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Can a software company obtain a preliminary injunction in an alleged software infringement case?

Posted by Steve Vondran | Feb 25, 2016 | 0 Comments

Software infringement caselaw

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Introduction

One question that pops up when we represent companies facing software audits is “can the software publisher shut our company down if they believe we are software pirates?”  The short answer is yes, it is possible your company could be subject to the highly publicized “software raids” and possible lawsuit seeking an “injunction.”  An injunction is basically an order from the Court demanding that a party do or refrain from doing something.  According to federal case law in the 9th circuit (which governs Arizona, California, Oregon, Washington, Montana, Idaho, and Nevada:

“The Copyright Act provides that courts ‘may' grant injunctive relief ‘on such terms as [they] may deem reasonable to prevent or restrain infringement of a copyright. 547 U.S. at 392, 126 S.Ct. 1837 (quoting 17 U.S.C. § 502(a)). Nothing in the statute indicates congressional intent to authorize a “major departure” from “the traditional four-factor framework that governs the award of injunctive relief,” or to undermine the equitable principle that such relief is an “extraordinary and drastic remedy” that “is never awarded as of right,” Munaf v. Geren, 553 U.S. 674, 689–90, 128 S.Ct. 2207, 171 L.Ed.2d 1 (2008) (internal quotation marks omitted). We therefore conclude that the propriety of injunctive relief in cases arising under the Copyright Act must be evaluated on a case-by-case basis in accord with traditional equitable principles and without the aid of presumptions or a “thumb on the scale” in favor of issuing such relief. Monsanto, 130 S.Ct. at 2757.  See Perfect 10, Inc. v. Google, Inc., 653 F.3d 976, 980-81 (9th Cir. 2011)”

What are the grounds to obtain a preliminary injunction for alleged copyright infringement?

To obtain an injunction, according to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff bears the burden of proof to show: (1) that it has suffered an irreparable injury;   (2) that remedies available at law, such as 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 disserved by a permanent injunction Another factor that may need to be show is “likelihood of success on the merits.”  As one important case noted:

“We begin by considering whether the district court erred in denying Perfect 10's request for preliminary injunctive relief. “A plaintiff seeking a preliminary injunction must establish [ (1) ] that he is likely to succeed on the merits, [ (2) ] that he is likely to suffer irreparable harm in the absence of preliminary relief, [ (3) ] that the balance of equities tips in his favor, and [ (4) ] that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 129 S.Ct. 365, 374, 172 L.Ed.2d 249 (2008).  Perfect 10, Inc. v. Google, Inc., 653 F.3d 976, 978-79 (9th Cir. 2011).  See, e.g.,Weinberger v. Romero—Barcelo, 456 U.S. 305, 311–313, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982).

The decision to grant or deny permanent injunctive relief is an act of equitable discretion by the district court, reviewable on appeal for abuse of discretion. See, e.g., Romero–Barcelo, 456 U.S., at 320, 102 S.Ct. 1798.  See eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S. Ct. 1837, 1839, 164 L. Ed. 2d 641 (2006):

Injunctions in software infringement cases

Other cases have shed light on the seeking of the issuance of court ordered injunctions in software cases and courts have noted:

“ When a licensee exceeds the scope of the license granted by the copyright holder, the licensee is liable for infringement. See Sun Microsystems, Inc., 188 F.3d at 1121 (“If … a license is limited in scope and the licensee acts outside the scope, the licensor can bring an action for copyright infringement.”); see also 3 Nimmer & Nimmer, supra, § 10.15[A] (“when a license is limited in scope, exploitation of the copyrighted work outside the specified limits constitutes infringement”). In S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1083–84 (9th Cir.1989), for example, a software designer that had granted a payroll company a license to use its copyrighted software alleged that the licensee had infringed its copyright by preparing and duplicating a modified version of the program. We observed that a “license must be construed in accordance with the purposes underlying federal copyright law. Chief among these purposes is the protection of the author's rights.” We concluded that the payroll company, which possessed the right to use the software but had not acquired any ownership rights, had exceeded the scope of its license by modifying and copying the program. The case was remanded for the district court to consider whether the payroll company had any valid defenses to the infringement action. Id. at 1089 & n. 11. Similarly, in Frank Music Corp. v. Metro–Goldwyn–Mayer, Inc., 772 F.2d 505, 511 (9th Cir.1985), a hotel obtained a license to present public performances of copyrighted music. The license specifically excluded “songs [accompanied by] visual representation of the work from which the music is taken.” We concluded that the hotel exceeded the scope of its license—and thereby committed copyright infringement—when it held a performance that included both music and representations of movie scenes because the licensing agreement expressly prohibited such activity. Id. at 512. See LGS Architects, Inc. v. Concordia Homes of Nevada, 434 F.3d 1150, 1155-56 (9th Cir. 2006).

Contact a software & copyright infringement law firm

We can help clients that are facing copyright issues and infringement cases representing both Plaintiffs and Defendants, and we have a strong niche practice area and can assist with software audits from the business software alliance, software information industry association, Microsoft, Autodesk and other software publishers.  We offer predictable flat rate fees and tenacious legal representation.  Call us at (877) 276-5084 for a no-cost initial consultation. For more detailed information, visit our software law resource center.

About the Author

Steve Vondran

Welcome to the SHORT BIO page for Attorney Steve®  (Yes, I was able to get a trademark for Attorney Steve®) Click here to go to a more COMPLETE BIO. AZ Bar Lic. #025911 CA. Bar Lic. #232337 Introduction I have done a lot of things in my 15 years of law practice and in my life in general.  ...

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