847 F.3d 1169
9th Cir.2017Background
- Design Data owns SDS/2, a copyrighted CAD program that generates 2D/3D drawings and job files used to fabricate steel components.
- Unigate Enterprise (UE) outsources steel detailing to Chinese contractors and sold CAD images/files to U.S. clients; some contractor output was created with an unauthorized copy of SDS/2.
- UE admits downloading a complete copy of SDS/2 and three patch files to an external hard drive but claims it never installed or used the program and believed it was a free demo.
- Design Data found SDS/2 installation/patch files on UE machines and SDS/2-generated images and job files, and sued for copyright infringement based on (1) UE’s unauthorized download and (2) UE’s importation/distribution of SDS/2-generated output created abroad.
- The district court granted summary judgment to UE: treated the download as de minimis, held U.S. copyright did not reach foreign-made program output imported into the U.S., and denied Design Data leave to amend; Design Data appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was UE’s download of SDS/2 actionable infringement or de minimis? | The complete download plus patch files and presence of SDS/2 output on UE machines show more than an insignificant violation. | UE downloaded only a free demo, made no use, and was unaware the copy was unauthorized. | Reversed: factual dispute exists; download may be more than de minimis—summary judgment improper. |
| Does Design Data’s copyright in SDS/2 extend to the program’s output (images and job files) created abroad? | The program control could mean the output reflects protectable expression of SDS/2. | The output results largely from user input, not the program’s protected expression. | Affirmed: on these facts, no triable issue that the program’s copyright protects the output; summary judgment for UE stands. |
| May Design Data amend its complaint after discovery cutoff to add claims/evidence? | Sought leave to file a second amended complaint late in the schedule. | Opposed as untimely and prejudicial. | Affirmed: district court did not abuse discretion in denying leave. |
| Attorney’s fees appeal (separate) — should it be resolved now? | (Design Data/UE positions not dispositive here.) | (Left for district court post-remand.) | Left for district court to consider upon remand. |
Key Cases Cited
- Newton v. Diamond, 388 F.3d 1189 (9th Cir.) (de minimis standard for unauthorized use)
- Ringgold v. Black Entm’t Television, Inc., 126 F.3d 70 (2d Cir.) (small uses can still be actionable)
- BMG Music v. Perez, 952 F.2d 318 (9th Cir.) (rejecting narrow de minimis threshold short of wholesale copying)
- Baxter v. MCA, Inc., 812 F.2d 421 (9th Cir.) (elements for proving copyright infringement)
- Torah Soft Ltd. v. Drosnin, 136 F. Supp. 2d 276 (S.D.N.Y.) (discussing when program output may be protected if program does the lion’s share of the work)