4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 1 of 26 Pg ID 1224
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF MICHIGAN
`SOUTHERN DIVISION
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`RGIS, LLC,
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`Plaintiff,
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`vs.
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`A.S.T., INC., and
`PHYLE INDUSTRIES, INC.
`A/K/A PHYLE INDUSTRIES INCORPORATED.,
`
`Defendants.
` /
`
`CASE NO.: 2:07-CV-10975
`
`DISTRICT JUDGE PAUL V. GADOLA
`MAGISTRATE. JUDGE STEVEN D. PEPE
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`Report and Recommendation
`to Deny Plaintiff’s Motion for Preliminary Injunction (Dkt. # 12)
`
`
`On March 6, 2007, Plaintiff, RGIS, LLC, (“RGIS” filed an Complaint against Defendants
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`A.S.T. Inc. (“AST”), and Phyle Industries, Inc., two companies owned by Charles E. Phyle
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`alleging copyright infringement under 17 U.S.C. § 101 et seq. (Dkt. # 1).1 On May 23, 2007,
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`Plaintiff filed a Motion for Preliminary Injunction enjoining Defendants from using in any
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`manner the subject matter of Plaintiff’s copyrights and such remedies as the Court deems
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`appropriate (Dkt. # 12). This Motion was referred, pursuant to 28 U.S.C. 636(b)(1)(A) and (B)
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`for Report and Recommendation (Dkt. # 15). Following a hearing and significant rounds of
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`1On October 16, 2007, Plaintiff was granted leave to file a first amended complaint which
`included an additional claim of breach of contract which allegedly arose when counsel for the
`Defendant contacted the United States Copyright Office and altered Plaintiff’s copyrights (Dkt. #
`43).
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`briefing and supplemental briefing for the reasons stated below, IT IS RECOMMENDED that
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`Plaintiff’s motion for a preliminary injunction be DENIED
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`I.
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`Background Facts and Plaintiff’s Complaint:
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`Plaintiff, is in the business of taking inventories for clients such as large retail outlets in
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`which it utilizes a computed system involving hand-held computers designed by AST and
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`marketed by Defendant Phyle Industries. Defendant AST designs and manufactures hand-held
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`computers and other software for use in inventory control which are marketed through Defendant
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`Phyle Industries to Plaintiff and other companies. Plaintiff and Defendant maintained a business
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`relationship for 28 years, until it broke down in 2005 after RGIS was acquired by another
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`company. RGIS parted ways with AST and Phyle Industries
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`As part of this separation, on November 21, 2005, Defendant AST, Inc. executed a
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`COPYRIGHT ASSIGNMENT to Defendant Phyle Industries of various copyrights later
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`assigned to Plaintiff (Dkt. 12, Exhibit 1). On January 27, 2006, Defendant Phyle Industries
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`executed a SOFTWARE TRANSFER AND COPYRIGHT ASSIGNMENT AGREEMENT in
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`which certain software related items were transferred and assigned to Plaintiff (Dkt. 12, Exhibit
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`2 and Dkt. # 33, Exhibit B). On that same day Defendant Phyle Industries executed a
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`SOFTWARE AND COPYRIGHT ASSIGNMENT to Plaintiff including all of the software and
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`the copyrights on the software needed by Plaintiff to continue its operations in selling devices to
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`undertake business inventories for its clients.
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`On October 3, 2006, Defendant Phyle Industries executed another abbreviated
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`COPYRIGHT ASSIGNMENT to Plaintiff which duplicated the earlier assignment and was done
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`for filing with the Copyright Office. This 2006 assignment also transferred the U.S. Copyright
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`Registrations Phyle Industries had on various of the software programs and transferred the
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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 3 of 26 Pg ID 1226
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`November 29, 2005, U.S. Copyright Application for AUDIT Download Builder (Dkt. 12,
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`Exhibits 3 & 4 and Dkt. # 33, Exhibit C). Both of these copyright assignments reserved to
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`Phyle Industries a royalty-free license to use certain Bar Code Algorithms that were part of the
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`software transferred as well as the Elite III and Elite III UPS Driver software. As noted below,
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`the November 29, 2005, Copyright Application (Dkt. 12, Exhibits 4) for AUDIT Download
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`Builder contained errors that attorney Neil E. Wallace tried to correct in April 2007.2 This
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`“correction” was undertaken after the copyrights and software was assigned to Plaintiff and after
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`this litigation was commenced. It was done without Plaintiff’s knowledge or consent.
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`After the AST and RGIS ended their long term relation, Defendant AST developed a new
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`business inventory product called Titan EPG. There is no indication that the two parties had
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`entered into a non-compete agreement or an agreement that AST would not produce and sell
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`products for taking business inventories, which it had done for other customers prior to the 2005
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`parting of ways. RGIS asserts that the AST’s new Titan EPG has many “features,
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`configurations and functionality that are substantially similar if not identical to that of Plaintiff’s
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`proprietary hardware and software” which Defendant Phyle assigned to Plaintiff (Dkt. # 1, ¶
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`2 The Original AUDIT Download Builder application was filed by attorney Jeremy D. Bisdorf on
`November 29, 2005, for Phyle Industries. The Bisdorf application noted under § 2 of the
`application that the software was not a “work made for hire”, under § 3a that “1999" was the
`year the work was completed, and under § 3b “September 9, 1999" as the date of first
`publication. Mr. Bisdorf left blank both the portions under § 6a on DERIVATIVE WORK OR
`COMPILATION and under § 6b on “Material Added to this Work.” Under § 8 Mr. Bisdorf was
`to receive the Registration Certificate. The modifications of April 2007 for the AUDIT
`Download Builder application changed § 2 noting AUDIT Download Builder was a “work made
`for hire,” and under § 3a the change was “*1999 * 2005" for the year the work was completed,
`and under § 3b the change was “September 9, 1999 * 2005" as the date of first publication. In §
`6a on DERIVATIVE WORK OR COMPILATION “*previous version” was added and under §
`6b on “Material Added to this Work” Mr. Wallace added “*additional or revised text of
`computer program.” The asterisks through these changes reference to “*Amended by C.O. from
`phone call to Neil E. Wallace on April 13, 2007” written at the top of page 2.
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`3
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`

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`15).3 RGIS asserts further that based on comparisons in its attached Exhibit F “there are
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`extensive, verbatim replications of Download Builder architecture, verbiage and functionality”
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`(Id. at ¶ 16). The Exhibit F referred to in support of this assertion contains two computer screen
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`shots taken from AST website advertisements that Plaintiff has labeled “(AST) Titan EPG Script
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`Builder” and two nearly identical screen shots labeled “Download Builder” and “Download
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`Builder Action Codes” generated from the AUDIT Download Builder software RGIS acquired
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`from Defendant Phyle Industries (Id. at Exhibit F). Plaintiff complains that Defendant utilized
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`copyrighted material owned by Plaintiff in marketing and developing its Titan EPG product.
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`Defendant AST and its owner, Charles Phyle, acknowledge that before Titan EPG
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`software was fully developed, AST’s marketing department utilized as promotional material on
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`its website for the Titan product two screen shots from AUDIT Download Builder, the software
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`transferred to Plaintiff (Dkt. # 17, p. 4-5, and Phyle Declaration, Exhibit # 2 ). AST President
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`Phyle states in his declaration that this was done without the knowledge of the principals at AST
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`AST. He noted that instead of contacting AST about the use of the RGIS screen shots, RGIS
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`gave AST notice of this transgression by filing this law suit. Once notice was provided that
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`these screen shots were being used, President Phyle states that AST ceased usage of the image
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`and he assures RGIS “AST will not use the screen shots again” (Id. at ¶ 6.). He further states
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`that AST spent over $1 million developing its new Titan inventory product and that its EPG
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`screens are very different from the AUDIT Download Builder screens.
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`3 In various places this new AST software product is called “Titan”, “Titan EPG”, “EPG Script
`Builder Advanced” but for simplicity AST’s new product line software will be referred to as
`“Titan EPG” throughout this Report and Recommendation.
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`4
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`

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`Thus, AST admits that these screen shots are from AUDIT Download Builder and denies
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`they are from its Titan EPG computer program software as Plaintiff contends that Exhibit F to its
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`complaint demonstrates. AST contends that “[t]here is no dispute that the actual Titan software
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`does not look like the screen shots on the web page” (Dkt. 11, Defendants Brief at p. 2).4 Since
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`this declaration was provided by Mr. Phyle, RGIS has not asserted anything to dispute the facts
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`that: (i.) the screen shots on AST’ website were from the AUDIT Download Builder software
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`and not from Titan software; (ii.) they have been removed from the AST website; and (iii.) they
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`have not been posted by AST anywhere since. As a result, in light of this unrebutted admission
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`of AST President Phyle and his other assertions, Exhibit F of Plaintiff’s complaint would only
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`elucidate the obvious that the two AUDIT Download Builder screen shots that AST admits were
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`on its website would be “substantially similar if not identical” to screen shots that could be
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`generated from Plaintiff’s AUDIT Download Builder. This admission regarding screen shots
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`from RGIS’ AUDIT Download Builder being posted on AST’s website does not demonstrate
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`that AST’s new Titan software is substantially similar to the AUDIT Download Builder
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`software. Because Plaintiff has provided no evidence from a computer forensic expert comparing
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`the source codes of AST Titan products and the AUDIT Download Builder software or any
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`other software assigned to RGIS, Defendants assert that Plaintiff’s complaint is based on
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`attorney assertion only. There is little to nothing in the record to refute this assertion.
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`4 Defendants further assert that after this complaint was filed they set up a meeting with RGIS to
`show its lawyers and executives the difference between the accused Titan software and the
`AUDIT Download Builder software RGIS acquired. It asserts that this “software running side-
`by side” demonstrated that the Titan screens and those generated by AUDIT Download Builder
`were very different (Dkt. 11, Defendants brief at 2-3.).
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`5
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 6 of 26 Pg ID 1229
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`Defendants are sufficiently confident of their position that they seek to have this Court
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`appoint as a Special Master, Dr. Lee A Hollaar, Professor of Computer Science at the University
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`of Utah, a computer expert, who was identified and selected by RGIS as its expert, to undertake
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`a review and analyze all versions of AST’ source codes for the Titan products (Dk. # 14,
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`Defendants Brief at p. 2, fn. 2) and compare them to the AUDIT Download Builder source
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`codes. In a separate order entered this date, that request is being granted to provide this Court
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`with a factual analysis by a competent computer expert skilled in interpreting and comparing
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`computer source codes and who was selected by RGIS to reduce its reason to question his
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`analysis of computer source codes that lie beyond the competence of the two judicial officers
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`assigned to this case.
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`II.
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`Copyright and Preliminary Injunction
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`The Constitution expressly gives Congress the power to grant protection to original
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`works of authorship. U.S. Const. Art. I, § 8, cl. 8. In enacting copyright protection for computer
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`software, Congress defined a computer program as a set of statements or instructions to be used
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`directly or indirectly in a computer in order to bring about a certain result, and it provided that
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`computer software would be protected as a literary work.5 17 U.S.C. §§ 101, 201(a). See Quinn
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`v. City of Detroit, 988 F. Supp. 1044 (E.D. Mich. 1997) (A computer program is classified as a
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`"literary work" for purposes of Copyright Act.); Whelan Assoc. v. Jaslow Dental Lab., 797 F.2d
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`517 U.S.C. § 101:
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`“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.
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`6
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 7 of 26 Pg ID 1230
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`1222, 1234 (3d Cir.1986) (Computer programs are entitled to copyright protection as “literary
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`works.”).
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`Plaintiff seeks an injunction to prevent “Defendants, their agents, servants, employees,
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`and attorneys and all persons in active concert or participation with them from copying or
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`otherwise using in any manner the subject matter of Plaintiff’s copyrights” (Dkt. # 12). A party
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`seeking an injunction:
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`“must demonstrate: (1) that it has suffered irreparable injury; (2)
`that remedies available at law, such a monetary damages, are
`inadequate to compensate for that injury; (3) that, considering the
`balance of hardships between the plaintiff and defendant, a remedy
`in equity is warranted; and (4) that the public interest would not be
`served by a permanent injunction.”
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`eBay Inc. v. MercExchange, L.L.C., ___ U S ___, 126 S.Ct. 1837, 1839 (2006).
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`These factors apply equally to motions seeking a preliminary injunction. Amoco Prod’n
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`Co. v. Village of Gambell, Alaska, 480 U S 531, 546 n. 12 (1987). A party seeking a preliminary
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`injunction must show a likelihood of success. Id. Preliminary injunctions in the copyright
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`context place great emphasis on the likelihood of success analysis as irreparable harm is
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`presumed once a likelihood of success has been established. See Forry, Inc. V. Neundorfer, Inc.,
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`837 F.2d 259, 267 (6th Cir. 1988).
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`Plaintiff in its motion for a preliminary injunction refers to three different tests which
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`may be used to determine whether a preliminary injunction should be granted: (1) the Mason
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`7
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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 8 of 26 Pg ID 1231
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`test6, (2) the Roth-Stenberg test7 and the (3) Nimmer test8 are all cited, but no reference is made a
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`more recent Supreme Court eBay Inc. case.
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`In eBay, the Supreme Court held that in a patent infringement case the traditional four
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`part test must be used prior to the granting of a permanent injunction. Id. Such a standard is also
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`applicable to requests for preliminary injunctions. See, Amoco Prod’n Co. v. Village of Gambell,
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`Alaska, 480 U.S. 531 (1987) (stating that the standard for a preliminary injunction is essentially
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`the same as for a permanent injunction).
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`In seeking one preliminary injunction, Plaintiff has blurred two requests for preliminary
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`injunction into one claim: (1) an injunction enjoining Defendants’ use of Plaintiff’s software in
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`screen shots and (2) an injunction enjoining Defendants’ alleged violation of Plaintiff’s
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`copyrights in the creation of the Titan EPG software. Analysis of Plaintiff’s preliminary
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`injunction claim requires separate application of the four-part eBay test first to the screen shots
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`and then to the creation of Titan EPG.
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`6 Mason County Medical Assoc. v. Knebel, 563 F.2d 256, 261 (6 Cir. 1977), which utilizes a four
`part test for determining whether a preliminary injunction should be granted.
`7 Roth v. Bank of the Commonwealth, 583 F.2d 527 (6 Cir. 1978) and Stenberg v. Checker Oil
`Company, 573 F.2d 921 (6 Cir. 1978), involved cases where the Sixth Circuit utilized the Second
`Circuit’s two party test for granting an injunction based on the movant’s likelihood of success
`and the degree of injury.
`8 Nimmer in his treatise on Copyright suggests that even when applying the four part test for
`preliminary injunctions, in most cases it is the “likelihood of success that is determinative.”
`NIMMER ON COPYRIGHT §14.06(A).
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`8
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 9 of 26 Pg ID 1232
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`Under the eBay test, before a preliminary injunction is granted, Plaintiff must show that it
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`has suffered irreparable harm as a result of Defendant’s actions.910
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`It is not sufficient for Plaintiff to allege that Defendant has copied their software, for
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`there to be an irreparable harm Plaintiff must show that the portion of the software copied was
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`protectible under copyright law. See Lexmark Int’l. Inc v. Static Control Components, Inc., 387
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`F.3d 522 (6th Cir. 2004). Such a showing requires analysis and comparison of complex
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`computer software source codes. See Kohus v. Mariol, 328 F.3d 848, 857-58 (6th Cir. 2003)
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`(with technical copyright issues, reliance upon an expert is almost a certainty). Yet, as noted
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`above, Plaintiff has provided no technical support for its assertion other than a declaration from
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`its Chief Information Officer, Anthony Baritz which will be discussed below (Dkt. # 22 Exhibit
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`10).
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` Kohus adopted a two-step approach for analyzing copyright infringement:
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`The first step requires identifying which aspects of the artist’s work, if any, are
`protectible by copyright; the second involves determining whether the allegedly
`infringing work is “substantially similar” to protectible elements of the artist’s
`work.
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`Id. at 55.
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`9 See CJS COPYRIGHT § 131: “To obtain a preliminary injunction against alleged copyright
`infringement, a party must show a reasonable likelihood that it will succeed on the merits of its
`copyright infringement claim, and a likelihood that it will suffer irreparable harm if the
`injunction is denied.”
`10“A copyright plaintiff who makes out a prima facie case of infringement is entitled to a
`preliminary injunction without a detailed showing of irreparable harm.” Apple Computer, Inc. v.
`Franklin Computer Corp., 714 F.2d 1240, 1254 (3d Cir.1983), cert. dismissed, 464 U.S. 1033
`(1984).
`See also The "prevailing view" in cases of copyright infringement is that a showing of likelihood
`of success on the merits raises a presumption of irreparable harm. This rule applies despite the
`fact that the copyright owner will suffer only monetary damages, which in other contexts are not
`usually considered irreparable harm because of the availability of an adequate legal remedy.
`PATLAWF § 6:88.
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`9
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 10 of 26 Pg ID 1233
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`The first prong tests originality which is presumptively established by virtue of copyright
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`registration. See M.M. Bus. Forms Corp. v. Uarco, Inc., 472 F.2d 1137, 1139 (6th Cir. 1973).
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`The second prong tests whether any copying occurred (a factual matter) and whether the portions
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`of the work copied were entitled to copyright protection (a legal matter). See Kepner-Tregoe,
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`Inc. v. Leadership Software, Inc., 12 F.3d 527, 534-35 & n. 14 (5th Cir. 1994). If no direct
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`evidence of copying is available, “claimant may establish this element by showing that the
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`defendant had access to the copyrighted work and that the copyrighted work and the allegedly
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`copied work are substantially similar.” Lexmark at 534.
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`In Kohus, the Sixth Circuit modified the traditional “ordinary observer” test for
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`substantial similarity. Kohus, 328 F.3d at 856. The ordinary observer test is “premised on the
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`notion that the lay public purchases a product at issue, and where the lay audience’s untutored
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`judgement determines” differences between products. Id. This test has significant drawbacks
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`when the copyright in issue covers a matter aimed at a technical audience.
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`Instead of always focusing on the general public, Kohus determined that the focus should
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`be on the intended audience possessing specialized expertise, in this case a technical audience
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`comprised of those familiar with reading computer source codes. Id. at 857.
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`A.
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`The AST Screen Shots Taken from AUDIT Download Builder
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`Plaintiff asserts that the AST screen shots “could not have been generated but for copying
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`of Defendants’ archival versions of Plaintiff’s copyrights” (Dkt. # 12, p. 11).
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`For purposes of this motion, it can be considered that the first step in analyzing whether
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`Plaintiff has an interest protectible by copyright has been met. This test is presumptively
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`established by virtue of the copyright registration. See M.M. Bus. Forms Corp. v. Uarco, Inc.,
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`10
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 11 of 26 Pg ID 1234
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`472 F.2d 1137, 1139 (6th Cir. 1973). Plaintiff acquired valid, registered copyrights, from
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`Defendants, for AUDIT Download Builder. Therefore for purposes of this motion, it is
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`presumptively established that Plaintiff has a protectible interest.
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`Defendants assert that the screen shots are not themselves protected, yet it has not
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`challenged Plaintiff’s assertion that the two screen shots it posted on the AST website were
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`generated from its archived copies of the AUDIT Download Builder software in which RGIS has
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`been assigned copyright protection.
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`For purposes of this preliminary injunction analysis, it can be presumed that Plaintiff has
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`a reasonable likelihood of success on showing that in posting the two AUDIT Download Builder
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`screen shots AST violated Plaintiff’s copyright. Yet, given the unrebutted assertions that this
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`posting was immediately ended when AST’s principals became aware of it, AST’s assertions
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`that it will not again post the AUDIT Download Builder screen shots, and the fact that AST no
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`longer needs any AUDIT Download Builder screen shots because it can generate and post Titan
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`EPG screen shots, all of this raises a substantial question of whether RGIS will really face
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`irreparable harm if the preliminary injunction concerning screen shots is not granted.
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`Furthermore, Plaintiff has failed to demonstrate other of the standards set by the e-Bay case.
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`RGIS fails to demonstrate that a monetary damage remedy is not sufficient to compensate RGIS
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`for any injury. Furthermore, it is hard to strike a balance of hardships between the Plaintiff and
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`Defendant and hard to find the public interest is served by an injunction against a future action
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`that is unlikely to occur. Now that AST has fully developed its Titan product, it has no further
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`need to use the AUDIT Download Builder screen shots when it can generate the Titan software
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`screen shots.
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`11
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`

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`Because Plaintiff has failed to demonstrate that a damages remedy at law is insufficient
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`to protect its interests in the unauthorized use of the AUDIT Download Builder screen shots, and
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`has failed to show a reasonable likelihood of a repeat of this action, IT IS RECOMMENDED that
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`Plaintiff’s Motion for a Preliminary Injunction be DENIED with respect to the AUDIT Download
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`Builder screen shots.
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`B.
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`The Titan EPG Software
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`Plaintiff’s primary goal in this motion is to enjoin Defendants from selling or using
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`Defendant’s Titan EPG software because RGIS’s claim that it violates the copyrights RGIS
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`obtained from Defendant Phyle Industries. This is really the heart of Plaintiff’s complaint – to
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`remove a competing software and hardware product to perform inventories. Yet, to do this
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`Plaintiff must provide evidentiary support for the claim that Defendant AST’s Titan EPG
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`violates protectible portions of Plaintiff’s copyrights. Plaintiff must demonstrate a likelihood of
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`success in proving that AST copied the software of RGIS (a factual matter) and that the portions
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`copied were entitled to copyright protection (a legal matter). See Lexmark Int’l, supra, 387 F 3d
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`at 534.
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`Initially, Plaintiffs believed that the two screen shots on the AST website were generated
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`from the Titan EPG software. If true, this would be some evidence that Titan EPG software was
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`derived from the AUDIT Download Builder software. Mr. Phyle’s unrebutted declaration
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`admits that the AUDIT Download Builder screen shots were posted for a period. Yet, he
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`clarifies that these two screen shots were not taken from Titan EPG software because it had not
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`yet been fully developed when someone in his marketing department posted the two AUDIT
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`Download Builder screen shots. If these screen shots came from the AUDIT Download Builder
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`12
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 13 of 26 Pg ID 1236
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`software as Mr. Phyle indicates, that may prove a copyright violation of the AUDIT Download
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`Builder software to generate these two screen shots as discussed in the previous section. But it is
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`no proof that the protected portions of the AUDIT Download Builder software (or other software
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`that Phyle Industries assigned to RGIS) were copied in the development of the Titan EPG
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`software. Thus, the screen shot evidence is of little to no probative value that the Titan EPG
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`contains portions of protected software from AUDIT Download Builder.11
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`The other evidence RIGS presents in its initial brief and supplemental brief is from a
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`draft Agreement for Substantial Similarity Determination (Dkt. 12, Exhibit 9). While RGIS
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`asserts this document was not evidence barred from use to prove liability under Fed. R. Evid.
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`408(a)(2)12, the portion of this document was drafted by lawyers for AST in an offer on how to
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`compromise and settle this copyright dispute in its entirety. Its opening line corroborates this
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`stating “In and effort to expedite resolution of this case . . . .” As such, it should be excluded
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`from consideration of potential liability on this motion for a preliminary injunction.
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`That leaves the record barren of sufficient evidence from which this Court could
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`determine that Plaintiff has a reasonable likelihood of success on the merits. There is no direct
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`evidence of copying of AUDIT Download Builder in the development of the Titan EPG
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`11 The screen shots is still some evidence that during the development of the AUDIT Download
`Builder software AST had available the AUDIT Download Builder software for copying had it
`chosen to do so.
`12 Rule 408. Compromise and Offers to Compromise
`(a) Prohibited uses.--Evidence of the following is not admissible on behalf of any party, when
`offered to prove liability for . . . a claim that was disputed as to validity . . . .
` * * *
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`(2) . . . statements made in compromise negotiations regarding the claim, except
`when offered in a criminal case and the negotiations related to a claim by a public
`office or agency in the exercise of regulatory, investigative, or enforcement authority.
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`13
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`

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`software. There is no expert or other testimony comparing the AUDIT Download Builder
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`software to the Titan EPG software to demonstrate substantial similarity. There is only evidence
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`that AST had access to the AUDIT Download Builder software while it was developing Titan
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`EPG. That alone is insufficient evidence upon which to find a reasonable likelihood of success.
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`Because RGIS fails to show a reasonable likelihood of success on the merits it fails to
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`demonstrate that it has suffered irreparable injury under the e-Bay standards. Thus, IT IS
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`RECOMMENDED that Plaintiff’s Motion for a Preliminary Injunction be DENIED with respect to
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`the Titan Software
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`C.
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`Alternate Findings on The Titan EPG Software
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`If this Court were to determine that the AST statements made in the Agreement for
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`Substantial Similarity Determination are not barred from use to prove liability under Fed.
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`R. Evid. 408(a)(2), Plaintiff still fails to present sufficient evidence to demonstrate a substantial
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`likelihood of success on the merits.
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`The Agreement for Substantial Similarity Determination AST provided that Professor
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`Hollaar, who had been selected as an computer software expert by RGIS, would review and
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`compare the computer source codes and object codes for AST’s EPG Script Builder Advanced
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`and RGIS’s AUDIT Download Builder to determine if they were substantially similar. In doing
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`this comparison, AST sought to exclude from comparison, among other items, eight files in the
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`Titan EPG program. Because these 8 files are in the Titan EPG software and also in the AUDIT
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`Download Builder software, RGIS asserts these 8 files prove AST violated RGIS’s copyright
`
`protections in AUDIT Download Builder . Since this accusation against Defendants, counsel for
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`RGIS now acknowledges that 6 of these 8 files are actually Microsoft products to which it has no
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`14
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`

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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 15 of 26 Pg ID 1238
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`claim of copyright protection (See Dkt. # 32, fn 3.). That leaves two files in Titan EPG that are
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`“WinMisc.c” and “WinMisc.h.”
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`In its draft exclusion of these two files in the Agreement for Substantial Similarity
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`Determination, AST states
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`•
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`The source code in the following files is similar between the two programs
`in question because it is a library of functions common to many Windows
`programs that has been used by AST in nearly every Windows program
`developed before, during, and since the writing of AUDIT Download
`Builder
`" WinMisc.c, WinMisc.h
`
`Plaintiff proffered in support of its infringement claim that
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`At lease eight (8) files in the EPG program appear identical to corresponding
`source code in Plaintiff’s Copyrights. Further investigation of EPG will
`undoubtedly reveal greater evidence of Defendants copying.
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`(Dkt. 12, Plaintiff’s Brief at p. 11). As noted above, Plaintiff now acknowledges that 6 of the 8
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`files it accused AST of copying from AUDIT Download Builder are actually Microsoft
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`copyrighted items to which RGIS has no claim. Thus, the charge of infringement has been
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`narrowed to the two WinMisc files that AST admits in the Agreement for Substantial Similarity
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`Determination are in both AUDIT Download Builder and Titan EGP.
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` If no direct evidence of copying is available,13 “claimant may establish this element by
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`showing that the defendant had access to the copyrighted work and that the copyrighted work
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`and the allegedly copied work are substantially similar.” Lexmark at 534. Here it is not disputed
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`13 Defendant agreed to have a expert of Plaintiff’s choosing evaluate the code. Terms of
`agreement could not be reached, but this reliance on outside experts clearly indicates the need for
`expert analysis of the software code.
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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 16 of 26 Pg ID 1239
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`that AST had access to the AUDIT Download Builder software when it developed the Titan EGP
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`software. Other than this purported “admission” by AST regarding WinMisc.c, and WinMisc.h
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`being in both source codes, Plaintiff provides no factual basis supporting its claim that the source
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`code in Titan EPG violates its AUDIT Download Builder copyrights. Plaintiff’s assertion that
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`the files in question “appear identical to corresponding source code in Plaintiff’s copyrights,” is
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`of little help in the absence of a comparison of the respective source codes by a computer expert.
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`Assertions by counsel are no substitute for competent forensic expert testimony by one who has
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`actually examined both source codes and one who knows what in AUDIT Download Builder is
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`original and what in AUDIT Download Builder was created earlier and has separate copyright
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`protection or is publically available to all. Additionally, similarity of source codes would not
`
`prove a copyright violation if the similar parts from a copyright work are of portions of that work
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`not subject to copyright protection. The copyright owner of a book on THE GREAT SPEECHES OF
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`LINCOLN cannot claim copyright protection on The Gettysburg Address contained in the book.
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`Determining what is and is not subject to copyright protection in computer source codes
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`is a more complicated task than tracing Lincoln’s prose. When the copyrighted item is technical,
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`Kohus notes that a substantial similarity determination requires the examination by one capable
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`of understanding technical matters where ordinary observers are unlikely to understand them.
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`Kohus, 328 F.3d at 858. Similarly, in the present case, reliable proofs will require analysis of
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`computer source codes which are clearly beyond the abilities of ordinary observers. Yet,
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`Plaintiff has not provided any analysis of the two source codes and there has been no expert
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`testimony in support of its assertion of substantial similarity of Titan EGB and AUDIT
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`Download Builder (Dkt. 12, p 11).
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`16
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`4:07-cv-10975-PVG-SDP Doc # 47 Filed 01/22/08 Pg 17 of 26 Pg ID 1240
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`Instead Plaintiff has provided the declaration of the RGIS Chief Information Officer
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`(“CIO”), Anthony Baritz, whose credentials might well qualify him as a forensi