Yates v. Adams et al

Filing 74

Order by Hon. James Donato granting 61 Motion for Summary Judgment. (jdlc2S, COURT STAFF) (Filed on 3/1/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 PETER YATES, Plaintiff, 8 9 10 United States District Court Northern District of California 11 12 Case No. 15-cv-04912-JD ORDER RE SUMMARY JUDGMENT v. Re: Dkt. No. 61 DAVID B. ADAMS, et al., Defendants. In this copyright infringement action filed by plaintiff Peter Yates, all defendants have 13 collectively moved for summary judgment under Rule 56 of the Federal Rules of Civil Procedure. 14 Dkt. No. 61. The Court grants the motion. 15 16 BACKGROUND Plaintiff Yates is a software developer. His complaint, which alleges a single claim for 17 copyright infringement, names as a defendant David Adams, individually and doing business as 18 Transmedia, Inc., Transmedia Post Production, Transmedia Radio Networks, Mediafax, Inc., and 19 Spottraffic, Inc. Dkt. No. 44 ¶ 1. Other defendants named by the complaint are television station 20 and media companies: Nexstar Broadcasting Group, Inc., Seal Rock Broadcasters, LLC, Sarkes 21 Tarzian, Inc., Gray Television, Inc., Sinclair Broadcast Group, Inc., Intermountain West 22 Communications Company, Inc., and Comcast Corporation. Id. ¶¶ 2-10. 23 Yates worked for Adams and his company, Transmedia, Inc. (“Transmedia”), as an 24 independent contractor from 2001 until 2009. Dkt. No. 62 at 2-3, 5; Dkt. No. 65 at 6. Between 25 2001 and 2003, Yates created the software that is the subject of this litigation. Dkt. No. 65 at 6. 26 The software relates to managing advertising traffic for television stations, and Adams hired Yates 27 to write a program that would allow Transmedia’s clients (which encompasses all defendants other 28 1 than Adams) to “digitally download ads from Transmedia’s server over the Internet for subsequent 2 on-air broadcast.” Dkt. No. 62 at 1. 3 Yates alleges that he “registered the copyright of his software” on March 18, 2013. Dkt. 4 No. 44 ¶ 18. He claims that defendants reproduced, distributed and/or prepared derivative works 5 of and from the software he created from May 2003 through at least January 2014; that defendants 6 did not have authorization to do so; and that these acts of the defendants constituted copyright 7 infringement. Id. ¶¶ 19-23. 8 9 DISCUSSION Summary judgment is appropriate when the pleadings, discovery and affidavits show that there is “no genuine dispute as to any material fact and [that] the movant is entitled to judgment as 11 United States District Court Northern District of California 10 a matter of law.” Fed. R. Civ. P. 56(a). Material facts are facts that may affect the outcome of the 12 case, and a dispute over a material fact is genuine if there is sufficient evidence for a reasonable 13 jury to return a verdict for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 14 242, 248 (1986). To determine if there is a genuine dispute as to any material fact, a court must 15 view the evidence in the light most favorable to the nonmoving party and draw all justifiable 16 inferences in that party’s favor. Id. at 255. The Court need not, however, “scour the record in 17 search of a genuine issue of triable fact,” and it is entitled to rely on the nonmoving party to 18 “identify with reasonable particularity the evidence that precludes summary judgment.” Keenan v. 19 Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quotations omitted). 20 Yates’ single claim in this lawsuit is for copyright infringement, Dkt. No. 44 ¶¶ 14-23, the 21 elements of which are “(1) ownership of a valid copyright, and (2) copying of constituent elements 22 of the work that are original.” Feist Publ’ns., Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 23 (1991). Defendants here assert that they are entitled to summary judgment because they had an 24 implied license for the software at issue, the existence of which creates an affirmative defense to a 25 copyright infringement claim. Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d 26 1110, 1114 (9th Cir. 2000). Although exclusive licenses must be granted in writing, nonexclusive 27 licenses can be granted orally or by implication. Asset Marketing Sys., Inc. v. Gagnon, 542 F.3d 28 748, 754 (9th Cir. 2008). Our circuit has held that an implied, nonexclusive license is granted for 2 1 computer programs when the following conditions are met: (1) a person (the licensee) requests 2 the creation of a work, (2) the creator (the licensor) makes that particular work and delivers it to 3 the licensee who requested it, and (3) the licensor intends that the licensee-requestor copy and 4 distribute -- or use, retain and modify -- the computer program at issue. Id. at 754-55. 5 Significantly, Yates concedes the first two prongs of the implied license test, thereby 6 removing any possibility of a genuine dispute of material fact as to those issues. See Dkt. No. 65 7 at 10 (“While plaintiff created the software and delivered it to defendants, the third prong of intent 8 fails”). The focus of the summary judgment dispute is consequently on the third prong: whether 9 or not Yates intended that defendants copy and distribute, or use, retain and modify, the software 10 United States District Court Northern District of California 11 that Yates created. Our circuit has stated that the relevant intent here is “the licensor’s objective intent at the 12 time of the creation and delivery of the software as manifested by the parties’ conduct.” Asset 13 Marketing, 542 F.3d at 756. The Court is to consider the following factors in determining that 14 intent: “(1) whether the parties were engaged in a short-term discrete transaction as opposed to an 15 ongoing relationship; (2) whether the creator utilized written contracts . . . providing that 16 copyrighted materials could only be used with the creator’s future involvement or express 17 permission; and (3) whether the creator’s conduct during the creation or delivery of the 18 copyrighted material indicated that use of the material without the creator’s involvement or 19 consent was permissible.” Id. (internal quotations omitted). 20 The detailed declaration by David Adams supports the finding of an implied license under 21 these factors. Adams hired Yates for his software coding services in the summer of 2001. Dkt. 22 No. 62-1 (Adams Decl.) ¶ 8. Yates was brought in as a contractor, and he and Adams agreed on 23 an hourly rate that Yates would be paid. Id. Because Yates had a preexisting relationship with 24 another Transmedia employee, “no formal written agreement was entered into.” Id. ¶ 9. Yates 25 instead worked off of a “verbal outline” given to him of Transmedia’s functionality needs, and he 26 began delivering the ASP pages component of the Spottraffic software directly to Transmedia’s 27 servers via remote access to those servers. Id. The ASP pages were fully delivered by the end of 28 2001, and in 2002, Adams asked Yates to extend his coding services “to include coding for the 3 1 FTP Downloader and to revise the ASP pages” as necessary to operate in conjunction with the 2 new Downloader. Id. ¶¶ 9-10. Revisions to the ASP pages by Yates were again delivered directly 3 to the Transmedia server. Id. ¶ 12. For his coding work in the October 2001 to July 2005 period 4 for the ASP pages and the Downloader aspects of the Spottraffic package, Yates was paid 5 $54,300.00. Id. ¶ 13. Yates himself “participated in the installation of the Downloader component of the 7 Spottraffic software at several TV stations from 2003 to 2005, including installations at KRON in 8 San Francisco, Comcast, and CABC in Los Angeles.” Id. ¶ 15. When issues arose, Yates would 9 often personally be involved in troubleshooting those issues at specific broadcasters on behalf of 10 Transmedia. Id. Adams declares that from his “first meeting with Mr. Yates in 2001 through the 11 United States District Court Northern District of California 6 entire course of Transmedia’s working relationship with him, Mr. Yates had never proposed or 12 requested any agreement, written or otherwise, specifying that use of the software he delivered to 13 Transmedia, including the ASP pages, was conditioned upon his continued involvement with or 14 employment by Transmedia, or was otherwise subject to any further expression of permission for 15 use, or payment of any royalty or other compensation beyond what was agreed upon in 2001 and 16 what he invoiced Transmedia, which invoices were paid in full.” Id. ¶ 19. Yates did not claim 17 rights to the software -- or assert a need for Transmedia and its clients to have Yates’ permission 18 for continued use of it -- until 2009, “soon after Transmedia discontinued use of Yates’ services.” 19 Id. ¶ 18. In 2014, Adams learned that Yates had registered a copyright for the ASP pages 20 component of the Spottraffic software, “specifically 22 separate ASP files, five of which Yates 21 had labeled . . . : ‘Created for Transmedia by Peter Yates 09/26/01.’” Id. ¶ 24. 22 These facts collectively establish an objective intent on Yates’ part, at the time he created 23 and delivered the software, for defendants to use, retain and modify that software. Yates’ effort to 24 create a genuine dispute of material fact over these issues is unsuccessful. Yates repeatedly 25 focuses on the length of relationship here, explaining that he and Adams “had a long term and 26 ongoing relationship” which spanned from 2001 until 2009. Dkt. No. 65 at 10-11. But here, as in 27 Asset Marketing, the “ongoing service relationship” in which Yates provided technical support for 28 defendants and “created certain custom software applications” at their request ultimately indicates 4 1 “neither an intent to grant nor deny a license without [Yates’] future involvement.” 542 F.3d at 2 756. 3 Significantly, Yates points only to his own subjective intentions, which are not relevant in this analysis. See, e.g., Dkt. No. 65-1 ¶ 13 (“Prior to my services being terminated, my 5 understanding and intent was that no license for the software was needed, or required, because I 6 anticipated participation in future projects with defendant Adams and Transmedia.”), and compare 7 with Asset Marketing, 542 F.3d at 756 (“The relevant intent is the licensor’s objective intent . . . as 8 manifested by the parties’ conduct.”). Where Yates does refer to external communications, he 9 gets the time period wrong. See Dkt. No. 65 ¶ 15 (“Once Transmedia, and thereby, defendant 10 Adams communicated to me that no further participation would occur, I immediately notified 11 United States District Court Northern District of California 4 defendant Adams that I was asserting my exclusive license of the software.”), and compare with 12 Asset Marketing, 542 F.3d at 756 (relevant intent is the “licensor’s objective intent at the time of 13 the creation and delivery of the software”) (emphasis added). On the latter point, the Asset 14 Marketing court found that an implied license existed after considering the fact that the 15 independent contractor and company “did not discuss a licensing agreement until their relationship 16 was ending. Gagnon delivered the software without any caveats or limitations on AMS’s use of 17 the programs.” Id. at 757. “The first time Gagnon expressed a contrary intent was in his letter to 18 Akersent after AMS had decided to terminate Gagnon’s services.” Id. (emphasis in original). 19 Those same observations fit this case to a tee, and the same conclusion applies: Yates granted 20 Adams and Transmedia’s clients an implied, nonexclusive license. 21 Yates argues in the alternative that the implied license was revocable, and that he in fact 22 revoked it. Dkt. No. 65 at 13. But that argument also fails. In Asset Marketing, our circuit held 23 that where consideration is paid, an implied license is irrevocable. 542 F.3d at 757 (“If an implied 24 license accompanied by consideration were revocable at will, the contract would be illusory.”). 25 Yates tries to escape that conclusion by arguing any compensation he received was only for his 26 labor, and not for the software itself, see Dkt. No. 65 at 7, but that argument has been tried and 27 rejected before. See, e.g., Asset Marketing, 542 F.3d at 756-57 (where he was well paid for his 28 services, “it defies logic that AMS would have paid Gagnon for his programming services if AMS 5 1 could not have used the programs without further payment pursuant to a separate licensing 2 arrangement that was never mentioned in the TSA, and never otherwise requested at the time.”); 3 Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558-59 (9th Cir. 1990) (“To hold that Effects did not 4 at the same time [as creating a work at defendant’s request and handing it over to defendant] 5 convey a license to use the footage . . . would mean that plaintiff’s contribution to the film was ‘of 6 minimal value,’ a conclusion that can’t be squared with the fact that Cohen paid Effects almost 7 $56,000 for this footage.”). Yates has himself submitted his invoices for his programming work 8 that total in the tens of thousands of dollars. Dkt. No. 65-1, Exh. 1. These were for his work on 9 “custom software [that] is far less valuable without the ability to modify it.” Asset Marketing, 542 10 F.3d at 757. The argument that he was paid only for his labor does not hold water. United States District Court Northern District of California 11 In sum, the conclusion reached in Asset Marketing, 542 F.3d at 757, applies equally here: 12 Yates “had to express an intent to retain control over the programs and limit [defendants’] license 13 if he intended to do so. A belated statement that the programs could not be used after [Yates’] 14 departure, made after the termination decision and well after the creation and delivery of the 15 programs for which substantial sums were paid, was not sufficient to negate all other objective 16 manifestations of intent to grant [defendants] an unlimited license.” CONCLUSION 17 18 Yates granted to defendants an implied, nonexclusive, irrevocable license, and that defeats 19 his copyright infringement claim against them. Defendants’ summary judgment motion is 20 granted. Dkt. No. 61. Judgment will be entered for defendants and the Clerk will close the file. 21 22 IT IS SO ORDERED. Dated: March 1, 2017 23 24 JAMES DONATO United States District Judge 25 26 27 28 6

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