the Chicago Tribune.9 However,
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`6 I also note that the present motion is being adjudicated separately from and
`simultaneous to consideration of a motion for sanctions filed by ASC (ECF # 309), which
`motion is also part of the referral. See, ECF # 303. The report and recommendation on the
`motion for sanctions is filed separately and contemporaneously.
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`7 ECF # 274 at 1.
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`8 ECF # 214.
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`9 Id. at 5-6.
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`disputes soon arose between the parties and, “[a]midst a deteriorating relationship,” the
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`parties executed a letter agreement in 2002 which provided, among other things, that ASC
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`was to provide Paragon with the unencrypted source code for the SCDS software by January
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`of 2003.10 In September, 2003, after Paragon complained that ASC had not provided either
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`encrypted or non-encrypted code according the agreement, Paragon terminated the contract
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`between the parties.11
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`As a result of Paragon’s action, ASC promptly filed a multi-count complaint against
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`Paragon in state court.12 By agreement, the parties partially dismissed large portions of the
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`complaint, waived a jury, and went to trial before the court on a single count of the
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`complaint.13 That count sought an order declaring that: (1) ASC has no further obligations
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`to Paragon under the prior agreements; (2) ASC is the sole owner of the SCDS software at
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`issue; and (3) Paragon is enjoined from interfering with that ownership and with ASC’s
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`actual and prospective business relationships.14 In a series of findings in February, 2005, the
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`state court trial judge determined that: (1) despite a “tumultuous relationship,” the parties
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`were joint owners of the software and the computer code for that software until Paragon
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`“unilaterally” terminated the contract on September 16, 2003; and (2) since that termination
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`10 Id. at 10.
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`11 Id. at 10-11.
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`12 Id. at 11.
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`13 Id.
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`14 Id.
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`by Paragon, the “exclusive and complete” ownership of the software code, including all
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`modifications to the code made since September 16, 2003, belongs to ASC.15
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`C.
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`Present action/federal case discovery
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`Immediately, ASC, through counsel, demanded that Paragon return copies of the
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`computer code and obtained federal copyright registration of the code.16 Paragon refused to
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`return the code.17 It also appealed the decision of the state trial judge.18 Upon review, the
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`Ohio appeals court in July, 2006, affirmed the judgment of the trial court.19
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`While the state appeal was pending, ASC filed the present action in state court against
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`Paragon, which filed an answer and counterclaim.20 After that action was removed to this
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`Court, a series of motions were then filed, including cross motions for partial summary
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`judgment by each party.21 Substantial discovery disputes arising from those motions then
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`ensued, which disputes, in turn, were referred to United States Magistrate Judge Patricia
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`Hemann for a report and recommendation as to resolution.22
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`15 Id. at 14-15.
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`16 Id. at 15.
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`17 Id.
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`18 Id.
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`19 Id. at 16-17.
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`20 Id. at 17-19.
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`21 Id. at 19-20.
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`22 Id. at 33.
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`ASC argued to Magistrate Judge Hemann that Paragon had failed or refused to
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`produce any documents related to Paragon’s development in 2004 and 2005 of a computer
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`code for its Delivery, Return and Collection Information (DRACI) software – a product
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`Paragon developed and sold to the Plain Dealer and that ASC contended was derived from
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`the SCDS code it owns by virtue of the state court judgment.23 Paragon, for its part, asserted
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`to Magistrate Judge Hemann that there were no copies of the DRACI code other than those
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`already provided to ASC and that development of the code for DRACI did not begin until
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`2005.24
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`As Judge Wells noted, Paragon was thus able to successfully resist ASC’s request to
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`compel additional discovery that ASC maintained might have revealed more details about
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`the development of DRACI.25 However, as Judge Wells also noted, Magistrate Judge
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`Hemann’s decision left open the possibility of authorizing additional discovery in the future
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`on ASC’s claims of spoilation.26
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`D.
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`Judge Wells’ order/spoliation claim
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`To that end, Judge Wells, inter alia, converted a portion of ASC’s then-pending
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`motion for partial summary judgment into a Rule 56(f) opposition to Paragon’s motion for
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`partial summary judgment and a motion to authorize additional discovery on the “contentions
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`23 Id. at 33.
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`24 Id. at 34.
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`25 Id.
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`26 Id.
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`and issues regarding the derivation of the DRACI code.” While Judge Wells observed that
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`counsel for Paragon had made “limited representations” to Magistrate Judge Hemann
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`concerning how the DRACI code came to be produced, Judge Wells concluded, after
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`consideration of evidence provided by ASC, that those representations were “insufficient.”27
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`Specifically, Judge Wells stated that a “key question in this litigation is whether the
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`DRACI code is derived from SCDS, and [that] this question can only be answered if the
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`developmental materials for DRACI are provided by Paragon.”28 Accordingly, Judge Wells
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`ordered that additional discovery be conducted.29
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`E.
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`Paragon’s motion for summary judgment
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`After discovery was conducted under terms of that order, ASC sought sanctions
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`against Paragon on grounds arising from the discovery.30 While that motion, as well as a
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`motion for partial summary judgment filed by Paragon,31 were pending, this matter was
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`referred to me in March, 2011, for the purpose of hearing any dispositive motions.32 Upon
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`receiving the referral, I convened a status conference.33 As a consequence of that conference,
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`27 Id. at 36.
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`28 Id.
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`29 Id. at 37.
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`30 ECF # 270.
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`31 ECF # 137.
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`32 ECF # 303.
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`33 ECF # 306.
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`among other things, Paragon’s previous motion for partial summary judgment34 was denied
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`without prejudice to it being refiled as a motion for summary judgment as to all remaining
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`claims, and ASC was granted leave to refile its prior motion for sanctions35 as a motion for
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`default judgment.36
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`Pursuant to my order, the parties have filed the motions indicated above.37
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`1.
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`Paragon’s argument
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`Paragon in its present motion for summary judgment initially states that ASC asserts
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`two major bases for relief in the amended complaint. First, Paragon states, ASC raises
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`federal claims that Paragon’s DRACI software unlawfully infringes its copyright for the
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`SCDS software and that the sale of DRACI violates the Lanham Act by creating confusion
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`in the marketplace.38 In addition, Paragon notes, ASC asserts that Paragon’s sale of DRACI
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`also raises state law claims for tortious interference with business relationships, unjust
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`enrichment, and unfair competition.39
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`34 ECF # 137.
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`35 ECF # 270.
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`36 ECF # 306.
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`37 ECF # 309 (motion for sanctions/default judgment); ECF # 315 (motion for
`summary judgment).
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`38 ECF # 315 at 3.
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`39 Id.
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`Paragon then contends that all the above claims are contingent upon ASC showing
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`“that the DRACI software infringes upon the SCDS copyright, or that DRACI was copied
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`from, or is substantially similar to SCDS.”40 Paragon argues that it can show that there is no
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`similarity between the two systems and that, therefore, it is entitled to summary judgment on
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`all claims.41 In particular, Paragon offers the report and affidavit of David Brumbaugh,
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`technical principal at Boundless Flight, Inc., to state that, because under eight observable
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`criteria, DRACI is not substantially similar to SCDS, it is “impossible for any reasonably
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`competent technical observer to think that DRACI was copied from SCDS.”42
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`2.
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`ASC’s response
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`ASC, in a sealed filing, opposes Paragon’s motion for summary judgment.43 First,
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`ASC disputes the assertion that the case can be reduced to the single fact issue of whether
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`Paragon’s DRACI software program was derived from ASC’s SCDS software.44 Rather, it
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`argues, the case involves “multiple discrete infringement’s on ASC’s copyrights” by
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`Paragon, as well as the issues of Paragon’s “utter failure to produce DRACI development
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`40 Id. at 4.
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`41 Id.
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`42 Id. at 7 (quoting declaration of David Brumbaugh, ECF # 315, Ex. 1 at 6).
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`43 ECF # 316.
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`44 Id. at 6.
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`materials and other versions of DRACI known to exist”45 and the matters related to the
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`Lanham Act claim of false and misleading sales and marketing practices.46
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`In addition, as to the copyright infringement claim itself, ASC raises two arguments:
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`(1) that, in addition to any similarity between DRACI and SCDS, there are other distinct acts
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`of copying that could support a finding of infringement and so preclude summary judgment
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`on a finding that DRACI is not similar to SCDS; and (2) that the expert testimony of
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`Dr. Wolfgang Pelz, emeritus professor of computer science at the University of Akron,
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`establishes that Paragon’s DRACI computer code is “substantially similar” to the original
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`aspects of ASC’s SCDS code.47
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`3.
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`Paragon’s reply
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`In its reply, Paragon initially reiterates the argument that all of ASC’s claims asserted
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`in the complaint “are predicated upon the allegation that DRACI is derived from SCDS. If
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`Automated cannot prove [this], then all of its claims must fail.”48 In that regard, Paragon then
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`contends that since the Pelz declaration rests on an allegedly faulty factual premise, that
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`declaration – which Paragon states is the only “proper Rule 56 evidence [from ASC] in
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`support of its position on [copying and similarity]” – is “entirely irrelevant to the issue of
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`45 Id.
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`46 Id. at 10.
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`47 Id. at 22 (citing affidavit of Dr. Wolfgang Pelz, ECF # 316, Ex. 1 at ¶¶ 13-17,
`19-22, and 28).
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`48 ECF # 318 at 5.
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`whether DRACI was derived from SCDS,” and so cannot create an issue of fact in that
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`regard.49
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`In addition, Paragon then claims that ASC is now “attempting to recast the
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`[infringement] claims in its complaint” from the single claim that Paragon improperly
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`developed, marketed, and sold DRACI to the Plain Dealer in 200450 to include instances of
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`Paragon’s use of the SCDS code that occurred while the parties were still litigating
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`ownership of that code in state court prior to that court’s rulings in 2005.51 Paragon, inter
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`alia, maintains that such arguments are precluded by “law of the case” rulings by Magistrate
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`Judge Hemann to which ASC did not object, and by res judicata because they could have
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`been raised, but weren’t, in the state court proceedings.52 Paragon further argues, for the first
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`time in the reply brief, that all the non-infringement claims should be decided in its favor as
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`a consequence of res judicata.53
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`F.
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`Summary
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`After setting forth the applicable law, I will discuss the arguments mentioned above
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`in greater detail and then recommend that Paragon’s motion for summary judgment be
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`granted in part and denied in part. I will discuss first the copyright infringement claim and
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`49 Id.
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`50 See, ECF # 214 (Judge Wells’ opinion of June 27, 2008) at 35-36.
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`51 ECF # 318 at 6-7.
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`52 Id.
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`53 Id. at 8-13.
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`then address the non-infringement claims, with particular attention in that regard to the
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`propriety and implications of seeking to raise new arguments in a summary judgment reply
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`brief.
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`A.
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`1.
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`Applicable law
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`Summary judgment
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`Analysis
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`Summary judgment is appropriate where the court is satisfied “that there is no genuine
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`issue as to any material fact and that the moving party is entitled to a judgment as a matter
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`of law.”54 The burden of showing the absence of any such “genuine issue” rests with the
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`moving party:
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`[A] party seeking summary judgment always bears the initial responsibility of
`informing the district court of the basis for its motion, and identifying those
`portions of ‘the pleadings, depositions answers to interrogatories, and
`admissions on file, together with affidavits, if any,’ which it believes
`demonstrates the absence of a genuine issue of material fact.55
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`A fact is “material” only if its resolution will affect the outcome of the lawsuit.56
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`Determination of whether a factual issue is “genuine” requires consideration of the applicable
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`54 Fed. R. Civ. P. 56(c).
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`55 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) (citing Fed. R. Civ. P. 56(c)).
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`56 Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986).
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`evidentiary standards.57 The court will view the summary judgment motion “in the light most
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`favorable to the party opposing the motion.”58
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`Summary judgment should be granted if a party who bears the burden of proof at trial
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`does not establish an essential element of his case.59 Accordingly, “[t]he mere existence of
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`a scintilla of evidence in support of the plaintiff’s position will be insufficient; there must be
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`evidence on which the jury could reasonably find for the plaintiff.”60 Moreover, if the
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`evidence presented is “merely colorable” and not “significantly probative,” the court may
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`decide the legal issue and grant summary judgment.61
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`In most civil cases involving summary judgment, the court must decide “whether
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`reasonable jurors could find by a preponderance of the evidence that the [non-moving party]
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`is entitled to a verdict.”62 However, if the non-moving party faces a heightened burden of
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`proof, such as clear and convincing evidence, it must show that it can produce evidence
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`which, if believed, will meet the higher standard.63
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`57 Id. at 252.
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`58 United States v. Diebold, Inc., 369 U.S. 654, 655 (1962).
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`59 McDonald v. Petree, 409 F.3d 724, 727 (6th Cir. 2005) (citing Celotex Corp., 477
`U.S. at 322).
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`60 Leadbetter v. Gilley, 385 F.3d 683, 689 (6th Cir. 2004) (quoting Anderson, 477 U.S.
`at 248-49).
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`61 Anderson, 477 U.S. at 249-50 (citation omitted).
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`62 Id. at 252.
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`63 March v. Levine, 249 F.3d 462, 471 (6th Cir. 2001).
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`Once the moving party has satisfied its burden of proof, the burden then shifts to the
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`nonmover.64 The nonmoving party may not simply rely on its pleadings, but must “produce
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`evidence that results in a conflict of material fact to be solved by a jury.”65 The text of
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`Fed. R. Civ. P. 56(e) states:
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`When a motion for summary judgment is made and supported as provided in
`this rule, an adverse party may not rest upon the mere allegations or denials of
`his pleading, but his response, by affidavits or as otherwise provided in this
`rule, must set forth specific facts showing that there is a genuine issue for trial.
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`“In other words, the movant can challenge the opposing party to ‘put up or shut up’ on a
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`critical issue.”66
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`Though parties must produce evidence in support of and in opposition to a motion for
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`summary judgment, not all types of evidence are permissible. The Sixth Circuit has
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`concurred that “‘it is well settled that only admissible evidence may be considered by the trial
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`court in ruling on a motion for summary judgment.’”67 Rule 56(e) also has certain, more
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`specific requirements:
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`[It] requires that affidavits used for summary judgment purposes be made on
`the basis of personal knowledge, set forth admissible evidence, and show that
`the affiant is competent to testify. Rule 56(e) further requires the party to
`attach sworn or certified copies to all documents referred to in the affidavit.
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`64 Anderson, 477 U.S. at 256.
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`65 Cox v. Kentucky Dep’t of Transp., 53 F.3d 146, 149 (6th Cir. 1995).
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`66 BDT Prods. v. Lexmark Int’l, 124 F. App’x 329, 331 (6th Cir. 2005).
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`67 Wiley v. United States, 20 F.3d 222 (6th Cir. 1994) (quoting Beyene v. Coleman Sec.
`Servs., 854 F.2d 1179, 1181 (9th Cir. 1988)).
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`Furthermore, hearsay evidence cannot be considered on a motion for summary
`judgment.68
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`However, the district court may consider evidence not meeting this standard unless the
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`opposing party affirmatively raises the issue of the defect. The burden is on the opposing
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`party to object to the improper evidence; failure to object constitutes a waiver.
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`If a party fails to object before the district court to the affidavits or evidentiary
`materials submitted by the other party in support of its position on summary
`judgment, any objections to the district court’s consideration of such materials
`are deemed to have been waived, and [the Sixth Circuit] will review such
`objections only to avoid a gross miscarriage of justice.69
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`As a general matter, the judge considering a motion for summary judgment is to
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`examine “[o]nly disputes over facts that might affect the outcome of the suit under governing
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`law.”70 The court will not consider non-material facts, nor will it weigh material evidence to
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`determine the truth of the matter.71 The judge’s sole function is to determine whether there
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`is a genuine factual issue for trial; this does not exist unless “there is sufficient evidence
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`favoring the nonmoving party for a jury to return a verdict for that party.”72
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`68 Id. at 225-26 (citations omitted).
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`69 Id. at 226 (citations omitted).
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`70 Anderson, 477 U.S. at 248.
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`71 Id. at 249.
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`72 Id.
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`In sum, proper summary judgment analysis entails:
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`[T]he threshold inquiry of determining whether there is the need for a trial –
`whether, in other words, there are any genuine factual issues that properly can
`be resolved only by a finder of fact because they may reasonably be resolved
`in favor of either party.73
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`2.
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`Copyright infringement
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`To establish copyright infringement, a plaintiff must prove (1) ownership of a valid
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`copyright, and (2) copying of constituent elements of the work that are original.74 Those two
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`areas will be addressed separately.
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`a.
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`The existence of a valid copyright
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`The first element requires courts to consider the “copyrightability” of the work.75
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`Essentially, this step requires that the court, in turn, address two concepts: originality and the
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`fact that a copyright only protects the expression of ideas, not the ideas themselves.76
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`Originality, as that term is used in copyright law, “means only that the work was
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`independently created by the author (as opposed to copied from some other works) and that
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`it possesses at least some minimal degree of creativity. To be sure, the requisite degree of
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`73 Id. at 250.
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`74 Feist Publ’ns, Inv. v. Rural Te. Serv. Co., 499 U.S. 340, 361 (1991).
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`75 Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 538-39
`(6th Cir. 2004).
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`76 Ross, Brovins & Oehmke, P.C. v. Lexis/Nexis, 348 F. Supp. 2d 845, 853 (E.D. Mich.
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`2004).
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`creativity is extremely low; even a slight amount will suffice.”77 As to distinguishing between
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`a non-protectable idea and a protected expression of an idea, courts recognize that a bright-
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`line test is not possible but, rather, have developed a series of mechanisms by which a work
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`at issue can be located on the spectrum between idea and expression in order to ascertain if
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`it is protected or not.78
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`In that regard, the “merger doctrine” recognizes that when there is essentially only one
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`way to express an idea, the idea and its expression become merged; therefore, copyrighting
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`the expression will not be allowed on the grounds that it would be an impermissible
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`copyrighting of the idea itself.79 This doctrine has been invoked, for example, to preclude
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`copyright protection for a map showing the location of a proposed pipeline80 and to preclude
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`protection for instructions for a sweepstakes contest.81
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`77 Feist, 499 U.S. at 345.
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`78 Murray Hill Publ’ns, Inc. v. Twentieth Century Fox Film Corp., 361 F.3d 312, 319
`(6th Cir. 2004).
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`79 See, Kohus v. Mariol, 328 F.3d 848, 856 (6th Cir. 2003). The Sixth Circuit in Kohus
`analyzed the merger doctrine as part of a discussion of the substantial similarity defense.
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`80 Kern River Gas Transmission Co. v. Coastal Corp., 899 F.2d 1458, 1464-65
`(5th Cir. 1990). Because a map was the only way to express the idea of the location of the
`pipeline, the idea and the expression of the idea merged such that the maps were not subject
`to copyright protection.
`
`81 Morrisey v. Proctor & Gamble Co., 379 F.2d 675, 678-79 (1st Cir. 1967). Where
`the subject matter is very narrow and thus necessarily requires only at best a limited number
`of forms of expression, to permit one party to copyright those forms would foreclose all
`possibilities of future use of such necessary forms by others.
`
`-16-
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`
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`Similarly, none of the elements dictated by necessity or function can be copyrighted.82
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`Relatedly, the “scenes a faire” doctrine precludes copyright protection for “scenes” that
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`“must be done” within a given work.83 In the computer software context, this doctrine, as
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`applied by the Sixth Circuit in Lexmark, means that:
`
`[T]he elements of a program dictated by practical realities – e.g., by hardware
`standards and mechanical specifications, software standards and compatibility
`requirements, computer manufacturer design standards, target industry
`practices, and standard computer programming practices – may not obtain
`protection.84
`
`b.
`
`Copying
`
`As the Sixth Circuit recently stated in R.C. Olmstead, Inc. v. CU Interface LLC,85 a
`
`plaintiff can show copying by two ways, either through direct evidence of copying or by
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`indirect.86
`
`In the first instance, even where there is direct evidence of copying, such evidence is
`
`not sufficient of itself to prove infringement. As the courts have clearly stated, “it is
`
`axiomatic that ‘[n]ot all copying is actionable.’”87 Rather, as was discussed above, copyright
`
`82 Kohus, 328 F.3d at 856.
`
`83 Lexmark, 387 F.3d at 534.
`
`84 Id.
`
`85 R.C. Olmstead, Inc. v. CU Interface, LLC, 606 F.3d 262 (6th Cir. 2010) (rehearing
`and rehearing en banc denied).
`
`86 Id. at 274 (citing Kohus, 328 F.3d at 853-54).
`
`87 R.C. Olmstead, Inc. v. CU Interface, LLC, 657 F. Supp. 2d 878, 890 (N.D. Ohio
`2009) (quoting Kohus, 328 F.3d at 853).
`
`-17-
`
`
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`only protects from copying that which is original and protectable. Thus, even when a plaintiff
`
`can provide direct evidence that a defendant copied its work, if that plaintiff cannot also
`
`establish that the copied elements were “original protectable constituent elements” of its
`
`work, it “cannot recover under a direct evidence theory of copyright infringement.”88
`
`Where there is no direct evidence of copying, “a plaintiff may establish ‘an inference
`
`of copying by showing (1) access to the allegedly-infringed work by the defendant(s) and
`
`(2) a substantial similarity between the two works at issue.’”89
`
`As the court in Lexis/Nexis explained, in establishing the inference of copying there
`
`is first a factual question of whether the defendant, in creating its work, used the plaintiff’s
`
`material as a model, template, or even inspiration.90 If the answer is “yes,” then it may be
`
`concluded that, as a factual proposition, copying may have occurred. But “the question still
`
`remains at this step of the analysis of whether such copying is actionable.”91
`
`As the recent Sixth Circuit opinion in R.C. Olmstead, Inc. makes clear, the analysis
`
`required to determine if any copying is actionable requires that the court employ a two-step
`
`approach: first, it must “‘identify and eliminate those elements [in the copyrighted work] that
`
`88 Id. at 893.
`
`89 R.C. Olmstead, 606 F.3d at 274 (quoting Kohus, 328 F.3d at 853-54 (quoting Ellis
`v. Duffie, 177 F.3d 503, 506 (6th Cir. 1999)).
`
`90 Id.
`
`91 Id.
`
`-18-
`
`
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`
`are unoriginal and therefore unprotected,’”92 and then it “asks whether the second [or copied]
`
`work involves elements that are substantially similar to the protected elements of the original
`
`work.”93
`
`Thus, a plaintiff alleging copyright infringement of computer software under either
`
`a theory of direct copying or by an inference of copying must initially “identify those
`
`elements of its software that are original” and thus entitled to protection, thereby filtering out
`
`those elements of the purportedly copied software “that would be expected to be common
`
`to any [industry] software, those dictated by the particular business practices [of that
`
`industry].”94
`
`Failure of a plaintiff to provide sufficient evidence on summary judgment for the court
`
`to determine precisely what elements of the plaintiff’s software were protected and what
`
`other elements would be expected to be common to any software for that industry will result
`
`in the granting of a motion for summary judgment by the defendant on the grounds that no
`
`triable issue of fact exists as to whether the defendant infringed the copyright by copying
`
`such protected elements.95
`
`92 R.C. Olmstead, 606 F.3d at 274 (quoting Kohus, 328 F.3d at 853).
`
`93 Id. at 275 (citing Kohus, 328 F.3d at 855).
`
`94 Id.
`
`95 Id. at 275-76.
`
`-19-
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`
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`B.
`
`Application of standards – Paragon’s motion for summary judgment should be
`granted in part as to the federal copyright infringement claim(s).
`
`I note initially that despite a published decision in March, 2009, by United States
`
`District Judge Sara Lioi in the matter of R.C. Olmstead, Inc. v. CU Interface, LLC,96 – a
`
`decision that was later affirmed by the Sixth Circuit in 201097 and which is highly analogous
`
`to the present motion – neither party, in all the extensive argumentative briefings, cited this
`
`Court to that authority98 nor framed its arguments with reference thereto. Such a conspicuous
`
`failing by both sides made resolution of this matter more time-consuming and cumbersome
`
`than it needed to be.
`
`That said, and using Judge Lioi’s opinion in R.C. Olmstead as a template, I
`
`recommend finding that Paragon is entitled to summary judgment in part as to the Federal
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`copyright infringement claim. In essence, I recommend finding that ASC has not presented
`
`sufficient admissible evidence from which a jury issue would exist as to whether Paragon
`
`impermissibly copied original, protected elements of ASC’s SCDS software.
`
` I note first that ASC argues that evidence exists to support both: (1) a finding from
`
`direct evidence that Paragon copied ASC’s SCDS code, and (2) that an inference may be
`
`96 R.C. Olmstead, 657 F. Supp. 2d 878.
`
`97 R.C. Olmstead, 606 F.3d 262 (rehearing and rehearing en banc denied).
`
`98 I note that Paragon does make a single citation to the district court opinion in R.C.
`Olmstead in its brief in opposition to ASC’s motion for sanctions. See, ECF # 311 at 20.
`
`-20-
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`
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`drawn from (a) Paragon’s access to the code, and (b) a resulting substantial similarity
`
`between ASC’s work and Paragon’s that Paragon copied the code.99
`
`As regards direct evidence of copying, ASC points to Paragon’s purported admissions
`
`that it copied the SCDS code on multiple occasions after September 16, 2003, and the report
`
`of a private investigator who witnessed Paragon demonstrating a program at an industry trade
`
`show “which appeared to be identical” to ASC’s software.100 As to the argument that copying
`
`may be inferred by access and inference, ASC relies on: (1) work purportedly documented
`
`in reports by Paragon employee Brent Anderson; (2) a computer file created by Paragon in
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`2004 that purportedly shows work being done on a similar program; and (3) a computer disk
`
`which ASC’s expert contends contains Paragon’s version of a substantially similar code.101
`
`Although this is the essence of ASC’s infringement case, I note that all such
`
`arguments – whether arising from a theory of direct evidence of copying or from the position
`
`that copying may be inferred – are not overly probative since they do not begin by even
`
`attempting to specify exactly what portions of the SCDS software are protectable, original
`
`elements and which are unprotectable because they are “‘dictated by efficiency ... and
`
`external factors such as particular business practices.’”102 In that regard, as Judge Lioi
`
`observed, the first step toward establishing what elements can pass through the filter as
`
`99 ECF # 316 at 14-16.
`
`100 Id.
`
`101 Id. at 16-18.
`
`102 R.C. Olmstead, 657 F. Supp. 2d at 894 (quoting Kohus, 328 F.3d at 855-56).
`
`-21-
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`
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`original, protectable components of the SCDS software should have been expert testimony
`
`“‘to establish what elements, if any, are necessary to the function’” of tracking single copy
`
`deliveries of newspapers.103 Then, once the unprotected elements have been filtered out, the
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`second step of determining if Paragon’s software infringed on SCDS’s software, minus the
`
`non-protected parts, would have required additional expert testimony to educate the trier of
`
`fact as to whether the intended audience for such software would find Paragon’s software,
`
`absent non-protected elements, “substantially similar.”104
`
`Here, as stated, although ASC has extensively argued its conclusion that Paragon’s
`
`software is substantially similar to its SCDS code when that code is reduced to only its
`
`original, protectable elements, it has offered no evidence as described above by which a jury
`
`could arrive at that conclusion.105 Stated differently, ASC appears to assume that because
`
`Paragon has not contested the validity of its copyright,106 the only thing it needed to prove
`
`to establish infringement by Paragon is that copying occurred.107 It appeared to have
`
`recognized no need to establish, as a predicate matter and through Rule 56 evidence, which
`
`specific elements of its software “constitute protectable original constit
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