Case: 18-12004 Date Filed: 05/20/2020 Page: 1 of 53
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`[PUBLISH]
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`IN THE UNITED STATES COURT OF APPEALS
`
`FOR THE ELEVENTH CIRCUIT
`_________________________
`
`No. 18-12004
`________________________
`
`D.C. Docket No. 9:16-cv-81942-RLR
`
`
`
`
`
`
`
`COMPULIFE SOFTWARE INC.,
`
` Plaintiff - Appellant,
`
` versus
`
`MOSES NEWMAN,
`AARON LEVY,
`DAVID RUTSTEIN,
`a.k.a. David Anthony Gordon,
`a.k.a. Bob Gordon,
`a.k.a. Nate Golden,
`BINYOMIN RUTSTEIN,
`a.k.a. Ben Rutstein,
`
` Defendants - Appellees.
`
`
`
`_________________________
`
`No. 18-12007
`________________________
`
`D.C. Docket No. 9:16-cv-80808-RLR
`
`

`

`Case: 18-12004 Date Filed: 05/20/2020 Page: 2 of 53
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`
`
`COMPULIFE SOFTWARE INC.,
`
`
`
` versus
`
`BINYOMIN RUTSTEIN,
`a.k.a. Ben Rutstein,
`JOHN DOES 1 - 10,
`DAVID RUTSTEIN,
`
`
`
`Plaintiff - Appellant,
`
`Defendants - Appellees.
`
`________________________
`
`Appeals from the United States District Court
`for the Southern District of Florida
`________________________
`
`(May 20, 2020)
`
`Before JORDAN and NEWSOM, Circuit Judges, and HALL,* District Judge.
`
`NEWSOM, Circuit Judge:
`
`There’s nothing easy about this case. The facts are complicated, and the
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`governing law is tangled. At its essence, it’s a case about high-tech corporate
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`espionage. The very short story: Compulife Software, Inc., which has developed
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`and markets a computerized mechanism for calculating, organizing, and comparing
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`life-insurance quotes, alleges that one of its competitors lied and hacked its way
`
`
`* Honorable James Randal Hall, United States District Chief Judge for the Southern District of
`Georgia, sitting by designation.
`
`
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`Case: 18-12004 Date Filed: 05/20/2020 Page: 3 of 53
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`into Compulife’s system and stole its proprietary data. The question for us is
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`whether the defendants crossed any legal lines—and, in particular, whether they
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`infringed Compulife’s copyright or misappropriated its trade secrets, engaged in
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`false advertising, or violated an anti-hacking statute.
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`With the parties’ consent, a magistrate judge was tasked with tackling these
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`thorny issues in a bench trial. He determined that Compulife had failed to prove
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`any legal violation. We conclude, however, that in finding that Compulife hadn’t
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`demonstrated either copyright infringement or trade-secret misappropriation, the
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`magistrate judge made several discrete legal errors and, more generally, failed to
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`adequately explain his conclusions. Accordingly, we vacate the judgment in part
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`and remand with instructions to make new findings of fact and conclusions of law.
`
`I
`
`A
`
`Warning: This gets pretty dense (and difficult) pretty quickly.
`
`Compulife and the defendants are direct competitors in a niche industry:
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`generating life-insurance quotes. Compulife maintains a database of insurance-
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`premium information—called the “Transformative Database”—to which it sells
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`access. The Transformative Database is valuable because it contains up-to-date
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`information on many life insurers’ premium-rate tables and thus allows for
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`simultaneous comparison of rates from dozens of providers. Most of Compulife’s
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`customers are insurance agents who buy access to the database so that they can
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`more easily provide reliable cost estimates to prospective policy purchasers.
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`Although the Transformative Database is based on publicly available
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`information—namely, individual insurers’ rate tables—it can’t be replicated
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`without a specialized method and formula known only within Compulife.
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`Compulife sells two different kinds of access to the Transformative
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`Database—a “PC version” and an “internet-engine version”—each run by its own
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`piece of software and each accompanied by its own type of license. Both pieces of
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`software contain an encrypted copy of the database. The PC-version software—
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`called the “PC quoter”—is sold along with a PC license that allows licensees to
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`install copies of the quoter on their personal computers and other devices for
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`(depending on the number of devices) a cost of either $180 or $300 per year. The
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`PC quoter uses its local copy of the Transformative Database to generate
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`insurance-rate estimates corresponding to demographic information entered by the
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`end user.
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`A PC licensee can purchase an add-on called the “web quoter” for an extra
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`$96 per year. The web-quoter feature allows the PC licensee to put a quoter on its
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`own website, which it can then use as a marketing tool to attract customers. Once
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`a licensee’s website is equipped with the web quoter, prospective life-insurance
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`purchasers can enter demographic information into fields on the licensee’s site and
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`receive quotes directly from the licensee. Unlike the PC quoter—which contains
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`its own local copy of the Transformative Database—the web quoter generates
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`quotes by communicating with an internet-quote engine hosted on Compulife’s
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`server. The HTML source code of the web quoter is protected by a registered
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`copyright.
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`A second kind of license—the “internet-engine” license—permits a licensee
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`to host Compulife’s internet-quote engine, which includes the Transformative
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`Database, on its own server and to integrate it with additional features of its own
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`creation. (Naturally, it’s more expensive—it costs $1200 per year.) An internet-
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`engine licensee can then sell access to “its” product—which is an amalgamation of
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`Compulife’s internet-quote engine with any accoutrements that the licensee has
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`seen fit to add. Importantly, though, internet-engine licensees can sell access only
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`to Compulife’s PC licensees. This arrangement allows an internet-engine licensee
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`to include Compulife’s internet-quote engine—again, with the Transformative
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`Database—as a part of its own product, while simultaneously ensuring that it
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`doesn’t compete with Compulife for potential insurance-agent customers.
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`Compulife also permits an internet-engine licensee to provide its web-quoter
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`HTML code to the licensee’s customers so that the customers’ websites can
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`retrieve quotes from the licensee’s server. This is the same copyrighted HTML
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`code that Compulife provides to PC licensees with the web quoter add-on.
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`In addition to the PC-version and internet-engine products that it licenses to
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`agents and that contain the Transformative Database, Compulife also provides
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`consumers with direct access to life-insurance quotes through its Term4Sale
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`internet site, www.term4sale.com. Term4Sale communicates with essentially the
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`same internet-quote engine that PC licensees’ web quoters access and that internet-
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`engine licensees are permitted to maintain on their own servers. Anyone can use
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`the Terms4Sale site to receive free life-insurance quotes directly from a copy of the
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`Transformative Database that Compulife hosts on its own server. The Term4Sale
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`site refers prospective life-insurance purchasers to insurance agents with whom
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`Compulife partners, who in turn pay Compulife for the referrals.
`
`Now, to the defendants, who are also in the business of generating life-
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`insurance quotes—primarily through a website, www.naaip.org. “NAAIP” stands
`
`for National Association of Accredited Insurance Professionals, but as the court
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`below found, “NAAIP is not a real entity, charity, not-for-profit, or trade
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`association, and is not incorporated anywhere.” Compulife Software, Inc. v.
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`Rutstein, No. 9:16-cv-80808, 2018 U.S. Dist. LEXIS 41111, at *15 (Mar. 12,
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`2018). Through naaip.org, the defendants offer a service similar to—and, the
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`evidence shows, at least partially copied from—Compulife’s web quoter, which
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`they call a “Life Insurance Quote Engine.” Any insurance agent can sign up for a
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`free website located on the domain naaip.org—for example,
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`“http://naaip.org/tmatteson77.” The defendants host thousands of these sites on a
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`server in Israel and equip each one with the Life Insurance Quote Engine.
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`Prospective life-insurance purchasers can then obtain quotes on any of these
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`NAAIP-hosted websites by entering demographic information, just as they could
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`on the website of any Compulife PC licensee with a web quoter add-on. Each
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`NAAIP site includes a link that allows consumers to purchase insurance through
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`One Resource Group, Inc., a brokerage firm with which the defendants have
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`partnered. If a visitor to an NAAIP site uses the link to buy insurance, the
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`defendants receive a part of One Resource’s brokerage fees in exchange for the
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`referral.
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`The defendants also operate the BeyondQuotes website,
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`www.beyondquotes.com, which includes a Life Insurance Quote Engine like the
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`ones on participating NAAIP websites. BeyondQuotes operates similarly to
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`Compulife’s Term4Sale site, generating revenue by selling referrals to affiliated
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`insurance agents.
`
`B
`
`Having canvassed Compulife’s and the defendants’ respective businesses,
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`we should introduce the (complex) cast of individual characters that populate this
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`case. The first is Robert Barney, the founder and CEO of Compulife. Barney
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`personally updates Compulife’s Transformative Database. To do so, he draws on
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`insurers’ publicly available rate information, but he also employs a proprietary
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`calculation technique—in particular, a secure program to which only he has access
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`and that only he knows how to use. Other relevant players at Compulife include
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`Jeremiah Kuhn, its CFO/COO, and Chris Bruner, the programmer who created the
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`Transformative Database.
`
`Most significant among the defendants is David Rutstein, the founder of
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`NAAIP and the owner of BeyondQuotes. He operates naaip.org and
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`beyondquotes.com with help from his son, defendant Binyomin Rutstein, and their
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`co-defendants Aaron Levy and Moses Newman. At one point—more on this to
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`come—the defendants also employed a hacker named Natal, who, it is undisputed,
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`took Compulife’s data for use in the defendants’ software.1
`
`There are also several key characters who aren’t directly affiliated with any
`
`of the parties. MSCC is a software company and a Compulife customer with an
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`internet-engine license. It sells access to a proprietary program for life-insurance
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`agents called “Vam DB,” which (as is permissible for internet-engine licensees)
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`includes Compulife’s internet engine. And because MSCC hosts Compulife’s
`
`
`1 There is some confusion about the hacker’s name in the record. We don’t know her first name.
`As for her last, sometimes it’s rendered Natal, sometimes Matal. For simplicity’s sake, we will
`use Natal.
`
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`internet engine on its Vam DB server, it also hosts (again, as is permissible) a copy
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`of Compulife’s Transformative Database.
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`Brian McSweeney is a life-insurance agent who, during the time of the
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`defendants’ alleged misconduct, was a Compulife PC licensee who used MSCC’s
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`Vam DB server. At the same time, McSweeney also had a working relationship
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`with the defendants—in particular, he was one of the agents who (as already
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`described) paid the defendants for leads generated from the BeyondQuotes site.
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`Eric Savage—another Compulife licensee—also had a working relationship with
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`defendant David Rutstein. McSweeney and Savage are important here because the
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`defendants used their relationships with them to gain access to Vam DB, and thus
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`to Compulife’s Transformative Database.
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`C
`
`With that background, we turn (at last) to the alleged espionage. Compulife
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`claims that the defendants’ websites don’t report their own quotes but merely
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`reproduce Compulife’s own proprietary data. According to Compulife, the
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`defendants stole its data in two different ways, which form the basis of two
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`separate lawsuits. These suits—which have been called the “08 case” and the “42
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`case” throughout these proceedings, to denote their original docket numbers—were
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`consolidated for trial and remain consolidated on appeal.
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`In the 08 case, Compulife contends that the defendants gained access to the
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`Transformative Database under false pretenses by purporting to work for licensed
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`Compulife customers. In particular, David Rutstein, using the email address
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`bob@naaip.org, represented that he was working with Compulife PC licensees
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`McSweeney and Savage and requested the HTML code for Compulife’s web
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`quoter, which he said would allow his websites to communicate with the copy of
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`the Transformative Database hosted on MSCC’s Vam DB server. Compulife
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`CFO/COO Kuhn responded by sending Rutstein the HTML code, believing that he
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`was a web designer employed by McSweeney, a licensed customer.2 A
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`comparison of the HTML used by the defendants with Compulife’s HTML source
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`code shows without a doubt that the defendants copied some of it, although (as
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`we’ll discuss) the legal significance of that copying is disputed.
`
`
`2 As already noted, the defendants really did have a professional relationship with McSweeney
`and Savage, but Kuhn provided the HTML code only because he misunderstood the nature of
`that relationship. Rutstein had partnered with McSweeney and Savage and forwarded them
`customer leads from Beyond Quotes, but Beyond Quotes was not owned by McSweeney or
`Savage. Nevertheless, when Rutstein requested HTML code for www.beyondquotes.com by
`email he claimed to have an “account . . . thru Eric Savage.” He also explained that he intended
`to set up a web quoter to forward “leads” to McSweeney, although he planned to set it up on a
`website that “would be separate from” McSweeney’s. In context, Kuhn took this to mean that
`Rutstein was a web designer helping McSweeney to set up a second website of his own. As
`Kuhn had explained to Savage in an email exchange a few months earlier, each customer was
`permitted to put the quoter on any website that he owned without an additional license, but an
`additional license was required before the quoter could be implemented on a website owned by
`someone else. Kuhn testified that he wouldn’t have emailed the HTML code if he had known
`that “Beyond Quotes did not belong to Eric Savage or Brian McSweeney or any other authorized
`user.”
`
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`For several years, the defendants’ websites enjoyed access to Compulife’s
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`internet engine—and thus to the Transformative Database—on MSCC’s Vam DB
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`server. They used this access to generate quotes for all NAAIP websites and for
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`their own BeyondQuotes site. Compulife eventually discovered the ruse and cut
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`off the defendants’ unauthorized access, at which point their sites temporarily (and
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`conspicuously) stopped producing quotes. The defendants don’t deny that they
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`connected their NAAIP websites and BeyondQuotes to Compulife’s database on
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`the Vam DB server—they simply claim that their access was innocent.
`
`In the 42 case, Compulife alleges that the defendants hired a hacker, Natal,
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`to “scrape” data from its server. Scraping is a technique for extracting large
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`amounts of data from a website. The concept is simple; a hacker requests
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`information from a server using ordinary HTTP commands similar to those that a
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`legitimate client program of the server might employ in the ordinary course.
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`Although a hacker could obtain the data manually by entering each command as a
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`line of code and then recording the results, the true power of a scraping attack is
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`realized by creating a robot—or “bot,” for short—that can make many requests
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`automatically and much more rapidly than any human could. A bot can request a
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`huge amount of data from the target’s server—technically one query at a time, but
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`several queries per second—and then instantaneously record the returned
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`information in an electronic database. By formulating queries in an orderly fashion
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`and recording the resulting information, the bot can create a copy—or at least a
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`partial copy—of a database underlying a website.
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`Natal used this scraping technique to create a partial copy of Compulife’s
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`Transformative Database, extracting all the insurance-quote data pertaining to two
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`zip codes—one in New York and another in Florida.3 That means the bot
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`requested and saved all premium estimates for every possible combination of
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`demographic data within those two zip codes, totaling more than 43 million quotes.
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`Doing so naturally required hundreds of thousands of queries and would have
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`required thousands of man-hours if performed by humans—but it took the bot only
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`four days. The HTML commands used in the scraping attack included variables
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`and parameters—essentially words (or for that matter any string of characters) used
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`to designate and store values—from Compulife’s copyrighted HTML code. For
`
`example, the parameter “BirthMonth” in Compulife’s code stores a number
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`between one and twelve, corresponding to a prospective purchaser’s birth month.)
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`Compulife alleges that the defendants then used the scraped data as the basis
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`for generating quotes on their own websites. The defendants don’t disagree,
`
`
`3 David Rutstein testified that he asked Natal to obtain data on New York and California.
`Whether he misspoke or Natal simply scraped the wrong data is unclear, but unrebutted
`testimony establishes that the defendants set up their quote engines to provide only New York
`and Florida quotes—specifically, quotes corresponding to two zip codes: 10458 and 33433.
`Moreover, it is undisputed that the defendants received data files from Natal with data for just
`those zip codes.
`
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`except to claim that they didn’t know the source of the scraped data but, rather,
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`innocently purchased the data from a third party. Moses Newman testified,
`
`however, that he watched Natal collect the requested data in a manner consistent
`
`with a scraping attack. David Rutstein also testified that when the defendants
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`instructed Natal to obtain insurance-quote information, they fully intended for her
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`to “extract[] data” from an existing website.
`
`D
`
`Compulife filed suit in the United States District Court for the Southern
`
`District of Florida. In both the 08 case and the 42 case, it asserted counts of
`
`copyright infringement and trade-secret misappropriation. In the 08 case,
`
`Compulife alleged that the defendants (1) infringed its copyright in the HTML
`
`source code of its web quoter when they implemented similar quoters on their own
`
`websites and (2) misappropriated its trade secret by accessing the Transformative
`
`Database on MSCC’s Vam DB server to generate quotes without permission. In
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`the 42 case, Compulife alleged that the defendants (1) infringed its copyright by
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`copying parameters and variables from the HTML source code in order to carry out
`
`a scraping attack and (2) misappropriated a trade secret by scraping data from its
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`Term4Sale site. Compulife also asserted false-advertising claims under the
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`Lanham Act, Florida Deceptive and Unfair Trade Practices Act, and Florida
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`common law in both cases, as well as a violation of the Florida Computer Abuse
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`and Data Recovery Act in the 42 case.
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`The parties consented to a bench trial before a federal magistrate judge.
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`Although the judge found, as an initial matter, that Compulife had a valid
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`copyright in the text of its HTML source code and that its Transformative Database
`
`was a protectable trade secret, he ruled in favor of the defendants. In doing so, he
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`held that Compulife hadn’t met its burden to prove—as it had to in order to make
`
`out a copyright-infringement claim—that the defendants’ copied code was
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`“substantially similar” to its own and, further, that the defendants hadn’t
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`misappropriated any trade secrets. The judge separately rejected Compulife’s
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`false-advertising claims on the ground that Compulife had failed to identify any
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`false or misleading advertisement. Finally, he ruled that the defendants hadn’t
`
`violated the Florida Computer Abuse and Data Recovery Act, because Compulife
`
`failed to show that the data that the defendants took was protected by any
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`“technological access barrier” within the meaning of that statute.
`
`Compulife contends that all of these determinations were in error,
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`identifying what it contends are mistakes of both law and fact in the magistrate
`
`judge’s decision. Regarding copyright infringement and trade-secret
`
`misappropriation, we agree with Compulife. As to the false-advertising and
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`Florida statutory claims, we agree with the magistrate judge’s conclusions.
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`Accordingly, we will vacate the judgment in part and remand for new findings and
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`conclusions limited to the issues of copyright infringement and trade-secret
`
`misappropriation.
`
`II
`
`On appeal from a bench trial, “the district court’s conclusions of law are
`
`reviewed de novo,” but its “findings of fact . . . ‘shall not be set aside unless clearly
`
`erroneous.’” MiTek Holdings, Inc. v. Arce Eng’g Co., 89 F.3d 1548, 1554 (11th
`
`Cir. 1996) (citation omitted) (quoting Fed. R. Civ. P. 52(a)(6)). “[T]he standard of
`
`review for a mixed question [of law and fact] all depends—on whether answering
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`it entails primarily legal or factual work.” U.S. Bank Nat. Ass’n ex rel. CWCapital
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`Asset Mgmt. LLC v. Vill. at Lakeridge, LLC, 138 S. Ct. 960, 967 (2018).
`
`Separately, “[w]hen an appellate court discerns that a district court has failed to
`
`make a finding because of an erroneous view of the law, the usual rule is that there
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`should be a remand for further proceedings to permit the trial court to make the
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`missing findings.” Pullman-Standard v. Swint, 456 U.S. 273, 291 (1982).
`
`We must also review findings of fact and conclusions of law to ensure that
`
`they satisfy Federal Rule of Civil Procedure 52(a)(1). That rule requires that a
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`district court “find the facts specially and state its conclusions of law separately.”
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`Fed. R. Civ. P. 52(a)(1). We will vacate and remand a judgment resulting from a
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`bench trial where “the findings of the district court do not provide a sufficiently
`
`
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`definite predicate for proper appellate review.” Hydrospace-Challenger, Inc. v.
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`Tracor/MAS, Inc., 520 F.2d 1030, 1034 (5th Cir. 1975).
`
`*
`
`*
`
`*
`
`With that précis, we will consider Compulife’s claims in turn: (1) copyright
`
`infringement; (2) trade-secret misappropriation; (3) false advertising; and
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`(4) violation of Florida’s Computer Abuse and Data Recovery Act.
`
`III
`
`A
`
`To succeed on its claim of copyright infringement, Compulife “must prove
`
`‘(1) ownership of a valid copyright, and (2) copying of constituent elements of the
`
`work that are original.’” Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1541 (11th
`
`Cir. 1996) (quoting Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340,
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`361 (1991)). The existence and validity of Compulife’s copyright are undisputed,
`
`so we can proceed directly to the second prong—copying. Copying comprises two
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`subparts, “factual and legal copying,” both of which Compulife, as the plaintiff,
`
`has the burden to prove. See BUC Int’l Corp. v. Int’l Yacht Council Ltd., 489 F.3d
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`1129, 1148 n.40 (11th Cir. 2007).
`
`Factual copying—the question “whether the defendant actually used the
`
`plaintiff's material,” id.—may be shown “either by direct evidence, or, in the
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`absence of direct evidence, it may be inferred from indirect evidence
`
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`demonstrating that the defendant had access to the copyrighted work and that there
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`are probative similarities between the allegedly infringing work and the
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`copyrighted work.” MiTek, 89 F.3d at 1554.4 Factual copying isn’t really disputed
`
`here, and we think it has been established, in any event,5 so we focus here on legal
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`copying.
`
`“Legal”—or “actionable”—copying occurs when “those elements of the
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`[copyrighted work] that have been copied are protected expression and of such
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`importance to the copied work that the appropriation is actionable.” Peter
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`Letterese & Assocs. v. World Inst. of Scientology Enters., 533 F.3d 1287, 1300
`
`(11th Cir. 2008) (alteration in original) (quoting MiTek, 89 F.3d at 1554). In most
`
`cases, a “‘substantial similarity’ between the allegedly offending program and the
`
`protectable, original elements of the copyrighted works” establishes actionable
`
`copying. Bateman, 79 F.3d at 1542; see also BUC, 489 F.3d at 1149 n.42
`
`
`4 A warning here: Although “probative similarity” may sound just like “substantial similarity”—
`which we’ll encounter momentarily—“[t]here is a vital distinction here between” them.
`4 Nimmer on Copyright § 13.02[B] n.70.4 (2019). “[P]robative similarity is but one of several
`vehicles to prove copying as a factual matter,” whereas “substantial similarity” is part of the test
`for legal copying and “remains an indispensable element of plaintiff’s proof, even in cases . . . in
`which defendant does not contest factual copying.” Id. § 13.01[B].
`5 David Rutstein frankly admits that the defendants had access to Compulife’s copyrighted
`HTML. Further, his testimony strongly suggests copying in fact, because he admits that “a life
`insurance quote engine [was] put on to Beyond Quote” after “[c]ommunications between myself
`and Compulife Software.” The defendants make similar admissions in their brief to us. Finally,
`defendant Moses Newman agreed that he modified the HTML on naaip.org “so that it would no
`longer be the same” as Compulife’s copyright-protected HTML. All of which is to say that the
`defendants have conceded access, at the very least, and they don’t meaningfully dispute factual
`copying.
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`(“BellSouth established the ‘substantial similarity’ standard as the default mode of
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`analysis for compilation copyright claims.”).6
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`Substantial similarity “must be assessed with respect to both the quantitative
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`and the qualitative significance of the amount copied to the copyrighted work as a
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`whole.” Peter Letterese, 533 F.3d at 1307. Quantitively insubstantial copying
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`may still be actionable if it is qualitatively substantial. See Harper & Row
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`Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 565 (1985). For instance,
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`because “a small portion of the structure or code of a [computer] program may
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`nonetheless give it distinctive features or may make the program especially
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`creative or desirable,” copying of that portion is actionable. 4 Nimmer on
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`Copyright § 13.03[F][5] (2019).
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`Before comparing two works to determine if they display the required
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`substantial similarity, a court must “eliminate from comparison the unprotectable
`
`
`6 In special circumstances, we have required that two works be more than substantially similar
`before infringement can be found, but this is not such a case. In MiTek, we adopted a “virtual
`identicality” standard for “analyzing claims of compilation copyright infringement of nonliteral
`elements of a computer program.” 89 F.3d at 1558. The virtual-identicality standard originated
`in the Ninth Circuit. See Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1446 (9th Cir.
`1994). Nonliteral elements of a computer program “are the products that are generated by the
`code’s interaction with the computer hardware and operating program(s),” of which “screen
`displays and the main menu” are illustrative examples. MiTek, 89 F.3d at 1555 n.15. “Source
`and object code,” on the other hand, are “literal elements.” Id. Copying of these elements, even
`nonliterally—i.e., without verbatim copying—therefore does not fall into the category analyzed
`for “virtual identicality” as identified in MiTek. “[A]pplication of ‘virtual identicality’ [is]
`limited to a specific factual context” that we have described as “narrow.” BUC, 489 F.3d at 1149
`n.42. Because the copying alleged here concerns source code, the substantial-similarity standard,
`rather than the heightened virtual-identicality standard, applies.
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`Case: 18-12004 Date Filed: 05/20/2020 Page: 19 of 53
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`elements of” the copyrighted work. Bateman, 79 F.3d at 1545. This process—
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`known as “filtration”—is necessary because even substantial similarity between a
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`copyrighted work’s unprotectable elements and a purportedly infringing work isn’t
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`actionable, regardless of how many unprotectable elements are copied or how
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`important they may be. Id. at 1544.
`
`B
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`We conclude that the magistrate judge (sitting as the district court) made
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`several errors in the course of concluding that Compulife had failed to prove
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`actionable—or legal—copying. Unpacking those errors will take some doing, but
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`in short they are as follows. First, the magistrate judge improperly placed the
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`burden on Compulife to prove, as part of the filtration analysis, that the elements
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`the defendants copied were protectable; we hold that he should have required the
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`defendants to prove that those elements were not protectable. Second, the judge
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`seems to have evaluated the substantiality of the defendants’ copying vis-à-vis
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`their allegedly infringing work; we hold that he should have judged the
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`substantiality of the copied material vis-à-vis Compulife’s copyrighted work.
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`Finally, even if the magistrate judge hadn’t based his decision on these legal errors,
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`he failed to state on the record sufficient findings of fact and conclusions of law to
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`Case: 18-12004 Date Filed: 05/20/2020 Page: 20 of 53
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`permit meaningful appellate review. All of these missteps call for the same
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`corrective: vacatur of the judgment with respect to copyright infringement.
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`1
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`First, the misplaced burden. To properly frame this error, a little background
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`is in order. The magistrate judge misallocated the burden of proof applicable to the
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`filtration step of the substantial-similarity analysis. Filtration, again, refers to the
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`process of separating the protectable elements of a copyrighted work from
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`elements that, for one reason or another, aren’t protected.7
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`The notion that unprotected material should be disregarded when comparing
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`two works is at least a century old. See Int’l News Serv. v. Associated Press, 248
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`U.S. 215, 234 (1918). Conceiving of filtration as a distinct step in the infringement
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`analysis, however, came into the law relatively recently, in the Second Circuit’s
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`seminal decision in Computer Assocs. Int’l, Inc. v. Altai, Inc., 982 F.2d 693 (2d
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`Cir. 1992). We have adopted a version of Altai’s test, see Bateman, 79 F.3d at
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`1543–46, which has three steps: (1) abstraction, (2) filtration, and (3) comparison.
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`Altai, 982 F.2d at 706. In order to “ascertain[] substantial similarity under this
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`approach, a court . . . first break[s] down the allegedly infringed program into its
`
`
`7 Filtering “protectable expression from non-protectable expression is . . . a question of law or, at
`the very least, a mixed question of law and fact.” Home Design Servs., Inc. v. Turner Heritage
`Homes Inc., 825 F.3d 1314, 1325 (11th Cir. 2016) (alteration in original) (quoting Intervest
`Constr., Inc. v. Canterbury Estate Homes, Inc., 554 F.3d 914, 920 (11th Cir. 2008)).
`20
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`constituent structural parts”—that’s abst