General Motors LLC et al v. Dorman Products, Incorporated et al

Filing 25

ORDER Denying Defendants' 20 Partial Motion to Dismiss Plaintiffs' Second Amended Complaint. Signed by District Judge Victoria A. Roberts. (LVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
GENERAL MOTORS LLC., ET AL.,
Plaintiffs,
v.

Case No.: 15-12917
Honorable Victoria A. Roberts

DORMAN PRODUCTS, INC., ET AL.,
Defendants.
__________________________________/
ORDER DENYING DEFENDANTS’ PARTIAL MOTION TO DISMISS
PLAINTIFFS’ SECOND AMENDED COMPLAINT [DOC. 20]

I.

INTRODUCTION
In August 2015, Plaintiffs General Motors LLC and GM Global Technology

Operations LLC (“Plaintiffs” or “GM”) filed suit against Defendants Dorman Products Inc.
(“Dorman”) and Electronics Remanufacturing Company LLC (“ERC”; collectively
“Defendants”), alleging copyright infringement under the Copyright Act, 17 U.S.C. 101 et
seq., and unlawful circumvention under the Digital Millennium Copyright Act, 17 U.S.C.
1201 et seq.
In September 2016, this Court granted in part Defendants’ Motion to Dismiss
Plaintiffs’ Amended Complaint because the complaint did not meet Rule 12(b)(6)’s
plausibility standards. The Court also granted Plaintiffs an opportunity to cure the
deficiencies. Plaintiffs submitted a Second Amended Complaint in October, adding two
more counts (trade secret misappropriation and unlawful trafficking under the Digital
Millennium Copyright Act).

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Defendants filed another Motion to Dismiss, currently before this Court, seeking
to dismiss Count I (copyright infringement) with respect to four out of Plaintiffs’ five
copyrighted works, and Count II (illegal circumvention of security measures) in its
entirety.
Defendants’ Partial Motion to Dismiss Plaintiffs’ Second Amended Complaint
(ECF No. 20) is DENIED.
II.

FACTUAL BACKGROUND
For the purposes of a Rule 12(b)(6) motion, “the complaint is viewed in the light

most favorable to the plaintiff, the allegations in the complaint are accepted as true, and
all reasonable inferences are drawn in favor of the plaintiff.” See Bassett v. Nat'l
Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). Plaintiffs, automobile
manufacturers, have registered valid copyrights in the software and computer files
which run on the control modules installed in their vehicles, and allege that Defendants
are illegally stealing and reselling this software. (Plaintiffs include copies of five of their
copyright registrations as an exhibit with their complaint; it may be considered as part of
the pleading for purposes of a motion to dismiss. See Commercial Money Ctr., Inc. v.
Illinois Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (“documents attached to the
pleadings become part of the pleadings and may be considered on a motion to
dismiss.”))
GM alleges that Defendants Dorman and ERC worked together to violate
copyright law by: (1) illegally stealing GM’s copyrighted software; and (2) installing it into
blank control modules, and then reselling the modules to the general public, allowing
users to avoid paying GM for the software. GM believes that Dorman purchases blank

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control modules from an authorized GM distributor and then sends these modules to
ERC. Individuals associated with ERC created accounts on websites owned by GM,
which allow paid subscribers to access GM software. ERC copies this software from
GM’s websites in violation of user agreements. GM says ERC then programs Dorman’s
modules with unauthorized and infringing copies of GM’s copyrighted software and
sends the programmed modules back to Dorman, which resells them to the general
public, advertising them as “pre-programmed.”
Dorman also manufactures, advertises, and sells a product called a “Software
Transfer Tool.” GM alleges this tool allows users to access, copy, and transfer GM’s
copyrighted software to other modules, circumventing GM’s technological protection
measure in violation of law.
GM acquired both a pre-programmed module and a Software Transfer Tool from
Dorman. By inspecting and testing the module, GM confirmed that it contained an
unauthorized copy of GM software, covered by copyright registration number TXu-1917-502. By testing the Software Transfer Tool, GM confirmed that it allows users to
bypass security measures to illegally transfer copyrighted software.
III.

Legal Standard
A complaint must contain “a short and plain statement of the claim showing that

the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Defendants seek to dismiss the
majority of Count I and the entirety of Count II under Fed. R. Civ. P. 12(b)(6). To survive
a 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter,
accepted as true, to state a claim that is plausible on its face.” R.S. Scott Associates,
Inc. v. Timm Const. Co. LLC, 2014 WL 7184448 at *3 (E.D. Mich. 2014). “A claim has

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facial plausibility when the plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 556, 570). While the court is required to take all factual allegations as true and
view the complaint in the light most favorable to the plaintiff, the court does not have to
accept legal conclusions as true. Id. Legal conclusions must be backed by plausible
factual assertions.
To establish a plausible claim of copyright infringement, a plaintiff must allege: 1)
ownership of a valid copyright, and 2) copying of constituent elements of the
copyrighted work that are original. Ford Motor Company v. Autel US Inc., 2015 WL
5729067 at *3; see also Ross, Brovins & Oehmke, P.C. v. Lexis Nexis Group, 463 F.3d
478, 482, 2006 WL 2639749 (6th Cir.2006). While other courts in this district have held
that copyright infringement claims require a heightened pleading standard under
National Business Development Services, Inc. v. American Credit Education &
Consulting, Inc., 299 F. App’x 509 (6th Cir. 2008), this Court has interpreted National
Business as consistent with the plausibility standard set forth in Twombly and Iqbal.
Accordingly, the “Twiqbal” standard governs; the two elements of a copyright
infringement claim must have facial plausibility as described in Ashcroft, supra.
With regard to the illegal circumvention claim, 17 U.S.C. 1201(a)(1)(A) provides
that “no person shall circumvent a technological measure that effectively controls
access to a work protected under [copyright law].” No courts within the Sixth Circuit
have analyzed the sufficiency of a pleading under this provision yet.
IV.

Analysis

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A.

Deficiencies In Plaintiffs’ Original Pleading

This Court previously found that Plaintiffs’ copyright infringement claim was
deficient in that it “fail[ed] to forge any sort of connection between [Plaintiffs’] list of six
copyrighted works and the control modules installed in Plaintiffs’ vehicles.” While
Plaintiffs alleged generally that Defendants infringed on copyrighted software by
installing it into control modules, they failed to identify specifically how the six mentioned
copyrights were involved in Defendants’ actions. Without further clarification, “a party
could plead the first element of a claim of copyright infringement merely by citing to a
laundry list of copyright registrations…without any effort to identify which of the party’s
copyrighted works were involved in the defendant’s allegedly infringing activities.”
Next, this Court agreed with Defendants that screenshots taken of Defendant
Dorman’s website, where Dorman describes modules as “pre-programmed” with a
“plug-and-play design,” were insufficient to support a plausible inference that
Defendants had pre-programmed the modules with Plaintiffs’ copyrighted software.
The Court found that Plaintiffs’ allegation that they purchased a module from
Dorman and found that it contained an unauthorized copy of Plaintiffs’ copyrighted
software was sufficient to support a plausible inference that Defendants copied the
protected software.
Finally, this Court found that Plaintiffs’ claim of unlawful circumvention of a
technological protection measure was deficient because Plaintiffs alleged that their
technological protection measure protected access to their vehicle control modules, not
to their copyrighted software or any other works protected by copyright.

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The Court granted Plaintiffs leave to amend their complaint in order to cure these
deficiencies, bringing us to Defendants’ current Motion to Dismiss Plaintiffs’ Second
Amended Complaint.
B.

Revisions in Second Amended Complaint

Defendant seeks to dismiss Count I with respect to four out of the five copyright
registrations provided by Plaintiffs. Defendants say Plaintiffs did not cure the
deficiencies in their first pleading: they still fail to connect the copyright registrations to
the control modules at issue. Defendants seek to dismiss Count II in its entirety on the
grounds that Plaintiffs’ allegations regarding the Software Transfer Tool still fail to
establish a plausible inference that Defendants themselves circumvented any of
Plaintiffs’ technological measures--even if they did create and sell a tool that allows
others to do so.
a. Count One: Copyright Infringement
In their first complaint, Plaintiffs merely provided a list of six copyright
registrations, then concluded that Defendant Dorman had offered to sell modules with
GM’s software. This Court asked Plaintiffs to cure this deficiency by specifying which of
their copyrighted works are installed on control modules found in their vehicles. Plaintiffs
complied by removing one of the registrations named in their original pleading, and
clarifying that the remaining five copyright registrations cover software that is installed
on GM control modules.
Defendants claim that Plaintiffs are required to allege specifically which software
is associated with which copyright registrations. Plaintiffs did so for one copyright
registration: TXu-1-917-502. This covers the software for GM’s Transmission Electro-

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Hydraulic Control Module. Defendants’ say Plaintiffs’ failure to specify what software is
covered by the other four registrations is fatal to their allegations of infringement.
However, Defendants cite no legal authority, other than Twombly and Iqbal, to
suggest that a software copyright infringement claim requires Plaintiffs to plead “detailed
factual allegations,” not typically required at the pleading stage. Twombly at 555. On the
contrary, “relevant case law counsels a court to view the individual allegations in [the]
context of the whole complaint.” R.S. Scott Assocs., Inc. v. Timm Const. Co. LLC, 2014
WL 7184448 at *5 (E.D. Mich. 2014). And “determining whether a complaint states a
plausible claim for relief [is] … a context-specific task that requires the reviewing court
to draw on its judicial experience and common sense.” Ashcroft at 679.
Plaintiffs have shown that one of their copyright registrations (TXu-1-917-502)
covers software installed on a module sold by Defendant Dorman. Just because they
cannot yet show that Defendants have copied software covered by the other four
copyright registrations does not mean that allegations regarding those four registrations
are insufficiently plausible to survive a motion to dismiss. Plaintiffs went above and
beyond the plausibility standard required for the TXu-1-917-502 copyright registration-but that doesn’t obligate them to meet that same heightened standard for the other four
copyrights. Plaintiffs are not required to continue attempting to purchase modules from
Dorman until they acquire one that corresponds to each copyrighted work. Viewed in
the context of the complaint as a whole, and using common sense, it is plausible to infer
that, if the software covered by TXu-1-917-502 was found on a Dorman module, then it
is more likely that software covered by GM’s other copyright registrations may also be
found on additional Dorman modules. “The plausibility standard “does not impose a

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probability requirement at the pleading stage; it simply calls for enough fact to raise a
reasonable expectation that discovery will reveal evidence of illegal [conduct].”” Gabay
v. Park W. Galleries, Inc., 2010 WL 5391464, at *4 (E.D. Mich. 2010) (quoting Twombly,
550 U.S. at 556). Despite not pleading in detail that the other four GM copyright
registrations cover software found on Dorman modules, Plaintiffs allege enough facts to
raise a reasonable expectation that discovery will reveal Dorman modules containing
more of GM’s copyrighted software.
Defendants’ motion to dismiss Count I with respect to four out of five of Plaintiffs’
registered copyrights is denied.
b. Count Two: Unlawful Circumvention
Plaintiffs allege that Dorman’s production and distribution of their Software
Transfer Tool violates the provision of the Digital Millennium Copyright Act. It provides
“no person shall circumvent a technological measure that effectively controls access to
a work protected under [copyright law].” 17 U.S.C. 1201(a)(1)(A). This Court previously
found that Plaintiffs’ allegations were deficient because the technological measures
cited in Plaintiffs’ complaint protected access to GM control modules, not to Plaintiffs’
copyrighted software.
Plaintiffs attempt to remedy this deficiency by alleging in their Second Amended
Complaint that “GM uses a technological protection measure to protect access to the
software contained on its vehicle control modules.” Specifically, Plaintiffs allege that GM
uses a technological protection measure or “Security Access” that “includes a softwarebased lock to effectively control access to (and unauthorized programming of) original
GM software that is installed on vehicle control modules in GM vehicles.” The Security

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Access lock is “designed to prevent people from accessing GM’s software contained on
the module and making unauthorized copies of it.” Plaintiffs believe that “Defendants
have defeated and are defeating this security measure and accessing the software
contained on the modules in order to program the modules with unauthorized copies of
GM’s copyrighted vehicle control software” either by “making an illegal copy of the
software-based security key” or by otherwise “hacking through or circumventing” the
software-based lock to gain access to the module’s software. Plaintiffs allege that the
tool “circumvents GM’s technological protection measure so that Service Technicians
and other users of the tool can access, copy, and transfer [GM]’s copyrighted software
and data files contained on [GM]’s vehicle modules.”
Defendants seek to dismiss this claim on the grounds that Plaintiffs allegations
involving the Software Transfer Tool essentially accuse Defendants not of illegally
circumventing the technological protection measure themselves, but of creating a
device that allows others to do the circumventing. In Defendants’ view, this is not a
violation of 17 U.S.C. 1201(a)(1)(A), and the allegations regarding the Software
Transfer Tool are better suited to Count III (Trafficking in Illegal Means for
Circumvention of Security Measures).
While the allegations regarding the Software Transfer Tool also support Count III,
it is not so far-fetched for this Court to infer that Defendants themselves must have also
circumvented GM’s technological measures at some point. Taken as true and viewed in
the context of the complaint as a whole, Plaintiffs’ factual allegations do support a claim
that Defendants must have circumvented GM’s Security Access feature-- whether

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during the development and distribution of the Software Transfer Tool, or prior to that,
when Defendants were allegedly copying the software onto blank modules themselves.
Courts within this District have found that courts may view a complaint as a
whole, considering all the factual allegations contained in the complaint (not just under
one count), in determining whether a plausible claim for relief has been established.
See In re: Packaged Ice Antitrust Litig., 723 F. Supp. 2d 987, 1005-06 (E.D. Mich.
2010); see also Empire Home Services, L.L.C. v. Empire Iron Works, Inc., 2006 WL
2269507 at *4 (E.D. Mich. 2006). Plaintiffs’ factual allegations are somewhat
disorganized. But considering the allegations under Count II in conjunction with those
under Count I’s copyright infringement claim, they do constitute a reasonable
expectation that discovery will reveal that Defendants circumvented GM’s technological
protection measures at some point.
Defendants’ motion to dismiss Count II is DENIED.
V.

Conclusion
When considering a motion to dismiss, a court is required simply to use its

common sense and experience to determine if plaintiffs allege sufficient facts to create
a plausible claim for relief. A claim is plausible if the court can draw a reasonable
inference that the defendant is liable for the misconduct alleged. See Ashcroft, supra.
Although Plaintiffs have not pled with specificity the details of how their software was
allegedly copied, their factual allegations, taken as true and viewed both in a light most
favorable to the Plaintiffs and in the context of the complaint as a whole, are sufficient to
create a reasonable inference that Defendants are liable for circumventing GM’s

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technological protection measures and infringing upon GM’s copyrighted software.
Discovery in this case may answer any remaining questions.
Defendants’ motion is DENIED.
S/Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: March 1, 2017
The undersigned certifies that a copy of this
document was served on the attorneys of
record by electronic means or U.S. Mail on
March 1, 2017.
s/Linda Vertriest
Deputy Clerk

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