Dataworks, LLC v. Commlog LLC

Filing 147

ORDER denying 91 Defendants Motion for Summary Judgment; Denying as moot 146 Plaintiff's Unopposed Motion for Leave to File Sur-Reply by Judge William J. Martinez on 7/13/2011.(erv, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge William J. Martínez

Civil Action No: 09-CV-00528-WJM-BNB
DATAWORKS, LLC, a Colorado limited liability company,
Plaintiff,
v.
COMMLOG, LLC, an Arizona limited liability company, and
STEVEN STREIFF,
Defendants.

ORDER DENYING MOTION FOR PARTIAL SUMMARY JUDGMENT

This matter is before the Court on Defendants Commlog, LLC and Steven
Streiff’s Motion for Partial Summary Judgment. (ECF No. 91; see also ECF Nos. 144,
145.) The motion is fully briefed and ripe for disposition. (See also ECF Nos. 110,
114.) Also pending is Plaintiff Dataworks’ Unopposed Motion for Leave to File SurReply. (ECF No. 146.) The Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1331. For the following reasons, Defendants’ Motion for Partial
Summary Judgment is DENIED, and Dataworks’ Unopposed Motion for Leave to File
Sur-Reply is DENIED as MOOT.
I. BACKGROUND
Defendants’ Motion for Partial Summary Judgment (“MPSJ”) pertains only to
Dataworks’ copyright infringement claim and the portion of its injunctive relief claim

pertaining to alleged copyright infringement.1 The copyright infringement claim involves
two documents: the “Manager’s Red Book (BEP)” and “Trainer’s Log (BEP).”2
A.

Factual Background
The following facts are not in dispute.
Managers’ log books are used in the restaurant industry, among others, to record

operational information. Dataworks and Commlog both create such log books for
restaurants, and are direct competitors in the log book business. Streiff is Commlog’s
owner. The Court will refer in this Order to both Defendants collectively as “Commlog.”
At some point prior to 2006, the Black-eyed Pea restaurant chain (“BEP”) began
purchasing log books from Dataworks, buying Dataworks’ universal, non-customized log
books. Starting in 2006, JB Bettinger, among other employees at BEP, began working
with Dataworks to customize the log books sold by Dataworks to BEP. Through that
customization process, the works at issue were created, namely, the third quarter 2008
versions of the “Manager’s Red Book (BEP)” and “Trainer’s Log (BEP)” (collectively,
“the Custom Logs”). Dataworks currently holds copyright registrations in works entitled

1

The MPSJ also seeks dismissal of Dataworks’s common law and state law
claims (see ECF No. 91, at 17-20), but Dataworks voluntarily dismissed those claims on
April 21, 2011 (see ECF No. 132, 133). Thus, that issue is moot.
The operative complaint also contains a trademark infringement claim that is not
at issue in the MPSJ. (See ECF No. 92, at 11-13.)
2

Although the operative complaint discusses many other alleged instances of
copyright infringement as to other works (see ECF No. 92, at 6-11, 13-14), the
Amended Final Pretrial Order clarifies that Dataworks has limited its copyright
infringement claim to alleged infringement related only to the “Manager’s Red Book
(BEP)” and “Trainer’s Log (BEP)” (see ECF No. 135, at 2; ECF No. 137, at 2-3).
Counsel for Dataworks confirmed this at the oral argument on the MPSJ. (See
Unofficial Transcript of July 8, 2011 Oral Argument on the MPSJ (“Hearing Transcript”),
at 3:14-19.)
2

“The Manager’s Red Book Third Quarter 2008 Black-eyed Pea” and “The Trainer’s Log
Book Third Quarter 2008 (Black-eyed Pea).” (See ECF No. 91, Exs. A-11, A-12.) It
appears that these documents were registered with the Copyright Office as
compilations. (See id.)
BEP subsequently stopped working with Dataworks, and hired Commlog to
create the equivalent customized logs for BEP for the fourth quarter 2008. BEP gave
Commlog copies of the Custom Logs and directed Commlog to produce similar logs.
(ECF No. 91, at 6 ¶ 25; ECF No. 110, at 12 ¶ 25.) Commlog did so and sold them to
BEP. (Id.) Commlog’s use of the Custom Logs to create similar logs for BEP is what
forms the basis for Dataworks’ copyright infringement claim against Commlog.
B.

Procedural Background
Dataworks originally filed this action on March 11, 2009 (ECF No. 1), and filed

the operative Second Amended Complaint on September 20, 2010 (ECF No. 92). BEP
has not intervened or been joined as a party to this action. On September 21, 2010,
Commlog filed the MPSJ. (ECF No. 91.)3 Dataworks filed a Response (ECF No. 110),
and Commlog filed a Reply (ECF No. 114).
In the MPSJ, Commlog argues that (1) because BEP authorized it to reproduce
the Custom Logs, and because BEP is at least a joint author (if not the sole author) of
the Custom Logs, Commlog is immune from copyright liability to Dataworks; (2)
Dataworks’ contributions to the Custom Logs are not copyrightable; and (3) Dataworks’
copyright registrations for the Custom Logs are invalid and should be cancelled. (ECF
3

The MPSJ was originally filed only on behalf of Defendant Commlog (see ECF
No. 91), but Defendant Streiff has since joined as a co-movant (ECF No. 144, 145).
3

91, at 10-17.)
II. STANDARD OF REVIEW
Summary judgment is warranted under Federal Rule of Civil Procedure 56 “if the
movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see also Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed fact is “material” if under
the relevant substantive law it is essential to proper disposition of the claim. Wright v.
Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). An issue is “genuine” if the
evidence is such that it might lead a reasonable jury to return a verdict for the
nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir. 1997). In analyzing
a motion for summary judgment, a court must view the evidence and all reasonable
inferences therefrom in the light most favorable to the nonmoving party. Adler v.
Wal–Mart Stores, Inc., 144 F.3d 664, 670 (10th Cir. 1998) (citing Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).
When, as here, “the moving party does not bear the ultimate burden of
persuasion at trial, it may satisfy its burden at the summary judgment stage by
identifying a lack of evidence for the nonmovant on an essential element of the
nonmovant’s claim.” Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th
Cir. 2001) (quotation marks omitted). If the movant meets this burden, the burden shifts
to the nonmoving party to designate “specific facts showing that there is a genuine issue
for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986); see also Fed. R. Civ. P.
56(e). See also Adler, 144 F.3d at 671 (stating that the nonmovant must come forward
with evidence “that would be admissible . . . in the event of trial from which a rational
4

trier of fact could find for the nonmovant”).
III. ANALYSIS
A.

Ownership of the Custom Logs
The primary issue raised by the briefing on the MPSJ is who owns the Custom

Logs. If Dataworks owns the Custom Logs (as Dataworks argues), BEP could not have
authorized Commlog to use the Custom Logs to create reproductions. If BEP owns the
Custom Logs (as Commlog argues), BEP obviously could have authorized Commlog to
create reproductions. Also, if BEP and Dataworks are co-owners (joint authors) of the
Custom Logs (as Commlog alternatively argues), then BEP could have authorized
Commlog’s use of the Custom Logs and Commlog would be immune from copyright
liability to the other co-owner, Dataworks. See, e.g., Davis v. Blige, 505 F.3d 90, 100
(2d Cir. 2007) (“A license from a co-holder of a copyright immunizes the licensee from
liability to the other co-holder for copyright infringement.”).
As an initial matter, it should be noted that this is not a traditional dispute
between two alleged co-owners of a copyrightable work. Instead, BEP, not being a
party to this lawsuit, has not taken a position regarding the extent of its ownership
interest, if any, in the Custom Logs. Instead, it is Commlog, as a licensee of BEP, that
is arguing that BEP has an ownership interest in the Custom Logs. The law is not
settled regarding whether a third party non-author such as Commlog can challenge the
validity of an alleged owner’s copyright. Compare Int’l Code Council, Inc. v. Nat’l Fire
Prot. Ass’n, Inc., No. 02 C 5610, 2006 WL 850879, at *18 n.33 (N.D. Ill. Mar. 27, 2006)
(citing case law holding that a non-author does have standing to challenge a copyright

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holder's right to enforce the copyright), with Homeowner Options for Mass. Elders, Inc.
v. Brookline Bancorp, Inc., No. 09-11790, 2011 WL 1832515, at *2 (D. Mass. May 12,
2011) (rejecting attempt by non-author to challenge the validity of copyright where no
actual potential authors of the work had disputed the copyright holder’s ownership).4
Even assuming that Commlog has standing to challenge the validity of
Dataworks' copyrights, there is a triable issue as to whether Dataworks owns the
Custom Logs, BEP owns the Custom Logs, or the Custom Logs are jointly owned by
Dataworks and BEP. As another threshold issue, it is important to note that there is no
indication in the record that Dataworks and BEP ever entered into a contract that
included a provision governing who owned the Custom Logs. (See Hearing Transcript,
at 5:25 - 6:8, 9:21 - 10:5.) See Richlin v. Metro-Goldwyn-Mayer Pictures, Inc., 531 F.3d
962, 968 (9th Cir. 2008) (“A contract evidencing intent to be or not to be coauthors is
dispositive.”). Therefore, the Court must look to other evidence potentially indicating
ownership of the Custom Logs.
Yet a third threshold issue is based on the fact that Dataworks holds copyrights
in these third quarter 2008 versions of the Custom Logs.5 Given this, a presumption
exists that it owns the Custom Logs and Commlog has the burden to show that the

4

Case law has more consistently held that a third party does not have standing
to challenge the validity of an assignment of a copyright, see, e.g., Billy-Bob Teeth, Inc.
v. Novelty, Inc., 329 F.3d 586, 592-93 (7th Cir. 2003); Imperial Residential Design, Inc.
v. Palms Dev. Grp., Inc., 70 F.3d 96, 99 (11th Cir.1995), but one court has specifically
distinguished that factual scenario from the situation present here, namely, a third party
challenging a copyright holder’s right of ownership, see In re Napster, Inc. Copyright
Litig., 191 F. Supp. 2d 1087, 1097 (N.D. Cal. 2002).
5

The Court addresses infra Commlog’s argument that it is not clear what
versions of the Custom Logs are actually copyrighted.
6

copyrights are invalid, i.e., that BEP was at least a co-owner of the Custom Logs. See
Autoskill Inc. v. Nat'l Educ. Support Sys., Inc., 994 F.2d 1476, 1487 (10th Cir. 1993).
The circumstances of this case underscore Commlog’s burden, because here,
the Custom Logs were created based on universal logs that Dataworks originally sold to
BEP and that were indisputably owned by Dataworks. Thus, under these
circumstances, it must be shown that the customizations made to the universal logs
were significant enough to lessen Dataworks' sole ownership of the logs. There are
genuine factual disputes regarding the extent to which the customizations of the
universal logs were authored by BEP, or Dataworks, or both. (See, e.g., ECF No. 91, at
5-6 ¶¶ 17-21; ECF No. 110, at 9-11 ¶¶ 17-21.) It certainly appears that BEP and
Bettinger provided at least some of the content added to the Custom Logs, but that fact
is not dispositive regarding ownership. See Erickson v. Trinity Theatre, Inc., 13 F.3d
1061, 1069 (7th Cir. 1994) (“Focusing solely upon the fact of contemporaneous input by
several parties does not satisfy the statutory requirement that the parties intend to
merge their contributions into a unified work.”).
Instead, the crucial question is what Dataworks’ and BEP’s intent was regarding
who would own the Custom Logs. For the Custom Logs to be joint works, Dataworks
and BEP must have had, at the time of creation, the mutual intent that they would be coowners of the Custom Logs. See 17 U.S.C. §§ 101, 201(a); Erickson v. Trinity Theatre,
13 F.3d 1061, 1067-69 (7th Cir. 1994). If only one party had that intent, a joint work
was not created. Childress v. Taylor, 945 F.2d 500, 508-09 (2d Cir. 1991). Viewing the
evidence in a light most favorable to Dataworks, there are genuine disputes of material
fact as to Dataworks’ and BEP’s intent regarding who owned the Custom Logs. On the
7

one hand, Commlog emphasizes Bettinger’s testimony that the customizations were
owned by BEP,6 and testimony of Dataworks employees that BEP had control over
changes to the Custom Logs.7 On the other hand, the fact remains that the Custom
Logs grew out of universal logs owned solely by Dataworks. There is insufficient
evidence here showing that the intent of the parties changed regarding the ownership of
the universal logs as the logs were changed into the Custom Logs at issue. Also, the
Custom Logs were still works that Dataworks was selling to BEP, and so although BEP
indisputably purchased copies of the Custom Logs, genuine disputes of fact remain
about who owned the copyrightable material itself.8

6

While Commlog may have standing to assert BEP’s ownership of the Custom
Logs, that does not mean Bettinger’s testimony is as persuasive as the testimony might
have been had it been provided by BEP itself. BEP is not a party to this action, and
Bettinger’s deposition testimony and affidavit were not made in a representative
capacity on behalf of BEP. Instead, Bettinger is simply a former employee of BEP who
has been willing to provide her own testimony in the case.
7

Commlog focuses in large part on the level of control that BEP had over the
creation of the Custom Logs. But it is not surprising that Dataworks was willing to make
whatever additions or changes requested by BEP, a customer of Dataworks that was
providing Dataworks with business. That makes this case different than the more
traditional case where two alleged co-authors fighting over ownership are not in a sellercustomer relationship. While level of control is still a relevant factor, the crucial issue,
as demonstrated by the relevant statute, is the parties’ intent. See 17 U.S.C. §§ 101,
201(a).
It should also be noted that Commlog has not argued that BEP owns the works
based on the “work for hire” doctrine (which holds that an employer or another entity
who hires someone else to create a work owns that work). See 17 U.S.C. §§ 101
(defining a “work made for hire”), 201(b). It is clear that doctrine does not apply here,
because BEP and Dataworks were not in an employer-employee relationship, and
because there was no written instrument between BEP and Dataworks indicating that
the Custom Logs were “work[s] made for hire.” See 17 U.S.C. § 101 (listing two bases
upon which to find that the “work for hire” doctrine applies).
8

When a piece of literature is purchased by a consumer, that does not mean the
consumer then has the right to violate the author’s copyright.
8

Thus, Commlog has not satisfied its burden on summary judgment of identifying
a lack of evidence for Dataworks as to whether Dataworks owned the Custom Logs at
issue. And even if Commlog has satisfied this burden, the evidence submitted by
Dataworks has created a triable issue as to ownership of the Custom Logs.
B.

Copyrightability of the Custom Logs
Commlog also argues that the portions of the Custom Logs created by

Dataworks are not copyrightable because they are mere “blank forms” (to be filled in by
BEP managers) lacking originality and creativity. (ECF No. 91, at 12-15.) Dataworks
disputes this, but also argues that, separate from the issue of the copyrightability of
each distinct element of the Custom Logs, the Custom Logs are copyrightable as
compilations. (ECF No. 110, at 17-21.)
The law is not settled as to “whether the question of copyrightability is a pure
question of law and thus one for the court, or a mixed question of law and fact and thus
one involving potential jury questions in the presence of materially disputed facts.”
Meshwerks, Inc. v. Toyota Motor Sales U.S.A., Inc., 528 F.3d 1258, 1262 n.4 (10th Cir.
2008). The court in Meshwerks pointed out that the Tenth Circuit has not resolved the
question, and the Meshwerks court declined to do so “as this case comes to us on
summary judgment, and we cannot, of course, grant such a motion if we discern any
material dispute of fact in the record before us.” Id.9
The Court declines to make judicial determinations regarding the copyrightability
9

See also Bryant v. Media Right Prods., Inc., 603 F.3d 135, 140 (2d Cir. 2010)
(“The question of whether a work constitutes a ‘compilation’ for the purposes of
statutory damages pursuant to Section 504(c)(1) of the Copyright Act is a mixed
question of law and fact.”).
9

of particular sections and particular pages of the Custom Logs, given the numerous
factual disputes that exist regarding who owns the particular sections and particular
pages of the Custom Logs. The Court will, however, make a judicial determination
regarding the copyrightability of the Custom Logs as a whole, as compilations, because
there are no factual disputes regarding the make-up of the Custom Logs as a whole
(what the Custom Logs looked like as a whole). The Court concludes that the Custom
Logs are copyrightable as compilations (as explained infra). However, there is still a
genuine dispute of material fact regarding the extent to which Dataworks compiled the
Custom Logs (as compared to BEP’s involvement in creating the compilation).
Therefore, the Court’s legal determination regarding the Custom Logs’ copyrightability
will only assist the trier of fact in determining whether Dataworks was entitled to
copyright them as the sole owner of the compilations.
17 U.S.C. § 101 defines a “compilation” as “a work formed by the collection and
assembling of preexisting materials or of data that are selected, coordinated, or
arranged in such a way that the resulting work as a whole constitutes an original work of
authorship.” If a work meets this definition, it is copyrightable, even if the individual
elements making up the compilation are not copyrightable in themselves. See 17
U.S.C. § 103; Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S.
340, 356-59 (1991).
[A] compilation is deemed original and hence protected by copyright if the
author has independently and with at least a minimal degree of creativity
made choices as to which facts to include, in what order to place them,
and how to arrange the collected data so that they may be used effectively
by readers.
Health Grades, Inc. v. Robert Wood Johnson Univ. Hosp., Inc., 634 F. Supp. 2d 1226,
10

1233 (D. Colo. 2009) (quotation marks omitted).
The Court finds that the required levels of originality and creativity have been met
here as to the compilation of the Custom Logs. The selection, design, and placement of
the calendars, daily logs, repair and maintenance logs, collective repairs lists, in-store
manager’s meeting logs, injury logs, and BEP policies and procedures within the
Custom Logs are sufficiently original and creative to warrant copyright protection as
compilations. This case is quite similar to Harper House, Inc. v. Thomas Nelson, Inc.,
889 F.2d 197 (9th Cir. 1989), which upheld the copyrightability as compilations of
certain daily organizers, and Baldwin Cooke Co. v. Keith Clark, Inc., 383 F. Supp. 650
(N.D. Ill. 1974), which held that the executive planners at issue were copyrightable as
compilations. The Court follows these cases and holds that the Custom Logs are
copyrightable as compilations.
However, as previously explained, a genuine dispute of material fact still exists
as to whether Dataworks was entitled to copyright the Custom Logs as the sole owner
of the compilations.
C.

Whether the Copyright Registrations for the Custom Logs are Valid
Commlog also argues that Dataworks’ copyright registrations for the Custom

Logs are invalid and should be cancelled because Dataworks deceived the United
States Copyright Office in two ways in order to obtain the copyrights: (1) by failing to
identify BEP as a co-author of the works, and (2) by deleting BEP’s copyright symbols
on particular pages and replacing them with Dataworks’ copyright symbols. (ECF No.
91, at 15-17.) Dataworks argues in response that it did not mislead the Copyright
Office, and even if the registrations are incorrect in some way, they can be corrected by
11

amended registrations. (ECF No. 110, at 22-24.) In its Reply, Commlog changes tacks,
making the new argument that the copyright registrations are vague about what
particular works are even being copyrighted. (ECF No. 114, at 7-9.)
As to Commlog’s first argument, the Court has already held that there are
genuine disputes of material fact as to who owns the Custom Logs, so the Court is not
in a position to hold as a matter of law that Dataworks deceived the Copyright Office by
failing to identify BEP as a co-author of the Custom Logs.
As to Commlog’s second argument, Dataworks disputes whether it removed BEP
copyright symbols from certain pages prior to submission of the Custom Logs to the
Copyright Office. Regardless, the Court has already held that the Custom Logs are
copyrightable as compilations, and that there is a genuine dispute of material fact as to
whether Dataworks was entitled to copyright the Custom Logs as the sole owner of the
compilations. If Dataworks was so entitled, then it would not necessarily have acted
improperly by removing BEP’s copyright symbols, given that Dataworks was simply
copyrighting the Custom Logs as a whole as compilations. See 17 U.S.C. §§ 103(b),
201(c) (providing that a copyright in a compilation only provides ownership over that
compilation, and not ownership over the individual parts of the compilation); Greenberg
v. Nat’l Geographic Soc’y, 533 F.3d 1244, 1273 n. 29 (11th Cir. 2008) (”Under § 103(b),
a copyright in a compilation does not extend to the compiler any exclusive rights in the
preexisting materials brought together in the collective work.”). If the trier of fact
concludes that Dataworks was entitled to copyright the Custom Logs as compilations,
and if it is found that Dataworks did remove BEP’s copyright symbols on particular
pages within the Custom Logs, it would not necessarily follow that Dataworks supplied
12

the Copyright Office with “false information” or “withheld [information from the Copyright
Office] that may have resulted in rejection of the application.” See Martin v. Cuny, 887
F. Supp. 1390, 1394 (D. Colo. 1995) (discussing bases to invalidate copyright
registration).
Commlog’s third argument – that it is not clear what versions of the Custom Logs
were actually copyrighted10 – was not raised until Commlog’s Reply brief. The Court
therefore may disregard this argument. See Kerber v. Qwest Grp. Life Ins. Plan, 727 F.
Supp. 2d 1076, 1079 (D. Colo. 2010); Alcohol Monitoring Sys., Inc. v. Actsoft, Inc., 682
F. Supp. 2d 1237, 1242 (D. Colo. 2010). However, even if the Court were to consider
the argument, it would conclude that genuine disputes of material fact preclude
summary judgment on this issue. The copyright registrations themselves list the titles of
the Custom Logs as “The Manager’s Red Book Third Quarter 2008 Black-eyed Pea”
and “The Trainer’s Log Book Third Quarter 2008 (Black-eyed Pea).” (See ECF No. 91,
Exs. A-11, A-12.) Also, the copyrights were registered in December 2008. (See id.)
These facts are consistent with Dataworks position that the works copyrighted were the
third quarter 2008 versions of the Custom Logs. Commlog’s argument appears to be
based solely on the fact that the copyright registrations contain fields indicating that the
“Year of Completion” and “Date of 1st Publication” for the Manager’s Log and Trainer’s
Log are 1996 and 2007, respectively. (See id.) Based on this evidence on both sides,
the Court concludes that genuine issues of material fact exist that preclude summary

10

Commlog argues that the copyright registrations suggest that 1996 and 2007
versions of the Manager’s Log and Trainer’s Log, respectively, were copyrighted, not
the third quarter 2008 versions advanced by Dataworks.
13

judgment for Commlog on this issue.
IV. CONCLUSION
In accordance with the foregoing, it is therefore ORDERED that:
(1)

Defendants' Motion for Partial Summary Judgment (ECF No. 91) is DENIED; and

(2)

Plaintiff’s Unopposed Motion for Leave to File Sur-Reply (ECF No. 146) is
DENIED as MOOT.
Dated this 13th day of July, 2011.
BY THE COURT:

_______________________
William J. Martínez
United States District Judge

14