L.A. Sheriff's Office Infringed Software Copyrights, 9th Cir. Says

The Los Angeles County Sheriff's Department committed copyright infringement by installing software on more computers than it had licenses for even though it configured the network to allow simultaneous access to only the number of copies it had paid for, the 9th Circuit has ruled.

The three-judge appellate panel upheld a $210,000 jury verdict for plaintiff Wall Data Inc., which had sued the Sheriff's Department for copyright infringement in the U.S. District Court for the Central District of California.

Facts

Wall Data produces software programs called RUMBA Office and RUMBA Mainframe that allow computers using one operating system to access data stored on computers that use a different operating system.

Wall Data's complaint alleged the Sheriff's Department paid for a total of 3,663 licenses for the two programs, but installed the software on 6,007 individual computers.

The majority of the installation was performed using a method called "hard drive imaging," in which a single copy of a program is installed on a "master" hard drive, from which it can be quickly duplicated onto individual computers.

Fair Use and Essential Step Defenses

The Sheriff's Department argued that its actions fell within the Copyright Act's "fair use" defense. The department said it configured its computer network so no more than 3,663 copies of Wall Data's software - the number for which it had licenses - could be accessed simultaneously.

It also asserted the "essential step" defense, which says the copying of software that would otherwise be infringement is permitted if the duplication is done by the owner of the copy and is an "essential step" in the utilization of the program.

The District Court granted summary judgment to Wall Data on the fair-use defense, and the case went to trial.

The jury found the Sheriff's Department infringed Wall Data's copyrights, concluding the defendant could not assert the essential-step defense and awarding $210,000 in damages. The court tacked on more than $516,000 in attorney fees and $38,000 in costs.

The Sheriff's Department appealed to the U.S. Court of Appeals for the 9th Circuit, which affirmed.

The 9th Circuit said the trial court correctly rejected the department's assertion of the fair-use defense. The copying was done to save the time and expense of installing individual copies of the Wall Data software on thousands of machines, the panel said.

The judges pointed out that the department could have paid Wall Data more money for additional licenses or more flexible license terms, but did not.

The panel also upheld the jury's rejection of the essential-step defense, noting that the defense is available only to "the owner of a copy of the computer program." Here, the panel said, the Sheriff's Department was only a licensee, and not the owner, of the challenged copies.

The panel also reiterated that the copying was done for convenience and was not necessary for the department to use the software.

The Sheriff's Department's technical staff installed the first 75 copies individually and switched to the "hard drive imaging" method only when one-by-one installation proved too time-consuming, the panel said.

Further, the department could have used the faster method to install the software only onto the number of computers for which it had licenses, the panel said.

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Wall Data Inc. v. Los Angeles County Sheriff's Department et al., No. 03-56559, 2006 WL 1329955 (9th Cir. May 17, 2006).

Courtesy of Donna Higgins of Andrews Publications.