General Motors (GM) recently defeated a motion to dismiss in its
case against Autel.US, Gary DeLuca, and others over the
company's alleged infringement of GM trademarks, copyrights,
and circumvention of security measures, among other claims. Autel
produces vehicle diagnostic and repair tools that compete with
similar GM products. GM alleged Autel (and its Chinese parent) used
log-in credentials for online accounts at GM/ACDelco websites to
access, copy and disseminate copyrighted vehicle access software
intended for GM diagnostic and repair tools. Customers in
possession of this information could recalibrate vehicle controls
on GM vehicles without having to pay GM for its use. Additionally,
GM made claims of personal liability against Mr. DeLuca,
Autel's Vice President, for misappropriation of its
intellectual property by unlawfully accessing ACDelco information.
Defendants moved to dismiss claims of personal liability against
DeLuca, arguing for immunity based on his official capacity as a
corporate officer and that GM did not sufficiently plead DeLuca
took personal actions.
The Eastern District of Michigan federal District Court denied
procedural motions to dismiss GM's claims. GM adequately
established personal jurisdiction and properly pled its claims
against each defendant, including claims related to the Digital
Millenium Copyright Act (DMCA), the Computer Fraud and Abuse Act
(CFAA), various Michigan state law claims, and damages. While these
procedural motions are generally lower legal bars for plaintiffs to
hurdle, the court's ruling means the case will likely continue
to the summary judgment phase, unless the parties settle out of
court. The court did not entertain Autel's arguments that it
was legally entitled to circumvent technological protection
measures to achieve software interoperability as a basis for
dismissal because GM's only claim was that Autel circumvented
to make illegal copies of GM programs. While the court acknowledged
corporate officers are not per se liable by virtue of holding a
position in a company, personal liability is possible where
officers personally take part in infringing activities (or
specifically direct employees to do so) and have a "culpable
intent" to infringe. GM based its claims on more than
DeLuca's role as VP by making specific allegations about his
conduct, and therefore the allegations of personal liability were
allowed to proceed. The court appeared sympathetic to GM in other
aspects of its order, but did not rule on the merits.
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