ACT Grp., Inc. v. Hamlin, CV-12-567-PHX-SMM
| Decision Date | 28 March 2014 |
| Docket Number | No. CV-12-567-PHX-SMM,CV-12-567-PHX-SMM |
| Parties | The ACT Group, Inc., Plaintiff, v. James Hamlin, et al., Defendants. And Related Counterclaim. |
| Court | U.S. District Court — District of Arizona |
Pending before the Court is Defendant James Hamlin's ("Hamlin") motion for summary judgment. (Doc. 89.) The motion is fully briefed. (Docs. 90, 99-102.) Also pending is Plaintiff The Act Group Inc.'s ("ACT") motion to modify the case management order and for leave to file a second amended complaint. (Doc. 97.) This motion is also fully briefed. (Docs. 103, 105.) After review and consideration,1 the Court will deny Hamlin's motion for summary judgment and deny ACT's motion to modify the case management order and for leave to file a second amended complaint.
ACT provides training and education services to Heating, Ventilation and Air Conditioning ("HVAC") distributors, dealers and their representatives nationwide. (Doc. 47.) In the course of its business, ACT developed copyrighted sales training materials, which it labeled "The Works," containing both sales training materials and written hand-outs. (Docs. 100-4 at 1-6, 90-1, 90-2.) The Works comprises the titles "No Pressure Selling" and "Trane Boot Camp: A Comprehensive Study Guide to In-Home Sales." (Id.) Defendant James Hamlin, a one-time provider of sales training for ACT, left ACT to go to work for Defendant WaterFurnace ("WaterFurnace") as a national sales trainer. (Doc. 47.) WaterFurnace is a geothermal manufacturer and distributor of HVAC systems, which also provides sales training to HVAC dealers and representatives. (Id.)
Mr. Hamlin had access to The Works while working as a sales trainer for ACT. (Id.) ACT alleges that Mr. Hamlin utilized ACT Group's proprietary sales training concepts and materials to perform sales training services for WaterFurnace. (Id.) Further, ACT alleges that Mr. Hamlin copied ACT's copyrighted materials and now uses materials that are, as a whole substantially similar to The Works, and that some of the materials used by Mr. Hamlin are identical to some of The Works. (Id.) Hamlin's sales training presentation is entitled to "Smarter Sales Training." (Doc. 90-3.) ACT's first amended complaint alleges copyright infringement, breach of duty of loyalty, aiding and abetting breach of duty of loyalty, and unfair competition. (Doc. 47.)
A court must grant summary judgment if the pleadings and supporting documents, viewed in the light most favorable to the nonmoving party, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Jesinger v. Nevada Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). Substantive law determines which facts are material. See Anderson v. Liberty Lobby, 477 U.S. 242, 248(1986); see also Jesinger, 24 F.3d at 1130. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. The dispute must also be genuine, that is, the evidence must be "such that a reasonable jury could return a verdict for the nonmoving party." Id.; see Jesinger, 24 F.3d at 1130.
A principal purpose of summary judgment is "to isolate and dispose of factually unsupported claims." Celotex, 477 U.S. at 323-24. Summary judgment is appropriate against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322; see also Citadel Holding Corp. v. Roven, 26 F.3d 960, 964 (9th Cir. 1994). The moving party need not disprove matters on which the opponent has the burden of proof at trial. See Celotex, 477 U.S. at 323. The party opposing summary judgment may not rest upon the mere allegations or denials of the party's pleadings, but must set forth specific facts showing that there is a genuine issue for trial. See Fed. R. Civ. P. 56(e); Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 585-88 (1986); Brinson v. Linda Rose Joint Venture, 53 F.3d 1044, 1049 (9th Cir. 1995).
After the district court has filed a pretrial case management order pursuant to Federal Rule of Civil Procedure 16 that establishes a timetable for amending pleadings, Rule 16 standards control any modification. See Johnson v. Mammoth Recreations, Inc., 975 F.2d 604, 607-08 (9th Cir. 1992). The case management schedule shall not be modified except by leave of court upon a showing of good cause. Fed. R. Civ. P. 16(b)(4). The good cause standard primarily considers the diligence of the party seeking the amendment. See Johnson, 975 F.2d at 609. The district court may modify the pretrial schedule if amendment cannot reasonably be sought despite the diligence of the party seeking the modification. Id.
If the party is able to establish good cause for amendment, the party must also demonstrate that amendment is proper under Rule 15. See id. at 608. Under Rule 15, although leave to amend "shall be freely given when justice so requires," it "is not to begranted automatically." Zivkovic v. Southern California Edison Co., 302 F.3d 1080, 1087 (9th Cir. 2002) (citing Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir. 1990). The district court may deny a motion for leave to amend if permitting an amendment would, among other things, cause an undue delay in the litigation or prejudice the opposing party. See Jackson, 902 F.2d at 1387; see also Solomon v. North Am. Life & Cas. Ins. Co., 151 F.3d 1132, 1139 (9th Cir. 1998) (). The Court's discretion to deny leave to amend is particularly broad where Plaintiff has previously been permitted to amend their complaint. Sisseton-Wahpeton Sioux Tribe v. United States, 90 F.3d 351, 355 (9th Cir. 1996). Repeated failure to cure deficiencies is one of the factors to be considered in deciding whether justice requires granting leave to amend. See Moore v. Kayport Package Express, Inc., 885 F.2d 531, 538 (9th Cir. 1989).
Hamlin moves for summary judgment against ACT's copyright infringement claim. (Doc. 89.) Hamlin alleges that ACT's The Works only uses common ideas, techniques, and phrases of the sales industry and that there is nothing unique or original about The Works that would entitle it to copyright protection. (Id. at 5-6.) Hamlin further alleges that even if The Works is entitled to copyright protection, substantially all of the portions of The Works claimed to have been copied by Hamlin are common phrases in the public domain, and not subject to copyright protection by ACT. (Id.) Therefore, there has been no copyright infringement.
ACT contends that The Works are "original" because they were independently created by ACT and reflect more than the minimal degree of creativity required for copyright protection. (Doc. 99 at 5.) ACT contends that Hamlin's motion be denied as to originality because it ignores the applicable elements in copyright infringement of literary works, and instead focuses on the inapplicable principle that copyright protection does not extend to ideas, methods, processes and the like. (Doc. 99 at 2.) ACT further contends that Hamlin'smotion be denied as to infringement because there are disputed issues of material fact, such as the substantial similarity between The Works and Hamlin's Smarter Sales Training. (Id.)
In its first amended complaint, ACT claims copyright infringement against Defendants. (Doc. 47.) In order to prove copyright infringement, ACT must prevail on both prongs: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publ'n, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991). In Hamlin's motion for summary judgment, he attacks both prongs alleging that ACT cannot prevail on either prong. (Doc. 89.)
Hamlin first argues that ACT, as a matter of law, cannot establish that The Works is properly entitled to copyright protection because there is nothing unique or original about The Works. (Doc. 89 at 6.) Hamlin argues that "[c]opyright protection does not extend to ideas, procedures, processes, methods of operation, concept, principle or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work." (Id. at 4, (quoting from 17 U.S.C. § 102(b)).) Therefore, it is argued that copyright protection does not extend to any process or method of providing sales training. (Id. at 5.) Next, Hamlin argues that The Works is not entitled to copyright protection because it only uses common ideas, techniques and common phrases taken from the sales industry. (Id. at 6.)
To be entitled to copyright protection, a work must be original to the creator. See Feist, 499 U.S. at 345 (1991). "Original," in copyright terms means "only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity." Id. (further citation omitted). The requisite level of creativity is Id. (internal citations omitted). The Feist Court further stated that while facts and ideas are not copyrightable, factual compilations can be protected by copyright. Id. at 348. It is the author's organization and expression of the facts,methods, or ideas contained in the work that enjoys copyright protection. Id.; see also B2B CFO Partners, LLC v. Kaufman, 787 F. Supp.2d 1002, 1007 (D. Ariz. 2011); Folio Impressions, Inc. v. Byer...
To continue reading
Request your trial