Contractor Caught Copying in Software Copyright Case

06/19/2006 By ENR Staff

A contractor that used information from one software company’s computer help pages to assist another software firm in developing contract specifications crossed the line between acceptable use of knowledge and ideas in the public domain and copyright infringement, according to a federal district court in California.

Starting in 1996, Hardin Construction Co. purchased licenses to use various versions of Meridian Project Systems Inc.’s project management software called Prolog Manager. Meridian sends each customer a CD with the software, an end user license agreement and a user’s manual. Hardin never objected to the terms.

In 2000, Hardin started talking to Computer Methods International Corp. about integrating its accounting package with Prolog. In May 2001, Hardin switched to CMIC’s project management software. The firms wanted to produce a document describing the software to be included in their contract.

On April 12, 2001, Hardin’s chief information officer sent CMIC’s vice president of sales and marketing an email containing a draft document prepared

by another Hardin employee. Meridian claimed it contained over 30 pages copied from the Prolog help files.

On April 27, 2001, Hardin and CMIC reached a master software acquisition agreement. Schedule H contained specifications for the project management software. Meridian claimed a large part of it also contained Prolog help files text.

Meridian sued Hardin in the U.S. District Court for the Eastern District of California for breach of contract and copyright infringement, among other things. On Meridian’s motion for summary judgment, the court rejected Hardin’s contention that the contract claim was preempted by federal copyright law. But it agreed with Hardin that the user contract was ambiguous because it was unclear whether the help files fell under the prohibition against copying and distributing Prolog “software or documentation.” Ruling that the files could be neither, the court denied the motion for summary judgment, saying that “this ambiguity precludes the court from interpreting the terms of the contract.”

On Meridian’s motion for partial summary judgment on the copyright claim, the court said that the help files are “entitled to at least some protection.” Evidence indicated the files describe the features, functions and operations of the software, including their selection, sequence and organization. “Because the expression set forth in the help files text are intertwined with the ideas conveyed through the text, to give Meridian broad copyright protection over the text would be to convey a monopoly of the ideas” in violation of federal copyright law.

Noting that such text is entitled to only “thin” protection, the court said Meridian prevailed nonetheless because it showed that the “almost every page of the email attachments contains verbatim copying of plaintiffs help files. Only four pages of the 38-page document do not contain verbatim copying.” It added: “A reasonable juror must find that the attachments are virtually identical.”

But the court noted that the Schedule H document contained substantial differences. “A reasonable juror could conclude that defendant’s schedule H does not infringe upon plaintiff’s copyright.

Meridian Project Systems Inc. v. Hardin Construction Co., U.S. Dist. Ct. Eastern District Calif., No. Civ. S-04-2728, 2006.