United States District Court, S.D. West Virginia, Charleston Division
AMENDED MEMORANDUM OPINION AND ORDER
R. GOODWIN UNITED STATES DISTRICT JUDGE.
before the court is Plaintiff's Motion for Preliminary
Injunction [ECF No. 65]. For the following reasons, the
Motion is DENIED.
plaintiff, CSS, Inc. (“CSS”), has asked the court
to preliminarily enjoin defendants, Christopher Herrington,
Gene Yoho, and Compiled Technologies, LLC (collectively,
“CT”), from “advertis[ing], licens[ing],
offer[ing] to license, sell[ing] or otherwise mak[ing]
available for use” CT's land indexing and estate
management software; “offer[ing] or . . . provid[ing]
support services” for CSS's software; or
“mak[ing] use of any trade secrets, confidential
information or proprietary information of CSS.”
Pl.'s Mot. Prelim. Inj. 1 [ECF No. 65]. However, CSS is
unable to show a likelihood of success on any of the claims
presently before the court, that irreparable harm will occur
absent the injunction, that the balance of the hardships
weighs in its favor, nor that an injunction is in the public
interest. Thus, a preliminary injunction is not warranted.
filed its Complaint [ECF No. 1] on February 23, 2016. On
September 16, 2016, CSS filed its First Amended Complaint.
First Am. Compl. [ECF No. 59]. CSS brings actions against CT
for copyright infringement, breach of contract, violation of
the duty of loyalty, tortious interference with business
relationships, and misappropriation of trade secrets under
the West Virginia Uniform Trade Secrets Act
(“WVUSTA”). In their Answer, CT filed a
counterclaim against CSS for tortious interference. Answer 11
[ECF No. 61].
November 23, 2016, CSS filed Plaintiff's Motion for
Preliminary Injunction wherein it asserted that it was likely
to succeed on its copyright infringement, misappropriation of
trade secrets claims, and breach of contract. Pl.'s Mot.
Prelim. Inj. [ECF No. 65]. CT responded on December 13, 2016.
Defs. Mem. Opp. Pls. Mot. Prelim. Inj. [ECF No. 68]. On
December 16, 2016, CSS moved for an extension of time to
reply to the defendants' response. Unopposed Mot. for
Extension of Time to File a Reply to Defs. Mem. Opp. Pls.
Mot. Prelim. [ECF No. 72]. I granted this Motion [ECF No.
73], and CSS filed a Reply Brief [ECF No. 74] on December 29,
January 25, 2017, the court conducted a hearing on the
Plaintiff's Motion for Preliminary Injunction. Prelim.
Inj. Mot. Hr'g [ECF No. 82]. Because of the volume and
length of evidence put forth, the hearing could not be
completed in one afternoon. This matter was continued to
February 23, 2017, and it was ultimately completed on
February 24, 2017. See Order Continuing Prelim. Inj.
Hr'g [ECF No. 84]; Mot. Hr'gs [ECF Nos. 89, 90]. On
March 22, 2017, both parties filed their proposed findings of
fact and conclusions of law. [ECF Nos. 106, 109, 110].
CSS's Motion is ripe for my review.
Findings of Fact
only make findings of fact pertinent to determining whether a
preliminary injunction should issue. I FIND
that the facts of this case are as follows:
is a company that provides software and related support
services to local government entities, namely county clerks
in West Virginia. See Hr'g Tr., Jan. 25, 2017,
Auburn Direct, 28:1-9.
has been in business since 1983. See Hr'g Tr.,
Feb. 23, 2017, D. Herrington Direct, 105:11.
Kofile acquired CSS in May 2014. See Hr'g Tr.,
Jan. 25, 2017, Auburn Direct, 39:18-19.
over twenty years, CSS has provided various software
solutions including: a land records indexing package, an
estate management package as well as utility billing,
sheriff's tax collection, and other applications.
See Hr'g Tr., Jan. 25, 2017, Auburn Direct,
Defendant Christopher Herrington was first employed by CSS in
October 1991. See Hr'g Tr., Feb. 23, 2017, C.
Herrington Direct, 157:8-12, 190:14-15.
Christopher Herrington worked at CSS in the computer
software, applications, and programming business related to
county government information and document management
systems. See Hr'g Tr., Feb. 23, 2017, C.
Herrington Direct, 157:8-12; see also Hr'g Tr.,
Jan. 25, 2017, Auburn Direct, 42:10-13.
During most of his employment with CSS, Christopher
Herrington was a programmer, and his work included
development of CSS's software, bug fixes, and
modifications. See Hr'g Tr., Jan. 25, 2017,
Auburn Direct, 14:14-23, 16:22- 17:5.
Christopher Herrington also provided support for CSS software
packages. Id. at 15:13-23.
Christopher Herrington's duties included programming
responsibilities and support responsibilities for both the
CSS land indexing software and the CSS estate management
software. Id. at 16:2-9.
August 23, 2014, Christopher Herrington resigned as an
employee of CSS. See Hr'g Tr., Feb. 23, 2017, C.
Herrington Direct, 190:14-15.
September 6, 2014, Christopher Herrington returned to CSS.
See Hr'g Tr., Feb. 23, 2017, C. Herrington
September 12, 2014, Christopher Herrington was required to
sign a confidentiality agreement. See Hr'g Tr.,
Jan. 25, 2017, Auburn Direct, 44:14- 45:2.
had never required Christopher Herrington to sign a
confidentiality agreement prior to September 12, 2014.
See Hr'g Tr., Feb. 23, 2017, McCasker Redirect,
97:6-17; see also Hr'g Tr., Feb. 23, 2017, C.
Herrington Cross, 239:3- 8.
Christopher Herrington was employed by CSS until June 5,
2015. See Hr'g Tr., Feb. 23, 2017, C. Herrington
August 12, 2015, Gene Yoho formed CT. See Hr'g
Tr., Feb. 24, 2017, C. Herrington Direct, 43:19-44:5.
Gene Yoho and Christopher Herrington operate CT. See
Hr'g Tr., Feb. 24, 2017, C. Herrington Direct,
is in the business of licensing custom computer software
applications. CT offers one program for land records
recording and indexing and one for an estate management
application. See Hr'g Tr., Feb. 24, 2017, C.
Herrington Direct, 44:3-5; see also Hr'g Tr.,
Feb. 23, 2017, C. Herrington Cross, 242:9-11.
also provides support services to county clerks' offices
related to these applications. See Hr'g Tr.,
Feb. 23, 2017, C. Herrington Cross, 242:9-11.
competes with CSS for West Virginia county clerk contracts.
See Hr'g Tr., Feb. 24, 2017, C. Herrington
CT's code is not a literal copy of CSS's code.
See Mot. by Defs. for Leave to File Under Seal Ex.
1, at 26 [ECF No. 70-1] (“McCasker Expert
Report”); see also Hr'g Tr., Feb. 23,
2017, McCasker Cross, 9:7-10.
programming language RM/COBOL (“COBOL”) was used
in the software of both CSS and CT. See McCasker
Expert Report at 25; see also Mot. by Defs. for
Leave to File Under Seal Ex. 2, at 3 [ECF No. 70-2]
(“Zeidman Expert Report”).
uses COBOL version 11, and CT uses COBOL version 12.
See McCasker Expert Report at 25.
CT's COBOL data files are structured differently than
CSS's COBOL data files. See Hr'g Tr., Jan.
25, 2017, McCasker Direct, 115:14-15.
parts of CSS's software relevant to this case consist of
the following architecture and technology: a client
application written in the Microsoft Visual Basic 6 computer
language (VB6), a VanGUI Network Communication Interface
Builder (“VanGUI”), TCP (Transmission Control
Protocol) Sockets, an application server with data files
written in COBOL, a Relativity Server, an ODBC (Open Database
Connectivity) Interface, and Crystal Reports OCX.
See McCasker Expert Report at 7-9.
parts of CT's software relevant to this case consist of
the following architecture and technology: a client
application written in the C# computer language (pronounced
“C-Sharp”), a Louis Network Communication
Interface, TCP Sockets, an application server with data files
written in COBOL, a Relativity Server, an ODBC Interface, and
Crystal Reports. See Hr'g Tr., Feb. 24, 2017, C.
Herrington Direct, 9-13.
CSS's software includes third-party components such as
VB6, the VanGUI interface, the COBOL programming language,
the Relativity server, and Crystal Reports. See
Zeidman Expert Report at 14-18.
intellectual property rights to the third-party
components-VB6, the VanGUI interface, the COBOL programming
language, the Relativity Server, and Crystal Reports-are not
owned by any party to this case. See Hr'g Tr.,
Feb. 23, 2017, D. Herrington Cross, 148:21-149:12.
source code was initially provided along with CSS's
software applications and installed on servers owned by the
various West Virginia county clerks' offices.
See Hr'g Tr., Jan. 25, 2017, Auburn Direct,
31:1-9, 35:12-18; Defs. Exs. 2, 14 from Prelim. Inj. Mot.
Hr'g [ECF Nos. 96-2, 96-13].
some point after 2014, this practice was discontinued, and
all of CSS's source code was removed from all county
servers. See Hr'g Tr., Jan. 25, 2017, Auburn
Direct, 31:1-9, 35:12-18.
Source code present on the county servers was available to
anyone who had administrative rights authorized by the county.
Id. at 31:3-20, 35:15-18.
Some of CSS's contracts with county clerks' offices
did not have any language requiring the county clerks to
protect CSS's source code on the county servers.
Some of CSS's contracts with the county clerks'
offices did stipulate that the county must protect CSS's
source code. Id. at 32:12-22.
CSS's corporate representative, Hubert “Bert”
Auburn, does not know how many of CSS's contracts
required the clerks' offices to protect CSS's source
code. See Hr'g Tr., Jan. 25, 2017, Auburn
Direct, 31:1-9; 35:15-18.
Bert Auburn does not know how many people had access to
CSS's source code. Id. at 35.
founder, current employee, and father of defendant, Chris
Herrington, Doug Herrington does not know how many people had
access to CSS's source code. See Hr'g Tr.,
Feb. 23, 2017, D. Herrington Direct, 105:12-13, 106:14-17,
Bert Auburn does not know whether CSS's source code was
password-protected. See Auburn Direct, 31:1-9;
Bert Auburn is not aware of the source code being identified
as confidential when on the county servers. See Mot.
by Defs. for Leave to File Under Seal Ex. 4, at 60:13-18 [ECF
No. 70-4] (“Auburn Dep.”).
Bert Auburn does not believe that CSS's source code was
encrypted when on county servers. See Hr'g Tr.,
Jan. 25, 2017, Auburn Direct, 35:1-9.
CSS's source code was neither password protected nor
encrypted on the county servers. See Hr'g Tr.,
Feb. 23, 2017, D. Herrington Direct, 120:21-23; Test. &
Ex. Submission by CSS, Inc., Ex. 1 at 182:20-24 [ECF No.
105-1] (“Lowers Dep.”).
WVNet is a virtual private network that provides access to
the county servers. See Hr'g Tr., Jan. 25, 2017,
Auburn Direct, 31:1-9, 35:15-18.
WVNet provides all companies with a contract with any county
access to all West Virginia county servers. Id.
Anyone who can access WVNet can access any of the West
Virginia county servers. See Hr'g Tr., Jan. 25,
2017, Auburn Direct, 31:1-9, 35:15-18.
competitor of CSS with a password for WVNet may have been
able to access CSS's source code. See Hr'g
Tr., Jan. 25, 2017, Auburn Direct, 31:1-20.
password to access the CSS software application was
“top gun.” See Hr'g Tr., Feb. 23,
2017, D. Herrington Cross, 135:3-11; see also
Hr'g Tr., Feb. 23, 2017, Smith Direct, 175:20-22.
did not enter into confidentiality agreements with the
clerks' offices that had the “top gun”
password. See Hr'g Tr., Feb. 23, 2017, Smith
Direct, 17-19. Hr'g Tr., Feb. 23, 2017, D. Herrington
would share the “top gun” password with county
employees who attended training sessions. See
Hr'g Tr., Feb. 23, 2017, D. Herrington Cross, 136:6-19;
see also Hr'g Tr., Feb. 23, 2017, Smith Direct,
CSS's contracts with county clerks' offices are
subject to document requests pursuant to the state freedom of
information act. See Hr'g Tr., Jan. 25, 2017,
Auburn Direct, 38.
CSS's pricing information for its county clients is
public information. See Auburn Dep. 166:15-21.
bases its pricing structure, in part, on a publically
available tax base classification of counties that is
published every two years. Id. at 167:14-15,
Christopher Herrington obtained CSS pricing information by
email, face-to-face conversations, and phone calls with
county clerks. See Hr'g Tr., Feb. 24, 2017, C.
Herrington Direct, 41:16-43:1.
has some customers in Ohio. See Hr'g Tr. Auburn
has no customers in Ohio. See Hr'g Tr., Feb. 23,
2017, C. Herrington Direct, 241:9-14.
has lost contracts to CT. See Hr'g Tr., Jan. 25,
Standard for Obtaining a Preliminary Injunction
secure a preliminary injunction, “plaintiffs must
demonstrate that (1) they are likely to succeed on the
merits; (2) they will likely suffer irreparable harm absent
an injunction; (3) the balance of hardships weighs in their
favor; and (4) the injunction is in the public
interest.” League of Women Voters v. North
Carolina, 769 F.3d 224, 236 (4th Cir. 2014) (citing
Winter v. Nat. Res. Def. Council, Inc., 555
U.S. 7, 20 (2008)). The Fourth Circuit reviews the grant or
denial of a preliminary injunction for abuse of discretion.
The Real Truth About Obama, Inc. v. Fed.
Election Comm'n, 575 F.2d 342, 346-47 (4th Cir.
2009), vacated on other grounds, 559 U.S. 1089
(2010). “[A] a preliminary injunction is an
extraordinary and drastic remedy, one that should not be
granted unless the movant, by a clear showing, carries the
burden of persuasion.” 11A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure
§ 2948 (3d. ed. 2017) (footnotes omitted).
Fourth Circuit permits district courts to rely on hearsay or
other inadmissible evidence when deciding whether a
preliminary injunction should be awarded. G.G. ex rel.
Grimm v. Gloucester Cty. Sch. Bd., 822 F.3d 709, 725
(4th Cir. 2016), vacated on other grounds and
remanded, 137 S.Ct. 1239 (2017).
Conclusions of Law
Likelihood of Success on the Merits for the Copyright
order to show copyright infringement, CSS must prove (1) it
owned a valid copyright and (2) CT copied original elements
of the copyright. Humphreys & Partners
Architects, Ltd. P'ship v. Lessard Design,
Inc., 790 F.3d 532, 537 (4th Cir. 2015) (citing
Lyons P'ship v. Morris Costumes, Inc.,
243 F.3d 789, 801 (4th Cir. 2001)). A valid copyright gives
the owner the exclusive right to reproduce the copyrighted
work and prepare derivative works. 17 U.S.C. § 106.
Anyone who violates this exclusive right infringes the
owner's copyright. Id. at § 501(a).
law protects “original works of authorship fixed in any
tangible medium of expression.” 17 U.S.C. §
102(a). Computer programs are explicitly covered as
“literary works.” 17 U.S.C. § 101; see
Atari Games Corp. v. Nintendo of Am., Inc., 975
F.2d 832, 838 (Fed. Cir. 1992). Courts have also granted
copyright protection over computer source code. See
Whelan Assocs., Inc. v. Jaslow Dental Lab.,
Inc., 797 F.2d 1222, 1233 (3d Cir. 1986). Copyright
protection extends to the “non-literal elements of
computer programs that embody original expression”.
Lotus Dev. Corp. v. Paperback Software Int'l,
740 F.Supp. 37, 76-77 (D. Mass. 1990).
copyright analysis in the computer program context is often a
“difficult task.” Oracle Am., Inc.
v. Google Inc., 750 F.3d 1339, 1354 (Fed. Cir. 2014);
see Lotus Dev., 49 F.3d at 820 (Boudin, J.,
concurring) (“Applying copyright law to computer
programs is like assembling a jigsaw puzzle whose pieces do
not quite fit.”); see also Comput. Assocs.
Int'l, Inc. v. Altai, Inc., 982
F.2d 693, 696 (2d Cir. 1992) (“In recent years, the
growth of computer science has spawned a number of
challenging legal questions, particularly in the field of
copyright law. . . . As scientific knowledge advances, courts
endeavor to keep pace, and sometimes-as in the area of
computer technology-they are required to venture into less
than familiar waters.”). As the Second Circuit
To be frank, the exact contours of copyright protection for
non-literal program structure are not completely clear. We
trust that as future cases are decided, those limits will
become better defined. Indeed, it may well be that the
Copyright Act serves as a relatively weak barrier against
public access to the theoretical interstices behind a
program's source and object codes. This results from the
hybrid nature of a computer program, which, while it is
literary expression, is also a highly functional, utilitarian
component in the larger process of computing.
Comput. Assocs. Int'l, 982 F.2d at 712.
scope of copyright protection, however, is limited in that it
does not cover “any idea, procedure, process, system,
method of operation, concept, principle, or discovery,
regardless of the form in which it is described, explained,
illustrated, or embodied in such a work.” Id.
at § 102(b); see Mazer v. Stein, 347 U.S. 201,
217 (1954) (“Unlike a patent, a copyright gives no
exclusive right to the art disclosed; protection is given
only to the expression of the idea-not the idea
itself.”); see also Feist Publ'ns,
Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 358
(1991); Avtec Sys., Inc. v. Peiffer, 21
F.3d 568, 572 (4th Cir. 1994) (“To reiterate, copyright
protects not original ideas but their incarnation in a
tangible means of expression.”).
must be “original” to qualify for copyright
protection. 17 U.S.C. § 102(a). This “originality
requirement is not particularly stringent, ” however.
Feist Publ'ns, 499 U.S. at 358. In the copyright
context, “original” means “that the work
was independently created by the author (as opposed to copied
from other works), and that it possesses at least some
minimal degree of creativity.” Id. at 345. The
more creative a work is, the “thicker” the
protection is for the work, and “less similarity is
needed for a court to find the similarity sufficiently
‘substantial' and thus infringing.” Lydia
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