PREMIER DEALER SERVICES, INC., Plaintiff-Appellee, v. ALLEGIANCE ADMINISTRATORS, LLC, Defendant-Appellant.
No. 23-3394
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
February 26, 2024
RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 24a0039p.06
Argued: February 1, 2024
Decided and Filed: February 26, 2024
Before: SUTTON, Chief Judge; CLAY and BLOOMEKATZ, Circuit Judges.
COUNSEL
ARGUED: Andrew E. Samuels, BAKER & HOSTETLER LLP, Columbus, Ohio, for Appellant. Scott R. Thomas, HEMMER WESSELS MCMURTRY PLLC, Ft. Mitchell, Kentucky, for Appellee. ON BRIEF: Andrew E. Samuels, BAKER & HOSTETLER LLP, Columbus, Ohio, for Appellant. Scott R. Thomas, HEMMER WESSELS MCMURTRY PLLC, Ft. Mitchell, Kentucky, Gregory J. Krabacher, EPSTEIN BECKER GREEN, Columbus, Ohio, for Appellee.
OPINION
SUTTON, Chief Judge. Premier Dealer Services competes with Allegiance Administrators to manage car dealers’ loyalty programs, an arrangement used to service cars after the dealer sells them. The terms and conditions of the programs appear on loyalty certificates that dealers use to enroll buyers. When Allegiance obtained the account of a former Premier client, it inсorporated Premier’s Lifetime Powertrain Loyalty Program certificates into its own plan. Premier sued Allegiance for using its copyrighted certificates. The district court held that Allegiance infringed Premier’s copyright, ordered Allegiance to disgorge any profits from using the certificates, and awarded Premier attorney’s fees. We affirm.
I.
A car dealer’s business usually does not end when a customer leaves the lot. Buyers need to service their vehicles over time, and dealers like to capture this cradle-to-grave business. “Loyalty programs” satisfy both goals by providing the buyer a place to service the car and by giving the seller the business. Unlike the warranties provided by manufacturers and the service contracts that car owners must purchase out of pocket, car dealers оffer loyalty programs for free to capture this repeat business. A loyalty program contains two components. In one direction, car buyers must continue to pay dealers for oil changes, tire rotations, and other routine maintenance at intervals spelled out in the plan. In the other direction, if a covered part turns defective, the plan requires the dealer to cover the cost to repair or replace it.
As part of the program, Premier designed a loyalty certificate for dealers to provide to car owners. The two-page certificate collects the owner’s personal informаtion and sets out the Program’s terms and conditions. Premier created this certificate in 2008 and registered it for copyright protection in 2012. That same year, it also registered a second certificate, largely the same as the first. A copy of that certificate appears as Appendix A to this opinion.
In 2008, Premier sold access to the program to Tricor Automotive Group, a Canadian corporation that develops dealership programs on behalf of approximately 250 dealer-owners. Tricor marketed the program to its members under its own brand and trained them on its operation. Premier received $40 (in Canadian dollars) every time a dealer provided a certificate to a car buyer in exchange for administering the program. As part of the agrеement, Premier modified its copyrighted loyalty certificate for Tricor’s Canadian market. It made cosmetic changes such as replacing miles with kilometers and states with provinces, but it otherwise left the terms the same. Tricor’s contract with Premier acknowledged that the form belonged to Premier and could not be disclosed or sold to anyone.
In 2018, after a decade of working with Premier, Tricor hired Allegiance to administer its aftermarket programs, including the Lifetime Powertrain Loyalty Program. Allegiance checked whether its new client needed a loyalty certificate. Tricor replied that it would continue to use its existing Lifetime Powertrain Loyalty Program certificates and provided Allegiance with a copy. Allegiance noticed that the certificate listed a website and American P.O. box and asked whether it belonged to another company. Tricor’s representative explained that Premier previously administered the program and that Allegiance should insert its own information. Allegiance substituted its contact information and kept the remainder of the certificate the same. The first page of that certificate appears as Appendix B to this opinion. Allegiance, like Premier, received $40 Canadian every time a dealer issued a certificate.
Premier sued Allegiance for infringing the copyrighted certificate. The district court granted summary judgment to Premier, reasoning that the certificate’s “dull” subject matter did not preclude it from being original or from otherwise obtaining copyright protection. R.128 at 19–22. After a bench trial on damages, the court awarded Premier $441,239 of Allegiance’s profits and enjoined Allegiance from infringing the copyright. The court awarded Premier $577,736 in attorney’s fees.
II.
Copyright protection. The Constitution allows Congress to grant authors exclusive copyrights over their works.
Originality has a low threshold, requiring only that the author “independently created” a work with “some minimal degree of creativity.” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 345 (1991). Authors fulfill originality’s requirement of minimal creativity by making “non-obvious choices” from “among more than a few options.” ATC Distrib. Grp., Inc. v. Whatever It Takes Transmission & Parts, Inc., 402 F.3d 700, 707 (6th Cir. 2005) (quoting Matthew Bender & Co. v. W. Publ’g Co., 158 F.3d 674, 682 (2d Cir. 1998)). The author’s choices must evince some “inventiveness and imagination,” Hiller, LLC v. Success Grp. Int’l Learning All., LLC, 976 F.3d 620, 627 (6th Cir. 2020), but not necessarily artistic merit, see Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251–52 (1903). Alongside choices about style and setting, this creative spark may arise from decisions about what materials to include and how to organize them. See ATC Dist., 402 F.3d at 711–12 & 711 n.7; Ross, Brovins & Oehmke, P.C. v. Lexis Nexis Grp., 463 F.3d 478, 484 n.3 (6th Cir. 2006); see also Experian Info. Sols., Inc. v. Nationwide Mktg. Servs. Inc., 893 F.3d 1176, 1184–85 (9th Cir. 2018) (selecting, arranging, or coordinating facts may be creative).
Most works will satisfy this low standard of creativity, no matter how humdrum the subject matter. Feist, 499 U.S. at 345. Consider a few recent examples. A testing company evinced sufficient creativity in its workforce-development technical manuals by choosing to divide such skills as “Reading for Information” into subskills and arranging them by skill level. ACT, Inc v. Worldwide Interactive Network, Inc., 46 F.4th 489, 500–02 (6th Cir. 2022). A guide for training HVAC technicians satisfied this requirement because its author made such creative choices as delineating four steps to prepare for service calls and including fill-in-the-blank problems. Hiller, 976 F.3d at 626–27. Physician credentialing forms proved sufficiently creative by eliminating some of the questions that competitors asked and rearranging others in a unique way. S. Credentialing Support Servs., L.L.C. v. Hammond Surgical Hosp., L.L.C., 946 F.3d 780, 783–84 (5th Cir. 2020).
This modest threshold comes with at least three qualifications. One is that copyright protection does not extend to facts that already exist in the world, even if no one has discovered or published them. Feist, 499 U.S. at 347; see
A second qualification, known as merger, arises when there is only a single way to express a given set of facts. Kohus v. Mariol, 328 F.3d 848, 856 (6th Cir. 2003); see generally 4 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.03[B][3] (2024). If copyright protection extended to those expressions, the first author to create a work would prevent others from expressing the underlying idea. See Murray Hill Publ’ns, Inc. v. Twentieth Century Fox Film Corp., 361 F.3d 312, 318 n.2 (6th Cir. 2004). Consider the example of a company deciding where to list a new part in its catalog. The only way for it to express the idea that the part belongs to a certain category—say, gaskets and not sealing rings—is to list it under that category. ATC Dist., 402 F.3d at 707. Copyright law does not impede other companies from expressing that idea by listing the part in an identical way. Id. at 707–08.
A third qualification, the one directly at issue today, is known as “scenes a faire”—settings, in other words, that must be done. Cain v. Universal Pictures Co., 47 F. Supp. 1013, 1017 (S.D. Cal. 1942) (Yankwich, J.) (coining this phrase to describe this aspect of copyright law). Scenes a faire arise when the expectations of an industry or subject matter require an author to express facts in a certain way, rendering only a few choices “feasible in that setting” even if alternatives theoretically remain. Lexmark Int’l, Inc. v. Static Control Components, Inc., 387 F.3d 522, 538 (6th Cir. 2004), abrogated on other grounds by eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392–94 (2006); see Ross, 463 F.3d at 485. The author’s choice to select the obvious approach over less functional alternatives does not qualify as minimally creative. See ATC Dist., 402 F.3d at 711–12. In determining whether an industry’s standards and practices tolerate sufficient creativity in the expression of facts, expert testimony “is desirable, if not required.” RJ Control, 981 F.3d at 458; see Lexmark, 387 F.3d at 539–40 (evaluating dueling expert reports about the feasibility of software alternatives); see also Feist, 499 U.S. at 363 (citing industry association’s amicus brief about standards).
Take the white pages section of what once occupied a central place in every home: a three-dimensional phonebook. It collects the facts of residential telephone numbers and addresses and expresses them alphabetically by the last name оf the homeowner. The phonebook could have chosen a different expression for those facts by, say, grouping them by street name. See Feist, 499 U.S. at 358, 362–63. But alphabetical order has become “so commonplace that it has come to be expected as a matter of course” and is “practically inevitable.” Id. at 363. This expected expression of the facts, as a result, falls short of even the “de minimis quantum of creativity” required for copyright protection. Id.
Measured by these guidelines and requirements, Allegiance’s challenge to the originality of Premier’s copyright falls short. Premier registered its loyalty forms for copyright within five years of first using them by filing them in the U.S. Copyright Office located in the Library of Congress. They thus presumptively receive copyright protection unless Allegiance rebuts thе presumption that Premier possesses a valid copyright.
The loyalty certificates amount to original expression under this test. They are “original to the author,” Feist, 499 U.S. at 345, because Premier designed them “in-house” and “independent of forms used by competitors,” R.101-1 at 8. And they presumptively possess a “minimal creative spark,” Feist, 499 U.S. at 363, by showing some “inventiveness and imagination,” Hiller, 976 F.3d at 627. The copyright covers a particular auto maintenance program, the customized expression and organization of which places the certificates beyond the kinds of highly abstracted descriptions typical of uncopyrightable facts and ideas. See Kohus, 328 F.3d at 855. The run-of-the-mine subject matter of the certificates does not detract from Premier’s creative choices in crafting them. To see why, compare the organization of Premier’s certificates to the rival certificates that Allegiance included in the record and that we have included as Appendix C. Premier’s certificates include a distinct section on eligibility that covers different categories of required maintenance, including a selection of different mileage optiоns between required oil changes. The other form lacks a distinct section on eligibility or maintenance, and it provides a single oil change standard above the signature line. Premier’s offering of a menu of different mileage options, together with its choice to arrange the form with that section, evinces more creativity than simply moving headers or rearranging identical sections. See ATC Dist., 402 F.3d at 711; cf. S. Credentialing, 946 F.3d at 784 (reasoning that the “distinctive arrangement” of business rivals’ competing forms shows originality).
The content of these certificates also expresses the idea of covering damage to a car in different ways. Premier’s certificates define several categories of covered parts, some of which depend on whether the part suffered damage resulting from “mechanical failure to an internally lubricated part.” R.100-1 at 3. The other company lists different parts under the single heading of “Engine” and offers to expand coverage to other components in the event of “mechanical failure . . . caused by the above-listed parts.” R.101-7 at 4. Choices about how to select and group categories and subcategories suffice to establish creativity. See ACT, Inc., 46 F.4th at 500–02 (finding skill and subskill classification and arrangement minimally creative).
The juxtaposition between Premier’s creative expression in the body of the certificates and the unoriginal top half of the front page, which merely provides spaces for the dealer to record the car buyer’s information, helps to illustrates the originality of the body of the certificates. See
The doctrines of uncopyrightable ideas, merger, and scenes a faire do not excuse Allegiance’s imitation. Premier’s certificate expresses the idea of a pаrticular type of loyalty program, and comparison of Premier’s form to the others in the record shows that companies can choose different ways to express that idea. The record also lacks any evidence about external constraints on the expression of these loyalty certificates. At summary judgment, Allegiance did not submit any testimony or affidavits from industry insiders or expert witnesses that car owners or dealers expect these forms to look a certain way or to include the same terms or conditions. See Kohus, 328 F.3d at 856 (explaining that external considerations include “standard industry practices” and professional organization standards).
Allegiance, last of all, copied the certificates. This case presents “rare[]” direct evidence of copying, Fоgerty v. MGM Grp. Holdings Corp., Inc., 379 F.3d 348, 352 (6th Cir. 2004), as no one in the case disputes.
All elements considered, the district court correctly ruled that Allegiance violated Premier’s copyright in the loyalty program certificates.
Allegiance tries to counter this conclusion in several ways. It maintains that the district court mistakenly reasoned that originality always trumps the scenes a faire doctrine. But that is not what the district court said or did. It recognized that Premier’s timely copyright registration shifted the burden to Allegiance to “rebut the copyright’s presumptive validity.” R.128 at 16. It explained that scenes a faire represents one exception to originality. See Kohus, 328 F.3d at 856. And it determined that the record failed to establish that any “requirements of insurance companies” or similar constraints dictated how Premier expressed the details of its plan. R.128 at 18. In the absencе of that expert testimony or other expert evidence at summary judgment, it properly concluded this chain of reasoning by holding that Allegiance failed to rebut the presumption that Premier enjoys a valid copyright.
The concepts underlying scenes a faire and merger, we appreciate, sometimes bear on the threshold originality of the copyright and sometimes are best viewed through the lens of an affirmative defense. As in Feist itself, a court may treat these principles as crucial to the initial question of originality. 499 U.S. at 358 (“[T]he principal focus should be on whether the selection, coordination, and arrangement [of a fact-based work] are sufficiently original to merit protection.”). At other times, it may make more sense to think about these doctrines as distinct underlying affirmative dеfenses to infringement, perhaps when an infringer copies only part of an original work. See, e.g., Kregos, 937 F.2d at 705; Ets-Hokin v. Skyy Spirits, Inc., 225 F.3d 1068, 1082 (9th Cir. 2000). That a copyright concept may go to the validity of a copyright in the first instance does not preclude it from operating as a defense to infringement in other instances. See Lexmark, 387 F.3d at 537–39. As the Copyright Office itself recognizes, “scènes à faire cannot be registered by themselves,” but works containing scenes a faire qualify for copyright registration “provided that the work as a whole contains a sufficient amount of original expression.” U.S. Copyright Off., Compendium of U.S. Copyright Office Practices
In this instance, any distinction between using scenes a faire as a threshold defense to originality or as an affirmative defense to infringement does not make a difference. Even the courts that treat scenes a faire only as an affirmative defense have cautioned that this doctrine still does not permit the infringer to produce work “virtually identical” to the original. Incredible Techs., Inc. v. Virtual Techs., Inc., 400 F.3d 1007, 1014–15 (7th Cir. 2005); see Apple Comput., Inc. v. Microsoft Corp., 35 F.3d 1435, 1444, 1446–47 (9th Cir. 1994). No one denies that Allegiance’s certificates copy Premier’s certificate, save for a few minor points of contact information. No matter how a court understands the doctrine of scenes a faire, Allegiance still had to produce evidence that external constraints dictated how Premier created its certificate. See RJ Control, 981 F.3d at 458; cf. Automated Sols. Corp. v. Paragon Data Sys., Inc., 756 F.3d 504, 520 (6th Cir. 2014). Allegiance did not offer any such evidence.
Allegiance, it is true, provided the district court with another company’s forms that resemble Premier’s certificates. But similarity by itself does not suffice to demonstrate scenes а faire. Expert testimony usually is needed to show that convention and the setting of the work constrained the author’s choices. Confirming the point, similar works still receive copyright protection so long as they are original to the author and satisfy the minimal threshold of creativity. Feist, 499 U.S. at 345–46. Identical “stock or standard phrases” in the end give rise to scenes a faire only if they “necessarily follow from a common theme or setting.” RJ Control, 981 F.3d at 458 (quoting Lexmark, 387 F.3d at 535).
The scattered similarities in parts of these forms, often due to their coverage of the same subject matter as opposed to a required convention, do not undermine their creative features. Consider an example that Allegiance identifies: the certificates’ similarities and differences when it comes to service intervals. Yes, the wording of each onе largely parallels the other given the imperative of covering a common subject—how often the owner must obtain service of the car. But Premier’s form includes that language as part of a section on “eligibility” that offers multiple checkboxes for different mileage options. R.100-1 at 3. The other company, by contrast, expresses this condition as a take-it-or-leave-it “responsibility” without any mechanism for customization. R.101-7 at 3. The existence of such substantive variation within the industry undercuts Allegiance’s claims that external constraints determined
There is another way, Allegiance adds, that external constraints limited Premier’s expressiveness. Insurance companies review the certificates and require the inclusion of “some language.” R.91-1 at 26. But this reality does not show that insurers have deрrived administrators of their flexibility when crafting loyalty certificates “as a whole.” Lexmark, 387 F.3d at 538. Even legally compliant expressions of facts may possess the modest creativity needed to qualify as original. As one court helpfully put the point: “Although laws and hospital policies dictate the contents of the credentialing forms, Southern Credentialing’s unique selection and arrangement of information exhibit creative expression.” S. Credentialing, 946 F.3d at 784; see SmithKline Beecham Consumer Healthcare, L.P. v. Watson Pharms., Inc., 211 F.3d 21, 25, 29 (2d Cir. 2000).
Allegiance also offers testimony from a former Premier contractor who claimed that the company drew upon “decades of prior underwriting work” in choosing to “model[]” its certificate on other existing programs. R.162-1 at 4. And it refers to the report of an auto service and finance expert who еxplained that dealers often dictate identical language and coverage to administrators. But Allegiance never introduced these sources into the summary judgment record. It thus has forfeited the invocation of them today. See
Nor does it make a difference that Allegiance urged the district court to reconsider its summary judgment ruling on the basis of this new evidence. The district court denied that motion because it raised new legal theories and new evidence that were both available at the time of summary judgment. Allegiance did not challenge the decision on appeal.
Disgorgement. Even if Allegiance faces copyright liability, it claims that the district court miscalculated the profits from the infringement that Allegiance is required to disgorge. A copyright owner may recover actual damаges and “any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.”
Once the plaintiff makes this showing, the infringer must show what part of its gross revenues did not result from the infringement. See ECIMOS, 971 F.3d at 635. It may do so by offering proof of its “deductible expenses” as well as thе “elements of profit attributable to factors other than the copyrighted work.”
This statutory burden-shifting corresponds to the reality that the infringer usually possesses the information necessary to provide the victim a fair share of the profits. See Singletary Constr., LLC v. Reda Home Builders, Inc., 815 F. App’x 892, 907 (6th Cir. 2020) (Murphy, J., concurring in part); see also Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 399, 408 (1940). Because the victim of infringement cannot readily extend its own experience to calculate the infringer’s costs, the statute requires the infringer to account for its actual expenses. See Thoroughbred Software Int’l, Inc. v. Dice Corp., 488 F.3d 352, 360–61 (6th Cir. 2007).
So too for the allocation of profits. Cоpyright plaintiffs may not always compete head to-head with the infringer and so can fail to appreciate all the other inputs that contribute to gross revenues and profits. Once the plaintiff has identified a final product containing the infringing work, the statute assigns the burden of allocating profit to the infringer, who possesses every incentive to identify as many alternative contributors to its profits as it can. Cf. Sheldon, 309 U.S. at 407–08.
The district court’s disgorgement award hewed to this process. Premier, as an initial matter, met its burden of showing the gross revenues for Allegiance’s infringement of the certificate. The certificates rest at the core of what Tricor hired Allegiance to do. They set forth the terms and conditions of the loyalty program, and car dealers enrolled buyers with Allegiance’s administration system using the cеrtificates to collect their registration information. Allegiance in turn received $40 Canadian every time a dealer issued a certificate to the buyer. As Premier’s expert testified, his calculation of Allegiance’s gross revenues came out “very close” to a back-of-the-envelope estimation that multiplies the number of loyalty certificates issued by $40 Canadian. R.255 at 32. The district court found that, after adjusting for exchange rates, Allegiance earned $1,279,280 from administering the Lifetime Powertrain Program between April 2018 and April 2022.
After that, the district court found that Allegiance could deduct $838,041 in costs, leaving a profit of $441,239. The court acknowledged that Allegiance thought that none of this profit could be attributed to the infringing certificates because it simply administered these plans for Tricor, thе ultimate beneficiary of any infringement. But the court reasonably concluded that Allegiance’s arguments did not satisfy its burden of showing its own profitability figures; they just went to Premier’s showing of gross revenues. Because Allegiance failed to carry its burden of allocating profits, the court fairly required it to pay this amount. No clear error occurred.
Allegiance replies that this analysis confuses the “words on the [loyalty] Certificate[s]” with the “administration services” that Allegiance performed. Appellant’s Br. 31–32. Because buyers do not review the certificate’s text before enrolling in the program and do not enroll in the program before purchasing a car, Allegiance claims Premier failed to satisfy its burden of relating Allegiance’s revenue from the loyalty program to its infringement of the certificates’ text. See R.189-2 at 2 (stating in Allegiance’s expert report that fees for administration relate to the “fair market value for the administration services” and not “the language or style of the form used”). But this argument asks too much of Premier. The statute places a low burden on the victim of the infringement to explain “why that [gross revenue] number is related to the infringement” without requiring a “causal connection.” Balsley, 691 F.3d at 769 n.6, 770 n.7. Any burden of proving causation instead falls on Allegiance, which must prove in the second phase of the burden-shifting framework how much of its profits stemmed from activity unrelated to the infringement. Id.
Allegiance claims that a few out-of-circuit district court cases have emphasized causation at the plaintiff’s stage of the burden-shifting process. But they do not offer meaningful parallels to this casе. One of them involved a pipe replacement company that infringed the copyrighted contract form of a rival firm. Phx. Renovation Corp. v. Rodriguez, 461 F. Supp. 2d 411, 414 (E.D. Va. 2006). The plaintiff calculated how much the infringer had earned from jobs that began by signing the contract. But the court declined to shift the burden as the plaintiff had not shown any customers hired the defendant because of that form. Id. at 421–23. In the second case, a bank infringed a copyrighted mortgage form. Homeowner Options for Mass. Elders, Inc. v. Brookline Bancorp, Inc., No. 09-11790-NMG, 2012 WL 3136786, at *1–2 (D. Mass. July 31, 2012). Those cases both imposed a legal standard of causation higher than the relationship test that we have adopted. Balsley, 691 F.3d at 769 & n.6. No matter whether Premier has shown that car buyers, dealers, or Tricor contracted with Allegiance because it had copied Prеmier’s expression, Premier satisfied its burden of establishing that Allegiance’s revenues reasonably relate to its use of the certificate.
Shifting gears, Allegiance challenges the district court’s factual findings about the operation of its program, claiming they are internally inconsistent. We disagree. The district court accurately described the “final product sold” by Allegiance as the Lifetime Powertrain Loyalty Program. R.241 at 6. Although it stated that the certificate was “not part of the final product sold,” it accurately explained that Allegiance “used [the certificate] to administer the program” and that the certificate formed “one small part of the final product” akin to other inputs that never reach the ultimate consumer. Id.; cf. ECIMOS, 971 F.3d at 636.
Allegiance adds that the findings lack specificity beсause the district court did not cite trial evidence about how this program operated or about Allegiance’s role in it. Not so. All that the court needed to do was find facts sufficient to give us an “understanding of the basis” for its decision, and we may assume the district court drew reasonable inferences from its findings. Solis v. Laurelbrook Sanitarium & Sch., Inc., 642 F.3d 518, 530 (6th Cir. 2011) (quotation omitted). The court’s orders met these modest requirements.
Attorney’s fees. Allegiance challenges the district court’s award of statutory attorney’s fees to Premier. We review that decision for an abuse of discretion. Balsley, 691 F.3d at 771.
Under copyright law, a district court “in its discretion may allow the recovery of full costs,” which includes “a reasonable attorney’s fee to the prevailing
The district court did not abuse its discretion in awarding these fees. In considering Allegiance’s litigation position, the court found that its arguments about the infringer’s burden in disgorgement calculations unreasonably ignored our precedent, and it found unreasonable Allegiance’s “late hour” challenges to the summary judgment decision. R.266 at 13–15. The court then concluded that the goal of deterrence also supported a fee award given that Allegiance had continued to profit from Premier’s copyright even after the summary judgment, and the company suggested that it would continue to do so absent a permanent injunction.
Allegiance claims that the district court could not rely on the rationale of deterrence once it enjoined Allegiance from infringing this copyright. But the Supreme Court declined to endorse all-or-nothing approaches to deterrence when it observed that courts must consider this factor “in particular circumstances.” Fogerty, 510 U.S. at 534 n.19. A case-by-case approach makes considerable sense in the equitable setting of injunctions. The district court had a legitimate basis to believe that an injunction by itself would not deter Allegiance from continuing to infringe on Premier‘s certificate. Allegiance had continued to infringe on the certificate during the litigation and had suggested that it would keep doing so.
Allegiance adds that the district court erred by finding that Allegiance took an unreasonable position on disgorgement. But
Allegiance claims that the court erred when it described several of Allegiance‘s motions as unreasonable because they were untimely and аmounted to thinly veiled attempts to relitigate summary judgment. Because the district court had a ring-side seat to the parties’ litigation strategies and positions, we will not lightly disturb its discretion in this area. See Bridgeport Music, Inc. v. Dimension Films, 410 F.3d 792, 809–10 (6th Cir. 2005) (amended opinion). Allegiance gives no reason why we should second guess the district court‘s determination that Allegiance needlessly delayed filing its motion for reconsideration.
We affirm.
Appendix A. Premier’s Copyrighted Certificate
SECTION 7 EXCLUSIONS
This Loyalty Certificate does NOT provide coverage for any of the following:
Defects or repair problems that result from collision, abuse, misuse or negligence. Defects or repair problems that result from lack of adequate maintenance after You bought the vehicle. - Repair or replacement of a covered part if the repair or replacement is сovered by the repairer‘s warranty, the manufacturer‘s new car warranty, an extended service contract provider, or if the manufacturer otherwise agrees to repair or replace the part.
- Repair or replacement of a covered part if the damage was caused by the failure of a non-covered part.
- Replacement of maintenance items (such as spark plugs, ignition points, positive crankcase ventilator valve, filters, lubricants and oil, electrical items) made in connection with normal maintenance services.
- Damage caused by Your failure to take or cause to be taken, reasonable precautions to prevent damage when an apparent problem exists (e.g. change in engine temperature condition, unusual noises, leaking fluids, shaking, unusual shifting, etc.).
- Damage caused by the lack of proper and/or necessary amounts of coolants or lubricants or caused by sludge buildup, contaminant(s), or foreign object(s).
- Replacement of or repairs to parts of the vehicle not listed on this Loyalty Certificate as covered parts.
- Gradual reduction in operating performance due to normal wear and tear (the natural and inherent wear characteristics of automotive parts) and not resulting from the failure of a covered part.
- Oil loss or use not resulting from the failure of a covered part.
- Failure of any part if the odometer is inoperative or has been tampered with or has been disconnected subsequent to Your purchase of the vеhicle.
- Fluids, seals and gaskets unless required in connection with the repair or replacement of a covered part.
- Vehicles used for commercial purposes including but not limited to construction purposes, delivery purposes, commercial towing, commercial farm operation, volunteer public service(s), snow plowing, rental, livery, taxi, any type of emergency vehicle, or competitive or off road racing.
- Repair or replacement to any part if
You have not maintained Your eligibility under the Lifetime Powertrain Loyalty Program. - Repair or replacement of hybrid or electric vehicle specific components.
- Repair or replacement of any part if the vehicle‘s powertrain components, exhaust system or suspension system have been modified in any manner not approved by the manufacturer.
- Damage caused by accident, civil commotion or riot, nuclear contamination, collision or upset, glass breakage, earthquake, explosion, falling objects, fire or smoke, flood, fluid contamination, freezing, hail, lightning, malicious mischief, fuel contamination, oil contamination, rust, corrosion or electrolysis, theft or larceny, vandalism, water, water contamination, windstorm and other external forces or events.
SECTION 8-LIMITS OF LIABILITY
- 90 days and 3,000 miles must elapse from the odometer reading at the date of Loyalty Certificate issuance to be eligible for repair. Failures that occur within the first 90 days and 3,000 miles are not covered.
- The total amount payable for any single incident of repair and/or replacement shall not exceed the actual сash value of the vehicle immediately prior to the breakdown. This determination will be made using the average trade-in value from the most recent National Automobile Dealers Association (NADA) guide.
SECTION 9-SUBSTITUTE TRANSPORTATION
If Your vehicle is undergoing repairs covered by this Loyalty Certificate, then We will reimburse You for actual substitute transportation expenses incurred up to forty dollars ($40.00) per day for each day Your vehicle is undergoing covered repairs for a maximum of five (5) days per occurrence. Reimbursement for substitute transportation shall not continue beyond the day on which the repairs are completed and/or the day that You are notified of the completion of the repair. To receive reimbursement, You must submit receipts from a licensed rental agency to Us. The total benefit per occurrence shall not exceed two hundred dollars ($200.00).