Geologic Computer Systems, Inc. v. MacLean et al
Filing
155
ORDER granting in part and denying in part 143 Motion for Summary Judgment; granting in part and denying in part 144 Motion for Summary Judgment. Signed by District Judge Arthur J. Tarnow. (MLan)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GEOLOGIC COMPUTER SYSTEMS, INC.,
Case No. 10-13569
Plaintiff,
SENIOR U,S. DISTRICT JUDGE
ARTHUR J. TARNOW
v.
JOHN D. MACLEAN, ET AL.,
U.S. MAGISTRATE JUDGE
R. STEVEN WHALEN
Defendants.
/
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR
SUMMARY JUDGMENT [143]; GRANTING IN PART AND DENYING IN PART
DEFENDANTS ALAN WILLIAMS, MARK WILLIAMS, JOHN MACLEAN, AMW
GROUP, AND AMW MACHINE CONTROL’S MOTION FOR SUMMARY JUDGMENT
[144]
On July 17, 2015, Plaintiff filed a Motion for Summary Judgment
[Doc. #143]. The same day, all remaining Defendants except Defendant Advanced
Geo Positioning Solutions, Inc. (AGPS) filed their own Motion for Summary
Judgment [144]. The parties filed their Responses [146, 148] on August 14, 2015,
and their Replies [153, 154] on September 4, 2015. The Court held a hearing on
the motions on September 15, 2015. For the reasons stated on the record, as
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supplemented below, both motions are GRANTED IN PART AND DENIED IN
PART.1
I.
Copyright Infringement
A plaintiff claiming copyright infringement must show (1) that it owned a
valid copyright in the work and (2) that the defendant copied protectable elements
of the work. Varsity Brands, Inc. v. Star Athletica, LLC, --- F.3d ---, 2015 WL
4934282, at *3 (6th Cir. 2015) (citing Lexmark Intern., Inc. v. Static Control
Components, Inc., 387 F.3d 522, 534 (6th Cir. 2004)). The second prong “tests
whether any copying occurred (a factual matter) and whether the portions of the
work copied were entitled to copyright protection (a legal matter).” Id. at *4
(quoting Lexmark, 387 F.3d at 534). Here, Plaintiff’s evidence, including Alan
Williams’s deposition testimony and its expert’s report, establish beyond genuine
dispute that copying occurred.
However, the evidence does not conclusively
establish that portions of the copied software code were entitled to copyright
protection. Defendants, for their part, have not established that no reasonable jury
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Defendant AGPS filed nothing concerning the motions, and counsel for AGPS
did not appear at the hearing. Nevertheless, “a district court cannot grant summary
judgment in favor of a movant simply because the adverse party has not
responded.” Carver v. Bunch, 946 F.2d 451, 455 (6th Cir. 1991). As explained
below, the Court holds that Plaintiff has failed to meet its burden as a summary
judgment movant on some of its claims. The Court therefore must deny Plaintiff
summary judgment against Defendant AGPS on those claims.
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could conclude that copyright-protected code was copied.
Accordingly, both
motions for summary judgment are DENIED with respect to Plaintiff’s copyright
infringement claim.
II.
Breach of Contract
Defendants Alan and Mark Williams executed employment contracts with
Plaintiff, promising not to use or disclose, during or after their employment, any
“confidential information,” defined to include software and software codes,
respecting GeoLogic’s activities. Nevertheless, Alan and Mark Williams have
admitted using software code written by Alan Williams for GeoLogic, during his
employment with GeoLogic, to create and sell competing software. Accordingly,
Plaintiff’s Motion for Summary Judgment [143] is GRANTED with respect to
Plaintiff’s claim that Defendants Alan and Mark Williams breached their
employment contracts.
III.
Tortious Interference with Contract or Expectancy
“It is well settled that the non-moving party must cite specific portions of the
record in opposition to a motion for summary judgment, and that the court is not
required to search the record for some piece of evidence which might stave
off summary judgment.” U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d
1185, 1191 (6th Cir. 1997) (citing Street v. J.C. Bradford & Co., 886 F.2d 1472,
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1479–80 (6th Cir.1989)). Plaintiff has not satisfied this burden with respect to this
claim.
Therefore, Defendants’ Motion for Summary Judgment [144] is
GRANTED with respect to Plaintiff’s claim for tortious interference with contract
or expectancy.
IV.
Misappropriation of Trade Secrets
Michigan courts use various factors to determine if information constitutes a
trade secret, including the following:
(1) extent to which information is known outside of owner’s business,
(2) extent to which information is known by employees and others
involved in business, (3) extent of measures taken to guard secrecy of
information, (4) value of information to owners and competitors, (5)
amount of effort and money expended in developing information, and
(6) ease or difficulty with which information could be properly
acquired or duplicated by other.
Dura Global Technologies, Inc. v. Magna Donnelly Corp., 662 F. Supp. 2d 855,
859 (E.D. Mich. 2009) (quoting Wysong Corp. v. M.I. Industries, 412 F. Supp. 2d
612, 626 (E.D. Mich. 2005)). Plaintiff has produced insufficient evidence and
argument relevant to such factors to raise a genuine dispute of material fact on its
claim that certain software code and a list of customers constituted trade secrets.
This is especially true concerning the customer list. See Hayes-Albion v. Kuberski,
421 Mich. 170, 183 (1984).
Accordingly, Defendants’ Motion for Summary
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Judgment [144] is GRANTED with respect to Plaintiff’s misappropriation of trade
secrets claim.
V.
Breach of Fiduciary Duty
As framed in the Third Amended Complaint, Plaintiff’s breach of fiduciary
duty claim is based solely on Defendant John MacLean’s sale of AMW software to
the City of Dubuque while employed by Plaintiff.2 “Michigan courts have held
that an agent of a principal owes a fiduciary obligation to the principal not to
appropriate the opportunity of the principal for his own benefit.” Mike Vaughn
Custom Sports, Inc. v. Piku, 15 F. Supp. 3d 735, 752 (E.D. Mich. 2014) (quoting
United Rentals (N. Am.), Inc. v. Keizer, 202 F. Supp. 2d 727, 743 (W.D. Mich.
2002)). Although merely planning and/or preparing to engage in competition with
the principal does not breach this duty of loyalty, actually engaging in competition
during the term of the agency relationship does. Id. Defendants have not disputed
that Defendant John MacLean was an agent of GeoLogic at the time he sold
AMW’s software to the City of Dubuqe; nor have they disputed that the sale
constituted competition with GeoLogic.
2
Accordingly, Plaintiff’s Motion for
The Court rejects Plaintiff’s attempt to read the Third Amended Complaint to
include a claim for breach of fiduciary duty against Defendants Alan and Mark
Williams.
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Summary Judgment is GRANTED with respect to its claim that Defendant
MacLean breached a fiduciary duty of loyalty.
VI.
Unfair Competition
As framed in the Third Amended Complaint, Plaintiff’s unfair competition
claim is solely based on the copying of software or software code. The claim is
therefore preempted by copyright law. See Decker Inc. v. G&N Equipment Co.,
438 F. Supp. 2d 734 (E.D. Mich. 2006) (holding an unfair competition claim under
Michigan law preempted by copyright law because it was solely based on the
copying and redistribution of illustrations, text, and photographs and “the rights
granted under Michigan’s common law are equivalent to exclusive rights within
the scope of copyright”); cf. ATC Distribution Group, Inc. v. Whatever It Takes
Transmission & Parts, Inc., 402 F.3d 700, 713 (6th Cir. 2005). Accordingly,
Defendants’ Motion for Summary Judgment [144] is GRANTED with respect to
Plaintiff’s unfair competition claim.
VII. Conversion
As framed in the Third Amended Complaint, Plaintiff’s conversion claim is
based solely on the taking away of tangible media containing copies of software
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and software code.3 The conversion claim is therefore preempted by copyright
law. Murray Hill Publications, Inc. v. ABC Communications, Inc., 264 F.3d 622,
636-37 (6th Cir. 2001) (holding Michigan-law claim for conversion preempted by
copyright law because allegedly converted property fell within scope of copyright
subject matter); Rossrovins & Oehmke, P.C. v. Lexis/Nexis Group, 2007 WL
1584210, at *7-*10 (E.D. Mich. May 31, 2007) (same). Accordingly, Defendants’
Motion for Summary Judgment [144] is GRANTED with respect to Plaintiff’s
conversion claim.
VIII. Concert of Action
Defendants argue that “concert of action” is not an independent cause of
action. There is support for Defendants’ position. See Kasey, Inc. v. Alpine Realty
Now, Inc., No. 298002, 2012 WL 10998, at *5 (Mich. Ct. App. Jan. 3, 2012)
(unpublished) (“Concert of action is not an independent cause of action, but rather
a legal theory used to hold multiple actors liable for a result that may only have
been directly caused by one of them.”) (citing Abel v. Eli Lilly & Co, 418 Mich.
311, 338 (1984)). Plaintiff has provided no contrary authority and has failed to
specify the acts and evidence that would support the claim even if the Court
3
The Court rejects Plaintiff’s attempt to read the Third Amended Complaint to
include a conversion claim concerning other tangible property. Even if the Court
accepted that reading, Defendants have persuasively argued that the expanded
claim would be barred by the applicable statute of limitations.
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recognized it as an independent cause of action. Accordingly, Defendants’ Motion
for Summary Judgment [144] is GRANTED with respect to Plaintiff’s concert of
action claim, to the extent it is asserted as an independent cause of action. The
Court expresses no opinion on any attempt Plaintiff may make to advance a
“concert of action” theory in support of other causes of action.
CONCLUSION
For the reasons stated on the record, as supplemented above,
IT IS ORDERED that Plaintiff’s Motion for Summary Judgment [143] is
GRANTED with respect to (1) Plaintiff’s breach of contract claim against
Defendants Alan and Mark Williams and (2) Plaintiff’s breach of fiduciary duty
claim against Defendant John MacLean.
Defendants’ Motion for Summary
Judgment [144] is DENIED with respect to these claims.
IT IS FURTHER ORDERED that Defendants Alan Williams, Mark
Williams, John MacLean, AMW Group, and AMW Machine Control’s Motion for
Summary Judgment [144] is GRANTED with respect to (1) Plaintiff’s tortious
interference with contract or expectancy claim; (2) Plaintiff’s misappropriation of
trade secrets claim; (3) Plaintiff’s unfair competition claim; (4) Plaintiff’s
conversion claim; and (5) Plaintiff’s concert of action claim, to the extent it is
asserted as an independent cause of action. These claims are DISMISSED against
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these Defendants. Plaintiff’s Motion for Summary Judgment [143] is DENIED
with respect to these claims.
IT IS FURTHER ORDERED that both of the instant Motions for
Summary Judgment [143, 144] are DENIED with respect to Plaintiff’s copyright
infringement claim.
SO ORDERED.
Dated: September 17, 2015
s/Arthur J. Tarnow
Arthur J. Tarnow
Senior United States District Judge
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