In a copyright case with evidence of actual copying, the U.S. District Court for the Northern District of Georgia nevertheless dismissed copyright infringement claims on summary judgment, holding that allegedly copied features of software code were not protected under the Copyright Act. It also dismissed related misappropriation of trade secret claims, leaving breach of contract as the only potential recourse at trial for the allegedly copied code.
Facts
The plaintiff, Card Isle Corporation, is a technology company providing online retailers with coding systems to sell personalized greeting cards. Defendant Edible Arrangements is a franchising business specializing in delivery of bouquets made of fresh fruit cut to resemble flowers. In 2019, Card Isle began exploring a potential business relationship with Edible Arrangements and its founder Tariq Farid. Ultimately, Edible Arrangements hired Card Isle to integrate its code into Edible Arrangements' e‑commerce platform and help roll out its greeting card product to Edible Arrangements' franchisees.
Pursuant to the parties' contractual arrangement, Card Isle agreed to create the capability to sell and print customizable paper inserts for Edible Arrangements' vases. Card Isle also agreed to waive its "web Integration development fees," in exchange for a mandated rollout of Card Isle printers for the paper inserts to Edible Agreements' franchisees by a certain date. Shortly after agreeing to the rollout, however, Edible Arrangements halted its nationwide launch of the Card Isle program and failed to meet the rollout milestone.
Edible Arrangements then enlisted two other companies owned by Farid, Netsolace, Inc. and Broadpeak Technologies, to build an in-house greeting card solution instead, which became known as "Printible." Broadpeak created three versions of software code to integrate Printible with Edible Arrangements' website. The first two iterations were verbatim or near-verbatim copies of Card Isle's code, which Card Isle had provided to the defendants. However, those iterations were never implemented on Edible Arrangements' website for customers to use. Only the third iteration—which Edible Arrangements claims Broadpeak wrote from scratch—was ultimately used in Printible when it launched in October 2020. On the same date that Printible was unveiled publicly on Edible Arrangements' website, Card Isle registered the copyright in its code.
After discovering the existence of Printible, in November 2020, Card Isle sued Edible Arrangements, Farid, and Netsolace for copyright infringement, seeking statutory damages and attorneys' fees. Card Isle also brought claims for misappropriation of trade secrets based on the use of its code and for breach of contract based on the defendants' alleged reverse engineering of its code and failure to deliver on milestones pursuant to the agreements. Following discovery, Card Isle moved for summary judgment on all claims, and the defendants filed a motion for partial summary judgment. The defendants raised three defenses to Card Isle's copyright infringement claims.
No Statutory Damages and Attorneys' Fees
First, the defendants argued that Card Isle could not recover statutory damages and attorneys' fees under the Copyright Act because Printible was developed and released before Card Isle registered its copyright in its code. The Copyright Act precludes an award of statutory damages and attorneys' fees when the infringement "commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work." 17 U.S.C. § 412(2). Here, the effective date of Card Isle's copyright registration was the same as Printible's launch date. Since Printible must have been developed before it was launched, the court reasoned that any infringement would have begun before Card Isle's copyright registration date, and Card Isle was thus not entitled to statutory damages or attorneys' fees.
Card Isle argued that the defendants created new versions of Printible after the launch date and these new versions qualified for statutory damages as independent acts of infringement. The court resoundingly rejected this argument, finding that Section 412's reference to "commencement" of infringement already presupposes an "activity that begins at one time and continues or reoccurs thereafter" and that every circuit court considering the issue "has held that the first act of infringement in a series of ongoing infringements of the same kind marks the commencement of one continuing infringement." As Card Isle had not shown that these new versions were "different in kind from the original act of infringement" or contained new material that itself infringed Card Isle's copyright, the court held that it could not award statutory damages or attorneys' fees.
No Lost Profits for First Two Code Iterations
Second, the defendants argued that Card Isle could not recover lost profits based on the first two iterations of Printible's code because no consumer purchased any products using those iterations. Again the court agreed, determining that neither party produced evidence of a single sale from the first two iterations, and therefore Card Isle could not prove any profits attributable to those initial versions. However, the court clarified that the mere fact that no sales occurred with the first two iterations did not prevent Card Isle from recovering lost profits associated with the third iteration, because Printible's development history, including the earlier iterations, could be relevant to demonstrating that the third iteration infringed the copyrighted code.
No Copyright Infringement for Third Code Iteration
Third, the defendants disputed copyright infringement liability on the merits with respect to the third iteration of the Printible code. Because the parties did not dispute that Card Isle owned a valid copyright, the court focused on the second prong of a copyright infringement claim, namely, whether the defendant copied elements of the plaintiff's work that are original. This element has two subparts: factual copying and legal copying.
The court explained that factual copying occurs when the defendant actually uses the plaintiff's material, which can be shown through direct evidence of copying or indirect evidence demonstrating that the defendant had access to the copyrighted work and that there are probative similarities between the parties' works. Legal copying occurs when "those elements of the copyrighted work that have been copied are protected expression and of such importance to the copied work that the appropriation is actionable." The existence of actionable copying is demonstrated by "substantial similarity" between the parties' works.
In determining substantial similarity, the court noted that it had to consider "both the quantitative and the qualitative significance of the amount copied to the copyrighted work as a whole." The court explained that the Eleventh Circuit uses a three-step test for differentiating between actionable and de minimis forms of copying: (1) abstraction (i.e., breaking down the allegedly infringed work into its structural parts), (2) filtration (sifting out all non-protectable material), and (3) comparison (comparing any remaining protectable material with the allegedly infringing work to determine if there is substantial similarity).
1. Factual copying
The defendants argued that the third iteration of Printible's code was not actually copied from Card Isle's code because there was no probative similarity between them. The court noted that in the Eleventh Circuit, "[p]robative similarity requires that an average lay observer would recognize the alleged copy as having been appropriated from the copyrighted work." Although Card Isle's expert had admitted that a side-by-side comparison of the codes would not show obvious similarities, the court found that some examples of similarities in the expert's report might pass the lay observer test. Specifically, the court found that a juror could easily observe that the parties' software shared some of the same CSS style code (which sets the visual aspects of a webpage) because the values for several properties such as "position," "width," "left," "transition," "-webkit-overflowscrolling," and "background-color" were identical.
The court also looked to Fifth Circuit precedent, which defines "probative similarity" not in terms of the average lay observer's point of view, but in terms of whether a jury could find "any similarities between the two works (whether substantial or not)" that "would not be expected to arise independently in the two works." Under the Fifth Circuit test, the court likewise found that Card Isle's expert report was "replete with analysis" supporting a finding that the third iteration could not have been developed without access to (or at least detailed knowledge of) Card Isle's code.
Finally, although access and probative similarity result in merely a presumption of factual copying that can be rebutted by evidence that the defendant independently created the accused work, the court found that a dispute of fact existed on independent creation. The defendants argued that they had independently created the third iteration because a new developer had worked on that iteration but not the first two; however, the court pointed to contrary evidence indicating that the new developer also had access to Card Isle's code. Accordingly, the defendants could not prevail on summary judgment based on lack of factual copying.
2. Legal Copying
To assess legal copying, the court had to examine whether (1) the copied elements were sufficiently original (and thus protectable under the Copyright Act) and (2) copying was so extensive that the codes were substantially similar. The court considered six specific features of the code described by Card Isle's expert:
(1) Changing button styles based on the type of device used (i.e., mobile device versus computer): The court held that Card Isle could not protect its idea of changing button styles based on whether a webpage is viewed on a mobile device or a computer because mere ideas, as opposed to expressions of an idea, are not protected under the Copyright Act. Moreover, the defendants' expert had testified that it is standard practice to change the look and feel of a website based on the type of device used, and Card Isle had offered no contrary evidence.
(2) Detecting whether a visitor is using the Safari browser on an iOS device: The defendants argued that Card Isle's expression of this technique was not unique and that near-identical lines of code could be found in the public domain online. Observing that two public online posts cited in Card Isle's own expert report included both Printible's and Card Isle's formulation of the Safari-check feature, the court held that it had "no choice but to find this element" unprotectable because Card Isle had again offered no contrary evidence.
(3) Setting margins and text alignment based on the particular webpage (i.e., product versus cart) and type of device used: The court relied on the scènes à faire doctrine to hold that Card Isle's code components for setting webpage styles like margins and text alignment were not protectable. The scènes à faire doctrine precludes copyright protection where external factors constrain the available choices for expression of an idea. The court explained that in the computer software context, scènes à faire applies to elements of computer programs that are dictated by practical realities such as software standards and compatibility requirements. Even Card Isle's expert acknowledged that formatting choices depend on practical realities such as the type of webpage being rendered and the type of device being used to access it.
(4) Synchronizing checkboxes based on type of device used (i.e., computer versus mobile device): The defendants argued, based on their expert's rebuttal report, that synchronizing checkboxes was an unprotectable idea because it constituted a common, unoriginal practice of implementing different behaviors when a page is accessed from a mobile device. Even Card Isle disclaimed any copyright protection in the idea of synchronizing checkboxes, and instead focused on factual similarities between the codes. However, factual similarities alone were not sufficient to prove actionable copying under the abstraction-filtration-comparison test. Because both parties conceded the point, the court concluded that the synchronizing checkboxes feature was not protectable under copyright law.
(5) Setting visual properties of a webpage such as size and color: The court determined that Card Isle's CSS code, which set visual properties of webpages, was unprotected scènes à faire. Specifically, the size and color of elements on Edible Arrangements' existing website constituted external factors dictating the choice of CSS properties. The court also held that the CSS properties were unprotected under the merger doctrine, which precludes copyright protection where there are so few ways of expressing an idea that the expression of the idea is considered to have "merged" into the idea. Because the CSS properties that were the same in both parties' codes were either extremely common or limited to a handful of possible values, the merger doctrine precluded copyright protection.
(6) Using an iframe to integrate greeting card function into checkout process: The court found that Card Isle failed to address and thus conceded the defendants' argument that Card Isle's use of an "iframe" (a computer software tool that embeds content from one website into another) was an unprotectable idea under the Copyright Act.
In sum, the court concluded that none of the six features of Card Isle's code identified by Card Isle's expert qualified for copyright protection and thus granted the defendants' motion for summary judgment on non-infringement.
Other Claims
In addition to copyright infringement, Card Isle brought claims of misappropriation of trade secrets and breach of contract. The court granted summary judgment for the defendants on Card Isle's trade secret claim, finding that Card Isle's purported trade secrets were either readily ascertainable by proper means or too vaguely defined to qualify for protection. However, the court denied the defendants' summary judgment motion on Card Isle's breach of contract claim. Card Isle alleged that the defendants had violated contractual provisions prohibiting reverse engineering of its software and had breached their commitment to outfit Edible Arrangements franchisees with Card Isle printers by a specific date. The court found disputes of material fact on these issues that precluded summary judgment, and these contract claims are now all that remain for trial.
The case is Card Isle Corp. v. Farid et al., No. 1:21-CV-1971-TWT, 2023 WL 5618246 (N.D. Ga. Aug. 30, 2023).
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