836 F.3d 1059
9th Cir.2016Background
- EA (owner of The Sims and the PlumbBob icon) contracted Lithomania to produce PlumbBob-shaped USB drives as promotional items; Lithomania engaged Direct Technologies (DT) to create a prototype.
- Lithomania secretly sent DT’s prototype to TREK2000 in China, which made a nearly identical drive cheaper; Lithomania then misled DT and procured DT’s signature on vendor/IP assignments.
- DT settled with Lithomania, then sued EA asserting (1) copyright co-authorship/derivative copyright in its 3‑D design and (2) trade-secret misappropriation under California CUTSA.
- District court granted summary judgment to EA on both claims (holding DT’s contributions were trivial/functional and that DT failed to take reasonable secrecy measures) but denied EA attorneys’ fees.
- On appeal, the Ninth Circuit reversed summary judgment on the copyright claim (finding genuine issues of fact on functionality, originality, joint authorship, and fraudulent inducement of assignments) and affirmed summary judgment on the CUTSA claim (on the alternate ground that DT’s design lacked independent economic value from secrecy).
Issues
| Issue | Plaintiff's Argument (DT) | Defendant's Argument (EA) | Held |
|---|---|---|---|
| Copyrightability of DT’s 3‑D contribution (derivative work) | DT contributed original, nontrivial artistic elements (12‑sided shape and a "futuristic cut‑away" removal design) deserving protection | DT’s features are functional or trivial differences from EA’s 2‑D PlumbBob and thus uncopyrightable | Reversed: factual dispute exists whether the cut‑away removal design is nonfunctional and sufficiently original; jury question |
| Joint authorship of the USB drive | DT exercised creative control over the removal/design and thus qualifies as joint author | EA had ultimate control/approval over design and procured IP assignments | Reversed: genuine issue of fact on control and authorship; jury to decide |
| Validity/effect of vendor/assignment contracts | Contracts were procured by fraud (fraudulent inducement) and thus may be unenforceable | Even if induced, agreements assign DT’s rights and bar DT’s claim | Court rejects EA’s argument based on prior law‑of‑the‑case; contracts may be invalid if fraud proven; not summary judgment basis |
| CUTSA trade secret claim (secrecy and value) | DT relied on implied confidential business relationship with Lithomania; reasonable efforts could be found | DT failed to take affirmative steps to protect prototypes; no secrecy or value to the design outside one project | Affirmed: DT’s design did not derive independent economic value from being secret (no evidence of actual/potential value from secrecy); summary judgment proper. |
| Attorneys’ fees under CUTSA | N/A (DT opposing) | EA sought fees for bad‑faith/specious suit | Affirmed denial: district court did not clearly err—DT’s claim was not objectively specious nor brought in bad faith |
Key Cases Cited
- Entm’t Research Grp., Inc. v. Genesis Creative Grp., 122 F.3d 1211 (9th Cir. 1997) (functionality/ separability analysis for 3‑D transformations of 2‑D works)
- Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905 (2d Cir. 1980) (two Durham factors for originality of derivative works)
- Satava v. Lowry, 323 F.3d 805 (9th Cir. 2003) (low but non‑negligible originality standard)
- N. Coast Indus. v. Jason Maxwell, Inc., 972 F.2d 1031 (9th Cir. 1992) (triviality for derivative differences is a jury question)
- Aalmuhammed v. Lee, 202 F.3d 1227 (9th Cir. 2000) (joint authorship factors, focus on control)
- DC Comics v. Towle, 802 F.3d 1012 (9th Cir. 2015) (character copyright protects distinctive traits across embodiments)
- Lamps Plus, Inc. v. Seattle Lighting Fixture Co., 345 F.3d 1140 (9th Cir. 2003) (functional additions excluded from copyright)
- Poe v. Missing Persons, 745 F.2d 1238 (9th Cir. 1984) (functionality is a question of fact)
- Pachmayr Gun Works, Inc. v. Olin Mathieson Chem. Corp., 502 F.2d 802 (9th Cir. 1974) (implied confidential relationship can support secrecy expectation)
- Hell’s Angels Motorcycle Corp. v. McKinley, 360 F.3d 930 (9th Cir. 2004) (appellate court may affirm on any ground in the record)