MiTek Holdings, Inc. v. Arce Engineering Co., Inc., 94-5262

• Citation: 89 F.3d 1548
• Decision Date: 05 August 1996
• Docket Number: No. 94-5262,94-5262
• Parties: , 39 U.S.P.Q.2d 1609 MITEK HOLDINGS, INCORPORATED, MiTek Industries, Incorporated, Plaintiffs-Appellants, v. ARCE ENGINEERING COMPANY, INCORPORATED, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 1548

89 F.3d 1548

65 USLW 2175, 39 U.S.P.Q.2d 1609

MITEK HOLDINGS, INCORPORATED, MiTek Industries, Incorporated, Plaintiffs-Appellants, v. ARCE ENGINEERING COMPANY, INCORPORATED, Defendant-Appellee.

No. 94-5262.

United States Court of Appeals,

Eleventh Circuit.

Aug. 5, 1996.

John H. Quinn, Keith A. Rabenberg, St. Louis, MO, Stuart J. McGregor, Miami, FL, Baila H. Celedonia, Cowan Liebowitz & Latman, PC, New York City, for Appellants.

Gustavo Gutierrez, P.A., Miami, FL, Christopher M. Hewitt, Hewitt & Hewitt, P.C., Dallas, TX, for appellee.

Appeal from the United States District Court for the Southern District of Florida.

Before BIRCH and CARNES, Circuit Judges, and SIMONS ^*, Senior District Judge.

BIRCH, Circuit Judge:

This case presents our circuit with an issue of first impression, namely, the scope of copyright protection afforded to nonliteral elements of a computer program. The holder of copyright registrations in three versions of a wood truss layout program brought an infringement action against a competitor and alleged infringement of several of the program's nonliteral elements, including the menu and submenu command tree structure and other elements of the user interface. At the conclusion of a bench trial, the district court found that the copyright registrant's program contained largely unprotectable elements, and, in those instances where elements were protectable and appropriated by the putative infringer, it deemed the copying to be de minimis. Therefore, the district court entered judgment for the putative infringer on the copyright infringement claim and denied the copyright registrant's motion for a preliminary injunction. For the reasons that follow, we AFFIRM the judgment of the district court.

I. BACKGROUND

Plaintiffs-appellants MiTek Holdings, Inc. and MiTek Industries, Inc. ("MiTek"), hold registration certificates for their claims of copyright in three versions of the ACES wood truss layout program, known as ACES Layout Versions 1, 2, and 3. Defendant-appellee, Arce Engineering Company, Inc. ("ArcE"), ¹ is the producer of a layout program known as TrussPro. ² The only version of TrussPro at issue in this case is TrussPro Layout Program Version 1, and we will refer to that ArcE program as "TrussPro." There is no dispute that the ACES program, at least its first two versions, were released prior to the publication of TrussPro. A few months after ArcE released TrussPro, MiTek filed suit against ArcE, alleged copyright infringement, and sought a preliminary injunction. ³ The district court conducted a bench trial and, in its findings of facts and conclusions of law, found in favor of ArcE. See MiTek Holdings, Inc. v. Arce Eng'g Co., 864 F.Supp. 1568 (S.D.Fla.1994). Before we address the numerous issues on appeal, it is important to provide some background as to both the wood truss industry and the relationship between the parties to this litigation.

Both MiTek and ArcE are in the business of supplying products and services to the wood truss industry. A wood truss is a group of wood beams, usually triangular in shape, that supports a roof; the beams in a wood truss are held together by connector plates. Wood trusses often are not constructed by the builder, but rather by off-site "fabricators", who build roof trusses to certain specifications and then deliver them in bulk to building sites. The use of off-site fabricators reduces construction time as well as labor costs. Prior to the advent of personal computers, fabricators would design and arrange the wood trusses by engaging an engineer to obtain the necessary truss specifications and drawings for the planned structures. After fabricators began using personal computers, layout programs, ⁴ like the ones at issue in this case, were developed to permit fabricators to do their own engineering and related work for their building designs, thereby eliminating the need to employ an engineer.

In this case, the parties disagree over whether or not the layout programs are "substantially similar" in a copyright context, but both sides agree that the programs at issue were written by the same author, Emilio Sotolongo ("Sotolongo"). ⁵ In 1988, Sotolongo began working in Miami for Advanced Computer Engineering Specialties, Inc. ("Aces"), the software arm of the Bemax Companies ("Bemax"). Bemax sold connector plates to the wood truss industry. Sotolongo was employed by Aces to develop a wood truss layout program that depicted three-dimensional representations of truss layouts. ⁶ Version 1 of the ACES program was published in March of 1989, upon display of the program at a trade show. ACES Version 1 was well received by the wood truss industry. ⁷ However, since Version 1 did not have its own printing functions, Sotolongo was asked to develop an improved version that would permit the user to print the layout. Aces released Version 2 in September of 1990. This version not only featured printing capabilities, but also had expanded memory capacity and a slightly different screen arrangement. ⁸ In March of 1991, ACES Version 3 was published and featured some enhanced graphics capabilities.

During the process of developing Version 3 of the ACES program, Sotolongo was approached by Art Sordo, MiTek's President of Operations, to gauge his interest in working for MiTek. MiTek wanted Sotolongo to compose a new truss layout program that was superior to the ACES program. Although MiTek offered Sotolongo a significant raise, he declined the offer, in large part because MiTek made its programmers maintain detailed logs and notes of the steps taken in writing their programs. Sotolongo testified that he preferred to work without notes and that he often would conceptualize program segments in his mind. Sotolongo advised Aces of the MiTek offer and explained his reasons for rejecting it. He was concerned, however, with rumors that MiTek was going to acquire Aces, and he asked Aces about this. Sotolongo was assured that the acquisition was not going to occur, and, as a reward for his loyalty, he was given a raise.

Contrary to what Sotolongo was advised, MiTek purchased Aces for $2.5 million on April 1, 1991. As part of the purchase, MiTek received an assignment of Aces's copyrights in the layout programs at issue in this case. ⁹ Eugene Toombs, the president and chief executive officer of MiTek, testified at trial that "the reason we paid the price we did [for Bemax/Aces], very frankly, was because of the software," and he further stated that the ACES layout program was the "key" to the software. R6-485. After the sale was announced, Sotolongo inquired of MiTek if its preacquisition offer was still open. He was told that it was not, since MiTek now had acquired the intellectual property rights to the ACES program. MiTek did offer Sotolongo a job, but at a salary lower than that previously offered.

At approximately the same time, Antonio Arce, one of the principals of ArcE, approached Sotolongo and recruited him to come work for ArcE. ArcE owned a layout program, but it operated only on Hewlett Packard equipment, and ArcE wanted Sotolongo to develop a program that functioned in the Microsoft Windows ("Windows") environment on International Business Machines Corp. ("IBM") compatible computers. Arce testified that he was aware that Sotolongo had been the principal programmer for all three versions of the ACES program. The ACES programs, however, were written for the MS-DOS ("DOS") operating system, which was starting to be replaced by the more user-friendly Windows operating system. ¹⁰

Sotolongo accepted ArcE's offer of employment. Arce testified that he instructed Sotolongo to write the new layout program "from scratch," not to rely on any source or object code from the ACES programs. ¹¹ In August of 1991, Sotolongo completed TrussPro, and customer testing of the program began shortly thereafter. By early November, Aces had released Version 3 of its layout program. On November 15, 1991, MiTek filed suit against ArcE and alleged copyright infringement. ¹² ArcE counterclaimed that MiTek's institution of the action constituted an abuse of process under Florida law. On December 9, 1993, the district court granted MiTek's motion to dismiss ArcE's counterclaim, finding that an abuse of process claim cannot be based solely on the filing of an allegedly meritless complaint. ¹³ MiTek, 864 F.Supp. at 1574. On that same day, the district court granted MiTek's motion to waive a jury trial. MiTek elected not to seek actual damages in the case but rather limited itself to statutory damages and attorneys' fees pursuant to 17 U.S.C. §§ 504(c) & 505. Accordingly, it had no constitutional or statutory right to a jury trial. See Cable/Home Communication Corp. v. Network Prods., Inc., 902 F.2d 829, 852-53 (11th Cir.1990) (noting that "in an equitable copyright infringement seeking only minimum statutory damages and injunctive relief, there is 'no constitutional or statutory right to a jury trial' ") (quoting Twentieth Century Music Corp. v. Frith, 645 F.2d 6, 7 (5th Cir. Unit B May 1981) (per curiam)). A six-day bench trial was held in December, at the conclusion of which the district court ruled in favor of ArcE.

II. ISSUES ON APPEAL

On appeal, MiTek asserts that the district court erred in: (1) failing to separate copyrightable expression in the ACES program from the program ideas, because it failed to perform an abstraction under the Altai ¹⁴ abstraction-filtration-comparison test or failed to undertake a similar means of analysis; (2) finding that the menu and submenu command tree structure in the ACES program is an uncopyrightable "process," based on its failure to abstract; (3) concluding that the menu and submenu command tree structure is an uncopyrightable "process" because of its erroneous finding of fact that the menu and the submenu command tree structure of the ACES program mimics the way a draftsman draws such a layout by hand; (4) failing to consider...