Blueport Co., LLC v. U.S.

• Decision Date: 25 July 2008
• Docket Number: No. 2007-5140.,2007-5140.
• Citation: 533 F.3d 1374
• Parties: BLUEPORT COMPANY, LLC, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

533 F.3d 1374

BLUEPORT COMPANY, LLC, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee.

No. 2007-5140.

United States Court of Appeals, Federal Circuit.

July 25, 2008.

Kurt M. Rylander, Rylander & Associates, PC, of Vancouver, WA, argued for plaintiff-appellant.

Scott Bolden, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Jeffrey S. Bucholtz, Acting Assistant Attorney General, and John J. Fargo, Director.

Before MICHEL, Chief Judge, CLEVENGER, Senior Circuit Judge, and GAJARSA, Circuit Judge.

GAJARSA, Circuit Judge.

This is an action brought by Blueport Co. ("Blueport") against the United States for copyright infringement and violations of the Digital Millennium Copyright Act of 1998 ("DMCA"), Pub.L. No. 105-304, 112 Stat. 2860 (Oct. 28, 1998), codified at 17 U.S.C. § 1201, et seq. The Court of Federal Claims ("CFC") dismissed Blueport's claims for lack of jurisdiction on the ground that the Government has not waived sovereign immunity for any of Blueport's claims. Because the CFC's decision contains no reversible legal error, we affirm.

BACKGROUND

In this case, Blueport claims that the Government — specifically the U.S. Air Force — infringed Blueport's copyright on a software program known as "the AUMD program." The AUMD program was written by Air Force Technical Sergeant Mark Davenport. On March 6, 2000, Davenport assigned all his rights in the AUMD program to Blueport.

When Davenport wrote the AUMD program, he was employed as a manager of the Air Force Manpower Data System ("MDS"), a database containing manpower profiles for each unit in the Air Force. In his capacity as an MDS Manager, Davenport updated the MDS with new data and provided reports from the MDS to Air Force personnel upon request. Davenport was also a member of the Air Force's Manpower User Group, a group of manpower personnel from each of the Air Force's major commands who provided guidance on the use of the MDS. Based on his experience with the MDS, Davenport concluded that the software the Air Force used to run the MDS was inefficient and began seeking ways to redesign the software program. Davenport initially requested training in computer programming from the Air Force, but his request was denied. Undeterred, Davenport learned the computer programming skills necessary to write the AUMD program on his own time and with his own resources. Davenport then wrote the source code¹ for the AUMD program while at home on his personal computer. Although he wrote the program solely at his home and at his own initiative, Davenport's intent in writing the program was that other Air Force manpower personnel would use it.

In June 1998, Davenport shared an early version of the program with a fellow coworker, and both tested the program on the MDS at work during regular business hours. Based on the results of this testing, Davenport made changes to the source code of the AUMD program on his home computer. Davenport did not at that time, or at any time thereafter, bring the AUMD program's source code to work or copy it onto Air Force computers.

After these initial tests, Davenport began sharing copies of the AUMD program with other colleagues. At first, Davenport shared the AUMD program with colleagues by giving them a computer disk containing the program or by personally installing the program on their computers. Later, Davenport posted the AUMD program on an Air Force web page so that Air Force manpower personnel could download it directly. As the program became popular within the Air Force manpower community, Davenport's superiors asked him to train additional personnel in its use. During this time, he continued to modify the program based on feedback he received and, as a result, improved its functionality and eliminated programming errors. At some point, Davenport added an automatic expiration date to each new version of the AUMD program so that users were required to download the newest version when the older one expired.

In September 1998, Davenport gave a presentation to senior Air Force manpower officers at an annual conference and, according to one of Davenport's superiors, "absolutely sold his audience" on the AUMD program. Davenport's performance report deemed him the "go to troubleshooter for [the] entire [Air Force] manpower community ... [and] the most knowledgeable database manager in [the] career field." The performance report concluded with a recommendation to promote Davenport immediately.

Despite Davenport's success in creating the AUMD program and his willingness to share it, the Air Force eventually decided it was becoming too dependent on Davenport for access to the program. Accordingly, Davenport's superiors asked him to turn over the source code for the program, which Davenport had always kept on his home computer. When he refused to turn over the source code, his superiors threatened him with a demotion and a pay cut, and excluded him from the Manpower User Group's advisory authority.

Davenport then assigned all his rights in the AUMD program to Blueport. Subsequently, Blueport attempted to negotiate a license agreement with the Air Force. However, the Air Force refused Blueport's offer and solicited other contractors to recreate the AUMD program. The Air Force ultimately contracted with Science Applications International Corporation ("SAIC"). At the request of the Air Force, SAIC programmers modified the AUMD program's object code to extend its expiration date. This modification allowed Air Force manpower personnel to continue to use the AUMD program despite Davenport's refusal to provide the source code.

In 2002, Blueport brought the present claims against the Government for copyright infringement and violations of the DMCA. Specifically, Blueport argues that the Air Force infringed its copyright in the AUMD program. In addition, Blueport argues that the Air Force violated the DMCA by extending the expiration date in the AUMD program's object code — thus circumventing the measures taken by Blueport to prevent unauthorized use of the program.² The CFC dismissed Blueport's claims for lack of jurisdiction on the ground that the Government had not waived its sovereign immunity for any of the claims. Blueport now appeals. This court has jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

DISCUSSION

In appeals from the CFC, this court reviews fact findings for clear error and legal rulings without deference. John R. Sand & Gravel Co. v. United States, 457 F.3d 1345, 1353 (Fed.Cir.2006) (hereinafter John R. Sand & Gravel I), aff'd, ___ U.S. ___, 128 S.Ct. 750, 169 L.Ed.2d 591 (2008) (hereinafter John R. Sand & Gravel II). "A finding is `clearly erroneous' when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed." United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948). Although findings of fact relating to jurisdictional issues are reviewed for clear error, the ultimate determination of the CFC's jurisdiction is a question of law that is reviewed de novo. John R. Sand & Gravel I, 457 F.3d at 1354.

In this appeal, we are required to consider the scope and application of the Government's waiver of sovereign immunity for copyright infringement under 28 U.S.C. § 1498(b). We are also required to consider whether the Government has waived its sovereign immunity for claims brought under the DMCA. In so doing, we bear in mind two long-established principles of sovereign immunity. First, "the United States, as [a] sovereign, `is immune from suit save as it consents to be sued ... and the terms of its consent to be sued in any court define that court's jurisdiction to entertain the suit.'" United States v. Testan, 424 U.S. 392, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976) (quoting United States v. Sherwood, 312 U.S. 584, 586, 61 S.Ct. 767, 85 L.Ed. 1058 (1941)). Second, "a waiver of the Government's sovereign immunity will be strictly construed, in terms of its scope, in favor of the sovereign." Lane v. Pena, 518 U.S. 187, 192, 116 S.Ct. 2092, 135 L.Ed.2d 486 (1996); see also Martinez v. United States, 333 F.3d 1295, 1306 (Fed.Cir.2003) (en banc) ("The `limitations and conditions upon which the Government consents to be sued must be strictly observed and exceptions thereto are not to be implied.'" (quoting Soriano v. United States, 352 U.S. 270, 276, 77 S.Ct. 269, 1 L.Ed.2d 306 (1957))).

I.

The waiver of sovereign immunity for copyright infringement in 28 U.S.C. § 1498(b) is, in relevant part, as follows:

Hereafter, whenever the copyright in any work protected under the copyright laws of the United States shall be infringed by the United States, ... the exclusive action which may be brought for such infringement shall be an action by the copyright owner against the United States in the Court of Federal Claims for the recovery of his reasonable and entire compensation as damages for such infringement ...: Provided, That a Government employee shall have a right of action against the Government under this subsection except where he was in a position to order, influence, or induce use of the copyrighted work by the Government: Provided, however, That this subsection shall not confer a right of action on any copyright owner or any assignee of such owner with respect to any copyrighted work prepared by a person while in the employment or service of the United States, where the copyrighted work was prepared as a part of the official functions of the employee, or in the preparation of which Government time, material, or facilities were used....

(Emphases added). Thus, § 1498(b) grants copyright owners a right of action for copyright infringement against the United States, subject to three provisos. First, § 1498(b) does not provide a Government...