Property, intangible

Photo by davesandford, CC BY-NC 2.0

In U.S. Auto Parts Network, Inc. v. Parts Geek, LLC out of the Ninth Circuit, the court says that its decision is about a “previously unexplored intersection of the Copyright Act’s work for hire and derivative work provisions.” Perhaps so, although the analysis is fairly routine.

Defendant Lucas Thomason had a pre-existing computer program called “Manager 2000.”  Plaintiff’s predecessor-in-interest, Partsbin, obtained a perpetual license to the software, used for processing internet orders for replacement car parts. Partsbin then hired Thomason, where he continued to improve the software (creating Manager 2001, Manager 2001 v2, Manager 2003 and Manager 2005) and added a new module called “Auto Vend,” a “material breakthrough” that allowed the business to significantly expand its ability to sell parts.

Partsbin was acquired by Plaintiff U.S. Autoparts Network (USAP), including all copyrights. Thomason worked for USAP for awhile where he continued to work on the software, adding Manager July 2008 and Versapart.  Some of his former co-workers from Partsbin started a new company, defendant Parts Geek, and they asked Thomason to write software, which he did while still employed by USAP. Thomason then quit USAP about four weeks later. USAP sued Parts Geek for copyright infringement.

(I’m sorry, I can’t help it.  So often I read cases and think “What were they thinking??!!” Do you have any doubt about how this is going to come out?)

The trial court granted summary judgment in favor of Thomason and Parts Geek on the theory that Thomason had never assigned the copyright in the original program to USAP.  The court of appeals differed, reaching the unremarkable conclusion that:

1. Thomason’s work on the program after he was employed by Partsbin and USAP was in the scope of his employment so that USAP was the copyright owner; and
2. Some of his modifications to the program, most notably the addition of the new “Auto Vend” module, were likely copyrightable derivative works.

This adds up to possible infringement by Parts Geek of the USAP improvements to the work, so summary judgment was reversed.

Lots of blah blah blah about the legal standard for works made for hire and derivative works, if you need some cut and paste for a brief.

U.S. Auto Parts Network, Inc. v. Parts Geek, LLC, Nos. 10-56194, 10-56129 (9th Cir. Aug. 21, 2012).

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