235 F.3d 360 (7th Cir. 2000), 99-4118, Itofca, Inc. v MegaTrans Logistics

Docket Nº:99-4118
Citation:235 F.3d 360
Party Name:ITOFCA, Inc., Plaintiff-Appellant, v. MegaTrans Logistics, Inc., Defendant-Appellee.
Case Date:December 19, 2000
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

Page 360

235 F.3d 360 (7th Cir. 2000)

ITOFCA, Inc., Plaintiff-Appellant,


MegaTrans Logistics, Inc., Defendant-Appellee.

No. 99-4118

United States Court of Appeals, Seventh Circuit

December 19, 2000

Argued November 3, 2000

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 99 C 2087--Ruben Castillo, Judge.

Page 361

Before Flaum, Chief Judge, and Easterbrook and Williams, Circuit Judges.

Flaum, Chief Judge.

ITOFCA, Inc. ("ITOFCA") brought suit against MegaTrans Logistics, Inc. ("MegaTrans") alleging that MegaTrans' continual licensing of a computer software program constitutes an infringement on a copyright belonging to ITOFCA. MegaTrans counterclaimed, seeking termination of ITOFCA's copyright in the program along with a declaratory judgment that MegaTrans holds a non-exclusive copyright in the software. Additionally, MegaTrans asserted in its counterclaim that ITOFCA has violated the Lanham Act, 15 U.S.C. sec. 1125, by representing to MegaTrans customers that ITOFCA is the software copyright owner. The district court granted MegaTrans summary judgment after determining ITOFCA's copyright infringement claim to be barred by res judicata. In the same order, the court dismissed all of MegaTrans' counterclaims without prejudice. ITOFCA now appeals the grant of summary judgment. For the reasons stated herein, we find appellate jurisdiction wanting and therefore dismiss.


ITOFCA is a not-for-profit association that was created to assist its members in the procurement of transportation, shipping, and freight forwarding services. By 1986, ITOFCA had developed a comprehensive intermodal software computer program that assisted its members in tracking and scheduling their freight shipments. That same year, as part of an asset transfer agreement, ITOFCA transferred ownership

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of two copies of the software to ITOFCA Consolidators, Inc. ("ICI"), a wholly owned, for-profit corporate subsidiary of ITOFCA. According to ITOFCA, the transfer of software ownership did not include any transfer of the intellectual property rights in the software. From 1987 through 1991, ICI used and modified the software program.

In January of 1991, ICI was forced into bankruptcy. Since the bankruptcy proceedings required that ICI receive court approval for any asset transfer, the company filed a motion with the court requesting authorization to sell one of its copies of the software to a company named Amerifreight. Initially, ITOFCA objected to the sale, but after a hearing clarifying the scope of the sale, the company withdrew its challenge. Amerifreight and ICI subsequently executed an assignment of ICI's rights in the software, and ICI delivered to Amerifreight one of its copies of the software's source code on magnetic tape. In return, ICI received $25,000.

Shortly thereafter, Amerifreight transferred its rights received under the ICI assignment to MegaTrans, the defendant in this matter. MegaTrans slightly altered the software and began to market it under the name MegaLink. Between 1991 and 1998 MegaTrans licensed the MegaLink software to three customers, raising approximately $225,000 in revenue. ITOFCA, which had gone dormant for almost five years, reemerged, contacted MegaTrans, and asserted that it, ITOFCA, owned the copyright in the software program. The parties were unable to come to any agreement regarding the ownership of the intellectual property rights. Thereafter, in March of 1999, ITOFCA applied for and obtained a copyright registration for the comprehensive intermodal software program.

ITOFCA subsequently filed suit in the District Court for the Northern District of Illinois alleging copyright infringement on the part of MegaTrans. In addition to damages, ITOFCA sought to enjoin MegaTrans from further alleged acts of infringement and to have all copies of the software produced in violation of ITOFCA's rights impounded. MegaTrans counterclaimed. In direct opposition to ITOFCA's prayer for relief, MegaTrans sought a declaratory judgment that ITOFCA has no copyright in the software at issue, and that MegaTrans has been assigned on a non- exclusive basis all intellectual property rights in the software. Furthermore, MegaTrans sought to have ITOFCA's 1999 copyright registration voided. Finally, MegaTrans alleged that ITOFCA, by contacting certain actual and potential customers of MegaTrans and representing to them that ITOFCA holds the copyright to the software, has made misleading descriptions of facts likely to cause confusion, all in violation of 15 U.S.C. sec. 1125, the Lanham Act.

On November 19, 1999, the district court granted summary judgment to MegaTrans. The court found that ITOFCA had been a party to the...

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