Geophysical Service Incorporated v. TGS-Nopec Geophysical Company, 4:14-cv-01368

Background

Geophysical Services Inc., a Canadian seismic-data company, submitted seismic survey data to a Canadian regulatory board in 1983 as required by Canadian offshore petroleum regulations; the Board kept the data confidential for a defined period and then released copies on request.
In 1999 TGS-NOPEC (Houston) requested and received copies from the Board after the confidentiality period expired, used and licensed its own seismic surveys of overlapping areas, and distributed seismic information to customers.
Geophysical sued TGS in 2014 for copyright infringement (direct importation/distribution and contributory infringement, and for removal of copyright-management information). The district court initially dismissed some claims; the Fifth Circuit affirmed dismissal of contributory infringement (extraterritoriality) but reversed as to unauthorized-importation component of direct infringement and remanded for choice-of-law determination under 17 U.S.C. §109.
On remand the district court addressed whether copies made abroad and later imported were “lawfully made under this title” for purposes of the first-sale doctrine and whether dismissal was warranted on alternative grounds (fair use, implied license).
The court concluded the proper legal standard is whether the foreign-made copy was made in a manner that would have complied with Title 17 if Title 17 applied (i.e., a counterfactual Title 17-compliance inquiry), denied TGS’s renewed motion to dismiss, and ordered further proceedings and discovery.

Issues

Issue	Geophysical's Argument	TGS's Argument	Held
Whether “lawfully made under this title” is governed by U.S. copyright law or by foreign law	Phrase means made “under the Copyright Act”; court should ask whether foreign-made copies comply with Title 17 (apply U.S. standard)	Foreign copies are lawful if made under foreign law similar to or consistent with U.S. law (no extraterritorial application of Title 17)	Court holds the standard is whether the foreign copy was made in a manner that would comply with Title 17 if Title 17 applied (counterfactual U.S. compliance inquiry)
Whether the copies made by the Canadian Board were “lawfully made” under §109	Copies made pursuant to Canadian regulatory regime do not automatically satisfy §109; must be tested against Title 17 compliance	Board’s copying at TGS’s request would have been authorized under U.S. law and thus §109 applies	Court finds existing record insufficient to hold copies lawful as a matter of law; denies dismissal on this ground
Whether fair use bars liability and supports dismissal	Geophysical: factual record insufficient; fair-use defense premature	TGS: its use was for exploration/public benefit and may qualify as fair use	Court: fair-use analysis is fact-intensive; insufficient record; denial of dismissal; discovery required
Whether Geophysical granted the Canadian Board an implied license to copy/distribute (defeating infringement)	Geophysical: did not authorize copying/distribution; no intent to license Board beyond regulatory submission	TGS: by submitting data under Canadian regime with known post-confidentiality disclosure, Geophysical impliedly licensed the Board to copy and distribute	Court: implied-license determination is fact-specific (intent); record inadequate to resolve; denial of dismissal

Key Cases Cited

Kirtsaeng v. John Wiley & Sons, Inc., 568 U.S. 519 (interpreting “lawfully made under this title” as meaning made in compliance with or in accordance with the Copyright Act)
Quality King Distributors, Inc. v. L’anza Research Int’l, Inc., 523 U.S. 135 (first-sale doctrine can limit §602 importation prohibition in certain circumstances)
Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (historical origins of the first-sale doctrine)
Geophysical Servs., Inc. v. TGS-NOPEC Geophysical Co., 850 F.3d 785 (5th Cir. decision reversing dismissal as to unauthorized-importation claim and remanding choice-of-law question)