Fonar Corp. v. Domenick
| Decision Date | 21 January 1997 |
| Docket Number | No. 699,D,699 |
| Citation | 105 F.3d 99 |
| Parties | 1997 Copr.L.Dec. P 27,604, 1997 Copr.L.Dec. P 27,634, 41 U.S.P.Q.2d 1496 FONAR CORPORATION, Plaintiff-Counter-Defendant-Appellant, v. Robert DOMENICK, Magnetic Resonance Plus, Inc., Defendants-Counter-Claimants-Appellees. ocket 96-7919. |
| Court | U.S. Court of Appeals — Second Circuit |
Steven L. Holley, New York City (D. Stuart Meiklejohn, Marc De Leeuw, Sullivan & Cromwell, New York City, on the brief), for Plaintiff-Counter-Defendant-Appellant.
Ronald S. Katz, San Francisco, CA (Janet Arnold Hart, Coudert Brothers, San Francisco, CA, Stephen M. Hudspeth, Lateef Mtima, Coudert Brothers, New York City, on the brief), for Defendants-Counter-Claimants-Appellees.
Before: VAN GRAAFEILAND, JACOBS and CALABRESI, Circuit Judges.
Appellant Fonar Corporation ("Fonar"), a manufacturer of magnetic resonance imaging ("MRI") scanners, has created software that Fonar's service people use to maintain the machines in good working order. Fonar alleges that Magnetic Resonance Plus ("MR Plus"), a company that services and maintains MRIs, has committed copyright infringement (and otherwise violated Fonar's rights) by using Fonar's software to service Fonar-manufactured MRIs. It is undisputed that Fonar's software was accepted for filing by the United States Copyright Office and that a certificate of copyright registration was issued. It is also undisputed for present Fonar appeals the grant of summary judgment in favor of MR Plus on Fonar's claims for copyright infringement and unfair competition. The district court determined that Fonar failed to comply with applicable regulations in registering the copyright and that the certificate of copyright registration therefore does not carry the ordinary presumption of copyright validity. The district court also concluded that Fonar's definition of its maintenance software is inconsistent, incomplete, and uninformative, and is therefore insufficient to establish that the work is copyrightable or to serve as the basis of a copyright action.
purposes that MR Plus has copied Fonar's software in whole.
We conclude that the district court improperly refused to employ the ordinary presumption of prima facie validity that attaches to a certificate of copyright registration. In light of that presumption, and the wholesale copying of the software, the grant of summary judgment is unsustainable. We vacate the order and judgment and remand for further proceedings consistent with this opinion.
Fonar manufactures, markets, and repairs MRI scanners, sophisticated machines that are controlled by complex electronic circuitry. Fonar has developed computer software to assist its field service technicians in servicing, calibrating, and repairing MRI scanners made by Fonar.
This "Maintenance Software" is installed at each customer site; but pursuant to Fonar's contracts with its customers, only Fonar employees are allowed access to the software. The complaint defines maintenance software as:
[S]oftware used in or with the system to aid in its installation, maintenance or repair, and includes all software other than operational software. Maintenance software includes but is not limited to "diagnostic and maintenance software," "field engineering utilities software" and "editors and utilities software."
Fonar received a Copyright Registration from the United States Copyright Office for the maintenance software in July 1991. As indicated in the Copyright Registration, the software consists of three modules called "Editors and Utilities," "Diagnostics," and "Field Engineering Utilities." The modules are grouped and identified by function, and when activated, the modules perform various service functions, several of which require interaction between the modules.
MR Plus is an independent service organization, which means that it maintains (but does not manufacture) certain types of equipment. It operates nationwide, and among the machines it services are certain models of MRI scanners made by various manufacturers including Fonar. Defendant Robert Domenick is the sole shareholder and president of MR Plus. (We refer to the defendants collectively as MR Plus.)
Fonar brought this action on April 1, 1993, alleging that MR Plus willfully infringed Fonar's maintenance software copyright by copying, reproducing, selling, and/or offering it for sale. Fonar also alleged that MR Plus engaged in unfair competition and trade secret misappropriation through the use and copying of the software and schematic diagrams. MR Plus has interposed counterclaims alleging antitrust violations, as well as unfair competition, trade libel, and tortious interference with prospective economic advantage.
After completion of discovery and submission of a proposed joint pretrial order, MR Plus filed a motion in limine seeking to dismiss Fonar's copyright infringement claims on the ground that Fonar had failed to describe and define the maintenance software with sufficient particularity to support a claim for infringement. Oral argument was heard on November 16, 1995. On November 28, the district court converted the motion into one for summary judgment, directing submission of additional papers. On March 27, 1996, the court granted summary judgment, dismissing Fonar's copyright infringement claims and the related unfair competition claims.
After reviewing the important background principles applicable to the case, the district court turned to our decision in Fonar Corp. Judge Motley recognized the presumption of copyright validity afforded by a copyright certificate, id. at 516-17, but held that the presumption was overcome here, because the work was filed as a "collection" without satisfying one of the statutory requirements for such a filing, namely, that the collected materials be "assembled in an orderly form." 37 C.F.R. § 202.3(b)(3)(i)(B). Fonar had filed less than all of its software program, relying on 37 C.F.R. § 202.20(c)(2)(vii)(A), which permits the filing of the first and last 25 pages of a computer program. But the district court, surveying a work composed of subparts, concluded that the "mass filing" of the entire work, furnishing no more than the first 29 pages of the first module and the last 34 pages of the last, was insufficient to identify the copyrighted work. 920 F.Supp. at 516-17 & n. 10. The district court also found that the "collection" was not sufficiently "orderly" because of the "self-serving and superficial descriptions of the different 'modules'." Id. at 518.
v. Deccaid Servs., Inc., 983 F.2d 427 (2d Cir.1993), which held that the definition of the maintenance software--the same software with the same definition at issue here--was insufficiently specific and detailed to support the grant of an injunction or a finding of contempt. Fonar Corp. v. Magnetic Resonance Plus, Inc., 920 F.Supp. 508, 516 (S.D.N.Y.1996).
Having stripped Fonar of the presumption of copyright validity, the court ruled that Fonar must shoulder the burden of proving the "multitude of facts necessary to prove the validity of its copyright, e.g., originality and copyrightability." Id. (internal quotations and citations omitted). The court proceeded to explain why Fonar's showing on that score was insufficient:
Upon review of the record, the court finds as a matter of law that the cryptic definition of the Maintenance Software upon which plaintiff relies, which fails to indicate that the work is copyrightable in any way, is insufficient to serve as a basis for the instant copyright action. Nowhere does plaintiff set forth with any particularity the elements of the work or the originality or uniqueness of its functioning. Without introducing a genuine issue of material fact on the issue of copyrightability, plaintiff cannot establish the first element of a copyright case: i.e., ownership of a valid copyright.
Id. at 518-19 (footnote omitted).
Turning to the question of whether copying had been proven, the court decided that Fonar had also failed to show that MR Plus's copying of the entire work (which the district court assumed) "was carried out with regard to protectible elements of the copyrighted work." Id. at 519. The court relied on the inference that "if plaintiff has not shown that its work contains protectible elements, it obviously cannot show that these protectible elements have been copied in such a way that the statute forbids." Id.
Fonar retained new counsel after the entry of summary judgment and moved for entry of final judgment pursuant to Fed.R.Civ.P. 54(b), as well as for reconsideration. In its motion to reconsider, made without prior leave, Fonar submitted to the district court for the first time a (second) affidavit by the author of the software, Robert Wolf, which attempted to further delineate the nature of its software. The district court properly refused to consider the affidavit, which had not been before the court when the summary judgment order was issued. Although we granted Fonar's motion to file the second Wolf affidavit in this Court, we have not considered it in resolving this appeal. See, e.g., United States v. Bonds, 12 F.3d 540, 552-53 (6th Cir.1993) (); Allen v. Minnstar, Inc., 8 F.3d 1470, 1475 (10th Cir.1993) (same). The district court did, however, grant the Rule 54(b) motion for a final judgment with respect to the dismissal of the copyright and unfair competition claims, and this appeal followed.
We review a district court's grant of summary judgment de novo. Silano v. Sag Harbor Union Free School Dist. Bd. of Educ., 42 F.3d 719, 722 (2d Cir.1994), cert. denied, --- U.S. ----, 115 S.Ct. 2612, 132
L.Ed.2d 856 (1995). On appeal "the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported...
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