Trulogic, Inc. v. Gen. Elec. Co.

• Citation: 177 N.E.3d 615
• Decision Date: 20 August 2021
• Docket Number: No. 2021-CA-3,2021-CA-3
• Parties: TRULOGIC, INC., Plaintiff-Appellant v. GENERAL ELECTRIC COMPANY through its GEA Division, Defendant-Appellee
• Court: United States Court of Appeals (Ohio)

177 N.E.3d 615

TRULOGIC, INC., Plaintiff-Appellant

v.GENERAL ELECTRIC COMPANY through its GEA Division, Defendant-Appellee

No. 2021-CA-3

Court of Appeals of Ohio, Second District, Greene County.

Rendered on August 20, 2021

D. JEFFREY IRELAND, Atty. Reg. No. 0010443, BRIAN D. WRIGHT, Atty. Reg. No. 0075359 and DONALD E. BURTON, Atty. Reg. No. 0040553, 110 North Main Street, Suite 1600, Dayton, Ohio 45402, Attorneys for Plaintiff-Appellant.

APRIL L. BESL, Atty. Reg. No. 0082542 and JACI L. OVERMANN, Atty. Reg. No. 0089306, 255 East Fifth Street, Suite 1900, Cincinnati, Ohio 45202, Attorneys for Defendant-Appellee.

OPINION

WELBAUM, J.

{¶ 1} Plaintiff-Appellant, TruLogic, Inc., appeals from a judgment granting a Civ.R. 12(B)(6) motion filed by Defendant-Appellee, General Electric Company through its GEA Division ("GEA"). According to TruLogic, the trial court erred in concluding that its claims for breach of contract and unjust enrichment were preempted by federal copyright law.

{¶ 2} We conclude that TruLogic's claim for breach of contract was not preempted by federal copyright law. A software licensing agreement may involve the required extra element (instead of or in addition to the acts of reproduction, performance, distribution, or display) that changes the action's nature so that it is qualitatively different from a copyright infringement claim. Under the allegations of the complaint, accepted as true, TruLogic's restriction of the use of its software and other restrictions in the software licensing agreement provided the extra element required to avoid preemption.

{¶ 3} However, the trial court did not err in dismissing TruLogic's claim for unjust enrichment. Unjust enrichment involves a contract implied in law. Where an express agreement exists, there can be no implied agreement. Further, while parties are permitted to plead alternative claims, the allegations in the complaint and the attached software licensing agreement provided that the written agreement was the entire agreement of GEA and TruLogic and superseded all prior or contemporaneous oral or written communications, proposals, and representations with respect to TruLogic's software or any other subject matter covered by the software agreement. As a result, regardless of preemption, there could be no claim for unjust enrichment.

{¶ 4} Finally, even if we needed to address preemption of the unjust enrichment claim, TruLogic's minimal defense of the claim did not address the reasons why preemption law distinguishes between contracts implied in law and those based on either an express contract or one implied in fact. Specifically, contracts implied in law do not involve allegations of actual promises between the parties. Such promises can provide the required extra element to avoid preemption.

{¶ 5} Accordingly, TruLogic's first assignment of error will be sustained and its second assignment of error will be overruled. The judgment, therefore, will be reversed in part and affirmed in part, and this cause will be remanded for further proceedings.

I. Facts and Course of Proceedings

{¶ 6} Before we discuss the factual background, we note that this case is before us following a Civ.R. 12(B)(6) dismissal. As a result, we will accept the facts alleged in the complaint as true. Mitchell v. Lawson Milk Co. , 40 Ohio St.3d 190, 192, 532 N.E.2d 753 (1988).

{¶ 7} According to the complaint, TruLogic was founded in 1998 and provides electronic data solutions to the United States and foreign military services, as well as to automotive systems manufacturing facilities. TruLogic specializes in products and services supporting "technical writing, illustrating, data management, and publishing." Complaint at ¶ 4.

{¶ 8} In 2000-2001, TruLogic used its proprietary publishing platform, TruView™, to develop Interactive Electronic Technical Manuals ("IETMs") for the United States Navy. Id. at ¶ 5. Shortly thereafter, in 2002, GEA expressed an interest in having TruLogic replace its current supplier of IETMs for engine-related technical services to the United States Air Force ("USAF"). Id. at ¶ 6. After TruLogic demonstrated its product and bid on the work, GEA awarded TruLogic a four-year contract to supply IETMs. These IETMs incorporated GEA data for the USAF's use in connection with its use of GEA products. Id. at ¶ 7. In addition, as GEA's service supplier, TruLogic performed the routine update service of Standardized Generalized Markup Language (SGML)-based aircraft engine technical manuals and "provided modified, GE-branded Interactive Electronic Technical Manual (IETM) products from 2002 to 2012 utilizing TruLogic's pre-existing commercial software products." Id. at ¶ 8.

{¶ 9} TruLogic again bid on the GEA IETM contract in 2006 and won the bid, thus continuing contractual relations with GEA on the USAF contract until 2012. Id. at ¶ 9-10. In order to fulfill the contract for IETM deliverables, TruLogic licensed the use of the IETMs that it had developed to GEA and its customer, USAF. Id. at ¶ 11. Although GEA supplied the technical content, TruLogic developed the style and format, and it produced the IETMs using its proprietary, copyrighted publishing platform, TruView™. Id. TruView™ pre-existed TruLogic's contractual relationship with GEA and was not developed as part of that relationship. Id. at ¶ 12. "TruLogic has never given GEA or anyone else the right or option to reverse-engineer or to reuse components of its software." Id. at ¶ 14.

{¶ 10} Beginning in 2008, TruLogic licensed IETMs to GEA under an end user license agreement ("EULA"), which let GEA use the IETM in its deliverables to GEA customers. Complaint at ¶ 15. However, the EULA restricted any other uses, "including specifically prohibiting any repurposing or creation of derivatives of the TruView™ IETM." Id. TruLogic attached a copy of the 2008 EULA to the Complaint, and while it has been updated from time to time, the terms have essentially remained the same. Id. at ¶ 16-17 and Ex. A ("2008 EULA").

{¶ 11} The EULA was a "click-thru" agreement, and GEA and USAF could not have used TruLogic's software without accepting it; the license terms appeared at the time of installation of TruView™, and users could not install the software if they did not click on the button accepting the EULA. Id. at ¶ 18. In pertinent part, the EULA stated:

SOFTWARE LICENSE AGREEMENT

FOR GE AVIATION INTERACTIVE ELECTRONIC TECHNICAL MANUAL (IETM) SYSTEM .

PLEASE READ THIS SOFTWARE LICENSING AGREEMENT CAREFULLY BEFORE INSTALLING OR USING THE SOFTWARE. BY CLICKING ON THE "ACCEPT" BUTTON DURING THE INSTALLATION PROCESS, OR BY USING THIS SOFTWARE, YOU ARE CONSENTING TO BE BOUND BY THIS AGREEMENT. IF YOU DO NOT AGREE TO ALL OF THE TERMS OF THIS AGREEMENT, CLICK THE "DO NOT ACCEPT" BUTTON AND THE INSTALLATION PROCESS WILL TERMINATE.

2008 EULA, p. 1.

{¶ 12} According to the EULA, the GEA system consisted of three individually copyrighted components. Id. at p. 1. The relevant component here is Component 1, which was described as "TruView™ Interactive Electronic Technical Manual (IETM) System SOFTWARE – a LICENSED BY-PRODUCT of the TruView™ Publisher (the IETM CORE SOFTWARE) developed and owned by TruLogic, Incorporated." Id. Concerning Component 1, the EULA stated, in relevant part, as follows:

SOFTWARE END-USER LICENSE AGREEMENT FOR COMPONENT 1 - TRUVIEW INTERACTIVE ELECTRONIC TECHNICAL MANUAL (IETM) SYSTEM SOFTWARE (the BYPRODUCT) (BRANDED – GE AVIATION IETM*)

THIS IS A NONEXCLUSIVE LICENSE FOR COMMERCIAL COMPUTER SOFTWARE – RESTRICTED RIGHTS

IMPORTANT – READ CAREFULLY. This TruLogic End-User License Agreement ("EULA") is a legal agreement between you (either an individual or a single entity) and TruLogic, Incorporated for the TruView SOFTWARE identified above, which may include computer SOFTWARE, associated media, printed materials, and "online" or electronic documentation ("SOFTWARE"). By downloading, installing, copying, or otherwise using the SOFTWARE, you agree to be bound by the terms of this EULA. The originating acquiring entity will be reimbursed the direct labor cost (the service) associated with TruLogic's IETM build process for the specific IETM system affected upon return or certified destruction of the rejected original master copies delivered and all copies reproduced or installed.

The SOFTWARE is protected by copyright laws and international copyright treaties, as well as other intellectual property laws and treaties. TruLogic or its suppliers own the title, copyright, and other intellectual property rights in the SOFTWARE. The SOFTWARE is licensed, not sold.

GRANT OF NONEXCLUSIVE LICENSE . TruLogic, Inc., and its suppliers grant you ("the Customer") a nonexclusive, perpetual, fully paid-up license to use the TruView Interactive Electronic Technical Manual (IETM) System SOFTWARE as provided.

GENERAL. You may reproduce the SOFTWARE (in its entirety), install and use any number of copies of the SOFTWARE on any number of computers, including workstations, terminals, or other digital electronic devices, for the intended use.

CONTROL. The SOFTWARE shall be DISCLOSED, DISTRIBUTED, CONTROLLED, HANDLED AND DESTROYED in an official capacity commensurate with the statements provided on the title pages of the documents contained within the accompanying customer-provided TECHNICAL DATA. The expired SOFTWARE, including TruLogic's set up and all resulting installations shall be properly disposed of in a method that prevents disclosure, unauthorized use and reassembly.

REDISTRIBUTION. If you reproduce and redistribute the SOFTWARE your copy must be a true and complete copy of the SOFTWARE, including TruLogic's set up and all copyright notices, logos, end-user license agreement and/or trademarks that appear in the SOFTWARE as received from TruLogic. This SOFTWARE may be redistributed to support the IETM distribution requirements of GE Aviation, its customers, authorized suppliers and team members; the U.S. Air Force and authorized recipients of the TECHNICAL

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