Manufacturers Technologies, Inc. v. Cams, Inc.
| Decision Date | 30 January 1989 |
| Docket Number | Civ. No. N-85-253 (TFGD). |
| Citation | 706 F. Supp. 984 |
| Parties | MANUFACTURERS TECHNOLOGIES, INC., Plaintiff, v. CAMS, INC., Edward D. Cormier, Kenneth J. Laviana, and Norman St. Martin, Defendants. |
| Court | U.S. District Court — District of Connecticut |
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Donald Holland and Malcom Chisholm, Jr., Springfield, Mass., for plaintiff.
Donald Hayes, Hartford, Conn., and William Reinsmith, for defendants.
Plaintiff, Manufacturers Technologies, Inc., has brought this action against defendants Cams, Inc., Edward Cormier, Kenneth Laviana, and Norman St. Martin alleging copyright infringement, breach of fiduciary duty, and unfair trade practices in connection with the creation and sale of various computer software programs. This matter was tried before the Court during four days commencing October 17, 1988. The Court having bifurcated this matter, this decision shall only address the theories of liability at issue, reserving for the future the question of what, if any, damages should follow from this decision.
Plaintiff, Manufacturers Technologies, Inc. ("MTI"), is a Massachusetts corporation having its principal place of business in Springfield, Massachusetts. Its incorporator, president, and controlling stockholder is Thomas Charkiewicz. Defendant, Cams, Inc. ("CAMS"), is a Connecticut corporation having its principal place of business in Waterbury, Connecticut. Defendants Kenneth Laviana and Edward Cormier are the key principals and owners of CAMS and respectively serve as its vice president and president. Defendant Norman St. Martin is president of Chempro Data Services Corp., a subsidiary of NSM Corp., a Massachusetts corporation having its principal place of business in Westfield, Massachusetts.
Charkiewicz is experienced in the fields of machining, process and manufacturing engineering, computer-aided design and manufacturing ("CAD/CAM"), and computer-aided cost estimating. Defendant Laviana is experienced in the fields of metalworking, manufacturing engineering, computer numerical controlled programming, and computer-aided cost estimating. Defendant St. Martin is experienced in the fields of engineering and computer programming including computer-aided manufacturing. However, the extent of his computer programming experience, is subject to some dispute.1 Defendant Cormier is experienced in sales and marketing of technical products but has no significant experience or knowledge in the creation or development of computer programming or cost estimating.
"COSTIMATOR" is a computer software program developed in 1982 and 1983 by Thomas Charkiewicz and Rene Laviolette for MTI. Approximately 3000 man hours were expended in developing the original program. It is designed to enable the user to estimate the cost of machining a manufactured part through computer application, as opposed to manual calculation. Plaintiff obtained copyright registrations for COSTIMATOR program versions 01.00, 01.01, 01.03, and 01.04 as follows:
Version Copyright Reg. No. Effective Date
01.00 TX-1-544-052 April 22, 1985
01.01 TX-1-544-053 April 22, 1985
01.03 TX-1-544-054 April 22, 1985
01.04 TX-1-544-055 April 22, 1985
Plaintiff has also obtained copyright registrations for selected screen displays and for the user's manual of COSTIMATOR version 01.00. They are as follows:
Version Copyright Reg. No. Effective Date
01.00 TX-1-737-903(screens) January 30, 1986
01.00 TX-1-808-645(manual) May 12, 19862
From December 5, 1983 through May 22, 1984, Defendants Cormier and Laviana (and thereby defendant CAMS through its principals) acted as MTI sales representatives attempting to sell the COSTIMATOR program in Connecticut. During December 1983, at the invitation of MTI defendant Cormier attended a demonstration of the COSTIMATOR program held at Wang Computers' offices in Farmington, Connecticut. At this demonstration, Cormier admitted viewing the exhibition of COSTIMATOR program version 01.00 and seeing selected COSTIMATOR screen displays. While at WANG, Cormier had the opportunity to take photographs of COSTIMATOR screen displays. However, he denied taking photographs of the screen displays, and states that instead he photographed visitors at the exhibition to be used in marketing the COSTIMATOR program. Defendant Cormier also viewed COSTIMATOR screen displays while present at a customer demonstration for the Wheeler Group in April of 1984. Defendant Laviana saw a brief display of the COSTIMATOR program at a trade show during 1985.
As MTI sales representatives, defendants Cormier and Laviana were given access to a variety of promotional materials prepared by MTI for distribution to prospects. For example, in early 1984 defendant Cormier ordered, presumably for distribution to prospects, COSTIMATOR brochures and a COSTIMATOR price quote package, containing a variety of product literature including sample screen displays. Defendants Cormier and Laviana also were given some sales and technical training by MTI to familiarize them with the product they were selling. Furthermore, defendants CAMS and Cormier obtained access to one or more COSTIMATOR user's manuals.3
In April 1983, defendant St. Martin met MTI's Charkiewicz at MTI's offices in Springfield, Massachusetts on a business call. Charkiewicz gave St. Martin a demonstration of the COSTIMATOR program version 01.00 and its screen displays as they appeared at that stage of development. No program source code was seen by St. Martin. St. Martin also found in his office a flyer entitled COSTIMATOR 123+ and other promotional materials which describe an unspecified version of COSTIMATOR, including a packet of materials called "THE SYSTEM" which shows COSTIMATOR screen displays and explains their functions.4 These materials do not contain a copyright notice. While St. Martin testified that neither he nor his employees saw these materials while writing "QUICK COST" ("QC") III, V, and X or its RAPIDCOST counterparts5 and that these materials were found in his office after the plaintiff filed suit, the Court does not find this testimony credible in light of the fact that the defendants failed to offer any explanation as to how and when these materials came into St. Martin's hands.6 Furthermore, in August 1985, defendant St. Martin filled out a "bingo card" in a machining trade publication requesting that MTI send him information on COSTIMATOR. No proof was submitted that indicated whether or not in fact this promotional brochure was actually sent to or received by defendant St. Martin.
In January or February 1984, St. Martin and Cormier and Laviana, as representatives of CAMS, agreed to work together to develop data-based cost-estimating computer programs for the metalworking field. Defendant Cormier told St. Martin about his (and presumably CAMS') association with MTI at the time they began their joint effort. They began formulating the new programs as early as March or April of 1984. The defendants testified that the starting point for their efforts was a computer program, entitled QCI, written by defendant Laviana prior to his association with MTI. QCI differs from COSTIMATOR and the programs later developed by the defendants in that it was not a data base program, i.e., a program that allows the user to access within the program itself a variety of technical materials and data incorporated into the program's logic and analysis which one would otherwise have to provide on one's own or by reference to some type of data compilation. Furthermore, the screen displays in QCI differ from those of QC III, V, and X and RAPIDCOST. The revision of QCI played a limited role in the development of QC III, V, and X, and RAPIDCOST 1, 2, and 3.7
Despite the fact that defendants Laviana, Cormier, and CAMS were preparing to compete with MTI as early as January 1984, they made no effort to notify CAMS of this fact until May 22, 1984. In a letter addressed to "Tom Charkiewicz" on that date, defendant Cormier notified MTI that CAMS, Laviana, and he were terminating their sales relationship with MTI because they planned to upgrade QCI and market a "K-Mart Cost Estimator rather than a Cadillac namely COSTIMATOR...." Furthermore, defendant Cormier incorrectly stated in that letter that "Ken Laviana and I thought it only right to alert you as soon as this decision was made so that no misunderstanding will result." Finally, despite his prior testimony that for all practical purposes the sales representation ended in February 1984, on March 12, 1984 defendant Cormier placed an order for and thereafter was sent 200 COSTIMATOR flyers.
The product of the defendants' efforts were the cost estimating programs QC III, V, and X, and RAPIDCOST 1, 2, and 3. Defendant St. Martin testified that approximately 1500 hours were expended developing these programs. They were developed primarily by defendant St. Martin with the assistance of defendant Laviana. In February 1985, St. Martin obtained copyright registrations for QC and RAPIDCOST.8 St. Martin did not write the source code. When the new programs were written, the defendants had in their possession a COSTIMATOR brochure, devoid of any copyright notices, containing pictures of seven COSTIMATOR screen displays. Shortly after this suit was filed an impoundment order was issued by the Court which was executed at defendant Laviana's residence on July 8, 1985. There MTI's Rene Laviolette found taped together copies of a series of COSTIMATOR and QC V screen displays with notations and checkmarks indicating similarities between the two. These displays raise an inference of copying which defendants have failed to rebut.
The Court will address in detail later the degree of similarity between the COSTIMATOR and QC programs (III, V, and X)9, as indicated in their screen...
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Table of cases
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