WorkSTEPS, Inc. v. ErgoScience, Inc. et al

Filing 43

ORDER GRANTING 32 Motion for Leave to File Sealed Document; FURTHER ORDERED that Defendants ErgoScience, Inc. and Deborah E. Lechner's Motion to Dismiss # 8 , which this Court converts to a motion for summary judgment, is GRANTED iN PART and DENIED IN PART as described in this opinion; FINALLY ORDERED that Plaintiff's Cross-Motion for [Partial] Summary Judgment # 32 -2 (sealed) is GRANTED IN PART and DENIED IN PART as described in this opinion. Signed by Judge Sam Sparks. (td)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TEXAS
AUSTIN DIVISION

r PR :0

P

2:

WORKSTEPS, INC.,
Plaintiff,
-vs-

Case No. A-14-CA-968-SS

ERGOSCIENCE,

INC.,

DEBORAH

E.

LECHNER, & DOES (1-300),
Defendants.

ORDER
BE IT REMEMBERED on the 7th day of January 2015, the Court held a hearing in the

above-styled cause, and the parties appeared by and through counsel.

Before the Court are

Defendants ErgoScience, Inc. and Deborah E. Lechner's Motion to Dismiss [#8], Plaintiff

WorkSTEPS' Response [#19] thereto, Defendants' Reply (Defs.' MTD Reply) [#25] thereto,
Defendants' Supplement to Pending Motion to Dismiss/Motion for SummaryJudgment(Defs.' Mot.
Summ. J.) [#27], Plaintiffs Opposition Memorandum to Defendant's Motion for Summary

Judgment and Plaintiffs Cross-Motion for [Partial] Summary Judgment [#32-2] (sealed),

Defendants' Reply in Support of Motion to Dismiss/Motion for Summary Judgment and Response
to Plaintiffs Cross-Motion for Summary Judgment [#3 9], Plaintiffs Reply to Defendant's Motion

for Summary Judgment and Plaintiff's Cross-Motion for Summary Judgment [#42], and Plaintiff's

Motion to File Pleadings Under Seal [#32] (sealed).1 Having reviewed the documents, the arguments

Plaintiff's Motion to File Pleadings Under Seal [#32] is GRANTED.

6

of the parties at hearing, the file, and the governing law, the Court now enters the following opinion
and orders.

Background
This is an action for copyright infringement and breach of contract brought by Plaintiff

WorkSTEPS, Inc. against Defendants ErgoScience, Inc., Deborah Lechner, President of
ErgoScience, and Does 1-300, unknown alleged third-party infringers, for alleged willful,
contributory, and induced infringement in violation ofa consent judgment and settlement agreement.

WorkSTEPS is a national provider of "functional employment testing," a type of testing designed
to evaluate the physical abilities ofjob applicants and new employees such that workers' jobs are

matched to their physical capabilities, decreasing the likelihood ofjob-related injuries. ErgoScience
is also a provider of functional employment testing and directly competes with WorkSTEPS.

WorkSTEPS holds a copyright in various materials related to its testing programs under

Copyright Registration Number TXu000942472. The two copyrighted documents at issue in this
case are WorkSTEPS' "Functional Capacity Evaluation," a twelve-page detailed form that guides

WorkSTEPS' providers through administration of WorkSTEPS' functional employment test and
provides space for recording the results as the test proceeds, and WorkSTEPS' "Medical History"
form, a questionnaire apparently given prior to administration ofthe Functional Capacity Evaluation

(together, the WorkSTEPS Materials). WorkSTEPS alleges ErgoScience's "Physical Agility Test"
and incorporated "Medical Issues" form infringe the WorkSTEPS Materials.

This is the second time WorkSTEPS has brought suit alleging ErgoScience has infringed its
copyright. Although the original dispute between the parties was dismissed by consent judgment

in July of2O 12, attorney error (and, evidently, a heaping helping of inability to compromise) brought
-2-

the action roaring back two years later. The mess the parties have made is now spread over two
cause numbers: this one, No.
Johnston etal.,

1

:14-CV-968-SS, and the originally filed suit, WorkSTEPS,

Inc.

v.

No. 1:10-CV-850-SS (W.D. Tex. 2010) (the Original Suit). A brief history is

outlined below.
A.

The Original Suit
In the Original Suit, WorkSTEPS claimed ErgoScience, Lechner, and Donna Johnston, an

ErgoScience employee not party to the present action, infringed WorkSTEPS' copyright by

incorporating portions of the WorkSTEPS Materials into ErgoScience's testing materials. After
completing discovery, the parties to the Original Suit informed the Court they had settled the case.

Under the parties' settlement agreement, the defendants agreed to pay WorkSTEPS $75,000 and to
cease using WorkSTEPS' copyrighted materials. Mot. Order Show Cause [#39-9] (sealed), Feeler

Deci., Ex. 3 (Settlement Agreement) at 3, Original Suit.2 On July26, 2012, the partiesjointlymoved
the Court for entry of a consent judgment against the defendants. Agreed Stipulation [#31] at 1-2,

Original Suit. On July 30, 2012, the Court entered the consent judgment as drafted by the parties.

Consent Judgment [#32] at 2, Original Suit.
As part of the Settlement Agreement, the parties negotiated a safe harbor which would permit

ErgoScience to use certain materials without threat of further litigation.

See Mot.

Order Show Cause

[#39-8] (sealed), Feeler Dccl., Ex. 2 (Safe Harbor) at 3, Original Suit. Unfortunately, a serious

miscommunication occurred during the negotiations. During WorkSTEPS' final review of the
proposed safe harbor, WorkSTEPS "redlined," or electronically crossed out, certain portions,

2

The parties have incorporated all briefing related to the show cause hearing in the Original Suit into their
arguments on the present motion. See Pl.'s Resp. [#19] at 20-21 & n.104; Defs.' Mot. Summ. J. [#27] at 4 n.2. The
Court will therefore consider and refer to those documents and arguments throughout this opinion.

-3-

indicating WorkSTEPS did not agree to inclusion of those portions in the final safe harbor.

See

Defs.' Resp. Mot. Order Show Cause [#54] (sealed) at 1, Original Suit. WorkSTEPS then sent the
redlined version to ErgoScience via email. Counsel for ErgoScience printed and reviewed the safe

harborbut, apparently due to the configuration of certain printing settings in Adobe Acrobat
(counsel's PDF reader), WorkSTEPS' electronic redlines did not appear on the printed document.
Id. at 1-2. Believing WorkSTEPS had agreed to the proposed safe harbor without redlining

anything, counsel for ErgoScience confirmed the same to his clients, and "relyi[ng] on its lawyer's

confirmation that the 'safe harbor' materials had been fully approved by WorkSTEPS," ErgoScience
signed the Settlement Agreement and proceeded to use all of the proposed safe harbor materials in
its business, including those WorkSTEPS redlined. Id. at 2; see also Mot. Order Show Cause [#3916] (sealed), Feeler DecL, Ex. 10 (July 31, 2013 Letter) at 1-2, Original Suit (letter from Brandon

Browning, then-counsel for ErgoScience, to counsel for WorkSTEPS explaining the error).

WorkSTEPS eventually discovered ErgoScience' s use of the redlined materials, reigniting
the infringement dispute. To their credit, the parties attempted to resolve their issues without court

involvement, but were ultimately unsuccessful.

See, e.g.,

July 31, 2013 Letter; Mot. Order Show

Cause [#39-17] (sealed), Feeler Dccl., Ex. 11, Original Suit (Sept. 27, 2013 Letter). Consequently,
on August 5, 2014, WorkSTEPS filed a motion for order to show cause in the Original Suit.
Mot. Order Show Cause [#39] (sealed), Original Suit.

ErgoScience has committed

willful

See

In its motion, WorkSTEPS argues

infringement, should be held in contempt of the Consent

Judgment, and is liable to WorkSTEPS for damages and attorney's fees.

The Court held a show cause hearing in the Original Suit on September 5, 2014. During the
hearing, the Court heard testimony concerning the alleged infringement from Larry Feeler, CEO of

WorkSTEPS and author of the materials at issue, and ordered the parties to submit supplemental
briefing on the question whether the issue of infringement, in the context of a contempt proceeding,
should be tried to a jury or the bench. In that briefing, WorkSTEPS indicated because "the law is

unsettled as to what relief a complainant in a contempt proceeding may recover[,]" it would file a
new lawsuit and seek to consolidate the two cases to preserve its rights. Pl.'s Brief Responsive to

Court's Sept. 5, 2014 Order [#58] at 4, Original Suit. WorkSTEPS has not sought consolidation of
the Original Suit and the present action.
B.

The Present Action
On October 24, 2014, WorkSTEPS filed its complaint in the present action. The complaint

alleges the facts as recounted above, tracing the history of the Original Suit and the redline mix-up
that brought the parties back to court.

See

Compi. [#1] ¶ 23-42. The complaint alleges Lechner

and ErgoScience willfully distributed materials which infringe WorkSTEPS' copyright and actively

induced their network of third-party providers to infringe by instructing those providers to reproduce
and distribute the infringing materials. Id. ¶J 43-50. As previously noted, WorkSTEPS brings

causes of action for: (1) willful, contributory, and induced infringement by Lechner, ErgoScience,
and Does 1-300, the unidentified third-party providers to whom ErgoScience distributed its

materials; (2) breach of contract against Lechner and ErgoScience for alleged violation of the

Settlement Agreement; and (3) collateral estoppel, claiming the Original Suit "resolved, in favor of
WorkSTEPS, the issue of that [sic] Reg. No. TXu000942472 is valid and enforceable and that
Lechner and ErgoScience's works infringed WorkSTEPS' copyrights." Id. ¶J 5 1-69.

Defendants filed their motion to dismiss on November 19, 2014.

See

Mot. Dismiss [#8].

Given the evidence outside the pleadings submitted with Defendants' motion, at hearing on January
-5-

7, 2015, the Court informed the parties it would construe the motion to dismiss as a motion for

summary judgment and permit the parties to supplement the record with additional evidence and
argument. Hr'g Tr. [#28] at 20:22-25. Following Defendants' submission of a supplement, see

Defs.' Mot. Summ. J. [#27], WorkSTEPS responded and cross-moved for partial summalyjudgment
on the issue of liability for copyright infringement. See Pl.'s Opp. & Cross-Mot. Summ. J. [#32-2]
(sealed) at 1.

Analysis
I.

Legal Standard

A.

Converted Motion to Dismiss
Under Federal Rule of Civil Procedure 12(d), a Rule 12(b)(6) motion to dismiss may be

converted into a Rule 56 motion for summary judgment if matters beyond the pleadings are

presented to and considered by the court.

FED. R. Civ. P.

12(d); Exxon Corp. v. Md. Cas. Co., 599

F.2d 659, 661 (5th Cir. 1979). Prior to conversion, all parties must be given notice and a reasonable

opportunity to present all material pertinent to the motion. Id.; Smith 's Estate v. Tarrant Cnty. Hosp.

Dist., 691 F.2d 207, 208 (5th Cir. 1982).
B.

Summary Judgment
Summary judgment shall be rendered when the pleadings, the discovery and disclosure

materials on file, and any affidavits show that there is no genuine dispute as to any material fact and
that the moving party is entitled to judgment as a matter of law.
v.

FED. R. Civ.

P. 56(a); Celotex Corp.

Catrett, 477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504 F.3d 505, 508 (5th Cir. 2007).

A dispute regarding a material fact is "genuine" if the evidence is such that a reasonable jury could

return a verdict in favor of the nonmoving party. Anderson

v.

Liberty Lobby, Inc., 477 U.S. 242,248

(1986). When ruling on a motion for summary judgment, the court is required to view all inferences

drawn from the factual record in the light most favorable to the nonmoving party. Matsushita Elec.
Indus. Co.

v.

Zenith Radio, 475 U.S. 574, 587 (1986); Washburn, 504 F.3d at 508. Further, a court

"may not make credibility determinations or weigh the evidence" in ruling on a motion for summary
judgment. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000); Anderson, 477
U.S. at 254-55.

Once the moving party has made an initial showing that there is no evidence to support the

nonmoving party's case, the party opposing the motion must come forward with competent summary

judgment evidence of the existence of a genuine fact issue. Matsushita, 475 U.S. at 586. Mere
conclusory allegations are not competent summary judgment evidence, and thus are insufficient to
defeat a motion for summaryjudgment. Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343
(5th Cir. 2007). Unsubstantiated assertions, improbable inferences, and unsupported speculation are
not competent summary judgment evidence. Id. The party opposing summary judgment is required
to identify specific evidence in the record and to articulate the precise maimer in which that evidence

supports his claim. Adams v. Travelers Indem. Co. of Conn., 465 F.3d 156, 164 (5th Cir. 2006).
Rule 56 does not impose a duty on the court to "sift through the record in search of evidence" to

support the nonmovant's opposition to the motion for summary judgment. Id.

"Only disputes over facts that might affect the outcome of the suit under the governing laws
will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 248. Disputed fact

issues that are "irrelevant and unnecessary" will not be considered by a court in ruling on a summary

judgment motion. Id. If the nonmoving party fails to make a showing sufficient to establish the

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existence of an element essential to its case and on which it will bear the burden of proof at trial,
summary judgment must be granted. Celotex, 477 U.S. at 322-23.

II.

Application
The long procedural history of this case and the high degree of enmity between the parties

have together created a whopper of a problem. Nearly five years after the dispute between

WorkSTEPS and ErgoScience began, theyhave managed to reach agreement on precisely zero issues

of consequence, and their inability to compromise is evidenced by the tangle of issues and looming
tower of acerbic paper presently before the Court.
The parties' arguments raise three preliminary questions: first, whether Defendants are
collaterally estopped by the consent judgment in the Original Suit from contesting copyright
infringement; second, whether ErgoScience' s use of the redlined material was a material breach of

the Settlement Agreement, enabling WorkSTEPS to sue ErgoScience for use of the safe harbor
material that WorkSTEPS did not redline (the non-redlined material); and third, whether

WorkSTEPS waived its ability to contend ErgoScience's use of the non-redlined material infringes

WorkSTEPS' copyright. As set forth below, the Court first finds the consent judgment in the
Original Suit has no collateral-estoppel effect. Second, while neither party raised the issue, the Court
finds the Settlement Agreement is not a binding, enforceable contract, as there was no mutual assent

concerning the safe harbor, and in the alternative, finds ErgoScience materially breached the
Settlement Agreement. Finally, the Court finds WorkSTEPS did not waive its ability to contend
the non-redlined material infringes its copyright.

Turning to the question of copyright infringement, the Court finds WorkSTEPS holds a valid
copyright as a matter of law, but determines there are genuine issues of material fact precluding

summary judgment on the issue of substantial similarity. Finally, the Court finds ErgoScience is

entitled to summary judgment on WorkSTEPS' breach-of-contract claim, as there was no
enforceable Settlement Agreement to be breached; in the alternative, the Court concludes

WorkSTEPS' breach-of-contract claim is preempted by the Copyright Act. This case will therefore
proceed to trial on the issue of substantial similarity between the parties' works.
A.

The Consent Judgment Has No Collateral-Estoppel Effect
Count Three ofWorkSTEPS' complaint alleges offensive collateral estoppel. According to

WorkSTEPS, the Original Suit "resolved, in favor of WorkSTEPS, the issue of that [sic] Reg. No.
TXu000942472 is valid and enforceable and that Lechner and ErgoScience's works infringed
WorkSTEP S' copyrights." Comp!. [#1] ¶ 66. According to WorkSTEPS, the "issue ofinfringement

was fully litigated and resolved

. .

.

through Lechner and ErgoScience's

. .

.

joint motion with

WorkSTEPS for a Consent Judgment and permanent injunction[,]" and that alleged "determination"

ofinfringement "was the primary part of the Consent Judgment entered by the Court." Id. ¶J 67-68.
Thus, in WorkSTEPS' view, "[a]s a proximate result of the Consent Judgment, and Defendants

Lechner and ErgoScience's motion for entry of the same, Lechner and ErgoScience are collaterally
estopped" from contesting the issues ofvalidity, copyrightability, and infringement ofWorkSTEPS'
copyright. Id. ¶ 69.

ErgoScience brushes aside WorkSTEPS' estoppel argument concerning validity of its
copyright and copyrightability, stating even if ErgoScience was to concede validity and
copyrightability, ErgoScience would still win on absence of substantial similarity. Defs.' MTD

Reply [#25] at 10-11. Further, ErgoScience argues the Original Suit has no collateral-estoppel effect
concerning infringement because the Original Suit involved a different set of allegedly infringing

I,'

ErgoScience materials, Mot. Dismiss [#8] at 21. According to ErgoScience, because WorkSTEPS'
claims in the present action are based on the ErgoScience materials as revised during settlement

negotiations, the two infringement issues are not identical, the identical issue was not "actually
litigated," see Stripling v. Jordan Prod. Co., 234 F.3d 863, 868 (5th Cir. 2000), and consequently,
collateral estoppel cannot apply. Id.

Both parties' arguments miss the mark, primarily because they completely fail to
acknowledge the difference between a typical judgment and a consent judgment. A consent

judgment ordinarily does not give rise to collateral estoppel, or issue preclusion, "because the issues
underlying the judgment are neither actually litigated nor necessary and essential to the judgment."

Hughesv. Santa Fe Int'l Corp., 847 F.2d 239, 241 (SthCir. 1988);see also Kaspar Wire Works, Inc.
v.

Leco Eng'g & Mach., Inc., 575 F.2d 530, 539 (5th Cir. 1978) ("The parties' proposal does not

reflect the considered judgment of a judicial officer: it has been forged by them alone as an

adjustment of conflicting claims and is not a tempered determination of fact and law[.]");
RESTATEMENT (SECOND) OF JUDGMENTS § 27 cmt. e

("In the case of a judgment entered by

confession, consent, or default, none of the issues is actually litigated. Therefore, the rule of [issue
preclusion] does not apply with respect to any issue in a subsequent action."). Thus, WorkSTEPS'

contention that validity, copyrightability, and infringement were actually litigated in the Original Suit
is incorrect. The Court did not "determine" any issue on the merits when it entered the Consent

Judgment; notably, no briefing on the merits of the Original Suit was even filed with the Court prior
to the parties' settlement.

Further, while a consent judgment maybe given collateral-estoppel effect if the parties to the
settlement manifest such intention, Arizona v. California, 530 U.S. 392, 414 (2000); Hughes, 847
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F.2d at 241, the Court finds no such manifestation of intent in this case. The Consent Judgment
reads in full:
This matter comes before the Court on the application of the parties in the [Original
Suit] for entry of judgment and an order of dismissal with prejudice pursuant to
Federal Rule of Civil Procedure 41(a)(l), the parties having advised the Court that
they have reached a settlement.
It is therefore ORDERED that:

A.
Defendants are jointly and severally liable as stated in the Settlement
Agreement;
B.
Defendants are immediately and permanently enjoined from infringing or
using the copyrighted works registered by copyright registration number
TXu000942474 and works derived therefrom;
C.

Defendants shall return all of [the] WorkSTEPS Materials to WorkSTEPS;

and
D.

Plaintiffs claims are dismissed with prejudice.

Consent Judgment [#32] at 2, Original Suit. The Consent Judgment itself makes no mention of a
determination of validity, copyrightability, or infringement, let alone indicate an intent to be bound

in other proceedings.
Even were the Court to read "Defendants are jointly and severally liable as stated in the
Settlement Agreement" as a wholesale incorporation of the Settlement Agreement into the judgment,

the result would be the same. First, concerning infringement, because ErgoScience revised its testing
forms as the parties negotiated settlement in the Original Suit, the materials WorkSTEPS now claims

infringe its copyright are not the same materials that were at issue in the Original Suit. Thus, the
Court agrees with ErgoScience that any "determination" ofinfringement or stipulation thereto in the

Original Suit could have no collateral-estoppel effect as to the present question of ErgoScience' s

-11-

alleged infringement. See, e.g., C.I.R.

v.

Sunnen, 333 U.S. 591, 599-600 (1948) ("[Collateral

estoppel] must be confined to situations where the matter raised in the second suit is identical in all

respects with that decided in the first proceeding and where the controllingfacts and applicable legal
rules remain unchanged." (emphasis added)).
Second, concerning copyrightability and validity, the only language in the Settlement

Agreement concerning those points is contained in prefatory "whereas" clauses, rather than operative

portions of the Settlement Agreement: "WHEREAS, the WorkSTEPS Copyrighted Works is an
original work of authorship. WHEREAS, the WorkSTEPS Copyrighted Works contain materials

which are wholly original and which are copyrightable subject matter under the laws of the United
States." Settlement Agreement at 2. These recitals do not "clearly show[] that the parties intended

that the issue[s ofvalidity and copyrightability] be foreclosed in other litigation." WRIGHT, MILLER

& COOPER,

FED. PRAC.

& PROC. § 4443. Accordingly, because collateral estoppel does not bar

Defendants from litigating validity, copyrightability, or infringement in this action, the Court grants

Defendants' motion for summary judgment on WorkSTEPS' offensive collateral estoppel claim.
B.

The Parties Failed to Form a Binding Contract
The parties' preliminary dispute as to ErgoScience's alleged material breach is predicated

on the assumption their Settlement Agreement is a binding, enforceable contract. The Court cannot
agree with the parties' implicit assumption, and finds the Settlement Agreement unenforceable for
lack of mutual assent. In the alternative, the Court addresses the parties' material breach and waiver

arguments, and finds ErgoScience materially breached the Settlement Agreement, permitting
WorkSTEPS to treat its waiver of the right to sue ErgoScience as rescinded. All roads thus lead to

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Rome, as the practical outcome of both analyses is the same: WorkSTEPS may sue for

ErgoScience' s use of the non-redlined materials.
Parties form a binding contract when the following elements are present: (1) an offer, (2) an
acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each

party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be
mutual and binding. Potcinske

v.

McDonald Prop. Invs., Ltd., 245 S.W.3d 526, 529-30 (Tex.

App.Houston [1st Dist.] 2007, no pet.) (citing Roman

v.

Roman, 193 S.W.3d 40, 50 (Tex.

App.Houston [1st Dist.] 2006, pet. denied)). A "meeting of the minds," or the parties' mutual
understanding and assent to the subject matter and essential terms of the contract, id. (citing
Weynandv. Weynand, 990 S.W.2d 843, 846 (Tex. App.Dallas 1999, pet. denied), is necessary to

form a binding contract. David J. Sacks, P.C.

v.

Haden, 266 S .W.3d 447, 450 (Tex. 2008). A term

is "essential" if it is "one that the parties reasonably regarded, at the time of contracting, as a vitally

important ingredient in their bargain." Neeley v. Bankers Trust Co. of Tex., 757 F.2d 621, 628 (5th
Cir. 1985) (applying Texas law). Stated differently, "[f]ailure to fulfill such a promise.

.

.

would

seriously frustrate the expectations of one or more of the parties as to what would constitute

sufficient performance of the contract as a whole." Id.
Here, the parties caimot credibly contend the safe harbor was anything other than "a vitally

important ingredient in their bargain"which, perhaps, is the reason neither party briefed or even
raised the issue of contract formation. As is evidenced by the continued existence of this litigation,
there is no question ErgoScience' s use of the redlined materials "seriously frustrated" WorkSTEPS'

expectations as to what constituted sufficient performance of the settlement agreement. Given
ErgoScience' s mistaken belief WorkSTEPS approved the proposed safe harbor without change, and
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WorkSTEPS' mistaken belief ErgoScience saw and assented to the redlined safe harbor, the Court
finds WorkSTEPS and ErgoScience did not reach agreement on a material term of the Settlement

Agreement: what materials ErgoScience could safely use without threat of further accusations of

infringement from WorkSTEPS. Consequently, no contract was formed, and the Settlement

Agreement is unenforceable.
1.

Alternatively, ErgoScience materially breached the Settlement Agreement

In the alternative, the Court finds Ergo Science materially breached the Settlement Agreement

by using the redlined materials. Under the Settlement Agreement, ErgoScience agreed (1) to pay
WorkSTEPS $75,000.00, (2) "to be permanently enjoined from use of [WorkSTEPS' copyrighted
materials] and works derived therefrom," and (3) "to immediately cease and desist using all and any
parts of [WorkSTEPS' copyrighted materials] and works derived therefrom[.]"

Agreement at 3 ¶J

1

3.

Settlement

In return, WorkSTEP S "expressly waive[d] any claim for copyright

infringement against Ergoscience based on Ergoscience' s reproduction or distribution of the
materials in the [safe harbor] exclusively." Id. at 4 ¶ 10. These promises were dependent promises

going to the heart of the Settlement Agreement.
379, 382 (Tex.

See D.E. W., Inc.

v.

Depco Forms,

Inc.,

827 S.W.2d

App.San Antonio 1992, no writ) ("A dependent promise is one which goes to the

entire consideration of a contract."). When ErgoScience used the redlined materials, it used a portion

of WorkSTEPS' copyrighted materials in breach of its promises. Although ErgoScience's breach
may have been inadvertent, it was nonetheless a breach, and it deprived WorkSTEPS of the most
important part of its bargain: an end to ErgoScience' s unauthorized use ofWorkSTEPS' copyrighted
materials.

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Because ErgoScience materially breached by failing to perform as promised, WorkSTEPS

was permitted to suspend its own performance and treat its waiver of the right to sue as rescinded.
See Murray

v.

Crest Constr., Inc., 900 S.W.2d 342, 344 (Tex. 1995) (per curiam) ("When a claim

is released for a promised consideration that is not given, the claimant may treat the release as

rescinded and recover on the claim." (internal quotation omitted)); Miller v. Kennedy & Minshew,

Prof'l Corp., 142 S.W.3d 325, 341 n.38 (Tex. App.Fort Worth 2003, pet. denied) (citing Hanks
v.

GAB Bus. Servs., Inc., 644 S.W.2d 707,708 (Tex. 1982)) ("Generally, a party's breach of mutually

dependent, reciprocal promises in a contract excuses performance by the other party.")
Resisting this conclusion, ErgoScience argues WorkSTEPS treated the Settlement Agreement
as continuing following ErgoScience's breach. See Long Trusts

v.

GrfJIn, 222 S.W.3d 412, 415

(Tex. 2006) (per curiam) ("A party who elects to treat a contract as continuing deprives himself of

any excuse for ceasing performance on his own part." (internal quotation omitted)). While not

entirely clear from its briefing, it appears ErgoScience contends certain letters exchanged between
counsel in an attempt to resolve this dispute without Court intervention qualify as an election to treat
the Settlement Agreement as continuing. See Defs.' Reply & Resp. Pl.'s Mot. Summ. J. [#39] at 9
(referencing WorkSTEPS' alleged "ratification of the safe-harbor provision in 2014, after this
dispute arose"). The Court cannot agree. Participation in settlement negotiations related to a breach

of contract does not qualify as an election to treat the contract as continuing. See
CONTRACTS § 39.32

WILLISTON ON

("[W]hen the innocent party brings its complaints to the defaulting party's

attention, and continues the relationship only on the assurance ofbetter future performance, she will

not be barred from asserting her rights under the contract[,]

. . .

and a waiver of the right to the

promised performance cannot be found."). This is good policy: were settlement negotiations
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considered elections to continue a contract, parties would be severely disincentivized from
attempting to resolve their disagreements absent judicial intervention. Consequently, WorkSTEPS
is free to bring a cause of action for infringement based on ErgoScience's use of the non-redlined

materials.
C.

WorkSTEPS Did Not Waive Its Right to Contend the Non-Redlined Material Infringes
Finally, the Court turns to the question whether WorkSTEPS has conceded the non-redlined

material does not infringe its copyright. ErgoScience argues WorkSTEPS has done so for four
reasons: (1) after this dispute arose, WorkSTEPS confirmed in writing that the non-redlined material
does not infringe; (2) during the show cause hearing in the Original Suit, Larry Feeler testified

WorkSTEPS had no objection to ErgoScience's use of the non-redlined material; (3) WorkSTEPS'

motion for contempt in the Original Suit, upon which this new action is based, did not bring claims
for infringement regarding any of the non-redlined material; and (4) in the Settlement Agreement

itself, WorkSTEPS unconditionally stipulated the non-redlined material does not infringe.

ErgoScience's first argument again refers to the letters exchanged by counsel during the
parties' failed attempt to settle this dispute. ErgoScience neither cites any legal authority nor even
articulates a legal theory that supports its position on this point. WorkSTEPS' statements during

settlement negotiations neither give rise to judicial estoppel nor are judicial admissions, and provide
no basis to find waiver. See Hopkins v. Cornerstone Am., 545 F.3d 338, 347 (5th Cir. 2008)

(invocation of judicial estoppel requires the court "have accepted the party's earlier position");
Giddens

v. Cmty.

Educ. Ctrs., Inc., 540 F. App'x 381, 390 n.3 (5th Cir. 2013) (unpublished) ("A

judicial admission is a formal concession in the pleadings or stipulations[.]")

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The Court is similarly unmoved by ErgoScience's claim Feeler's testimony during hearing

waived WorkSTEPS' right to bring an infringement claim based on ErgoScience's use of the nonredlined materials. Feeler's testimony was, again, neither a basis for invocation ofjudicial estoppel
nor ajudicial admission. See Hopkins, 545 F.3d at 347; Giddens, 540 F. App'x at 390 n.3. Further,
counsel for WorkSTEPS did not have the opportunity to take Feeler's redirect testimony during

hearing. The Court declines to find waiver under these circumstances.
ErgoScience' s third argument is factually inaccurate. While WorkSTEPS' briefing in the

present action does identify several examples of alleged infringement WorkSTEPS did not identify

in the Original Suit, WorkSTEPS did raise claims for infringement in the Original Suit based on

ErgoScience' s use of the non-redlined material. In fact, ErgoScience pointed out that WorkSTEPS
did so. See Defs.' Resp. Mot. Order Show Cause [#54] (sealed) at 2, Original Suit ("WorkSTEPS
is asking this Court to hold ErgoScience in contempt for using material contained in the safe harbor

materials that WorkSTEPS did not cross out, that WorkSTEPS expressly agreed was not infringing,
and over which WorkSTEPS waived any claim of infringement."); id. at 3, 22-23 (noting
WorkSTEPS claims copying of its non-redlined blood pressure screening formulation and

instructions on how to handle a belligerent applicant). It is therefore not the case, as ErgoScience
contends, that "[u]ntil this very moment.. . WorkSTEPS[] has complained only about the small
amount of material it redlined." Defs.' Reply & Resp. Pl.'s Mot. Summ. J. [#39] at 2. Moreover,
even had WorkSTEPS' complaints in the context of the Original-Suit motion for contempt been

limited to the redlines, ErgoScience does not explain why WorkSTEPS would be prohibited from
asserting additional infringement claims in the context of a brand-new lawsuit.

-17-

ErgoScience's final argumentthat WorkSTEPS conceded non-infringement of the nonredlined material in the Settlement

Agreementis a non-starter, given the Court's finding the

Settlement Agreement is unenforceable. Considering the question in the alternative, the Court finds
WorkSTEPS did not concede non-infringement in the Settlement Agreement. The relevant provision
reads as follows:
WorkSTEPS has reviewed the Ergoscience materials attached to this agreement in
[the safe harbor] and concludes the materials in [the safe harbor] do not infringe
WorkSTEPS' copyright rights. WorkSTEPS expressly waives any claim for
copyright infringement against Ergoscience based on Ergoscience's reproduction or
distribution of the materials in [the safe harbor] exclusively.
Settlement Agreement at 4 ¶ 10. ErgoScience contends this language unambiguously demonstrates

WorkSTEPS conceded the non-redlined material does not infringe its copyright. WorkSTEPS, on
the other hand, argues the statement the materials "do not infringe" is a conditional promise, part and
parcel of the conditional waiver of WorkSTEPS' infringement claims. The Court agrees with

WorkSTEPS.
In construing a written contract, the primary concern of the court is to ascertain the true

intentions of the parties as expressed in the instrument. IM. Davidson, Inc.

v.

Webster, 128 S.W.3d

223, 229 (Tex. 2003). Courts must read all provisions of an agreement together, interpreting the

agreement to give each provision its intended effect. Mustang Tractor & Equip. Co.

v. Liberty Mut.

Ins. Co., 76 F.3d 89,91(5th Cir. 1996) (citing Forbau v. AetnaLfe Ins. Co., 876 S.W.2d 132, 133

(Tex. 1994)). "We must be particularly wary of isolating individual words, phrases, or clauses and

reading them out of context of the document as a whole." Id. (citing State Farm Life Ins. Co.

v.

Beaston, 907 S.W.2d 430, 433 (Tex. 1995)). Here, while ErgoScience's reading of the provision
may exert some pull when the first sentence is isolated and read out of context, it does not make

sense when read with the remainder of the provision or in light of the Settlement Agreement as a

whole. Had WorkSTEPS intended the first sentence of the provision to be read as a concession the

safe-harbor materials do not infringe, there would have been no need for a second sentence waiving
any infringement claims concerning the safe-harbor materials. Further, the safe harbor itself (which
is part

of the Settlement Agreement) indicates not that WorkSTEPS concedes its contents do not

infringe, but that WorkSTEPS is not alleging its contents infringe: the safe harbor is titled
"Docu[me]nts Reviewed By WorkSTEPS and Which WorkSTEPS Does Not Allege Infringe Its
[Copyright]." Settlement Agreement [#8-3], at 22, Ex. C (emphasis added).

Under the Settlement Agreement, ErgoScience is obligated to stay within the safe harbor, and
WorkSTEPS is reciprocally obligated not to sue ErgoScience for its use of materials within the safe
harbor. Reading the safe-harbor provision to relieve ErgoScience of its obligation to stay within the

safe harbor but hold WorkSTEPS to its obligation not to sue would deprive WorkSTEPS of the

benefit of its bargain. The Court concludes, in the alternative, that WorkSTEPS did not waive its
ability to contend the non-redlined materials infringe its copyright.
D.

Infringement
Having resolved the preliminary questions, the Court turns to the heart of the dispute:

ErgoScience's alleged infringement. Copyright law protects "original works of authorship fixed in
any tangible medium of expression." 17 U.S.C.

§

102(a). The primary objective of copyright "is

not to reward the labor of authors, but '[t]o promote the Progress of Science and useful Arts." Feist
Pubs., Inc.

v.

Rural Tel. Serv. Co., 499 U.S. 340, 349 (1991) (quoting U.S. C0NsT. art. I, § 8, cl. 8).

To that end, copyright protects an author's original expression of an idea, but never the idea itselfa

truism termed the idealexpression dichotomy. Id. at 350; see 17 U.S.C.
-19-

§

102(b) ("In no case does

copyright protection

. .

.

extend to any idea, procedure, process, system, method of operation,

concept, principle, or discovery, regardless of the form in which it is.

. .

embodied in such work.")

Stated differently, "copyright rewards originality, not effort." Feist, 499 U.S. at 364.
To establish copyright infringement, two elements must be proven: (1) ownership of a valid

copyright, and (2) copying of constituent elements of the work that are original. Id. at 361.

Ownership of a valid copyright is established by proving the originality and copyrightability of the

material and compliance with the statutory formalities. Norma Ribbon & Trimming, Inc.
51 F.3d 45, 47

v.

Little,

(5th Cir. 1995). "Original, as the term is used in copyright, means only that the work

was independently created by the author (as opposed to copied from other works), and that it possess
at least some minimal degree of creativity." Feist, 499 U.S. at 345. A timely-obtained certificate

of copyright registration is prima facie evidence of copyright ownership and validity.
§

410(c); Gen. Universal Sys., Inc.

v.

17 U.S.C.

Lee, 379 F.3d 131, 141 (5th Cir. 2004). However, "where

other evidence in the record casts doubt on the question, validity will not be assumed." Utopia

Provider Sys., Inc. v. Pro-Med Clinical Sys., L.L. C., 596 F.3d 1313, 1319 (11th Cir. 2010) (internal
quotes and alterations omitted). To demonstrate the second elementcopyinga plaintiff must

prove (1) factual copying and (2) substantial similarity. Amazing Spaces, Inc.

v. Metro Mini Storage,

608 F.3d 225, 251 (2010). Stated differently, copying is established by proving the defendant had

access to the copyrighted material and there is a substantial similarity between the protectable
elements of the two works. Norma Ribbon, 51 F.3d at 47.
The Court will consider each prong in turn.

-20-

1.

Ownership of a valid copyright

There is no dispute WorkSTEPS owns its copyright and complied with the statutory
formalities; thus, as to the first prong of the test, the only issues in play are originality and
copyrightability. Further, WorkSTEPS is entitled to the statutory presumption in its favor, as it holds
a timely obtained copyright certificate of registration. See Mot. Order Show Cause [#39-2] (sealed)
Ex. A (Certificate of Registration), Original Suit. Attempting to rebut the presumption, ErgoScience

argues the WorkSTEPS Materials are unoriginal and non-copyrightable for two reasons: first,

because the WorkSTEPS Materials are blank forms, and second, because the WorkSTEPS Materials
lack the minimal creativity that is the touchstone for originality. WorkSTEPS responds the blankform doctrine does not apply, as the arrangement of information in the WorkSTEPS Materials is

itself informative, and contends the WorkSTEPS Materials clear the creativity bar, characterizing
them as "factual compilations" which exhibit minimal creativity in selection and arrangement.
Analyzing these two related issues, the Court concludes WorkSTEPS owns a valid copyright as a

matter of law because the WorkSTEPS Materials exhibit minimal creativity and therefore do not fall
within the ambit of the "blank form" doctrine. See Kregos v. Associated Press, 937 F.2d 700, 709
(2d Cir. 1991) (noting the conclusion a work displays sufficient creativity to survive a defendant's

motion for summary judgment preludes rejecting it as a blank form).
ErgoScience is correct that a truly "blank" form, which "conveys no information and serves
only to provide blank space for recording information[,] contains no expression or selection of

information that could possibly warrant copyright protection." Id. at 708. However, "it should be
equally obvious that a writing that does contain a selection of categories of information worth

recording, sufficiently original and creative to deserve a copyright as a compilation of facts, cannot
-21-

lose that protection simply because the work also contains blank space for recording the

information," Id. As the Second Circuit explained:
When the Copyright Office denies a copyright to scorecards or diaries that do not in
themselves convey information, it must be contemplating works with headings so
obvious that their selection cannot be said to satisfy even minimal creativity (a
baseball scorecard with columns headed 'innings' and lines headed 'players'; a travel
diary with headings for 'cities,' 'hotels,' and 'restaurants'). Such a work conveys no
information, not just because it contains blanks, but because its selection of headings
is totally uninformative. On the other hand. . . books intended to record the events
of baby's first year, or a record of a European trip, . . . may evince considerable
originality in suggestions of specific items of information which are to be recorded,
and in the arrangement of such items.
Id. at 708-09 (internal quotations and citations omitted). The WorkSTEPS Materials are more

closely analogous to a book intended to record the events ofbaby's first year than a travel diary with
generic headings. Selecting the most insightful categories of information such that an employee's

functional capacity can be helpfully and accurately assessed by WorkSTEPS is the whole point of

the WorkSTEPS functional capacity evaluation, and to that end, the WorkSTEPS Materials are
highly detailed and specific in the categories and types of information they indicate should be

recorded.

See, e.g.,

Mot. Dismiss [#8-5] (sealed) (Functional Capacity Examination) at 1 (prompting

the question "How do the following activities make you feel?" as to bending, sitting, rising, standing,
lying down, "[in the m]orning," "[a]s day progresses," and "[in the e]vening"); id. (prompting

question as to "Social Limitations" concerning hobbies, sports, sexual relations, housework, and
work).3

Further, the testimony of Larry Feeler, WorkSTEPS' CEO and the architect of the

WorkSTEPS Materials, corroborates this conclusion. Feeler testified at the time he created the
materials, for example, he had "actually never seen anybody do [a musculoskeletal exam] this way"

The Court notes there appear to be several versions of WorkSTEP S' materials filed in this case. The Court
cites and refers to the work deposited with the Copyright Office.

-22-

and, aware of the gap in the market, he "designed a test with all these complex measurements,

because at that time, there was no standard.

. . .

so basically I tried to standardize this process all

at once." Show Cause Hr'g Tr. [#60] at 19:10-19, 28:17-29:2. To be clear, Feeler's testimony

supports the conclusion the WorkSTEPS Materials are minimally creative notbecause a trailblazer's
work afortiori deserves copyright protection (which it does not), but rather, because ErgoScience

has adduced no persuasive evidence showing WorkSTEPS' selection of categories and types of
information is obvious, nor otherwise demonstrated the WorkSTEPS Materials lack minimal
creativity.
ErgoScience contends the Eleventh Circuit's Utopia Provider decision compels a finding the
WorkSTEPS Materials are non-copyrightable; on the contrary, Utopia
opposite conclusion. The Utopia

Provider

Provider

supports the

court held certain templates designed for use by a

physician to record a emergency-room patient's medical history and present symptoms were noncopyrightable blank forms. 596 F.3d at 1320-23. The templates provided space for recording

information with respect to a patient about basic identifiing information, "the history of the present
illness, a review of symptoms, medical and social history, physical exam, medical decision making,
clinical impressions, and finally, consultation, disposition, and instructions." Id. at 1323. The

copyright holder argued the templates were creative in their selection and arrangement of
information; the panel, however, disagreed. Id. at 1322. In conducting its analysis, the panel
explained "[t]he only way the [templates] could convey information would be in the selection of the
terms on the forms; that is, if they convey information to the doctors about what questions they

should be asking." Id. at 1320-21. The panel then found the templates conveyed no information,

-23-

as the categories of information the templates sought to capture were the major categories routinely

considered when a doctor examined an emergency-room patient. Id. at 1323.

Unlike the templates in Utopia Provider, the WorkSTEPS Materials convey information to
providers regarding the questions they should be asking of the employees being evaluated. As

previously explained, the WorkSTEPS Materials contain far more than general headings such as
"physical exam," "clinical impressions," and the like followed by blank spaces. Unlike the Utopia

Provider templates, which captured major categories of information any emergency room physician
would obtain in a basic exam, the WorkSTEPS Materials are designed to guide WorkSTEPS'
providers through the process of collecting information relevant to a WorkSTEP S functional capacity
evaluation. See, e.g., Functional Capacity Examination at 6 (prompting the questions whether

aerobic fitness is required by the employee's job, the length of time the employee's job will require
him or her to sit or stand, and the pounds of weight the employee's job will require him or her to lift

alongside cardiovascular and activity tolerance analyses). The WorkSTEPS Materials exhibit the
requisite creativity and are not blank forms. Consequently, WorkSTEPS owns a valid copyright, and
WorkSTEPS is entitled to summaly judgment on the first prong of the copyright-infringement test.
2.

Substantial similarity

Turning to the issue of substantial similarity, the Court finds there are genuine issues of
material fact precluding summary judgment for either party. To determine whether two works are

substantially similar, "a side-by-side comparison" must be made between the copyrighted and
allegedly infringing works. Lee, 379 F.3d at 142. Substantial similarity is determined by the
comparison, not by the parties' credibility. King v. Ames, 179 F.3d 370, 376(5th Cir. 1999). Where

"the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook
-24-

them, and regard the aesthetic appeal of the two works as the same[,]" the works are substantially
similar. R. Ready Prods., Inc.

v.

omitted) (quotingArica Inst., Inc.

Cantrell, 85 F. Supp. 2d 672, 683 (S.D. Tex. 2000) (alterations
v.

Palmer, 970 F.2d 1067, 1072 (2d Cir. 1992)). A party claiming

infringement "may place no reliance upon any similarity in expression resulting from unprotectable
elements" of the copyrighted work. Randolph

v.

Dimension Films, 630 F. Supp. 2d 741, 746 (S.D.

Tex. 2009) (internal quotes omitted) (citing Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435,
1446 (9th Cir. 1994)).

"Because substantial similarity is customarily an extremely close question of fact, summary

judgment has traditionally been frowned upon in copyright litigation." Sturdza

v.

United Arab

Emirates, 281 F.3d 1287, 1297 (D.C. Cir. 2002) (quotingA.A. Hoehling v. Universal City Studios,
Inc., 618 F.2d 972, 977 (2d Cir. 1980)). "Accordingly, a finding of infringement is generally

inappropriate at the summary judgment stage." Am. Registry ofRadiologic Technologistsv. Bennett,
939 F. Supp. 2d 695, 707 (W.D. Tex. 2013) (noting only two occasions in which courts in this

Circuit have granted summary judgment in favor of a plaintiff on a copyright infringement claim).
Two points must be noted at the outset. First, despite the mountain of paper the parties have
filed in this action (and in the Original Suit), substantial similarity has not been comprehensively

briefed given the parties' inability to agree on the scope of the claims at issue. Second, the Court's

ruling WorkSTEPS owns a valid copyright "does not, of course, mean [WorkSTEPS] will
necessarily obtain much of a victory. 'Even if a work qualifies as a copyrightable compilation, it
receives only limited protection..

the

. .

[C]opyright protects only the elements that owe their origin to

compilerthe selection, coordination, and arrangement of facts." Kregos,

937 F.2d at 709

(quoting Feist, 499 U.S. at 359). Ideas, systems, and processes, of course, are also unprotectable.
-25-

In examining the portions of the WorkSTEPS Materials cited by WorkSTEPS, reading WorkSTEPS'

briefing, and reviewing Feeler's testimony, it appears WorkSTEPS' infringement claims maybe at

least partially rooted in objections to ErgoScience's use of unprotectable elements of the

WorkSTEPS Materials. WorkSTEPS cannot, for example, claim copyright in the idea to include
nerve root designations in a musculoskeletal examination such that a provider conducting a

functional capacity test can screen the subject for nerve damage.

See 17 U.S.C. §

102(b). Nor may

WorkSTEPS claim copyright in the system ofjoint stability measurement used in the WorkSTEPS
Functional capacity Evaluation, even if, as WorkSTEPS claims, Feeler cut that system from whole
cloth. Id. And perhaps most importantly, WorkSTEPS may not claim copyright in the process by

which it conducts a musculoskeletal examination, or, for that matter, a functional capacity evaluation
on the whole. Id.

After filtering out the unprotectable elements of the work, a side-by-side review of the
WorkSTEP S Materials and the Ergo Science materials reveals the two works are neither so dissimilar

nor so similar that no reasonable juror could find, respectively, substantial similarity or the absence
thereof. WorkSTEPS urges, for example, that the two works' overall musculoskeletal examinations
are substantially similar, and claims the alleged copying is legally actionable because the
musculoskeletal examination is the heart of WorkSTEPS' copyrighted work. As for substantial
similarity, the Court has its doubts: the headings of each subpart of the musculoskeletal test, for

example, are expressed in a different order and use different language, and the tables contained
within each subpart strike the Court as dissimilar in arrangement. A comparison of WorkSTEPS'

"Joint Integrity" table with ErgoScience's "Joint Stability" table, for example, shows that while

WorkSTEPS'joint-stability measurement scale is expressed as a three-column table within thejoint
-26-

stability table, ErgoScience's measurement scale is expressed as a single line. In other respects,

however, the two joint tables are at least somewhat similar: both use a three-column format, and each
have separate spaces to record information about the right and left side of the body for each joint
tested.

See

Functional Capacity Examination at 6; Mot. Dismiss [#8-7] (sealed), Ex. 6 (ErgoScience

Materials) at 9. Further, WorkSTEPS' "Strength" table and ErgoScience's "Myotome/Strength"
table, also part of the musculoskeletal examination, are similar in that both use columns which, from

left to right, list the muscle being tested and the corresponding nerve root, provide a space to record

information about that muscle on the right side of the body, and provide a space to record
information about that muscle on the left side of the body. WorkSTEPS' table, however, includes
an additional column labeled "cogwheel" not found in ErgoScience' stable.

See Functional Capacity

Examination at 5; ErgoScience Materials at 8-9.

Whether these two works are ultimately similar or dissimilar from a layman's point of view
and whether, if similarities exist, those similarities are qualitatively so important the copying should

be legally actionable, is for the factfinder, not the Court, to determine. The Court finds there are

genuine issues of material fact precluding summary judgment for either party on the issue of
substantial similarity.
E.

Breach of Contract
Finally, ErgoScience argues it is entitled to summary judgment on WorkSTEPS' state-law

breach-of-contract claim because the claim is preempted by copyright law. As previously noted,
given the Court's finding the parties never formed a binding Settlement Agreement, ErgoScience is
entitled to summary judgment on the claim. Alternatively, the Court agrees the breach-of-contract

claim is preempted.

-27-

For a state-law claim to be preempted by the Copyright Act, a two-factor test must be
satisfied. GlobeRanger Corp.

v.

SoftwareAG, 691 F.3d 702, 706 (5th Cir. 2012). "First, the claim

is examined to determine whether it falls within the subject matter

U.S.C.

§

of copyright as defined by

17

102." Id. (quoting Carson v. Dynegy, Inc., 344 F.3d 446, 456 (5th Cir. 2003)). Second,

"the cause of action is examined to determine if it protects rights that are equivalent to any of the
exclusive rights of a federal copyright, as provided in 17 U.S.C.

§

106." Id. (quoting Dynegy, 344

F.3d at 456). The second prong "is commonly referred to as the 'extra element' test," because it asks

whether the asserted cause of action requires proof of "one or more qualitatively different elements"
than a copyright infringement claim. Dynegy, 344 F.3d at 456 (quoting Alcatel USA, Inc.

v.

DGJ

Techs., Inc., 166 F.3d 772, 787 (5th Cir. 1999)).

In its complaint, WorkSTEPS alleges Lechner and ErgoScience breached their Settlement

Agreement obligations by their: "own infringement and use" of the WorkSTEPS Materials;
"distribution of [the WorkSTEPS Materials] and works derived therefrom to ErgoScience

Providers"; "contribution to the infringement of [the WorkSTEPS Materials] by ErgoScience
Providers"; and "induc[ement of] infringement of [the WorkSTEPS Materials] by ErgoScience

Providers." Compl. [#1] ¶J 6 1-63. The parties do not appear to dispute that the first factor of the
test is satisfied; in any event, WorkSTEPS' breach-of-contract claim clearly concerns rights to the

WorkSTEPS copyrighted materials, which fall within the scope of copyright law. See 17 U.S.C.
§

1

02(a)(1) (copyright protects "works of authorship," including "literary works"4). As for the

second factor, the Court finds it, too, is satisfied. The exclusive rights provided by copyright include

"Literary works' are works, other than audiovisual works, expressed in words, numbers, or other verbal or
numerical symbols or indicia, regardless of the nature of the material objects, such as books, periodicals, manuscripts,
phonorecords, film, tapes, disks, or cards, in which they are embodied." 17 U.S.C. § 101.

-28-

the rights to reproduce the copyrighted work, prepare derivative works, distribute copies of the work
to the public, and display the work publicly. 17 U.S.C.

§

106. A right is equivalent to those

exclusive rights "if the mere act of reproduction, distribution, or display infringes it." Taquino v.
Teledyne Monarch Rubber, 893 F.2d 1488, 1501 (5th Cir. 1990). WorkSTEPS' breach-of-contract

claims, which, as plead, are based on "infringement," "use," "distribution," "contribution to []

infringement," and "induc[ement of] infringement," see Compl. [#1] ¶J 61-63, involve the same
conduct as an infringement claim and protect rights upon which mere reproduction, distribution, or
display ofWorkSTEPS' copyrighted materials would infringe. Accordingly, WorkSTEPS' breachof-contract claim is preempted by the Copyright Act.

Conclusion
Substantial similarity will be tried to the jury; thereafter, one hopes, this acrimonious
litigation will finally come to a close, Rare is the action originally dismissed with prejudice by
consent of the parties that finds its way back before the Court, and this one stands as a lesson to all
attorneys licensed to practice in this and other Districts: intimately familiarize yourselves with the

electronic redlining features (or, perhaps, foibles) of Adobe Acrobat, as here, but for the grace of
God, you may arrive.

Accordingly:
IT IS ORDERED that Plaintiff's Motion to File Pleadings Under Seal [#32] (sealed)
is GRANTED;
IT IS FURTHER ORDERED that Defendants ErgoScience, Inc. and Deborah E.

Lechner's Motion to Dismiss [#8], which this Court converts to a motion for summary
judgment, is GRANTED iN PART and DENIED IN PART as described in this opinion;
-29-

IT IS FINALLY ORDERED that Plaintiff's Cross-Motion for [Partial] Summary

Judgment [#32-2] (sealed) is GRANTED IN PART and DENIED IN PART as described in
this opinion.
SIGNED this the GZO day of April 2015.

54P
UNITED STATES

968

NEW deny rntd convert msj ba.frrn

30

TRICT JUDGE