Ford Motor Company et al v. Thermoanalytics, Inc.

Filing 47

OPINION AND ORDER GRANTING PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT #25 . Signed by District Judge Gershwin A. Drain. (DPar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

FORD MOTOR CO., and FORD GLOBAL
TECHNOLOGIES, LLC,
Case No. 14-cv-13992
Plaintiffs,
UNITED STATES DISTRICT COURT JUDGE
GERSHWIN A. DRAIN

v.
THERMOANALYTICS, INC.,

UNITED STATES MAGISTRATE JUDGE
R. STEVEN WHALEN

Defendant.
/
OPINION AND ORDER GRANTING PLAINTIFFS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
[25]
I. INTRODUCTION
Ford Motor Company and Ford Global Technologies, LLC (“Plaintiffs”), commenced
this action on October 16, 2014 against ThermoAnalytics, Inc. (“Defendant”). See Dkt. No. 1.
On August 14, 2015, Plaintiffs filed an Amended Complaint adding no new parties. See Dkt. No.
30. In the Amended Complaint, Plaintiffs contend that Defendant is liable for: (I) False
Designation of Origin under 15 U.S.C. § 1125(a); (II) Breach of Contract; (III) Promissory
Estoppel; and request (IV) Declaratory Judgment on the RadTherm Software. See id.
On July 29, 2015, Plaintiffs filed a Motion for Partial Summary Judgment on both the
False Designation of Origin claim and Breach of Contract. See Dkt. No. 25. For the reasons
discussed herein, the Court GRANTS Plaintiffs’ Motion for Partial Summary Judgment.
II. BACKGROUND
Beginning in 1994, Ford began collaboration with Michigan Technological University
(“MTU”) to help develop a specialized computer-aided engineering program named

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“RadTherm.” Dkt. No. 25 at 11, Pg. ID No. 277. RadTherm was designed to model the
distribution and transfer of heat over complex systems, such as automobiles. Id. Over the course
of about two years, Ford paid over $300,000 toward the development of RadTherm. At that
point, the latest version of the software was “RadTherm 3.0.” Id. at Pg. ID No. 278.
In 1996, Defendant ThermoAnalytics began operations and, according to Defendant,
acquired MTU’s intellectual property for the RadTherm software. Dkt. No. 33 at 5, Pg. ID No.
610. Ford paid ThermoAnalytics for the development of RadTherm under the terms of a
Software Development agreement through most of 1998. Dkt. No. 25 at Pg. ID No. 278. Ford
claims that the Software Development was a “Work for Hire” contract that granted them
ownership of whatever ThermoAnalytics produced. Id.; see also Dkt. No. 19-1 at 21, Pg. ID No.
137. This arrangement lasted until the end of 1998, and brought the software to Version 4.1.1. Id.
At the end of 1998, Ford and ThermoAnalytics entered into a License Agreement (“the
Agreement”). Dkt. No. 33 at Pg. ID No. 610. Under the terms of the Agreement, Defendant
would have an exclusive license to develop and commercialize the existing “FGTI Licensed
Software.” Id. The Agreement defined FGTI Licensed Software as “RadTherm” and “Fluid
Flow.”1 Id. In return, Defendant would pay royalties to Plaintiffs. The Agreement further
provided at Section 4.3:
As further consideration for the License granted herein, [ThermoAnalytics]
hereby assigns and agrees to assign to FGTI all copyrights [ThermoAnalytics]
acquires in original works of authorship included in additions, enhancements and
improvements [ThermoAnalytics] is authorized to make as Derivative Works to
FGTI Licensed Software, and to assign to FGTI and [ThermoAnalytics] jointly all
copyrights [ThermoAnalytics] acquires in original works of authorship included
in additions, enhancements, and improvements in Jointly Owned Software, but
excluding such original works by [ThermoAnalytics] that form portions of
Licensee Licensed Software.
Dkt. No. 25 at Pg. ID No. 304. The Agreement further provided:
1

The parties are not disputing any rights or terms regarding “Fluid Flow.”

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FGTI represents and [ThermoAnalytics] acknowledges that title to FGTI Licensed
Software, and all copies made in connection with this Agreement or Derivatives
Works created based on FGTI Licensed Software shall belong to FGTI and that
FGTI. . . shall have ownership of all copyright, trade secret, patent, trademark and
other intellectual or industrial property rights therein or associated therewith.
Id. at Pg. ID No. 306. The Agreement also included a post-termination clause which required
ThermoAnalytics to “deliver source code and object code for joint works,” and to pay royalties
to FGTI until ThermoAnalytics ceased “to market, Sell, and support the FGTI Licensed
Software, Licensee Licensed Software or Jointly Owned Software.” Additionally, the Agreement
provided a “Trademark Notice” clause at Section 12:
All trademarks and trade names identifying FGTI Licensed Software or FGTI or
Ford businesses are, and will remain the exclusive property of FGTI and Ford
respectively. [ThermoAnalytics] shall not take any action that jeopardizes the
Marks, and acquires no rights in the Marks except in the limited use rights
specified below. [ThermoAnalytics] shall be limited to using the Marks
exclusively to advertise and promote FGTI Licensed Software.”
Id. at Pg. ID No. 311.
In the year 2000, Defendant released “RadTherm 5.0.” Dkt. No. 33 at Pg. ID. No. 638.
Defendant claims that this version of RadTherm “was an entirely new software product and not a
derivative of RadTherm 4.1.1, and it was not the licensed software under the License
Agreement.” Id. According to ThermoAnalytics, RadTherm 5.0 was a modified version of
software called MuSES, created under programs with the United States Army. Id. at Pg. ID No.
638–639. ThermoAnalytics claims that RadTherm 5.0 rendered prior versions of RadTherm
obsolete. Id. at Pg. ID No. 639. ThermoAnalytics further claims that all subsequent versions of
RadTherm starting in 2000 were derived from the MuSES source code, and not the RadTherm
4.1.1 source code that was subject to the Licensing Agreement. Id. Despite these updates
however, the new software retained the name RadTherm. ThermoAnalytics maintains that they

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discussed the change “openly with Ford” in 2000. Id. Ford disputes this. Dkt. No. 25 at Pg. ID
No. 284.
In 2012, the Agreement was amended to Ford Global’s change in name and address.
Those were the only changes made to the Agreement. The First Amendment stated:
Except as specifically modified or amended by the terms of this AMENDMENT,
the LICENSE AGREEMENT and all provisions contained therein are, and shall
continue, in full force and effect and are hereby ratified and confirmed.
Dkt. No. 25-10 at Pg. ID No. 387. The document was signed by both parties. Id.
Ford claims they were not aware of any software changes until they received a letter from
ThermoAnalytics in November of 2013 claiming that their ownership interest in RadTherm was
terminated. Id. ThermoAnalytics, in response, has pointed to an email exchange between the two
parties, where ThermoAnalytics denied Ford’s request for source code updates because the
software was different and subject to specific “restrictions.” Dkt. No. 33 at Pg. ID No. 683.
Despite allegedly changing the software completely and retaining the original name,
ThermoAnalytics still partially performed under the Licensing Agreement. Although
ThermoAnalytics has not provided the RadTherm source code since 2000, they continued to pay
royalties to Ford over an additional 13 years. Dkt. No. 25 at Pg. ID No. 284.
In November of 2013, the Defendant sent the Plaintiffs a Termination Notice, effective
March 1, 2014. Id. The last royalty was paid to Plaintiffs in March of 2014. ThermoAnalytics has
still not provided any source code to the new versions of RadTherm (now called TAITherm). Id.
III. LEGAL STANDARD
Federal Rule of Civil Procedure 56(a) empowers the Court to render summary judgment
“if the pleadings, depositions, answers to interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving

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party is entitled to judgment as a matter of law.” See Redding v. St. Eward, 241 F.3d 530, 532
(6th Cir. 2001). The Supreme Court has affirmed the Court’s use of summary judgment as an
integral part of the fair and efficient administration of justice. The procedure is not a disfavored
procedural shortcut. Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986); see also Cox v.
Kentucky Dept. of Transp., 53 F.3d 146, 149 (6th Cir. 1995).
The standard for determining whether summary judgment is appropriate is “‘whether the
evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.’” Amway Distributors Benefits Ass’n v.
Northfield Ins. Co., 323 F.3d 386, 390 (6th Cir. 2003) (quoting Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 251–52 (1986)). The evidence and all reasonable inferences must be construed in
the light most favorable to the non-moving party. Matsushita Elec. Indus. Co., Ltd. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986); Redding, 241 F.3d at 532 (6th Cir. 2001). “[T]he mere
existence of some alleged factual dispute between the parties will not defeat an otherwise
properly supported motion for summary judgment; the requirement is that there be no genuine
issue of material fact.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also
National Satellite Sports, Inc. v. Eliadis, Inc., 253 F.3d 900, 907 (6th Cir. 2001).
If the movant establishes by use of the material specified in Rule 56(c) that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law, the opposing
party must come forward with “specific facts showing that there is a genuine issue for trial.”
First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 270 (1968); see also McLean v. 988011
Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). Mere allegations or denials in the nonmovant’s pleadings will not meet this burden, nor will a mere scintilla of evidence supporting the
non-moving party. Anderson, 477 U.S. at 248, 252. Rather, there must be evidence on which a

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jury could reasonably find for the non-movant. McLean, 224 F.3d at 800 (citing Anderson, 477
U.S. at 252).
IV. DISCUSSION
A. False Designation of Origin
Trademarks are typically protected by the Lanham Act. 15 U.S.C. § 1125. A trademark is
“any word, name, symbol, or device, or any combination thereof used by a person to identify and
distinguish his or her goods, including a unique product, from those manufactured or sold by
others and to indicate the source of the goods, even if that source is unknown.” Two Pesos, Inc.
v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992) (quotations omitted). Under the Lanham Act, a
plaintiff will have a claim for false designation of origin if a defendant uses a trademark in a way
that “is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,
connection, or association of such person with another person, or as to the origin, sponsorship, or
approval of his or her goods, services or commercial activities by another person . . .” 15 U.S. C.
§ 1125(a)(1)(A). Where the use of a trademark has been licensed to a licensee, “use by a licensee
which is outside the scope of the license is both trademark infringement and a breach of contract.
And continued use by an ex-licensee after the license has been terminated is an act of trademark
infringement.” 4 J. THOMAS MCCARTHY, MCCARTHY

ON

TRADEMARKS

AND

UNFAIR

COMPETITION § 25:30 (4th ed. 2015).
Plaintiffs allege in their Motion that the Defendant exceeded the scope of the Licensing
Agreement in its use of the RADTHERM trademark. Dkt. No. 25 at Pg. ID No. 300. Plaintiffs
argue that the terms of the Agreement demonstrate Plaintiffs’ ownership of the mark, as well as
the limited scope of Defendant’s license to use the mark. Plaintiffs assert that the Agreement
required Defendant to “cease all use of the RadTherm trademark” upon the Agreement’s

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termination. Id. But despite the termination of the Agreement, and a written demand to cease use
of the mark, Defendant continued its use.
Defendant concedes that it continued to use the mark, RADTHERM, until April of 2015,
a couple of years after Defendant terminated the Agreement. Dkt. No. 33 at Pg. ID No. 628.
However, Defendant argues that Plaintiffs never had a proprietary interest in the mark at all. Id.
Defendant argues that its use of the mark prior to the Agreement, as well as its registration of the
mark with the United States Patent and Trademark Office in 2002—years after the Agreement
was executed—without any objection from Plaintiffs, demonstrate that Defendant alone has sole
ownership of the mark. Id. Defendant further argues that the Agreement did not assign any
trademark rights to Plaintiffs because the language of the contract does not refer to the
RADTHERM trademark. Id. at Pg. ID No. 629–630. Defendant also asserts that if there was an
assignment, the assignment would be invalid as an improper “naked assignment” of a mark
without its goodwill. Id.
a. The Language of the Agreement Assigned the RADTHERM Trademark to
Plaintiffs
Trademarks are property that can be bought, sold and licensed. 3 J. THOMAS MCCARTHY,
MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 18:1 (4th ed. 2015). An assignment
of a mark “is an outright sale of all rights in that mark.” McCarthy § 18:15. “[A]fter a valid
assignment, the assignee acquires all of the legal advantages of the mark that the assignor
enjoyed, including prior use.” Id.
Defendant argues that the Agreement did not make any assignment to Plaintiffs, and at
most, “confirms Ford’s ownership of its then-existing intellectual property rights.” Dkt. No. 33 at
Pg. ID No. 629. But that argument is not persuasive.

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The language of the Agreement is plain. Section 12, the “Trademark Notices” of the
Agreement, in relevant part states, “[a]ll trademarks and trade names identifying FGTI
Licensed Software or FGTI or Ford business (the “Marks”) are, and will remain the exclusive
property of FGTI and Ford respectively.” Dkt. No. 25-1 at 10, Pg. ID No. 311 (emphasis added).
In Exhibit 1 of the Agreement, “RadTherm” is listed as “FGTI Licensed Software.” Id. at Pg. ID
No. 315. Section 8.1, titled “Ownership of Software,” states that “FGTI, or its licensees or
assigns shall have ownership of all copyright, trade secret, patent, trademark and other
intellectual or industrial property rights therein or associated [with FGTI Licensed
Software].” Id. at Pg. ID No. 306 (emphasis added). When Section 12, Section 8 and Exhibit 1
are read together, it appears the text of the Agreement clearly grants ownership of the
RADTHERM mark to Plaintiffs. Laborers Pension Trust Fund-Detroit and Vicinity v. Interior
Exterior Specialists Co., 824 F. Supp. 2d 764, 770 (E.D. Mich. 2011) (“if the language is ‘clear
and unambiguous,’ the Court need look no further”) (citing Haywood v. Fowler, 190 Mich. App.
253, 475 N.W.2d 458, 461 (1991)).
Defendant’s alternative argument, that the assignment is an invalid “naked assignment,”
is similarly undercut by the language of the Agreement. Defendant correctly states that an
assignment of a trademark without its goodwill is not valid. Liquid Glass Enterprises, Inc. v.
Liquid Glass Indus. of Canada, Ltd., 1989 WL 222653 at *4 (E.D. Mich. 1989). However, their
argument is puzzling given that Section 8 granted Ford all “other intellectual or industrial
property rights.” Dkt. No. 25-1 at Pg. ID No. 306. Although it is not clear from their brief,
ThermoAnalytics apparently is pointing to the fact that the Agreement does not expressly grant
goodwill along with the trademark. However, while goodwill may not be explicitly spelled out
within the terms of the Agreement, it is certainly captured impliedly by the broad property grant

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of Section 8. See Ferrellgas Partners, L.P. v. Barrow, 2005 WL 1736276 at *4 (11th Cir. 2005)
(“Where the entire stock of a business is purchased and the business continued under its original
name, it must be presumed that the purchaser acquired the goodwill of the business together with
the commercial symbols of that goodwill, the business’ trademarks and trade names.”); see also
Holly Hill Citrus Growers’ Ass’n v. Holly Hill Fruit Products, Inc., 75 F.2d 13, 15 (5th Cir.
1935) (“[Trademarks] attach to and pass with the good will of a business, and, as appurtenant to
it, they are freely and easily sold. No particular form of words is necessary to transfer them; they
inhere in and pass with good will.”); see also McCarthy § 18:37.
Accordingly, the language of the Agreement created a valid assignment of the
RADTHERM trademark to Plaintiffs. Therefore, whether Plaintiffs had ownership rights in the
mark prior to the Agreement is no longer a relevant question, and any arguments regarding
original ownership and prior use of the mark are moot. Upon the execution of the Agreement, the
mark was assigned to Plaintiffs and licensed back to Defendant.
b. ThermoAnalytics Infringed on the Trademark by Exceeding the Scope of the
Licensing Agreement
“The Lanham Act creates a private cause of action to protect trademarks and trade dress
where there is a likelihood of confusion between the defendant’s mark and the plaintiff’s
protected mark.” Innovation Ventures, LLC v. N2G Distributing, Inc., 763 F.3d 524, 534 (6th Cir.
2014); see also 15 U.S.C. § 1125(a). Typically, where an ex-licensee continues to use the
licensed trademark, the continued use by itself creates a likelihood of confusion under the
Lanham Act. U.S. Structures, Inc. v. J.P. Structures, Inc., 130 F.3d 1185, 1190 (6th Cir. 1997)
(“We . . . hold that proof of continued, unauthorized use of an original trademark by one whose
license to use the trademark had been terminated is sufficient to establish “likelihood of
confusion.”); see also Sunsport Inc. v. Barclay Leisure Ltd., 984 F. Supp. 418, 422 (E.D. Va.

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1997) (“As a former licensee who continues to use the licensor’s mark, Sunsport has to
overcome the presumption that it has infringed.”) (citing Burger King Corp. v. Mason, 710 F.2d
1480 (11th Cir. 1983)).
Here, Defendant terminated the License Agreement on March 1, 2014. Dkt. No. 25 at Pg.
ID No. 284. Section 11.1 of the Agreement, “Effects of Termination,” states “the obligation to
pay Royalties to FGTI shall survive until Licensee ceases to market, sell, and support the FGTI
Licensed Software, Licensee Licensed Software or Jointly Owned Software.” However, despite
sending its last royalty payment in March of 2014 and being given a written demand to cease use
of the Trademark in February of 2014, Dkt. No. 25-13 at 1, Pg. ID No. 390, Defendant continued
to use the RADTHERM mark until April of 2015. Dkt. No. 33 at Pg. ID No. 638. In fact, during
oral argument, Plaintiffs revealed to the Court that, despite “officially” changing the name of the
software to TAITHERM, Defendant still uses the original name, RADTHERM, as a reference
for its newly branded software on Defendant’s website.2 It’s even used in the URL. Therefore,
Plaintiffs have provided clear and substantial evidence of unauthorized use to establish liability.
Defendant has brought no evidence or defense sufficient to raise a genuine issue of material fact
as to liability. Accordingly, the Court will grant Plaintiffs’ Motion with regard to this Count.
B. Breach of Contract
Plaintiffs have also moved for Summary Judgment on their Breach of Contract claim.
Their argument focuses primarily on the payment of royalties and the status of their ownership
rights to the source code of the latter versions of RadTherm.

2

The website can be found at: http://www.thermoanalytics.com/products/taitherm-radtherm

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a. The Language of the Contract Requires that the New Software be a Derivative
Work in Order for Copyrights to be Captured by the Agreement
According to the Agreement, ThermoAnalytics was required to pay royalties on the
marketed software and turn over source code within thirty days of every release of a new version
of the FGTI Licensed Software. Dkt. No. 25-1 at Pg. ID No. 304. Further, in Section 4.3,
ThermoAnalytics agreed to assign to Plaintiffs:
[A]ll copyrights Licensee acquires in original works of authorship included in
additions, enhancements and improvements Licensee is authorized to make as
Derivative Works to FGTI Licensed Software, and to assign to FGTI and
Licensee jointly all copyrights Licensee acquires in original works of authorship
included in additions, enhancements, and improvements in Jointly Owned
Software, but excluding such original works by Licensee that form portions of
Licensee Licensed Software.
Id. (emphasis added).

Additionally, in Section 11.1, upon termination of the Agreement,

ThermoAnalytics agreed to “assign copyrights, grant licenses to inventions, [and] deliver source
code and object code for joint works,” (emphasis added) as well as to continue to pay royalties
for as long as ThermoAnalytics continued to “market, sell, and support . . . Jointly Owned
Software.” Id. at Pg. ID No. 311.
The Agreement also provides definitions for many of these terms:
1. Jointly Owned Software: defined by the Agreement as being “FGTI and Licensee owned
software and derivative works based thereon or compilations thereof described in Exhibit
I hereto.”3 Id. at Pg. ID 303.
2. Derivative Works: defined by the Agreement as “a work of authorship based on one or
more preexisting works including, without limitation, a translation, condensation,
transformation, expansion or adaptation, which, if prepared without authorization of the

3

As stated above, RadTherm is listed as FGTI Licensed Software. Dkt. No. 25-1 at Pg. ID No. 315.

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owner of the copyright of such preexisting work, would constitute a copyright
infringement.” Id.
3. Joint Works: defined by the Agreement as being “all works of authorship created or
derivative works created with respect to Jointly Owned Software under this
Agreement.” Id. at Pg. ID No. 307 (emphasis added).
With these definitions in mind, it appears Defendant was required to 1) assign the copyrights and
2) continually turn over the source code for every new version of RadTherm4 and any derivative
works, as well as 3) pay royalties for as long as the software was marketed by the Defendant.
i. The New Software is a Joint Work
Neither party disputes that RadTherm 4.1.1 (“the Original Software”) is subject to the
Agreement. Whether the latter versions of RadTherm (“the Disputed Software”) are subject to
the Agreement is the issue before the Court.
Defendant claims that the software they marketed starting in 2000 was not similar to the
original RadTherm programs, but was instead an original work of authorship that did not
constitute a “derivative work.” If the new software is not a derivative work and is truly different,
the argument follows, then it would fall outside of the parameters set by Sections 4.3 and 11.1.
However, this argument mischaracterizes the scope of the Agreement.
As stated above, under the Agreement:
The Parties agree that all works of authorship created or derivative works created
with respect to Jointly Owned Software under this Agreement shall be deemed
“joint works” under the Copyright Act and that all copyrights for such works of
authorship shall jointly belong to FGTI and Licensee . . .
Dkt. No. 30-1 at Pg. ID No. 530 (emphasis added). While Defendant has addressed the definition
of derivative works, Defendant’s argument essentially reads out all of the language that precedes
4

Or at least the code that is captured by the agreement.

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it. Under Michigan law, “contracts must be construed as a whole: if reasonably possible, all parts
and every word should be considered; no part should be eliminated or stricken by another part
unless absolutely necessary.” Workmon v. Publishers Clearing House, 118 F.3d 457, 459 (6th
Cir. 1997).
The word “or” signals to the Court that there is a difference between “works of
authorship” and “derivative works.” The Court finds that the Agreement extends to “all
derivative works created with respect to Jointly Owned Software” (e.g. the Original Software)
and “all works of authorship created with respect to Jointly Owned Software.” Therefore, the
Agreement covers the Disputed Software if it was created with respect to the Original Software.
Despite Defendant’s contention that the Disputed Software was wholly original, the
evidence points to the contrary. At oral argument, Defendant’s counsel stated the inspiration for
the Disputed Software was the Original Software. The Disputed Software served the same
function as the Original Software. Dkt. No. 33-2 at Pg. ID No. 639 (“The software that was the
subject of the License Agreement was made obsolete with the release of RadTherm 5.0.”).
Defendant held out the Disputed Software as being a new and improved version of the Original
Software for over a decade. Dkt. No. 30 at Pg. ID No. 504. Defendant even represented to the
general public that the Disputed Software was owned by Plaintiffs. Id. Finally, in 2012,
Defendant re-affirmed the Agreement when it signed the Amendment, confirming that Sections
4.3 and 11.1 of the Agreement still applied to the Disputed Software.
Defendant has brought evidence demonstrating that the Disputed Software was not
derivative. But Defendant has not brought evidence demonstrating that the Disputed Software
was created without respect to the Original Software. Accordingly, the Court finds that the
Disputed Software is covered by the Agreement as a joint work.

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ii. The Defendant breached the Contract
As stated above, Section 11.1 clearly states that upon termination of the Agreement,
Defendant is to “assign copyrights, grant licenses to inventions, [and] deliver source code and
object code for joint works.” Dkt. No. 30-1 at Pg. ID No. 534. The Court has found that the
Disputed Software is a joint work, but Defendant has neither provided the source code, nor
assigned the relevant copyrights. Therefore, the Defendant has breached the contract.
b. ThermoAnalytics Breached the Contract when it Infringed on the Trademark
The primary focus of Plaintiffs’ brief with regard to this Count is the status of the source
code to the latter versions of RadTherm. However, Defendant’s counterargument to this claim
leads inexorably to an alternate breach of contract.
Defendant argues that the Disputed Software, being of almost entirely new/original
source code, is not subject to the contract because it is not a derivative work, and therefore they
did not breach when they ceased the payment of royalties and refused to turn over the source
code. See Dkt. No. 33 at Pg. ID No.614–626. Even if Defendant’s interpretation of the contract
is true, it doesn’t explain why Defendant continued to use the mark, RADTHERM, on the new
software. Despite contending that they had stopped marketing the relevant code near the turn of
the century, the Defendant used the RADTHERM mark continuously until April 2015.5 Section
12 of the Agreement states, “Licensee shall be limited to using the Marks exclusively to
advertise and promote FGTI Licensed Software.” Dkt. No. 25-1 at Pg. ID No. 311 (emphasis
added). It has already been determined that “the Marks” include the name, RADTHERM. Thus,
accepting Defendant’s argument also requires accepting the fact that Defendant used the
RADTHERM trademark beyond the limitations provided in the Agreement. Accordingly, even
5

As stated above, ThermoAnalytics is currently still using the name RadTherm on their website. The website can be
retrieved at: http://www.thermoanalytics.com/products/taitherm-radtherm

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taking Defendant’s counterarguments as true, the Defendant has breached for an additional
reason.
V. CONCLUSION
For the reasons discussed herein, the Court GRANTS the Motion for Partial Summary
Judgment.
IT IS SO ORDERED.
Dated: October 28, 2015
Detroit, MI

s/Gershwin A. Drain
HON. GERSHWIN A. DRAIN
United States District Court Judge

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