Case 1:11-cv-11526-DPW Document 512 Filed 06/27/16 Page 1 of 38
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
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`CIVIL ACTION NO.
`11-11526-DPW
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`ICONICS, INC.
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`Plaintiff,
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`v.
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`SIMONE MASSARO,
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`CHRISTOPHER VOLPE, VENTO
`INDUSTRIES, INC., BAXENERGY GmbH )
`And BAXENERGY ITALIA S.r.L.,
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`Defendants.
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`MEMORANDUM AND ORDER
`June 27, 2016
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`I. FACTUAL BACKGROUND
`This case involves two sets of business disputes, tied
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`together by a common cast of characters and allegations
`concerning misappropriation of plaintiff’s intellectual
`property.
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`Plaintiff ICONICS is a software company which produces
`HMI/SCADA (Human Machine Interface/Supervisory Control and Data
`Acquisition) systems. HMI/SCADA systems collect data from a
`machine and transmit that data in a useful, visualized form to
`client computers. For example, a SCADA system might be
`connected to a boiler in a factory, allowing a factory operator
`to see and control data such as water levels or temperature.
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`UNITED STATES DISTRICT COURT
`DISTRICT OF MASSACHUSETTS
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`CIVIL ACTION NO.
`11-11526-DPW
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`ICONICS, INC.
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`Plaintiff,
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`v.
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`SIMONE MASSARO,
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`CHRISTOPHER VOLPE, VENTO
`INDUSTRIES, INC., BAXENERGY GmbH )
`And BAXENERGY ITALIA S.r.L.,
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`Defendants.
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`MEMORANDUM AND ORDER
`June 27, 2016
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`I. FACTUAL BACKGROUND
`This case involves two sets of business disputes, tied
`
`together by a common cast of characters and allegations
`concerning misappropriation of plaintiff’s intellectual
`property.
`
`Plaintiff ICONICS is a software company which produces
`HMI/SCADA (Human Machine Interface/Supervisory Control and Data
`Acquisition) systems. HMI/SCADA systems collect data from a
`machine and transmit that data in a useful, visualized form to
`client computers. For example, a SCADA system might be
`connected to a boiler in a factory, allowing a factory operator
`to see and control data such as water levels or temperature.
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`Case 1:11-cv-11526-DPW Document 512 Filed 06/27/16 Page 2 of 38
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`This process necessarily requires customization – by either
`ICONICS itself or by middlemen known as “system integrators” -
`to the particular machines being monitored and controlled.
`Certain aspects of SCADA systems are standardized under the
`“OPC” interoperability standard. ICONICS’s software includes
`the GENESIS32, GENESIS64, and BizViz products.
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`Defendant Simone Massaro is a former ICONICS employee.
`Beginning in late 2007, while still employed by ICONICS, Massaro
`started helping another former ICONICS employee, Chris Volpe,
`with software development for Volpe’s company, Volpe Industries.
`The remaining defendants, BaxEnergy GmbH, BaxEnergy Italia,
`S.r.L., and Vento Industries, Inc. are entities with which
`Massaro or Volpe was affiliated after Massaro left ICONICS.
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`A. Project Foxtrot
`Volpe Industries worked in the surveillance camera business
`and sought to develop its own surveillance software. This
`software development project, with which Massaro became
`involved, was known as Project Foxtrot. Massaro has admitted
`that while still employed by ICONICS, he took ICONICS source
`code without permission for use in Project Foxtrot. ICONICS
`first learned that Massaro was using its code in Project Foxtrot
`in August, 2008 and confronted him on September 16, 2008.
`Massaro resigned from ICONICS on January 6, 2009.
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`In the wake of the Project Foxtrot initiative, ICONICS
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`commenced state and federal litigation. In December 2009, the
`Suffolk Superior Court issued a declaratory judgment holding
`that ICONICS owned all of Massaro’s interest in Project Foxtrot,
`due to employment contracts between ICONICS and Massaro.
`ICONICS, Inc. v. Volpe Industries, Inc., No. 09-0361-BLS2 (Mass.
`Super. Ct. Dec. 14, 2009). In 2010, Volpe Industries filed for
`bankruptcy. Those bankruptcy proceedings were marred by efforts
`to conceal the activities of Massaro and Volpe:
`It is undisputed that in the bankruptcy proceedings, Vince
`Volpe, the brother of Chris, set up a shell company to
`purchase and then wipe Volpe Industries' servers. The
`Bankruptcy Court expressed concern that it had been
`defrauded by this purchase and when ICONICS ultimately
`acquired those servers, found that 80,000 files had been
`deleted. It is also undisputed that Chris Volpe testified
`in the state court proceedings that he never knew that
`Massaro was using ICONICS software in his Project Foxtrot
`work but also stated in his deposition for this proceeding
`that he was in fact aware. ICONICS alleges, but defendants
`dispute, that in the state court litigation, Massaro and
`Volpe Industries intentionally withheld part of the source
`code to hide the fact that he had copied it from ICONICS.
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`ICONICS, Inc. v. Massaro, No. CV 11-11526-DPW, 2016 WL 199407,
`at *2 (D. Mass. Jan. 15, 2016).
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`B. Energy Studio Pro
`Meanwhile, Massaro moved on to a new enterprise. Two weeks
`after his resignation, Massaro began communicating with Rüdiger
`Bax, of the system integrator firm Bax Engineering GmbH, about
`possible work. By June 2009 – ICONICS contends earlier –
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`Massaro’s new consulting company was working with Bax
`Engineering on a new wind power software product called Bax Wind
`Power. In February of 2010, Bax and Massaro formed a new German
`company, defendant BaxEnergy GmbH, to run renewable energy
`operations, as well as an Italian subsidiary defendant BaxEnergy
`Italia SRL (the two companies will be referred to herein as
`BaxEnergy). The development history of Bax Wind Power begins in
`February 2010, after the formation of BaxEnergy, leaving a
`potential gap in the record regarding how the product was coded
`in the early stages of its development.
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`Over time, BaxEnergy developed the Bax Wind Power product
`into a new product, still focused on wind power, called Energy
`Studio Pro (“ESP”). ESP includes a SCADA component, which for
`one of its customers is provided by ICONICS and for other
`customers is provided by an ICONICS competitor. The Volpe
`brothers were also involved with BaxEnergy. Vince Volpe
`eventually purchased Mr. Bax’s majority share of BaxEnergy.
`Chris Volpe founded a new company, defendant Vento Industries,
`Inc., which operates as an American partner or division of
`BaxEnergy providing sales and support in the American market.
`ICONICS contends, among other things, that ESP was
`developed using misappropriated ICONICS code, provided by
`Massaro, violating both copyright protection and trade secrets
`law. There is no dispute that at least some ICONICS code
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`appears in ESP. A small, 150-line file of javascript ICONICS
`code known as webHMI.js can be found on the BaxEnergy source
`code repository. Most of that code was also copied into a
`different file titled ScadaAutomation.js. WebHMI.js allows
`clients to view relevant data visualizations over a web browser.
`That said, plaintiff’s technical expert opined that webHMI.js is
`the only directly copied ICONICS code he found in Energy Studio
`Pro. ICONICS alleges additional copyright and trade secret
`violations based on the development process itself.
`II. PROCEDURAL HISTORY
`The original complaint in this proceeding was filed in
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`August 2011, alleging only one count (copyright infringement)
`against only Massaro, for claims related to Project Foxtrot.
`ICONICS has amended its complaint twice, in May 2013 and April
`2014, and now pleads ten causes of action against the current
`list of defendants. Almost immediately after this litigation
`began, discovery disputes arose. By the summer of 2014, ICONICS
`was complaining – as it still does – that it was being
`improperly denied access to BaxEnergy code, while defendants
`were complaining – as they still do – that ICONICS had not
`properly identified its trade secrets with specificity. These
`issues, which have been litigated aggressively, have required
`consistent judicial oversight and intervention since then, as
`have other discovery matters. They remain intertwined with the
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`instant summary judgment motions, both on the merits and as a
`continuing source of contention between the parties and their
`counsel.
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`In May, 2014, a separate settlement was reached that
`resolved all claims against Vince Volpe. He is no longer a
`defendant in this matter. Otherwise, motion practice has failed
`to narrow the scope of this litigation substantially. On
`September 17, 2014, by oral order, I denied motions to dismiss
`by BaxEnergy and by Chris Volpe (with the exception of
`dismissing on preemption grounds state unfair business practice
`claims concerning copyright infringement) and denied defendants’
`motion to strike trade secret claims.
`
`Earlier this year, on defendant’s motion for partial
`summary judgment, I entered an order denying the motion in part
`(as to Massaro) on statute of limitations defenses and granting
`the motion in part (as to the trade secrets, intentional
`interference with contractual relations and DMCA claims against
`Christopher Volpe, and as to the copyright infringement claims
`related to Volpe Industries). ICONICS, Inc. v. Massaro, No. CV
`11-11526-DPW, 2016 WL 199407, at *1 (D. Mass. Jan. 15, 2016).
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`Now before me are two separate summary judgment motions
`brought by defendants, one concerning plaintiff’s civil RICO and
`civil conspiracy claims and one concerning all other claims
`insofar as they relate to Energy Studio Pro (but focused almost
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`entirely on the intellectual property issues). Notably, this
`means that summary judgment is not sought as to the non-
`BaxEnergy defendants for eight of ten counts. For its part,
`Plaintiff has moved for summary judgment on its claims under the
`Digital Millennium Copyright Act (“DMCA”). In addition, there
`are three motions to strike expert witness testimony under
`Daubert, two from plaintiff, one as to defendant’s technical
`expert, Arthur Zatarain, and the other as to defendant’s damages
`expert, Bradford J. Kullberg, and one from defendants (as to
`Jimmy S. Pappas, plaintiff’s damages expert). Finally, ICONICS
`has a pending motion to compel discovery and for sanctions based
`on long-standing discovery controversies.
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`In this Memorandum and Order I consider and reject all
`summary judgment motions with respect to the issues presented
`except those raising trade secret claims, which I reserve,
`awaiting the development of additional initiatives to clarify
`the trade secrets at issue. I will allow Plaintiff’s motion to
`compel as a predicate for further developments and clarification
`of the disputed trade secrets. I will treat as moot the motions
`to strike the expert witness submission as to trade secrets in
`light of such further trade secret claim clarification
`initiatives. I will reserve the motions to strike the damages
`experts until further clarification of the substantive claims.
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`III. STANDARD OF REVIEW
`Under Rule 56, I may only grant summary judgment if there
`is no genuine dispute of material fact and if the undisputed
`facts demonstrate that the moving party is entitled to judgment
`as a matter of law. Fed. R. Civ. P. 56(a); Carmona v. Toledo,
`215 F.3d 124, 132 (1st Cir. 2000). An issue is genuine if it
`“may reasonably be resolved in favor of either party.” Vineberg
`v. Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008). A fact is
`material if it could sway the outcome of the litigation. Id.
`In determining whether genuine disputes of material fact exist,
`all reasonable inferences must be drawn in the non-movant’s
`favor. Id. Once the moving party has carried its burden, the
`burden shifts to the non-moving party, which must provide
`specific and supported evidence of disputed material facts.
`LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993).
`The non-moving party “may not rest upon mere allegation or
`denials” and must “establish a trial-worthy issue.” Id.
`IV. BAXENERGY COPYRIGHT CLAIMS
`ICONICS has alleged both direct copying – specifically, in
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`the form of the single webHMI.js file – and indirect copying in
`which defendants used ICONICS code while developing the Energy
`Studio Pro software but ultimately did not retain that code in
`ESP. Defendants raise two general arguments against ICONICS’
`copyright claims. First, they argue that the copyright
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`allegations are extraterritorial and therefore outside the scope
`of domestic copyright law. Second, they argue that the
`copyright registrations covering ICONICS’ products do not cover
`the relevant, potentially copied code, barring an infringement
`suit. With respect to allegations of indirect copying,
`defendants argue that the evidence of infringement is only
`circumstantial and refuted by direct record evidence. As for
`WebHMI.js, where copying is admitted, defendants assert that the
`file was either permissibly used under license or copied in a de
`minimis fashion. I address these contentions in turn.
`A. Extraterritoriality
`
`BaxEnergy is not an American company and Massaro’s work for
`it has not been performed in the United States. Defendants
`therefore argue that any potential copyright infringement is
`extraterritorial and cannot give rise to liability under
`domestic copyright law. Defendants are correct that the
`copyright laws do not generally extend extraterritorially.
`Elsevier Ltd. v. Chitika, Inc., 826 F. Supp. 2d 398, 402 (D.
`Mass. 2011) (quoting Update Art, Inc. v. Modiin Publ'g, Ltd.,
`843 F.2d 67, 73 (2d Cir. 1988) (“It is well established that
`copyright laws generally do not have extraterritorial
`application.”)).
`But the predicate act exception to this general rule allows
`for liability where a domestic act of copyright infringement
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`permits the later distribution, reproduction or other use
`abroad. Update Art, Inc., 843 F.2d at 73; see also Tire Eng'g &
`Distribution, LLC v. Shandong Linglong Rubber Co., 682 F.3d 292,
`308 (4th Cir. 2012) (per curiam) (“a plaintiff is required to
`show a domestic violation of the Copyright Act and damages
`flowing from foreign exploitation of that infringing act to
`successfully invoke the predicate-act doctrine”). So long as
`one connected act of infringement occurred in the United States,
`there is no obstacle to liability on the basis that BaxEnergy
`and Massaro worked outside the United States.
`It is uncontested that Massaro’s initial act of copying the
`ICONICS code occurred while he was in the United States. This
`is uncontested. Defendants now argue that it is conjectural
`which files were copied and that, in any case, no nexus has been
`shown between the domestic Project Foxtrot copying and the
`alleged extraterritorial BaxEnergy copying. But it would be a
`permissible – although not necessary - inference for a jury that
`the code in question traveled from ICONICS servers in the United
`States to use by BaxEnergy through that first, potentially
`extensive, act of copying in the United States. If copyright
`infringement were to be found, that would be the most plausible
`pathway, given that ICONICS has mustered direct evidence of
`copying domestically and no such evidence extraterritorially.
`In short, there exists a genuine issue of material fact as to
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`whether this case falls within the predicate act exception to
`the extraterritorial limitation on copyright law and summary
`judgment is not appropriate on those grounds.1
`B. Copyright Registration
`The Copyright Act “requires copyright holders to register
`their works before suing for copyright infringement.” Reed
`Elsevier, Inc. v. Muchnick, 559 U.S. 154, 157, (2010) (citing 17
`U.S.C. § 411(a)). Although this requirement is not
`jurisdictional, id., it is an important element of an
`infringement claim.
`ICONICS registered specific versions of three software
`products on May 17, 2013: GENESIS64 v. 10.4, from May 2010;
`GENESIS32 v. 9.10, from December 2007, and BizViz v.9.10, from
`April 2008. Those registrations arguably excluded previously
`released versions of the software. In its applications, in a
`space labeled “Material excluded from this claim,” ICONICS wrote
`“Previously released versions of the work.” Then, under “New
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`1 Earlier this month, the Supreme Court reaffirmed its general
`approach to extraterritoriality in a fashion consistent with the
`development in the lower courts of the predicate act exception
`for copyright violations. RJR Nabisco, Inc. v. European
`Community, 2016 WL 3369423 (U.S., June 20, 2016). While not
`extraterritorial by terms, the Copyright Act – with its focus on
`whether copying occurred in the United States – can properly be
`invoked for extraterritorial application when, as here, the
`predicate act exception is applied to domestic copying integral
`to an extraterritorial violation. See generally Morrison v.
`Nat’l Australia Bank, 561 U.S. 247, 266 (2010).
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`material included in claim,” ICONICS wrote “Computer program,
`including various revisions and updates throughout the work.”
`The “material excluded” section appears to exclude from the
`registration prior versions, although the “new material” section
`seems to limit the exclusion only to the revisions and updates
`it “includ[es].”2 Defendants argue that these registrations only
`cover the updates, that the unlawful copying was (or may have
`been) from earlier unregistered versions, and that ICONICS
`therefore cannot establish a prima facie case of copyright
`infringement sufficient to avoid summary judgment.
`Specifically, defendants claim that Massaro copied ICONICS code
`prior to the May 2010 release of GENESIS64 v. 10.4, meaning that
`he copied from an earlier unregistered version, and that the
`WebHMI.js code existed in unregistered versions of GENESIS32
`prior to v. 9.10.
`Defendants err, however, by contending for a particular
`categorical connection between the version of a work that is
`registered and the version of a work that is copyrighted and
`infringed upon. Defendants correctly cite Airframe Sys., Inc.
`v. L-3 Commc'ns Corp., 658 F.3d 100, 106 (1st Cir. 2011), as
`
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`2 ICONICS asserts that this online form is misleading, because it
`includes “uneditable exclusion language” that is not present on
`the paper version of the same registration form. Nevertheless,
`this is the form, and the exclusion language the plaintiff chose
`and a wholesale argument that the registration was unlawful
`would not seem to serve ICONICS’ purpose.
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`requiring a plaintiff to present “sufficient evidence of copying
`(including substantial similarity) with respect to at least one
`of the . . . source code versions covered by its copyright
`registrations.” But Airframe does not address the registration
`requirement, or to what extent a copyright registration can
`cover previous versions of a software program. It only
`addressed the need to show “substantial similarity” to prove
`copying, and the factual difficulties in that instance of
`showing such similarity across different versions of a program.
`Moreover, Airframe did not involve unregistered prior versions
`of software, but rather unregistered subsequent versions of
`software.
`In Airframe, plaintiff compared an unregistered 2009
`version of a software program to the allegedly infringing work,
`which was made using unauthorized access to code in or before
`2003. The plaintiff’s registered software versions dated from
`1981 to 2003 and the plaintiff presented no evidence asserting
`how similar the 2009 version it analyzed was to the earlier
`versions that were infringed upon and which were registered.
`Given those facts, the First Circuit found that the plaintiff
`could not establish the “substantially similar” prong of the
`“copying” element of copyright infringement. Those factual
`issues are not implicated in this litigation on summary
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`judgment, where plaintiff’s expert has supportably undertaken to
`quantify the overlap between the various versions.3
`Also unlike Airframe, this case involves registered
`versions of software that postdate the potentially-infringed
`versions, not which precede it. Registration of subsequent
`versions of a copyrighted work allows for infringement suits on
`past versions, even though the converse is not true. Compare
`Streetwise Maps, Inc. v. VanDam, Inc., 159 F.3d 739, 747 (2d
`Cir. 1998) (“because Streetwise is the owner of the copyright of
`both the derivative and pre-existing work, the registration
`certificate relating to the derivative work in this circumstance
`will suffice to permit it to maintain an action for infringement
`based on defendants' infringement of the pre-existing work”)
`with Well-Made Toy Mfg. Corp v. Goffa Int'l Corp., 354 F.3d 112,
`115-16 (2d Cir. 2003) (abrogated on other grounds by Reed
`Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010)) (“Well–Made
`contends that the converse proposition—that registration of a
`
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`3 Likewise, a District of Arizona case relied upon by the
`defendants involves a factual record without any evidence of how
`different versions of the relevant software built on each other.
`AFL Telecommunications LLC v. SurplusEQ.com Inc., 946 F. Supp.
`2d 928, 941 (D. Ariz. 2013). The court there noted that it had
`found the “effective registration doctrine” of cases like
`Streetwise applicable on a motion to dismiss, where it could
`“infer from the complaint that each successive software version
`incorporates the preceding versions,” but could not do so
`without factual basis on summary judgment. Id. Here, plaintiff
`has put forward facts of the sort missing in that case.
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`claim on a pre-existing work confers jurisdiction over
`infringement claims regarding its derivative works—is also true.
`We conclude otherwise.”). See also Christopher Phelps &
`Associates, LLC v. Galloway, 492 F.3d 532, 539 (4th Cir. 2007)
`(“While Phelps & Associates only registered the Bridgeford
`Residence design, that registration satisfied the prerequisite
`for suit under 17 U.S.C. § 411 for the entire design, even
`though some of it was created earlier in the form of the Bell
`and Brown Residence design”). Even if the previous versions of
`the three software programs were not included in the 2013
`registration applications, those earlier registrations are
`sufficient to allow an infringement suit concerning the earlier
`versions of the software.4
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`4 ICONICS also seeks to avoid a registration problem through
`another, less promising, mechanism. In response to the instant
`summary judgment motion, on May 16, 2016 ICONICS filed for
`copyright registrations on a set of older versions of GENESIS32
`and GENESIS64. In a January 15, 2016 memorandum in this
`litigation, I noted (without expressly holding) that
`“[g]enerally, a copyright registration filed after the
`infringement suit, but before the statute of limitations has
`expired, will cure the § 411 defect.” ICONICS, Inc., No. CV 11-
`11526-DPW, 2016 WL 199407, at *4 n.4. However, I also noted
`that “where final judgment is sought before the copyright is
`registered, courts have dismissed the action.” Id. citing
`Kernel Records Oy v. Mosley, 694 F.3d 1294, 1302 (11th Cir.
`2012). Registrations filed subsequent to a summary judgment
`motion may not necessarily cure a failure to register earlier.
`However, I find this issue immaterial for the reasons stated
`above.
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`C. Intermediate Copying Claims
`ICONICS’ expert, Mr. Hicks, has opined that BaxEnergy must
`have had a copy of ICONICS source code which it used during the
`software development process to ease, speed, and improve its own
`coding – even if most of that ICONICS code does not appear
`directly in BaxEnergy’s products.
`Defendants suggest in their briefing that this is “non-
`copying” that cannot form the basis of an infringement claim,
`although they cite no case law to that effect. But creating
`intermediate copies of copyrighted code, even to develop one’s
`own independently-written code, can be copyright infringement.
`Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1518-19
`(9th Cir. 1992), as amended (Jan. 6, 1993) (“intermediate
`copying of computer object code may infringe the exclusive
`rights granted to the copyright owner in section 106 of the
`Copyright Act regardless of whether the end product of the
`copying also infringes those rights”). See also Terril Lewis,
`Reverse Engineering of Software: An Assessment of the Legality
`of Intermediate Copying, 20 Loy. L.A. Ent. L. Rev. 561, 564
`(2000) (“A person who reverse engineers a piece of software will
`almost certainly infringe the copyright in that software through
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`the creation of an intermediate copy of the work”).5 In part,
`this is because each time a software program is run, it is
`transferred to the computer’s memory, creating a new copy.
`Soc'y of Holy Transfiguration Monastery, Inc. v. Gregory, 689
`F.3d 29, 55 (1st Cir. 2012) (quoting MAI Sys. Corp. v. Peak
`Computer, Inc., 991 F.2d 511, 517–18 (9th Cir. 1993)) (“a
`computer makes a ‘copy’ of a software program when it transfers
`the program from a third party's computer (or other storage
`device) into its own memory”); see also Airframe Sys., Inc. v.
`Raytheon Co., 520 F. Supp. 2d 258, 267 (D. Mass. 2007), aff'd,
`601 F.3d 9 (1st Cir. 2010) (“With regard to software, an act of
`copying sufficient to violate the Copyright Act occurs each time
`the software is run”). If adequately supported, an intermediate
`copying claim can generate infringement liability.
`Defendants also argue that the evidence of such
`intermediate copying is merely circumstantial, largely
`speculative, and rebutted by direct evidence. But defendants’
`arguments require the kind of weighing of evidence that is not
`appropriate on summary judgment. For example, Hicks identified
`what he asserted to be nine months of missing software
`development history from the repository of Massaro’s consulting
`
`
`5 This type of copying can often be fair use. See Sony Computer
`Entm't, Inc. v. Connectix Corp., 203 F.3d 596, 602 (9th Cir.
`2000). But defendants do not assert a fair use defense here.
`17
`
`
`
`
`
`Case 1:11-cv-11526-DPW Document 512 Filed 06/27/16 Page 18 of 38
`
`company, Anteasoft, during the period in which Massaro was
`consulting for Bax Engineering. ICONICS seeks to draw from that
`gap various inferences about defendants’ use of ICONICS code
`during the undocumented period of time. Defendants disagree and
`put forward what they consider “the most reasonable explanation
`of the facts,” based on the deposition testimony of Massaro (who
`testified that the missing months were the product of a transfer
`of code made nine months after a separate back-up of the code
`was created), to suggest that all their code was accounted for
`and developed fully independently. Adjudicating the credibility
`of Massaro, or the reasonableness of one explanation over
`another, is a matter for the jury, not for summary judgment.
`Defendants also press a series of other plainly factual
`arguments. Defendants push back on Hicks’ opinion that the
`close interoperability between ICONICS software and Bax software
`shows that defendants used ICONICS code while developing their
`own programs, asserting that such interoperability could be
`achieved instead from public documentation and the skills of a
`system integrator (or on Massaro’s own personal expertise in the
`field) and citing their own expert’s testimony. Notably,
`defendants have not moved to exclude Hicks’ report or testimony
`on Daubert grounds. They simply disagree about his conclusions.
`Likewise, when plaintiffs put forward evidence that Massaro sent
`emails including two ICONICS copyright headers as suggesting
`
`
`
`18
`
`
`
`Case 1:11-cv-11526-DPW Document 512 Filed 06/27/16 Page 19 of 38
`
`that he retained the source code those headers were previously
`associated with, defendants respond by citing Massaro’s
`testimony that he retained those headers only to show that
`ICONICS itself was misappropriating open source software. These
`are disputes over facts and what inferences can be drawn from
`the evidentiary record. Defendants’ objections to the
`circumstantial evidence put forward by ICONICS are inadequate
`arguments for summary judgment.
`D. Direct Copying Claims Related to WebHMI.js
`WebHMI.js is the only code in BaxEnergy’s source code
`repository that ICONICS has identified as identical to its own
`code. It is roughly 150 lines of javascript that was first
`copied onto BaxEnergy’s TFS source code repository and then
`placed into a different file named ScadaAutomation.js. It is
`used by EDF-EN-Portugal, a BaxEnergy customer that also uses
`ICONICS software, and allows clients to view ICONICS software
`over a web browser. Defendants admit that webHMI.js is ICONICS
`code, copied and in use by BaxEnergy. Their argument that this
`is not copyright infringement as a matter of law is – in full –
`that “whereas the ‘use’ to which the javascript code is made is
`a licensed use by a licensed customer, ICONICS’ copyright claim
`as to WebHMI.js is licensed, or at best, de minimis.” This
`entirely conclusory argument – made without citation to legal
`authority or the factual record in defendants’ original brief –
`
`
`
`19
`
`
`
`Case 1:11-cv-11526-DPW Document 512 Filed 06/27/16 Page 20 of 38
`
`is not sufficient to support a summary judgment motion. Cf.
`Nat'l Foreign Trade Council v. Natsios, 181 F.3d 38, 61 n.17
`(1st Cir. 1999), aff'd sub nom. Crosby v. Nat'l Foreign Trade
`Council, 530 U.S. 363, (2000) (“arguments raised only in a
`footnote or in a perfunctory manner are waived”).
`ICONICS has mustered sufficient record evidence and
`argument to rebut these contentions. It asserts that, as
`opposed to EDF-EN-Portugal, which did receive a license
`BaxEnergy never received a license to work with ICONICS
`software; that the license to EDF-EN-Portugal only allowed the
`creation of a single archival back-up copy but that at least
`three copies were made; and that webHMI.js could be found on
`BaxEnergy servers even before BaxEnergy began working with EDF-
`EN-Portugal.
`The de minimis argument also lacks force. ICONICS notes
`that webHMI.js allowed BaxEnergy customers to interoperate with
`ICONICS software while using a BaxEnergy-branded web interface,
`which it asserts to be of material value, and that the length of
`the code (as opposed to its effect) is irrelevant to a de
`minimis defense, see Dun & Bradstreet Software Servs., Inc. v.
`Grace Consulting, Inc., 307 F.3d 197, 208 (3d Cir. 2002). More
`importantly, the de minimis argument is simply inapplicable in
`this context. The First Circuit has stated that a de minimis
`amount of copying is not a separate defense to copyright
`
`
`
`20
`
`
`
`Case 1:11-cv-11526-DPW Document 512 Filed 06/27/16 Page 21 of 38
`
`infringement but rather “a statement regarding the strength of
`the plaintiff's proof of substantial similarity.” Situation
`Mgmt. Sys., Inc. v. ASP. Consulting LLC, 560 F.3d 53, 59 (1st
`Cir. 2009). Moreover, the First Circuit found the de minimis
`exception inapplicable when infringement has also been alleged
`“through the overall structure and arrangement” of a work, as
`has been alleged in this case. Id. at 59 n.2. ICONICS has
`sufficiently raised a genuine issue of material fact on these
`defenses, particularly given the bare development of Defendants’
`claims concerning webHMI.js.
`Because none of defendants’ arguments for summary judgment
`proves persuasive, summary judgment is denied with respect to
`all of ICONICS’ copyright infringement claims.
`V. CIVIL RICO AND CIVIL CONSPIRACY CLAIMS
`In a second, separate motion, defendants also seek summary
`
`judgment on ICONICS’ claims of a civil RICO violation and a
`civil conspiracy. To establish a RICO violation, a plaintiff
`must show “(1) conduct (2) of an enterprise (3) through a
`pattern (4) of racketeering activity.” Efron v. Embassy Suites
`(Puerto Rico), Inc., 223 F.3d 12, 14-15 (1st Cir. 2000) (quoting
`Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 496 (1985)).
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