Rouse v. Walter & Associates, L.L.C.

Decision Date20 September 2007
Docket NumberNo. 4:05-cv-00440-JEG.,4:05-cv-00440-JEG.
Citation513 F.Supp.2d 1041
PartiesGene ROUSE and Doyle Wilson, Plaintiffs/Counterclaim Defendants, v. WALTER & ASSOCIATES, L.L.C., and Marvin J. Walter, Defendants/Counter-claimants/Third-Party Plaintiffs, v. Viren Amin, Third-Party Defendant.
CourtU.S. District Court — Southern District of Iowa

Brian William Hayes, R.J. Zayed, Carlson Caspers Vandenburgh & Lindquist PA, Minneapolis, MN, Larry R. Curtis, Pasley & Singer Law Firm LLP, Ames, IA, for Plaintiffs.

Barry J. Nadler, Debra Lynne Hulett, Randall D. Armentrout, Nyemaster Goode Voigts West Hansell & O'Brien PC, Des Moines, IA, for Defendants.

Debra Lynne Hulett, Randall D. Armentrout, Nyemaster Goode West Hansell & O'Brien, PC, Des Moines, IA, for Third-Party Plaintiffs.

R.J. Zayed, Brian William Hayes, Carlson, Caspers, Vandenburgh & Lindquist, P.A., Minneapolis, MN, Larry R. Curtis, Pasley & Singer Law Firm LLP, Ames, IA, for Third-Party Defendant.

Barry J. Nadler, Debra Lynne Hulett, Randall D. Armentrout, Nyemaster Goode Voigts West Hansell & O'Brien PC, Des Moines, IA, for Counterclaimants.

Larry R. Curtis, Pasley & Singer Law Firm LLP, Ames, IA, Sharon S. Greer, Cartwright Druker & Ryden, Marshalltown, IA, for Counterclaim Defendants.


JAMES E. GRITZNER, District Judge.

This matter is before the Court on Defendants/Counter Claimants/Third-Party Plaintiffs Walter & Associates, L.L.C., and Marvin Walter's Motion for Partial Summary Judgment, and Plaintiffs/Counter Defendants and Third-Party Defendant's Motion for Partial Summary Judgment. Hearing was held on both motions on August 24, 2007. Defendants/Counter Claimants/ Third-Party Plaintiffs were represented by attorney Randall Armentrout. Plaintiffs/Counter Defendants and Third-Party Defendant were represented by attorney Bryan Hayes. The matter is now. fully submitted for review.


Plaintiffs Dr. Gene Rouse (Rouse) and Dr. Doyle Wilson (Wilson) were employed by Iowa State University of Science and Technology (ISU). Rouse was employed by ISU between 1971 and June 30, 2004. Rouse was a Professor of Animal Science between 1984 and 2004. Wilson was employed by ISU between 1980 and October 1, 2001. Wilson was an assistant, associate, or full Professor of Animal Science between 1982 and 2001.

Third-Party Defendant Dr. Viren Amin is an Associate Scientist with the ISU Department of Animal Science. Biotronics, Inc., is an Iowa corporation that was formed in 1998 by Wilson, Rouse, Amin, and Craig Hayes.

Defendant Walter & Associates, L.L.C., markets and provides agricultural consulting services through the United States, Canada, and Latin America. Defendant Marvin J. Walter is President and Chairman of Walter & Associates, L.L.C., and was a member of the board of directors of the Iowa State University Research Foundation (ISURF) prior to the formation of Walter & Associates. ISURF is a not-forprofit corporation that is a separate entity from ISU. ISURF owns and licenses ISU's intellectual property. The Office of Intellectual Property and Technology Transfer (OIPTT) at ISU is charged with serving ISU as the vehicle for marketing and licensing intellectual property owned by ISURF. Dr. Kenneth Kirkland is the Executive Director of ISURF and the Director of OIPTT. Nita Lovejoy is the Associate Director of ISURF and OIPTT.


Plaintiffs Rouse and Wilson, as research professors at ISU, began a large research project in the late 1980's, researching the ability to use an ultrasound machine to scan cattle in order to determine the quality of the beef on live cattle before the cattle are slaughtered. Rouse and Wilson applied for multiple grants from various entities, including the United States Department of Agriculture, the American Angus Association, and the Beef Industry Council, among others, to fund their research efforts. Rouse and Wilson raised $1.6-million in outside grant funding to support their efforts to explore and research the application of real-time ultrasound technology to predict compositional traits in live beef cattle.

The primary portable scanning device in use at the time the research was being conducted was known as the Aloka. Rouse and Wilson's research was directed generally to the development of ultrasound technology to measure the compositional traits in beef cattle, and the Aloka was the primary scanning device used in one component of this research.

Rouse and Wilson's research resulted in the development of live animal intramuscular fat prediction software (LAIPS). LAIPS was used to predict the degree of intramuscular fat shown on the cattle scans in the lab and contains algorithms that analyze data and provide comprehensive information in terms of the percentage of intramuscular fat. LAIPS takes a scanned image as an input and makes a computation using the algorithms. The initial LAIPS algorithms were designed to work with the Aloka ultrasound device.

Because the LAIPS program arose from the sponsored research, Rouse and Wilson assigned the copyright to the software to ISURF in February of 1995. LAIPS was given ISURF Reference No. 1480. ISU began to license the LAIPS program to third parties in approximately May of 1995. Rouse, Wilson, and Amin, who had assisted Rouse and Wilson during the development of LAIPS, received royalties from ISURF's licensing of the LAIPS software until 2001.

LAIPS requires the use of another software program, a "front-end" interface program, to serve as a user interface and a means to display the images. Rouse, Wilson, and Amin used "PV-WAVE" and "SAS" software programs in conjunction with the LAIPS software. PV-WAVE was used in conjunction with the MF prediction model in the LAIPS software in order to conduct the research. The PV-WAVE was relatively slow compared to other software programs like Rib-O-Matic, which was a, front-end program that could be used with LAIPS.

Using a small part of the $1.6-million in grant money, the ISU Department of Animal Science purchased new computers that had increased processor speed and used Microsoft Windows © as an operating system. Rouse and Wilson wanted to develop a Windows © compatible front-end program that could process large numbers of images and asked Amin to develop a frontend program that would allow the LAIPS program to run on the new, faster, Windows ©-based computers. Amin drafted USOFT in response to this request.

In May 1995, while still developing the USOFT program, Amin contacted Evergreen Technologies, Inc., in order to obtain a license for Evergreen's VisionTools software. Amin wanted to use VisionTools in creating USOFT. Amin obtained a license for VisionTools from Evergreen. Pursuant to this license agreement, ISU was granted a nonexclusive, nontransferable license to copy the VisionTools software for the sole purpose of incorporating the software into ISU's programs. The license also permitted the distribution of the software within the departments of the University on a noncommercial basis. The license agreement specifically stated the software "may not be distributed commercially to any person or organization" and further stated that ISU may not use, reproduce, sub-license, distribute, or dispose of the software, in whole or in part, other than as permitted under the license agreement. Amin signed the license agreement as an employee of ISU.

USOFT, developed in 1996, is described as a "front-end" software program for use with the Aloka 500 and Classic 200 intramuscular fat prediction models. USOFT, when used in combination with an intramuscular fat prediction model such as LAIPS, allows for the analysis of real-time ultrasound images collected on live beef cattle to estimate beef carcass composition traits. The USOFT program requires access to the VisionTools libraries in order to be able to return and display meaningful data on a computer screen; thus, Vision-Tools, while not embedded in the USOFT program, is a necessary component of USOFT. Amin testified during his deposition that USOFT was created to support the research they were doing into intramuscular fat and some of the other traits they were researching. Rouse testified during his deposition that Amin alone was the one who wrote the software code but that Rouse and Wilson were involved in calculating and preparing certain algorithms used in the USOFT program. Rouse and Wilson also directed and planned the type of information that would be beneficial to an individual using the software and how to display the information on the screen. Amin programmed the USOFT menu pages with Iowa State University" on each screen of the program, resulting in the following being displayed at the top of each screen:

"U-SOFT for Beef Quality Grading (vl.5d 9/17/98) © Iowa State University"1

A print-screen depicting a screen displayed by the USOFT software shows the software also displays the following message to users: "This software is developed at Iowa State University (U.S.A.) and copyrighted by the ISU Research Foundation, Inc." Amin testified that he wrote this message into the software. USOFT was never assigned to ISURF in written form, and an express written agreement regarding the ownership of the USOFT copyright does not exist between Plaintiffs and Amin and ISU.

In approximately 1996 or 1997, after USOFT was developed, Amin, Wilson, and Rouse co-authored a research paper entitled "USOFT: an Ultrasound Image Analysis Software for Beef Quality Research" that was published in ISU Beef Research Report. The first page of this research paper says, in part:

Iowa State University has developed technology for objective evaluation of beef quality by predicting the percentage of intramuscular fat (IMFAT) from ultrasound scans of live animals as well as carcasses. The technology for live animal evaluation has been licensed to a commercial company for field use (A.S. Leaflet R1326, 1996...

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