Free Memorandum of Contentions of Fact and Law - District Court of Federal Claims - federal

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 1 of 58

IN THE UNITED STATES COURT OF FEDERAL CLAIMS BLUEPORT COMPANY, LLC, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 02-1622C Judge Lawrence J. Block

DEFENDANT'S MEMORANDUM OF CONTENTIONS OF FACT AND LAW

PETER D. KEISLER Assistant Attorney General JOHN J. FARGO Director SCOTT BOLDEN Attorney Commercial Litigation Branch Civil Division Department of Justice Washington, D. C. 20530 Telephone: (202) 307-0262 Facsimile: (202) 307-0345

OF COUNSEL: CHUN-I CHIANG Air Force Legal Operations Agency Department of the Air Force

May 25, 2006

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 2 of 58

TABLE OF CONTENTS I. II. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ULTIMATE ISSUES OF FACT AND LAW TO BE RESOLVED BY THE COURT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 STATEMENT OF THE ISSUES OF FACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A. This Court Has Jurisdiction over Claims of Copyright Infringement by or for the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 This Court Lacks Jurisdiction for DMCA Claims Against the Government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Blueport's Claim is Barred by the Defenses Incorporated into Section 1498(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 1. Mark Davenport actually influenced and induced the government's use of the AUMD program . . . . . . . . . . . . . . . . . . . . . . . . 20 Mark Davenport prepared the AUMD program as a part of his official functions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Mr. Davenport used government time, material, and facilities to create the AUMD program . . . . . . . . . . . . . . . . . . . . . . . . . . 25

III. IV.

B.

C.

2.

3.

D.

The Government Did Not Infringe Blueport's Copyright . . . . . . . . . . . . . . . . . . 26 1. The Government Held an Implied License to Use AUMD up to May 15, 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 The Government Copied and Adapted AUMD as an Essential Step in the Utilization of the Program ­ 17 U.S.C. § 117 . . . . 28 The government fairly adapted the AUMD program in the context of SAIC's efforts to reverse engineer the AUMD program ­ 17 U.S.C. § 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Blueport registered only one version of the AUMD program . . . . . . . . . 32 Blueport cannot prove that MARS infringes AUMD . . . . . . . . . . . . . . . 34 -i-

2.

3.

4. 5.

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 3 of 58

a.

The government and SAIC did not have access to the AUMD source code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The MARS program is not substantially similar to the AUMD program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

b.

E.

Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 1. 2. 3. 4. 5. 6. Reasonable and Entire Compensation Under Section 1498(b) . . . . . . . . 38 Damages Under 17 U.S.C. § 504(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Blueport is not entitled to any compensation . . . . . . . . . . . . . . . . . . . . . . 41 Dr. Rudd's analysis is fundamentally flawed . . . . . . . . . . . . . . . . . . . . . . 43 Blueport cannot seek an injunction or damages for willfulness . . . . . . . 45 Blueport cannot recover fees, costs, or compensation under the Equal Access to Justice Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 The proper measure of compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 a. b. Statutory damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Compensation based on the SAIC contract . . . . . . . . . . . . . . . . . 46

7.

F.

The Digital Millennium Copyright Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

-ii-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 4 of 58

TABLE OF AUTHORITIES

CASES Abeshouse v. Ultragraphics, Inc., 754 F.2d 467 (2d Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Amini Innovation Corp. v. Anthony California, Inc., 439 F.3d 1365 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 34, 35 Atari Games Corp. v. Nintendo of America, 975 F.2d 832 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Autoskill, Inc. v. Nat'l Educ. Support Systems, 994 F.2d 1476 (10th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Aymes v. Bonelli, 47 F.3d 23 (2d Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Boyle v. United States, 44 Fed. Cl. 60 (1999), aff'd 200 F.3d 1369 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . 27, 39, 45 Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Childress v. Taylor, 798 F. Supp. 981 (S.D.N.Y.1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Commission For Creative Non-Violence v. Reid, 490 U.S. 730 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Commissioner v. Keystone Consol. Industries, Inc., 508 U.S. 152 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Computer Assocs. Int'l, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Data East USA, Inc. v. Epyx, Inc., 862 F.2d 204 (9th Cir.1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Data General Corp. v. Grumman Systems Support Corp., 36 F.3d 1147 (1st Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 -iii-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 5 of 58

Decca Ltd. v. United States, 640 F.2d 1156 (Ct. Cl. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 DSC Communications Corp. v. Pulse Communications, Inc., 170 F.3d 1354 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Effects Assocs., Inc. v. Cohen, 908 F.2d 555 (9th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Engineering Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335 (5th Cir 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Feist Publ'ns, Inc. v. Rural Telephone Services Co., 499 U.S. 340 (1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 35 Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505 (9th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Gates Rubber Co. v. Bando Chemical Indus., 9 F.3d 823 (10th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Herbert v. United States, 36 Fed. Cl. 299 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Krause v. Titleserv, Inc., 402 F.3d 119 (2d Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 - 31 Lane v. Pena, 518 U.S. 187 (1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Leesona v. United States, 599 F.2d 958 (Ct. Cl. 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39, 45 Lotus Development Corp. v. Borland Intern., Inc., 49 F.3d 807 (1st Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Marshburn v. United States, 20 Cl. Ct. 706 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26, 34 Miller v. CP Chemicals, Inc., 808 F. Supp. 1238 (D.S.C. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 -iv-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 6 of 58

Missouri Pac. R.R. Co. v. Ault, 256 U.S. 554 (1921) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 MiTek Holdings, Inc. v. Arce Engineering Co., Inc., 89 F.3d 1548 (11th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Montgomery v. Noga, 168 F.3d 1282 (11th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Motorola, Inc. v. United States, 729 F.2d 765 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Myers v. United States, 147 Ct. Cl. 485 (1959) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Polar Bear Productions, Inc. v. Timex Corp., 384 F.3d 700 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Standard Mfg. Co. v. United States, 42 Fed. Cl. 748 (1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Storage Technology Corp. v. Custom Hardware Engineering & Consulting, Inc., 421 F.3d 1307 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Trek Leasing, Inc. v. United States, 66 Fed. Cl. 8 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 - 37 Vermont Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Zoltek v. United States, 442 F.3d 1345 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

STATUTES 17 U.S.C. § 101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 17 U.S.C. § 102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

-v-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 7 of 58

17 U.S.C. § 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 31 17 U.S.C. § 117 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 - 31 17 U.S.C. § 504 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39, 40, 43 17 U.S.C. § 1201 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 48, 49 17 U.S.C. § 1202 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19, 48 28 U.S.C. § 1498 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 28 U.S.C. § 2412 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

OTHER AUTHORITIES United States Constitution, Fifth Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Nimmer on Copyright by Melville B. Nimmer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Restatement (Second) of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Rules of the Court of Federal Claims, Appendix A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 S. Rep. No. 1877 (86th Cong., 2nd Sess. 1960, reprinted in 1960 U.S.C.C.A.N. 3444, 3446) . . . . . . . . . . 38 The American Heritage Dictionary of the English Language (4th ed. 2000) . . . . . . . . . . . . . . . . 6 United States Copyright Office Copyright Circular 61 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

-vi-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 8 of 58

IN THE UNITED STATES COURT OF FEDERAL CLAIMS BLUEPORT COMPANY, LLC, Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 02-1622C Judge Lawrence J. Block

DEFENDANT'S MEMORANDUM OF CONTENTIONS OF FACT AND LAW Pursuant to the Court's Order of December 22, 2005, and Paragraph 14(b) of Appendix A of the Rules of the Court of Federal Claims ("RCFC"), defendant, the United States ("the government"), hereby respectfully submits its contentions of fact and law.

I.

INTRODUCTION Blueport brought this case against the United States pursuant to 28 U.S.C. § 1498(b),

claiming that the government infringed Blueport's copyright. Blueport alleges that it is entitled to compensation for the unauthorized copying and use of a computer program known as the AUMD program. In addition, Blueport claims that this action arises under the Digital Millennium Copyright Act of 1998. The AUMD program was written by an Air Force Technical Sergeant named Mark Davenport, who worked as an Air Force Manpower Data Manager when he wrote the program. The AUMD program provided an interface to the Air Force's Manpower database that allowed users to download data from the database and format it into standard and customized reports. Other Manpower Data Managers began using the AUMD program. At the end of 1999, a dispute arose

-1-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 9 of 58

between Mr. Davenport and the Air Force over the ownership of the source code to the AUMD program. During the spring of 2000, the Air Force contracted with Science Applications

International Corporation ("SAIC") to develop a different program that offered functionality that was similar to the AUMD program. The replacement program is known as the MARS program. Mr. Davenport subsequently assigned all rights to the AUMD program to Blueport, a company that was formed by Mr. Davenport and his uncle, Robert Gunter. On March 9, 2000, Blueport registered its copyright for version 2.1d of AUMD. On November 18, 2002, Blueport filed a Complaint against the government, contending that the reproduction and use of the MARS program, as well as the unauthorized use of the AUMD program, infringed its copyright. This Court must resolve four general issues of law: (1) whether the Section 1498(b) defenses relating to Mr. Davenport's creation of the program during his employment are applicable; (2) whether Blueport can prove infringement; (3) assuming infringement, what is the reasonable and entire compensation under Section 1498(b); and (4) whether Blueport can prove the government violated the DMCA.

II.

ULTIMATE ISSUES OF FACT AND LAW TO BE RESOLVED BY THE COURT

Section 1498(b) Defenses A. Whether Mark Davenport was in a position to order, influence, or induce use of the AUMD program by the government B. Whether Mark Davenport prepared the AUMD program as a part of his official duties

-2-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 10 of 58

C.

Whether Mark Davenport prepared the AUMD program with the use of government time, material, or facilities

Non-Infringement D. Whether the government copied and adapted the AUMD program as an essential step in the utilization of the program E. Whether the government fairly used the AUMD program by reverse-engineering the program F. G. Whether the government had access to the source code of the AUMD program Whether any of the MARS programs are substantially similar to the AUMD program

Reasonable and Entire Compensation H. I. Whether Blueport suffered any actual damages Whether Section 1498(b) permits recovery of the infringer's profits, and if so, whether the government profited from the alleged infringement DMCA Claim J. Whether Blueport can establish that the government infringed the DMCA

III.

STATEMENT OF THE ISSUES OF FACT

Whether Mark Davenport was in a position to order, influence, or induce use of the AUMD program by the government 1. Blueport brought this case against the United States pursuant to 28 U.S.C. § 1498(b),

claiming that the government infringed Blueport's copyright. See Blueport Law ¶¶ 1, 12.1

Citations to "Blueport Fact," "Blueport Law," and "Blueport Damages" refer to the corresponding paragraph in Blueport's Proposed Findings of Fact and Conclusions of Law -3-

1

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 11 of 58

2.

Blueport's copyrighted work was registered as Registration No. TX 5-159-682 on

March 9, 2000. Mark Davenport is identified as the author of the work. The registration is titled "UMD Admin Program V.2.0A and Master Program V.2.1D." See Blueport Fact ¶ 2; Complaint ¶¶ 26, 31-32. The two programs comprise one registered work, and are known collectively as the AUMD program. 3. Blueport filed a Supplementary Registration with the Copyright Office on October

21, 2004 in connection with the AUMD program. The Supplementary Registration was assigned the code TX 6-064-419. See Blueport Fact ¶ 2. 4. The AUMD program was written by an Air Force Technical Sergeant named Mark

Davenport, who worked as a Manpower Data Systems Manager for the Air Force when he wrote the program. See Blueport Fact ¶¶ 6, 15. 5. Blueport Company, LLC was formed by Robert Gunter on February 7, 2000. Robert

Gunter is Mr. Davenport's uncle. See Davenport Dep. at 32-33. Mr. Davenport and Mr. Gunter are the only members of Blueport. See 100081-83. 6. Mr. Davenport designed the AUMD program to be used exclusively with the Air

Force's Manpower database. The database is known as the Manpower Data System ("MDS"), and is housed at Gunter Air Force Base in Alabama. The database contains "information on Air Force manpower profiles for each unit in the Air Force based on specified readiness levels, including skill profiles for each personnel slot. Air Force personnel use MDS information to manage current and future manpower needs." Blueport Fact ¶ 7.

("Blueport's Memorandum"), filed on May 4, 2006. Similarly, citations to "Gov't Fact" refer to the incorporated Statement of the Issues of Fact. Finally, citations to "Complaint" refer to Blueport's Amended Complaint, filed April 7, 2005. -4-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 12 of 58

7.

As a Manpower Data Systems Manager, Mr. Davenport oversaw and maintained

MDS by ensuring the accuracy of both the input and output data. See Blueport Fact ¶ 15; Davenport Dep. at 68. 8. As part of his employment, Mr. Davenport distributed "data which reflected

personnel requirements for assignment purposes and combat readiness throughout the Pacific Air Force ("PACAF") theater." Blueport Fact ¶ 15. Mr. Davenport frequently incorporated this data into the Unit Manpower Document ("UMD"), a standard report used by Air Force Manpower data managers. See Davenport Dep. at 11, 55, 68-70. 9. The purpose of the AUMD program is to create reports from data in MDS. First, the

program downloads data resident in MDS and incorporates the data into a local database. The component of the program responsible for this task is known as AUMD Admin. Second, the program manipulates the data in the local database into standard reports, such as the Unit Manpower Document ("UMD"), and into user-customizable reports. This component of the program is known as AUMD Master. See Blueport Fact ¶ 7. 10. The AUMD program was created in Microsoft Access 97, and was programmed in

the Visual Basic programming language. Microsoft Access can save the program into at least two different kinds of files: (1) Access can save a program in .MDB format, which is human-readable source code; and (2) Access can save a program in .MDE format, which is not human-readable, and is compiled binary (or object) code. See generally Davenport Dep. at 53-54. 11. Mr. Davenport incorporated an automatic expiration date function in many versions

of the AUMD program. If a user of a copy of the AUMD program attempted to use the program after the automatic expiration date, the program would stop running, and would display a message

-5-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 13 of 58

that directed the user to "contact your MAJCOM Data Manager," or to go to a website managed by Mr. Davenport "to download the most current version." See Blueport Response to Req. for Adm. 10; see generally Blueport Fact ¶ 14. 12. Mr. Davenport completed development of a beta version2 of the AUMD program "on

or about May 28, 1998." This version was known as Beta 0.9. See Blueport Fact ¶ 6; 200141; 200148. 13. After completing development of the beta version of AUMD, Mr. Davenport "sent

a copy of the [beta] AUMD program to M. Sgt. William Luckie" in June 1998. Blueport Fact ¶ 16. 14. M. Sgt. William "Butch" Luckie, the Manpower Data Manager at Scott Air Force

Base, first met Mr. Davenport when they worked together on MDS and was a friend of Mr. Davenport. See Davenport Dep. at 92, 155. 15. Mr. Davenport also distributed copies of the programs to others within the Air Force's

Manpower community: Out of generosity, [Mr. Davenport] shared the program with interested individuals. Initially, Mr. Davenport's friend from a prior assignment, MSgt William Luckie, was the person with whom Mr. Davenport shared copies of the program. He later shared the program with individuals at other Air Force bases in the PACAF. See Interrogatory 17; see also Davenport Dep. at 117 ("I wrote the program and I made it available for them to use."). 16. Mr. Davenport increased the availability of the program by posting the AUMD

program on the PACAF web page. See Davenport Dep. at 118.

A "beta test" is defined as "the final stage in the testing of new software before its commercial release, conducted by testers other than its developers." The American Heritage Dictionary of the English Language (4th ed. 2000). -6-

2

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 14 of 58

17.

In addition to directing other Manpower employees to the PACAF website, he also

distributed the program by sending copies of the program on disks and by sending copies by email. See Davenport Dep. at 161. 18. In September 1998, Mr. Davenport traveled to an Air Force Manpower conference

at Randolph Air Force Base in San Antonio, Texas, to demonstrate the AUMD program to many of the Manpower managers from the various Air Force Air Commands. See Blueport Fact ¶ 16; Davenport Dep. at 90-92. 19. As alleged in Blueport's Proposed Findings of Fact, the response to Mr. Davenport's

demonstration of AUMD was "overwhelmingly positive," and the Air Force's use of the program "increased substantially" after Mr. Davenport's demonstration. Blueport Fact ¶ 16. 20. In the annual Enlisted Performance Report for Mr. Davenport, Mr. Davenport's

superior, Col. Richard Zeimet, recognized that Mr. Davenport had influenced the use of the "Net Worth" program.3 See 100030 ("Presented his creation at worldwide conference ­ absolutely sold his audience ­ now a 'must have' tool"); see also Davenport Dep. at 145. 21. Prior to the San Antonio Manpower conference, Mr. Davenport had already

demonstrated his program at Eielson and Elmendorf Air Force bases, as well as in Misawa, Japan. According to Mr. Davenport's testimony and Blueport's discovery responses, these demonstrations took place in July 1998 ­ two months after he had allegedly created the program, but two months before he demonstrated the program in San Antonio, Texas. See Davenport Dep. at 98-101; Response to Interrogatory 18.

Mr. Davenport's influence may have been due, in part, to others' respect for his technical abilities, as indicated by his Performance Reports. See Davenport Dep. at 138-141; 100029-30, 1000596-601. -7-

3

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 15 of 58

22.

Mr. Davenport never acted to reduce or limit the distribution of the AUMD program.

See Davenport Dep. at 119. 23. Mr. Davenport did take action to limit the distribution and use of at least two other

computer programs he created: Q (By Mr. Bolden) In the Comments section for the Project Listing program it states "I've only let a couple people use this one because I don't have time to support another program." What did you mean by [this]? A I would assume my verbiage was there as I sent it to Butch [Luckie] and I wasn't going to let any of the other ­ I wasn't going to pass it out to the others and make it available as the other programs because I didn't want them calling me for ­ for help. See Davenport Dep. at 155; see also Davenport Dep. Ex. 14 (limiting access to the MDS Error Checking program). 24. Mr. Davenport provided technical support for his program while on duty:

I believe that I am being very responsive to anyone using the program and until someone comes up with a better way to accomplish what this program does, I hope to continue the same support. G101; see also Davenport Dep. at 87. 25. Mr. Davenport testified that he extensively supported the program:

I was taking care of the program. I was maintaining it. I was making modifications to it and it was working so I was supporting that program. I was keeping it running on ­ on my end. Davenport Dep. at 88. 26. He added features to the program at the request of other Air Force employees. See

Davenport Dep. at 128. 27. Mr. Davenport supported the government's use of the program for at least 18 months

after he first developed the beta version of the AUMD program.

-8-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 16 of 58

28.

Mr. Davenport was a member of the Air Force MDS Users Group ("MUG"). See

G00099; Davenport Dep. at 46. Whether Mark Davenport prepared the AUMD program as a part of his official functions 29. As noted above, Mr. Davenport's responsibilities as a Manpower Data Systems

Manager included collecting data from the MDS database and incorporating that data into the Unit Manpower Document ("UMD"), as well as other reports. See Blueport Fact ¶ 15; Gov't Fact ¶¶ 7-8. Mr. Davenport's Enlisted Performance Report from April 11, 1998 through April 10, 1999 states that Mr. Davenport: Manages the command manpower database containing over 40,000 manpower authorizations in more than 400 units . . . . Directs the daily operation of the manpower data system (MDS) throughout PACAF theater. Supervises execution of the manpower data system providing manpower resource information to HQ USAF . . . . Provides resource information to customers across the Air Force including HQ USAF, PACAF and other MAJCOMs. 100029-30 ("Key Duties, Tasks, and Responsibilities"). 30. Mr. Davenport's job responsibilities were also outlined in an Air Force Manual.

According to 1997 AFMAN 36-2108, a Manpower manager: 2.1. . . . . Uses industrial engineering and computer techniques to facilitate work measurement and process improvement . . . . 2.3. Designs, operates, and maintains manpower data systems at base major command (MAJCOM), or Headquarters USAF. Develops and prepares manpower documents . . . . Prepares and maintains manpower reports. G0251-52. 31. The AUMD program directly assisted Mr. Davenport in the performance of his

responsibilities with respect to MDS and the creation of the UMD and other reports. The AUMD program created UMDs and other customizable reports from data in MDS. See Davenport Dep. at 68-70. -9-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 17 of 58

32.

Prior to his creation of the AUMD program, Mr. Davenport spent a significant

portion of his work time manually interfacing with MDS to create the UMD and other reports. See 200145. The AUMD program directly assisted him in his day-to-day tasks, and helped disperse his workload. See Davenport Dep. at 152. 33. Mr. Davenport testified that, in general, "probably 50 to 60%" of his job involved

working on a computer. Davenport Dep. at 29. 34. As part of his duties, Mr. Davenport helped create PACAF's website. He was also

responsible for the content on that website. He could add content to the website by updating a directory on his work computer. See Davenport Dep. at 112-113. 35. Mr. Davenport admitted that he had learned at least some Visual Basic during duty

hours. See Davenport Dep. at 31-32. 36. Mr. Davenport taught a colleague how to program in Visual Basic in Microsoft

Access during work hours. See Davenport Dep. at 156, 159. 37. Mr. Davenport's predecessor, the previous Manpower Data Manager for PACAF, had

designed a database query in Microsoft Access as part of his job. See Davenport Dep. at 135-136. 38. Mr. Davenport created at least four other Microsoft Access programs while employed

by the government, including the NetWorth program. See 200133; Davenport Dep. at 153-55. 39. Mr. Davenport provided technical support for the AUMD program while at work.

See Davenport Dep. at 88-89. 40. When he received questions at work about his program, he either referred the user

to other data managers, or he answered the question personally. See Davenport Dep. at 102-103.

-10-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 18 of 58

41.

As noted above, he added features to AUMD at the request of other Air Force users.

See Davenport Dep. at 127. 42. His demonstrations of AUMD occurred while on duty, on trips paid for by the Air

Force. See Davenport Dep. at 90, 97-98. 43. Mr. Davenport testified that M. Sgt. Luckie was primarily responsible for creating

the User Manual for the AUMD program, but that Mr. Davenport assisted by reviewing and editing the document. See Davenport Dep. at 124-125. 44. Mr. Davenport helped review and edit the User Manual for the AUMD program while

at work. See Davenport Dep. at 124, 127. M. Sgt. Luckie created the manual while at work. These facts are supported by the document metadata properties of the manual. See Davenport Dep. at 127, 130-131; Davenport Dep. Ex. 11-12. 45. Mr. Davenport may also have helped by contributing graphics to the manual. See

Davenport Dep. at 125-126. 46. Dr. Rudd, Blueport's expert on damages, testified that he included time and expenses

for creating software documentation within the scope of the cost of developing of a program: Q. Okay. What about requirements, definition, design and documentation? Did you include that in the earlier analysis as well? A. I included what I thought the Air Force was contracting for, which was what Mr. Davenport did. .... Q. And with respect to these noncoding activities that they talk about, are those activities considered part of the development of the program? A. They would be, yes. Rudd Dep. at 91-92, 92-93. 47. Mr. Davenport received excellent performance ratings for his creation of the AUMD

program. See Davenport Dep. Ex. 13. -11-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 19 of 58

48.

Mr. Davenport's Enlisted Performance Report dated April 10, 1999, recognizes Mr.

Davenport's work on the AUMD program and its contribution to the Air Force: - Foresaw delays fielding critical MDS functionalities ­ single-handedly rectified problem for the Air Force ­ Designed, tested, implemented two database programs ­ used off-the-shelf software at no cost to PACAF ­ Selflessly passed programs to other MAJCOMs ­ now employed AF wide ­ outstanding contribution Davenport Dep. Ex. 13; 100029-30. 49. Mr. Davenport's other Enlisted Performance Reports during this time period also

acknowledge his efforts with respect to the AUMD program specifically, and with respect to computer programming generally: ­ Authored several data code queries to ensure most accurate reflection of information within both manpower and personnel data systems ­ quickly assessed the problem and provided corrective actions .... ­ Devised a method allowing all MAJCOMs to download and use data from MDS central location Davenport Dep. Ex. 13; 100596-97; see also 100030 ("Created 'Net Worth' program . . . presented his creation at worldwide conference ­ absolutely sold his audience ­ now a 'must have' tool"); 100601 ("Drawing on his extensive computer background . . . [wrote] some experimental programs for analysts . . . . Designed a query to produce manpower data by unit"). 50. Mr. Davenport created the program with the desire to help the Air Force. See

Davenport Dep. at 44-46; Blueport's Response to Interrogatory No. 15.

-12-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 20 of 58

Whether Mark Davenport prepared the AUMD program with the use of government time, material, or facilities 51. With respect to the actual AUMD program, M. Sgt. Luckie was instrumental in

testing and debugging the program. Mr. Davenport discussed M Sgt. Luckie's role in an email sent to Robert Gunter: I knew that [the AUMD program] worked with my MAJCOMs data, and when I sent it to Butch [Luckie] for testing, he was not only testing the application, but making sure that it worked with other MAJCOMs data. He found places that didn't work with his data and he had suggestions to the program . . . . People did find errors and had suggestions for enhancements . . . . That's what each one of the version numbers were ­ as I made changes, I increased the letters so that I knew when someone called if they had the most current version or not. At no time did anyone question the way the program was being distributed around. 200142 (emphasis added). 52. Mr. Davenport verified the content of this email during his deposition. See

Davenport Dep. at 162-63. 53. M. Sgt. Luckie assisted Mr. Davenport in the development of at least one other

program. See Davenport Dep. at 155. 54. It is impossible to create the AUMD program without knowledge of and access to

MDS, and Mr. Davenport had both. See generally Davenport Dep. at 119 ("without data for it to report on there was no sense in having the program"). 55. Mr. Davenport tested his AUMD program with the MDS database, while at work,

using government computers. See Blueport's Response to Request for Admission No. 18 ("After he had developed the AUMD Admin program he tested it with the 'Oracle Database'."). 56. To access the data in MDS, the AUMD program must log into the database through

the use of a user account, issued only to Manpower employees. See Davenport Dep. at 52-53.

-13-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 21 of 58

57.

Initially, the AUMD program logged into MDS through the use of one server. After

a dispute with personnel at Gunter Air Force Base, the AUMD program logged into MDS through a personal user account, going "through two or three different servers." Davenport Dep. at 169. 58. Mr. Davenport could not access MDS from his home. He could only access MDS

from his work computer. See Blueport's Response to Request for Admission No. 18. 59. Mr. Davenport used his work computer and his work email account to send

information on the program to his personal email account and Robert Gunter. See Davenport Dep. at 122-123. Whether the copyright was infringed 60. During 1999, the Air Force began to request that Mr. Davenport release the source

code to the AUMD program to the Air Force Manpower and Innovation Agency ("AFMIA"). 61. Mr. Davenport refused to release the source code, but continued distributing binary,

compiled versions of the program, and continued supporting the program. See generally Blueport Fact ¶ 17. 62. On January 11, 2000, the Air Force issued a solicitation for contractors to write a

replacement program for the AUMD program. See G0178-82. The solicitation was republished on March 14, 2000. See G0040-48. The replacement program was to be known as the MARS program. See G0041. 63. Science Applications International Corporation ("SAIC") was selected to write the

replacement program on April 10, 2000. See G0078-79. 64. As a result of the impasse, Mr. Davenport ceased distribution of the AUMD program.

The last version of the AUMD program that was distributed by Mr. Davenport and used by the Air

-14-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 22 of 58

Force was version 2.1f. Version 2.1f was created on January 5, 2000, and contained an expiration date of May 15, 2000. See 200148. 65. Mr. Davenport authorized the Air Force to use the AUMD program up until May 15,

2000. In an Interrogatory Response, Blueport essentially admits that the Air Force held an implied license to use the AUMD program on all dates prior to May 15, 2000. See Interrogatory No. 7 ("With regard to the compensation that Plaintiff seeks in this action, Blueport specifies that the copyright infringement began on May 15, 2000."). Blueport admits that the Air Force "may" have had an implied license "to use the compiled version of the AUMD software prior to May 15, 2000." Blueport Law ¶ 5. 66. SAIC, acting as a contractor for the Air Force, extended the expiration date of version

2.1d of the AUMD program by modifying the compiled object code of the AUMD program with a hexadecimal editor. SAIC relabeled this version as 2.1e. This program was used by the Air Force until May 17, 2000. See G0152-54.4 67. SAIC, acting as a contractor for the Air Force, extended the expiration date of version

2.1f of the AUMD program by modifying the compiled object code of the AUMD program with a hexadecimal editor. SAIC relabeled this version as 2.1g. The modified expiration date of this program was set to February 15, 2001. See G0152-54. 68. The Air Force continued using SAIC modified version 2.1g until SAIC distributed

version 1C of the MARS program on December 11, 2000. See G0248.

Note that Blueport appears to generally agree with this Statement of Fact, except that: (1) the AUMD versions are incorrectly identified; and (2) Blueport alleges that AUMD version 2.1d / Modified version 2.1e was used between May 15 and May 18, 2000. See Blueport Fact ¶ 21. -15-

4

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 23 of 58

69.

The Air Force used the modified version of version 2.1d of the AUMD program

(relabeled as 2.1e), without Mr. Davenport's authorization, for approximately two days ­ the time period between May 15, 2000 and May 17, 2000. See Gov't Fact ¶¶ 65-66. 70. The Air Force used the modified version of version 2.1f of the AUMD program

(relabeled as 2.1g), without Mr. Davenport's authorization, for approximately seven months ­ the time period between May 17, 2000 and December 11, 2000. See Gov't Fact ¶¶ 66-68. 71. Mr. Davenport retained sole possession of the AUMD source code. He never brought

the source code from his home, and never copied the source code to his work computer. See generally Blueport Response to Request for Admission No. 6) ("the AUMD programs installed on Mr. Davenport's computer at work were the compiled programs and could not be modified"). Mr. Davenport verified this statement during his deposition: Q Sure. Does a user of your AUMD programs who has access to the MDE file, do they have access to the source code? A No, they do not. Q Okay. Did you ever bring your programs in [source code] format into your office? A No, I did not. Q Did you ever let any other person have access to a [source code version] of your AUMD programs? A Not with my knowledge, no. Davenport Dep. at 54. 72. There is no evidence that the government or SAIC ever had access to the source code

for the AUMD program during the development of the MARS program. 73. The MARS program(s) contains more features than AUMD, runs on more recent

versions of Microsoft Access, and contains more lines of source code.

-16-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 24 of 58

74.

The MARS program(s) are not substantially similar to any protectable expression in

the AUMD program. The applicable accounting period 75. In an Interrogatory Response, Blueport stated that the applicable accounting period

for its claim of copyright infringement "began on May 15, 2000 and continues to this day." Blueport Response to Interrogatory No. 7. Blueport has never earned income from the AUMD program 76. There is no evidence that Blueport experienced any economic harm as a direct result

of the government's activities. 77. Blueport admits that it never sold a single copy or license of the AUMD program.

See Blueport Response to Req. for Adm. 19. 78. Furthermore, Blueport admits that it has never received any income from the AUMD

program. See Blueport Response to Req. for Adm. 20. 79. Finally, Blueport admits that it did not submit a proposal in response to the Air

Force's official solicitation for contractors. See Blueport Response to Req. for Adm. 21. The SAIC Contract 80. Initially, the Air Force paid SAIC $152,354.09. See G0078-79. On December 19,

2000, the contract was modified and the payment was increased by $4528.62 to a total amount of $156,882.71. See G0080-81. On February 9, 2001, the contract was modified for a second time and the payment was increased by $163,440.96 to a total amount of $320,323.67. See G0082-83. On September 4, 2001, the contract was modified for a fourth time5 and the payment was increased by

5

The third contract modification was never executed. -17-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 25 of 58

$290,111.13 to a total amount of $610,434.80. See G0084-85. On August 16, 2002, the contract was modified for a final time and the payment was increased by $67,980.58 to a final amount of $678,415.38. See G0086-87. 81. The SAIC contract proposed the following allocation of work for the development

of the MARS program: 8.3% to Planning; 16.7% to Analysis; 25.0% to Design; 25.0% to Development; 8.3% to Testing; and 16.7% to Documentation. See G0072. Other Damages Issues 82. An Air Force document indicates that, as of August 1, 2003, there were 78 users of

the MARS Get Data program, and 2510 users of the MARS Query and Report program. See G0088.

-18-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 26 of 58

IV.

ANALYSIS A. This Court Has Jurisdiction over Claims of Copyright Infringement by or for the United States

With respect to Blueport's First Claim for Relief, as set forth in the Complaint, this Court has jurisdiction pursuant to 28 U.S.C. § 1498(b) over Blueport's action to recover compensation for alleged copyright infringement by the United States.

B.

This Court Lacks Jurisdiction for DMCA Claims Against the Government

As set forth in the government's Motion for Partial Summary Judgment and the responsive and supplemental briefs, this Court lacks jurisdiction with respect to Blueport's Digital Millennium Copyright Act claim. See 17 U.S.C. §§ 1201, 1202. That issue is a matter of law and will not be reargued in this Memorandum. It is worth noting, however, that the Federal Circuit recently confronted a similar issue in its recent decision in Zoltek.6 See Zoltek v. United States, 442 F.3d 1345 (Fed. Cir. 2006). In Zoltek, the Federal Circuit reversed the trial court's ruling that the patentee could allege patent infringement as a Fifth Amendment taking under the Tucker Act. See id. at 1352-53 ("We simply note that to reach its conclusion the Court of Federal Claims had to read an entire statute, § 1498, out of existence ­ a result that betrays the error in the trial court's analysis.").

The Federal Circuit's decision was published on March 31, 2006, after both Blueport and the government had filed their Supplemental Briefs with respect to the Motion for Partial Summary Judgment. -19-

6

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 27 of 58

C.

Blueport's Claim is Barred by the Defenses Incorporated into Section 1498(b)

Even if a copyright infringement claim may otherwise be actionable against the government pursuant to Section 1498(b), the claim may still be denied under three statutorily-enumerated circumstances: where [the copyright author] was in a position to order, influence, or induce use of the copyrighted work by the Government . . . . where the copyrighted work was prepared as a part of the official functions of the employee, or in the preparation of which Government time, material, or facilities were used. 28 U.S.C. § 1498(b). "The use of the word 'or' in the statute indicates that satisfaction of any one of these conditions is sufficient to deny a right of action." Herbert v. United States, 36 Fed. Cl. 299, 305 (1996). The Court of Federal Claims thoroughly analyzed and applied these defenses in the Herbert case. See id. In Herbert, the plaintiff claimed that the National Institutes of Health, through its contractor, had infringed his copyrights in three written works. See id. at 302-03. After a trial, the court held that under Section 1498(b), the plaintiff had no cause of action because: (1) the written works were prepared as part of his official functions; (2) the plaintiff used government facilities in the preparation of his works; and (3) the plaintiff was in a position to influence the use of his works. See id. at 304-07. The Herbert decision is particularly relevant to this case, and it will be discussed in conjunction with each of the factors below. 1. Mark Davenport actually influenced and induced the government's use of the AUMD program

The facts of this case demonstrate that Mr. Davenport actually influenced and induced the government's use of the AUMD program. Note that Mr. Davenport's role goes far beyond what is

-20-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 28 of 58

required by statute ­ Section 1498(b) merely requires that the author have been in a position to order, influence, or induce the use of the work. See id. at 307. The Herbert court held that the plaintiff's cause of action was denied on facts that were much more limited than in this case. The court held that as a member of the Food and Nutrition Board, the plaintiff was clearly in a position to influence his appointment to a later committee, and "thereby in a position to influence the Committee's use of his works." Herbert, 36 Fed. Cl. at 307. As a member of the committee, he knew that his written works would be published. Id. Thus, the court held that he was in a position to influence the use of his works. Id. Mr. Davenport's direct influence over the government's use of the AUMD program is proved by his: (1) free and widespread distribution of the AUMD program throughout the Air Force Manpower community; (2) demonstrations of the program to others; (3) failure to restrict the use of the program; and (4) unfailing support of the program as part of his official job duties up until the early part of the year 2000. As noted by the facts discussed above, Mr. Davenport began distributing the AUMD program to other Air Force personnel almost as soon as he finished development of the beta version. See Gov't Fact ¶¶ 12-16. The evidence shows that after he finished development of the beta version in May 1998, he almost immediately shared a copy of the program with his friend, M. Sgt. Luckie. See Gov't Fact ¶¶ 12-14. Then, he demonstrated the program at Eielson and Elmendorf Air Force bases, as well as in Misawa, Japan, beginning in July 1998. See Gov't Fact ¶¶ 21. Two months later, he demonstrated the program to Manpower directors in San Antonio, Texas. See Gov't Fact ¶¶ 18-20. He even facilitated its use by posting it on a military website for easy downloading, sent copies to others on disk and through email, and actively supported the program through technical help and the inclusion of new features in new versions. See Gov't Fact ¶¶ 15-17,

-21-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 29 of 58

24-27. He was a member of the MDS User's Group, a group that had influence with respect to the use of the MDS database throughout the Air Force. See Gov't Fact ¶ 28. Throughout this time period, he took no active steps to impede the use of his program. See Gov't Fact ¶¶ 22-23. Perhaps most significantly, Mr. Davenport could have easily stopped the government's use of the program at any time during 1998 and the early part of 1999. He could have kept it as his own private project, and not given it out to friends. Compare Gov't Fact ¶ 23 (limiting distribution of two other programs). He could have refused to demonstrate the program. He could have refused to post the program on the website. He could have stopped making new versions of the program, and let the initial versions expire. Accordingly, Blueport's claim of infringement must be denied. Mr. Davenport was in a position to influence and induce the use of the AUMD program, and actually did influence and induce the use of the AUMD program. 2. Mark Davenport prepared the AUMD program as a part of his official functions

With respect to the second defense incorporated into Section 1498(b), it is clear that Mr. Davenport created the AUMD program within the scope of his employment with the Air Force. This ultimate conclusion is supported by three main areas: (1) his job responsibilities; (2) the recognition he received for his efforts; and (3) his desire to assist the Air Force. Mr. Davenport, as a Manpower data manager, was responsible for maintaining and operating MDS, the Air Force's Manpower database. See Gov't Fact ¶¶ 4, 7-9. As part of this responsibility, he was required to analyze data in MDS, and to create the Unit Manpower Document, as well as other written summaries of the information contained within the database. See Gov't Fact ¶¶ 8-9, 29-30. The sole purpose of AUMD was to accomplish the goal of creating UMDs and other written -22-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 30 of 58

summaries. See Gov't Fact ¶¶ 9-10, 31. As he stated in his deposition, the AUMD program directly assisted him in his day-to-day tasks, and helped disperse his workload. See Gov't Fact ¶ 32. Even though he was not officially classified as a computer programer, a significant amount of his job responsibilities involved computer use and computer programming. See Gov't Fact ¶ 33. He admitted that he had learned to program in the computer language that was used for AUMD during work hours, and that he taught a colleague how to program during work hours. See Gov't Fact ¶¶ 35-36. He authored several other programs and database queries for the Air Force as part of his job. See Gov't Fact ¶ 38. Finally, his predecessor, the previous Manpower Data Manager, had also designed a database query as part of his job. See Gov't Fact ¶ 37. After the Manpower community began to use the AUMD program, he helped support the program at work. See Gov't Fact ¶ 39. He provided technical support. See Gov't Fact ¶ 39. He answered questions. See Gov't Fact ¶ 40. He added features to AUMD at the request of other users. See Gov't Fact ¶ 41. He demonstrated the program during work hours. See Gov't Fact ¶ 42. He helped review and edit the AUMD user manual while at work. See Gov't Fact ¶¶ 43-45. And he was recognized and praised for his efforts in his Enlisted Performance Reports. See Gov't Fact ¶¶ 47-49. The Court of Federal Claims cited several identical facts in the Herbert case to support its decision that the plaintiff had created the written works within the scope of his official duties. See Herbert, 36 Fed. Cl. at 305 (citing excellent performance reports, and reputation as an expert). Furthermore, the court flatly rejected the contention that "writing and publishing the [written works] was not a specific duty or condition of his employment . . . and therefore could not be considered part of his official duties or functions." Id. The court held that the plaintiff's reliance on "specific"

-23-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 31 of 58

tasks was misplaced, and that where the employee's official functions included the activity generally, the employee may still be barred a right of action for infringement. Id. at 305-06 (citing Myers v. United States, 147 Ct. Cl. 485, 489 (1959)). Although not directly applicable, several other courts have confronted scope of employment copyright issues outside of the context of Section 1498. As an example, in Miller v. CP Chemicals, the District Court for the District of South Carolina ruled that an employee created a computer program within the scope of his employment with similar facts to this case. Miller v. CP Chemicals, Inc., 808 F. Supp. 1238 (D.S.C. 1992). In that case, the plaintiff contended that the copyrighted computer programs were a result of his own initiative, were written and tested at his home, and that he was an hourly employee and was never compensated for his creation of the computer programs. See id. at 1242. In response, the defendant contended that the programs were specific to products manufactured by the defendant, and that the plaintiff, as a supervisor, had broad responsibilities, "and that writing the computer programs, although not required, was in connection with and incidental to his job." Id. at 1243. The court held that the general common law of agency applied, citing both the Supreme Court and the Second Restatement of Agency. See id.; see also Commission For Creative Non-Violence v. Reid, 490 U.S. 730, 741 (1989); Restatement (Second) of Agency § 228 (1958). The court determined that programming was within the ultimate objective of the employer, that programming was not an unlikely act for an employee in that position, and that the plaintiff created the programs in an effort to serve his employer. See Miller, 808 F. Supp. at 1243 ("The initial program was created to simplify Miller's job and to eliminate errors, which was for the benefit of both Miller and CP."). The court weighed the factors and concluded that the plaintiff developed the computer programs within the scope of his employment. See id. at 1244.

-24-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 32 of 58

Thus, Mr. Davenport's creation of the AUMD program fell within the scope of his official duties. Blueport's copyright claim must be denied on the basis of Mr. Davenport's day-to-day responsibilities; the recognition he received for developing, distributing, and supporting the AUMD program; and the ultimate purpose of the program ­ to benefit the Air Force and to simplify his job. See Gov't Fact ¶¶ 32, 50. 3. Mr. Davenport used government time, material, and facilities to create the AUMD program

With respect to the third Section 1498(b) defense, it is clear that Mr. Davenport used government personnel and a government database to create the AUMD program. First, Mr. Davenport extensively relied on M. Sgt. Luckie to assist in the development of the program ­ while M. Sgt. Luckie was on duty. See Gov't Fact ¶¶ 51-53. Among other things, M. Sgt. Luckie helped Mr. Davenport: draft the user manual, test the AUMD program, debug the AUMD program, and test other programs created by Mr. Davenport. See Gov't Fact ¶¶ 51-53. These actions occurred while M. Sgt. Luckie was at work, and were facilitated by his access to the government's MDS database. See Gov't Fact ¶¶ 51-52, 56. By obtaining this critical assistance from another government employee while the employee was being paid by the government, Mr. Davenport's actions are no different than if he had simply done the work on his own while he was at work. And there is proof that he did ­ he helped review and edit the AUMD user manual while at work. See Gov't Fact ¶¶ 43-45. Mr. Davenport's reliance on M. Sgt. Luckie, as well as his reliance on the Manpower community as a whole, consumed government time, materials, and facilities. Second, Mr. Davenport could not have programmed the AUMD program without extensive access to the government's MDS database. The evidence shows that Mr. Davenport used a variety of user names to access MDS to obtain data for his program. See Gov't Fact ¶¶ 55-58. In addition, -25-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 33 of 58

Mr. Davenport's program needed to be tested against the real MDS database in order to correct errors in the final output. See Gov't Fact ¶¶ 51, 55, 58. MDS access was a prerequisite for the creation, modification, and operation of the AUMD program. See Gov't Fact ¶ 54. In Herbert, the court concluded that it was likely that the plaintiff had produced the works while on government time, and that the parties had stipulated that government facilities were used. See Herbert, 36 Fed. Cl. at 306. In this case, it appears that Mr. Davenport produced AUMD while relying on other government employees who were working on government time, using government materials, in government facilities. Mr. Davenport also personally used government time and materials by directly accessing the MDS database to create and troubleshoot his program. In conclusion, the government has established the existence of at least three Section 1498(b) defenses, where only one would be sufficient to bar Blueport's claim for copyright infringement.

D.

The Government Did Not Infringe Blueport's Copyright

Blueport must prove two elements to establish copyright infringement: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publ'ns, Inc. v. Rural Telephone Services Co., 499 U.S. 340, 361 (1991). With respect to the second element, "[c]opying requires evidence that a defendant literally copied the [work] or, alternatively, that a defendant had access to the protected [work] before creating the accused [products] with an additional showing of substantial similarity not only of the general ideas but of the expression of those ideas as well." Amini Innovation Corp. v. Anthony California, Inc., 439 F.3d 1365, 1368 (Fed. Cir. 2006) (applying Ninth Circuit law) (citation omitted); see also Herbert, 36 Fed. Cl. at 303; Marshburn v. United States, 20 Cl. Ct. 706, 709 (1990). Thus, in this case, Blueport must prove

-26-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 34 of 58

that: (1) the government made verbatim copies of the AUMD program (also known as "direct evidence"); or (2) the government had access to the AUMD program source code and that the MARS programs are substantially similar with respect to the original expression of the AUMD program. See generally Atari Games Corp. v. Nintendo of America, 975 F.2d 832, 837-38 (Fed. Cir. 1992) (discussing infringement in the context of a computer program). Even if Blueport proves unauthorized copying, that copying may be noninfringing pursuant to the limitations on infringement in Sections 107 through 122 of Title 17. See 17 U.S.C. §§ 107-122. Ultimately, Blueport cannot prove infringement. First, the government did not infringe because it copied and adapted the AUMD program as an essential step in the utilization of the program, and because its reverse engineering of AUMD was a fair use. See 17 U.S.C. §§ 107, 117. Second, there is no evidence that either the government or SAIC had access to the source code of AUMD. Third, MARS and AUMD are not substantially similar with respect to any original elements. Blueport fails to comprehend that "a copyright does not preclude others from using ideas found in a copyrighted work." Boyle v. United States, 44 Fed. Cl. 60, 63 (1999), aff'd 200 F.3d 1369 (Fed. Cir. 2000). 1. The Government Held an Implied License to Use AUMD up to May 15, 2000

Through Mr. Davenport's conduct, the government held an implied license to use the AUMD program up to May 15, 2000. As noted above, Mr. Davenport freely distributed and supported the AUMD program throughout the Manpower community up until the expiration of version 2.1f on May 15, 2000. Mr. Davenport's actions fit within the definition of an implied license. The Court of Federal Claims directly addressed this issue in Herbert:

-27-

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 35 of 58

An implied license is one derived from the conduct of the parties. The existence and scope of such an implied license depends upon the facts of the individual case, but courts have found such licenses to exist where, for example, a person voluntarily submitted a work for publication. Delivery of a copy of the work is one type of conduct that demonstrates the existence of an implied license. In [Effects Assocs., Inc. v. Cohen, 908 F.2d 555, 558-59 (9th Cir. 1990)], the Ninth Circuit Court of Appeals found that by creating a work at defendant's request and conveying it to him, intending that it be copied and distributed, plaintiff necessarily conveyed a license because otherwise the conveyance would have been of minimal value. In the present case, as in Cohen, plaintiff and others worked on the 10th RDA at the Academy's request, and voluntarily created and conveyed their writings to the Academy. In doing so, the court finds that Dr. Herbert necessarily transferred a nonexclusive license for his works as well as the manuscript to the Academy. Herbert, 36 Fed. Cl. at 310 (citations omitted). Mr. Davenport's widespread distribution of AUMD is equivalent to the "delivery" and "conveyance" discussed in the Herbert case. His support of AUMD and his reliance on other employees for troubleshooting and features are other indicia that an implied license existed. In addition, Blueport's response to an interrogatory supports the conclusion that an implied license existed between Mr. Davenport and the government, at least up until May 15, 2000. See Interrogatory No. 7 ("With regard to the compensation that Plaintiff seeks in this action, Blueport specifies that the copyright infringement began on May 15, 2000."). Finally, Blueport admits in its Memorandum that the "Air Force may have had a fully revocable implied license to use the compiled version of the AUMD software prior to May 15, 2000." Blueport Law ¶ 5. 2. The Government Copied and Adapted AUMD as an Essential Step in the Utilization of the Program ­ 17 U.S.C. § 117

Even though the government, through its contractor, copied and adapted the AUMD program for an extremely short period,7 that activity is not a copyright infringement. Pursuant to Section 117

AUMD version 2.1d (relabeled as 2.1e) was used without authorization for approximately two days; AUMD version 2.1f (unregistered) (relabeled as 2.1g) was used without authorization for -28-

7

Case 1:02-cv-01622-LB

Document 56

Filed 05/25/2006

Page 36 of 58

of Title 17, the owner of a copy of a computer program may make non-infringing copies or adaptations of the computer program if: that . . . new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine and that it is used in no other manner. 17 U.S.C. § 117(a)(1). To put it another way, the government did not infringe Blueport's copyright if it: (i) owned a copy of the AUMD program; (ii) adapted AUMD as "an essential step in the utilization of" the AUMD program "in conjunction with a machine"; and (iii) "used [the adaptation] in no other manner." Id. First, the government owned copies of the AUMD program. The same facts that support the existence of the implied license support the finding that the government owned copies of the AUMD program. The issue of ownership of a copy was discussed at length in the Second Circuit's decision in the recent Titleserv case. Krause v. Titleserv, Inc., 402 F.3d 119 (2d Cir. 2005). In Titleserv, the plaintiff had previously worked as a computer programmer for the defendant. See id. at 120. After a falling out between the two parties, the plaintiff terminated the business relationship, and left the defendant with only the executable object code for several programs. See id. at 120-21. The defendant later managed to decompile the executable object code, obtained the source code, and modified the source code to enable the continued use of the programs. See id. The Second Circuit held that the defendant's adaptation of the source code of the computer programs was non-infringing within the scope of Section 117(a)(1) of Title 17. See id. at 130. In reaching its decision, the Second Circuit held that Section 117 does not