Ashton-Tate Corp. v. Ross, C-88-2844 DLJ.

• Decision Date: 04 April 1989
• Docket Number: No. C-88-2844 DLJ.,C-88-2844 DLJ.
• Citation: 728 F. Supp. 597
• Court: U.S. District Court — Northern District of California
• Parties: ASHTON-TATE CORPORATION, Plaintiff, v. Richard A. ROSS, Bravo Technologies, Inc., Defendants.

728 F. Supp. 597

ASHTON-TATE CORPORATION, Plaintiff, v. Richard A. ROSS, Bravo Technologies, Inc., Defendants.

No. C-88-2844 DLJ.

United States District Court, N.D. California.

April 4, 1989.

Cynthia C. Cannady and Leslie A. Fithian of Fenwick, Davis & West, Palo Alto, Cal., for plaintiff.

Paul N. McCloskey and Fenn C. Horton, III of McCloskey, Kays & Horton, Menlo Park, Cal., for defendants.

ORDER GRANTING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

JENSEN, District Judge.

Plaintiff's Motion for Summary Judgment was heard by the Court on January 25, 1989. Appearing for plaintiff Ashton-Tate Corporation were Cynthia C. Cannady and Leslie A. Fithian of Fenwick, Davis and West. Appearing for defendants Richard A. Ross and Bravo Technologies were Paul N. McCloskey and Fenn C. Horton, III.

This action involves a computer spreadsheet program, "Full Impact", which plaintiff developed and is currently marketing, and which defendants allege infringes upon their proprietary interests under intellectual property, contract and tort theories.

Prior to the public introduction of Full Impact, defendant Ross demanded compensation from plaintiff based on his claim of contribution to the development of the program. In response to defendants' demands, plaintiff filed the present action for declaratory relief. Plaintiff requests that the Court declare that: (1) plaintiff owns all the existing copyright interest in Full Impact; (2) Full Impact does not infringe upon existing copyrights; (3) plaintiff did not misappropriate or use defendants' trade secrets in the development of Full Impact; and (4) plaintiff has not interfered with any contractual relationships in the process of developing Full Impact.

Defendants assert counterclaims for: (1) declaratory relief regarding defendants' rights with respect to copyright, trade secret and contract interests in Full Impact; (2) breach of contract; (3) breach of the covenant of good faith and fair dealing; (4) tortious interference with contract; (5) violation of California trade secret statutes; and (6) violations of the Federal Copyright Act of 1976.

After reviewing the evidence and briefs submitted by the parties, the argument of counsel and the applicable legal authority, the Court hereby GRANTS plaintiff's Motion for Summary Judgment.

I.

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment may be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the party is entitled to a judgment as a matter of law."

In a motion for summary judgment, "if the party moving for summary judgment meets its initial burden of identifying for the court those portions of the materials on file that it believes demonstrates the absence of any genuine issues of material fact," the burden of production then shifts so that "the nonmoving party must set forth, by affidavit or as otherwise provided in Rule 56, `specific facts showing that there is a genuine issue for trial.'" T.W. Electric Service, Inc. v. Pacific Elec. Contractors, 809 F.2d 626, 630 (9th Cir.1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986); Kaiser Cement Corp. v. Fischbach & Moore, Inc., 793 F.2d 1100, 1103-04 (9th Cir.), cert. denied, 479 U.S. 949, 107 S.Ct. 435, 93 L.Ed.2d 384 (1986)) (emphasis in original). In addition, the United States Supreme Court has stated that summary judgment could issue "after adequate time for discovery and upon motion, 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." Celotex Corp., 106 S.Ct. at 2552-54.

As the moving party, Ashton-Tate bears the initial burden of identifying those portions of the record that demonstrate there is an absence of material fact. As plaintiff, Ashton-Tate bears the ultimate burden of demonstrating that there are no genuine issues of material fact regarding all the elements of its original claims upon which it bears the burden of proof. In this case Ashton-Tate is moving for summary judgment of its claims and is moving for summary judgment as a defendant to the counterclaims of Ross. In the later instance, under Celotex, although Ashton-Tate is the moving party, defendant Ross must make an evidentiary showing that genuine issues of material fact exist regarding all essential elements of their counterclaims, on which they will bear the burden of proof at trial, to defeat plaintiff's motion.

Under this standard, the Court finds that the following material facts are established in this action. In September of 1984, defendant Ross and Randy Wigginton decided to collaborate on the development of a new spreadsheet software program. At that time both Ross and Wigginton were developing software independently or in conjunction with their respective software companies. Defendant Ross had begun to develop the "engine" or "back end" of the spreadsheet program prior to discussing a partnership with Wigginton, but needed someone to create a suitable "interface" or "front end." Wigginton was referred to Ross as a specialist in the development of interface systems. Defendant sought out Wigginton and the informal partnership was formed.

During September through February of 1985, Ross and Wigginton worked on their respective portions of the software program. On at least two occasions in 1984 the two met and "brainstormed" ideas and concepts for the new system. However, the actual drafting of the source code for the program occurred when the two were separated. During one of their meetings, Ross gave Wigginton a list of user commands he felt the program should contain. This list was handwritten on a single sheet of paper. See Exhibit 8 to the Ross Deposition. No formal or written contract, other than a non-disclosure agreement, existed between the two programmers.

In February 1985, problems arose concerning how the new software was to be published and marketed. Ross wanted to publish it through his own company, "Bravo", while Wigginton wanted to use a larger and more established software publisher.

In March 1985, Wigginton approached plaintiff and asked if it would be interested in publishing the system. Without the knowledge or consent of Ross, Wigginton showed Ashton-Tate officials the interface system he had created. Ross later learned of Wigginton's disclosure to plaintiff and called a meeting between himself, Wigginton and the Bravo board of directors on March 28, 1985. At this meeting, defendant confronted Wigginton with his knowledge of the disclosure made to Ashton-Tate and after a heated discussion, the working relationship between Ross and Wigginton was terminated.

Wigginton then went to work for plaintiff in mid-April of 1985, and altered his interface program so that it could function with plaintiff's "Alembic" engine. The combination of Alembic and Wigginton's interface became the final version of Full Impact.

Defendant also continued to work on developing a spreadsheet program. Ross created his own user interface designed to run with the original engine he programmed for the spreadsheet program. In June of 1986, defendants published this spreadsheet system entitled "MacCalc."

On April 17, 1985, Ross met with two employees of Ashton-Tate to discuss a software project unrelated to this action entitled "Framework." During this meeting, Ross and plaintiff's representatives signed a "non-disclosure" agreement binding them to confidentiality regarding the contents of the meeting. Ross contends that certain aspects of his MacCalc program were discussed at this meeting, but cannot remember the specific details of the discussion.

Defendants did not attempt to assert their alleged proprietary rights in the Full Impact program until the eve of its introduction in mid-1988.

II. COPYRIGHT

There are several causes of action in this case based on federal copyright law. Plaintiff's first and second causes of action and defendant's first counterclaim for declaratory relief request that the Court decide the copyright interests of both parties in Full Impact. In addition, defendant's sixth counterclaim is brought under section 506(e) of the Federal Copyright Act. 17 U.S.C. § 506(e). The Court finds that an analysis of each of these claims results in a summary adjudication for plaintiff.

a) Plaintiff's First and Second Causes of Action and Defendants' First Counterclaim.

Defendants make two claims to support their position that they are entitled to compensation from plaintiff for the revenues generated by the marketing of Full Impact. First, defendant's contend that the user interface portion of Full Impact is a "joint work," 17 U.S.C. § 101 (1977), between defendant Ross and Randy Wigginton. Second, defendants argue that plaintiff copied source code from Ross's MacCalc engine to create the engine that runs Full Impact. After applying federal copyright law to the undisputed facts in this case, the Court finds that neither of defendants' assertions are valid.

Under federal law, a "joint work" is "a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." 17 U.S.C. § 101 (1977). In order for an author to obtain an interest in a "joint work," federal copyright law requires that the contribution made by that author to the "joint work" is, by itself, protectable under the Federal Copyright Act. Whelan Associates v. Jaslow Dental Laboratory, Inc., 609 F.Supp. 1307, 1318-19 (D.C.Pa.1985), aff'd on other grounds, 797 F.2d 1222 (3rd Cir.1986), cert. denied, 479 U.S. 1031, 107 S.Ct. 877, 93 L.Ed.2d 831 (1987); Aitken, Hazen, Hoffman, Miller, P.C. v. Empire Construction Co., 542 F.Supp. 252 (D.Neb. 1982).¹

The foundation of federal copyright...