UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

GENERAL MOTORS L.L.C., and GM 

GLOBAL TECHNOLOGY OPERATIONS 

L.L.C., 

Plaintiffs, 

 Case No. 14-14864 

v. HON. TERRENCE G. BERG 

AUTEL.US INC., and AUTEL 

INTELLIGENT TECHNOLOGY CO., LTD. 

and GARY DELUCA, 

Defendants. 

 / 

OPINION AND ORDER DENYING 

DEFENDANTS’ MOTION TO DISMISS (DKT. 15) 

Plaintiffs General Motors L.L.C. and GM Global Technology Operations 

L.L.C., (collectively “GM”) filed this lawsuit against Defendants Autel.US Inc., 

Autel Intelligent Technology Co., Ltd., (collectively “Autel”)1 and Gary DeLuca on 

December 12, 2014, asserting various claims, including trademark and copyright 

infringement, circumvention of security measures, computer intrusion, breach of 

contract misappropriation of trade secrets, and unjust enrichment. (Complaint, 

Dkt. 1). On March 20, 2015, Defendants filed this partial motion to dismiss. (Dkt. 

15). Following full briefing, the Court heard oral argument on December 3, 2015. 

For the reasons that follow, Defendants’ motion to dismiss is DENIED. 

 

1 The Court will refer to the Autel Defendants collectively as Autel, except as specified. 

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I. FACTUAL AND PROCEDURAL HISTORY 

 GM is a world-renowned auto manufacturer with its principal place of 

business in Detroit, Michigan. (Complaint, ¶ 3). In addition to manufacturing 

vehicles, GM offers post-sale products and services to service technicians for the 

diagnosis and repair of its vehicles. (Id. at ¶ 46). For this purpose, GM has 

developed the Techline Information System (“TIS”) software. (Id. at ¶ 79). GM 

holds copyrights in the various versions of TIS. (Id. at ¶ 80). 

 In order to access and use GM’s TIS software, technicians must obtain a 

subscription from GM. (Id. at ¶¶ 80-81). Paying subscribers download the TIS 

software on their personal computers and then upload it onto GM’s “Tech 2” handheld vehicle diagnosis device. (Id. at ¶¶ 81-83). Vehicle technicians use the Tech 2 

to connect to a GM vehicle’s on-board computer systems and read data directly from 

a vehicle’s electronic control modules; the data contains diagnostic trouble codes 

that guide the vehicle’s diagnosis and repair. (Id. at ¶ 84). 

 The Tech 2 can also “reflash” and re-program vehicles’ electronic control 

modules and “conduct service programming events.” (Id. at ¶ 85). The electronic 

control modules in GM vehicles are normally “locked” and can only be unlocked by 

GM’s vehicle calibration software. (Id. at ¶ 183). Subscribers can download the 

vehicle calibration software, located within TIS, onto their PCs and then load the 

software onto the Tech 2. (Id. at ¶ 86). In addition, subscribers can perform these 

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functions directly from their PCs under a GM program called “Tech2Win.” (Id. at 

¶¶ 88-89). 

 Non-dealership aftermarket technicians obtain access to TIS software, 

calibration files, and Tech 2 products through a subscription to GM’s ACDelco TDS 

Website (“ACDelco”).2 (Id. at ¶¶ 90-91). ACDelco is hosted on servers located in 

this judicial district. (Id. at ¶ 23). To gain access to ACDelco, users must first 

create a username and password. (Id. at ¶ 92). GM only authorizes users in the 

United States, Canada, and Australia to access ACDelco. (Id. at ¶ 94). 

 GM requires users to agree to ACDelco’s Terms of Use and End Use License 

Agreement prior to accessing its software. (Id. at ¶ 95). Users must indicate that 

they accept these agreements every time they log into ACDelco. (Id. at ¶ 20). The 

Terms of Use prohibit users from “reproducing, modifying, adapting, distributing, 

transmitting, transferring, republishing, compiling or decompiling, [or] reverse 

engineering” GM’s intellectual property contained within ACDelco. (Id. at ¶ 96). 

Users also “agree to submit to the exclusive personal jurisdiction and venue of the 

state and federal courts located in Wayne County, Michigan, in any legal action or 

proceeding.” (ACDelco Terms of Use, Dkt. 1, Ex. A). 

 Gary DeLuca, a resident of New York, is Vice President of Autel.US. 

(Complaint, ¶ 1). Autel.US, a New York corporation, is a wholly-owned subsidiary 

of Autel ITC, a Chinese corporation. (Id. at ¶¶ 5-8). Autel, consisting of both 

 

2 In contrast, GM dealerships obtain subscriptions from www.gmglobalconnect.com. (Id. at ¶ 90). 

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Autel.US and Autel ITC, produces vehicle diagnosis and repair tools that compete 

with GM’s Tech 2 product, including the MaxiDAS DS708 and the MaxiSys Pro 

MS908P. (Id. at ¶ 1). 

 According to GM, DeLuca, either for himself and or on behalf of Autel, has 

established at least seven subscription accounts on ACDelco. (Id. at ¶ 97). The 

complaint alleges that he entered these contracts knowing that GM was a Michigan 

corporation. (Id. at ¶ 18). When he established the accounts, DeLuca used his own 

name along with the address and phone number of Autel.US. (Id. at ¶ 99). He then 

transferred the log-in credentials associated with the accounts to people in China 

(id. at ¶ 102) and accessed ACDelco himself several times. (Id. at ¶ 21). The log-in 

records for the accounts show that they have been used extensively by Chinese 

users (id. at ¶ 101) at a level far above that expected of a legitimate user (id. at ¶ 

103). For example, during some months the accounts registered thousands of 

programming events. (Id. at ¶ 104). 

 GM alleges that Autel has used these accounts to download GM’s calibration 

files onto at least the MaxiSys Pro MS908P and that this has allowed Autel’s 

customers to recalibrate the electronic control modules of GM vehicles without 

paying GM for its software and data. (Id. at ¶ 106). GM also claims that Autel has 

misappropriated its intellectual property through its unlawful access to ACDelco. 

(Id. at ¶ 106). 

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 Autel ITC manufactures its products in China and distributes them through 

Autel.US in the United States; the products are sold in Michigan. (Id. at ¶ 26). 

Autel ITC also utilizes the CARQUEST distribution network in Michigan (id. at ¶ 

30) and maintains an interactive website where Michigan customers can obtain 

support and software updates for their Autel products (id. at ¶ 37). 

 Based on Defendants’ actions, GM filed this lawsuit on December 22, 2014 

seeking relief on nine counts, including: (I) trademark infringement; (II) false 

designation of origin; (III) copyright infringement; (IV) illegal circumvention of 

security measures; (V) trafficking in illegal means for circumvention; (VI) violation 

of the Federal Computer Fraud and Abuse Act; (VII) breach of contract; (VIII) 

misappropriation of trade secrets; and (IX) unjust enrichment. (Dkt. 1). On March 

20, 2015, Defendants filed this partial motion to dismiss seeking dismissal of 

Counts IV, V, VI, VIII, and IX. (Dkt. 15). Defendants also seek the dismissal of 

Autel ITC and DeLuca, but not Autel.US, for lack of personal jurisdiction. 

II. ANALYSIS 

A. Standard of Review 

 Defendants seek a partial dismissal of GM’s complaint under Rule 12(b)(2) 

for lack of personal jurisdiction and Rule 12(b)(6) for failure to state a claim. 

1. Rule 12(b)(2) 

 Federal Rule of Civil Procedure 12(b)(2) authorizes the filing of motions to 

dismiss for lack of personal jurisdiction. When “[p]resented with a properly 

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supported 12(b)(2) motion and opposition, the court has three procedural 

alternatives: it may decide the motion upon the affidavits alone; it may permit 

discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to 

resolve any apparent factual questions.” Theunissen v. Matthews, 935 F.2d 1454, 

1458 (6th Cir.1991) (citing Serras v. First Tennessee Bank Nat. Ass'n, 875 F.2d 

1212, 1214 (6th Cir.1989)). “The court has discretion to select which method it will 

follow, and will only be reversed for abuse of that discretion.” Id.

 When a defendant challenges personal jurisdiction under Rule 12(b)(2), the 

plaintiff bears the burden of establishing the existence of personal jurisdiction. See 

Int'l Tech. Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 391 (6th Cir.1997). In 

the face of a properly supported motion for dismissal, the “plaintiff may not stand 

on his pleadings but must, by affidavit or otherwise, set forth specific facts showing 

that the court has jurisdiction.” E & M Props. v. Razorgator, Inc., No. 08–CV–

10377, 2008 WL 1837261, at *2 (E.D.Mich. Apr. 23, 2008) (quoting Theunissen, 935 

F.2d at 1458). Because the Court has not conducted an evidentiary hearing, it will 

construe the facts in the light most favorable to Plaintiff and may not consider 

conflicting facts offered by Defendant. See Neogen Corp. v. Neo Gen Screening, Inc., 

282 F.3d 883, 887 (6th Cir.2002). Further, in the absence of an evidentiary hearing, 

“the plaintiff must make only a prima facie showing that personal jurisdiction exists 

in order to defeat dismissal.” Theunissen, 935 F.2d at 1458. 

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 Lastly, a defendant may waive objections to personal jurisdiction, and courts 

will generally enforce waivers made by agreement. See Preferred Capital, Inc. v. 

Associates in Urology, 453 F.3d 718, 721 (6th Cir.2006); see also Carnival Cruise 

Lines v. Shute, 499 U.S. 585, 590–95, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991); M/S 

Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 8–20, 92 S.Ct. 1907, 32 L.Ed.2d 513 

(1972). 

2. Rule 12(b)(6) 

 A Rule 12(b)(6) motion tests whether a legally sufficient claim has been 

pleaded in a complaint, and provides for dismissal when a plaintiff fails to state a 

claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). “To survive a 

motion to dismiss, a complaint must contain sufficient factual matter, accepted as 

true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 

U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). 

 A claim is facially plausible when a plaintiff pleads factual content that 

permits a court to reasonably infer that the defendant is liable for the alleged 

misconduct. Id. (citing Twombly, 550 U.S. at 556). When assessing whether a 

plaintiff has set forth a “plausible” claim, the district court must accept all of the 

complaint’s factual allegations as true. See Ziegler v IBP Hog Mkt., Inc., 249 F.3d 

509, 512 (6th Cir. 2001). A plaintiff must provide “more than labels and 

conclusions,” or “a formulaic recitation of the elements of a cause of action.” 

Twombly, 550 U.S. at 556. Therefore, “[t]hreadbare recitals of the elements of a 

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cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 

556 U.S. at 678. 

B. Discussion 

1. Motion to Dismiss for Lack of Personal Jurisdiction 

 “Where a federal court's subject matter jurisdiction over a case stems from 

the existence of a federal question, personal jurisdiction over a defendant exists ‘if 

the defendant is amenable to service of process under the [forum] state’s long-arm 

statute and if the exercise of personal jurisdiction would not deny the defendant[ ] 

due process.’” Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002) (citing Michigan 

Coalition of Radioactive Material Users, Inc. v. Griepentrog, 954 F.2d 1174, 1176 

(6th Cir. 1992)). 

 “Where the state long-arm statute extends to the limits of the due process 

clause, the two inquiries are merged and the court need only determine whether 

exercising personal jurisdiction violates constitutional due process.” Bridgeport 

Music, Inc. v. Still N The Water Publ’g, 327 F.3d 472, 477 (6th Cir. 2003). 

Michigan’s long-arm statute extends to the limits of due process. Audi AG & 

Volkswagon of Am., Inc. v. D’Amato, 341 F. Supp. 2d 734, 741 (E.D. Mich. 2004) 

(“The Michigan Supreme Court has construed Michigan's Long–Arm Statute to 

bestow the broadest possible grant of personal jurisdiction consistent with due 

process.”). 

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 “Personal jurisdiction can be either general or specific, depending upon the 

nature of the contacts that the defendant has with the forum state.” Bird, 289 F.3d 

at 873. Here, GM only claims that this Court has specific jurisdiction over 

Defendants. Specific, or limited, jurisdiction is proper where a defendant’s contact 

with the forum state satisfies the three-part Southern Machine Company Test, 

First, the defendant must purposefully avail himself of the 

privilege of acting in the forum state or causing a consequence in 

the forum state. Second, the cause of action must arise from the 

defendant’s activities there. Finally, the acts of the defendant or 

consequence caused by the defendant must have a substantial 

enough connection with the forum state to make the exercise of 

jurisdiction over the defendant reasonable. 

Bridgeport Music, 327 F.3d at 477-78 (citing Southern Machine Co. v. Mohasco 

Industries, Inc. 401 F.2d 374 (6th Cir. 1968)). “[T]he crucial federal constitutional 

inquiry is whether, given the facts of the case, the nonresident defendant has 

sufficient contacts with the forum state that the district court’s exercise of 

jurisdiction would comport with ‘traditional notions of fair play and substantial 

justice.’” CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1263 (6th Cir. 1996) (citing 

International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Both Autel ITC 

and DeLuca contend that they are not subject to personal jurisdiction in this Court. 

The Court will address each in turn. 

a. Autel ITC is Subject to Limited Jurisdiction 

 

 This Court has now twice held that it has personal jurisdiction over Autel 

ITC. In Service Solutions U.S., L.L.C. v. Autel U.S. Inc., No. 13-10534, 2013 WL 

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5701063, at *6 (E.D. Mich. Oct. 18, 2013), this Court held that Autel ITC was 

subject to limited jurisdiction in a patent infringement matter based on Autel ITC’s 

importation of allegedly infringing products into the United States and Michigan. 

Similarly, in Ford Motor Co. v. Autel US Inc., No. 14-13760, 2015 WL 5729067, at 

*12 (E.D. Mich. Sept. 30, 2015), a case nearly identical to this one, this Court held 

that Autel ITC was subject to limited personal jurisdiction because of Autel ITC’s 

use of the CARQUEST distribution network to advertise its products in Michigan, 

and its interactive website that permits Michigan customers to download updates to 

Autel ITC’s products. 

 GM relies on the same contacts with the forum that were shown in those 

cases and adds one more: that Autel ITC has reached into Michigan to access GM’s 

intellectual property located on its servers residing in Michigan. (Dkt. 19, p. 9). 

This is an example of purposeful availment. Not surprisingly, the Court here 

reaches the same conclusion that it reached in the Ford case: Autel ITC is subject 

to limited personal jurisdiction in this forum. Autel ITC’s motion to dismiss for lack 

of personal jurisdiction is denied. 

b. DeLuca is Subject to Limited Personal Jurisdiction 

 To establish personal jurisdiction over DeLuca, GM has the burden of 

showing that (1) DeLuca purposefully availed himself of the privilege of acting in 

Michigan; (2) the cause of action arises from DeLuca’s activities in Michigan; and 

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(3) that the exercise of personal jurisdiction over DeLuca is reasonable. See 

Bridgeport Music, 327 F.3d at 477-78. 

(i) Purposeful Availment 

 “[T]he question of whether a defendant has purposefully availed itself of the 

privilege of doing business in the forum state is the sine qua non for in personam 

jurisdiction.” CompuServe, 89 F.3d at 1263 (internal citation omitted) (emphasis 

omitted). This requirement is met when “the defendant’s contacts with the forum 

state proximately result from actions by the defendant himself that create a 

substantial connection with the forum State, and when the defendant’s conduct and 

connection with the forum are such that he should reasonably anticipate being 

haled into court there.” Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 

474-75 (1985)) (internal quotation marks omitted) (emphasis in original). “Courts 

require purposeful availment to insure that ‘random,’ ‘fortuitous,’ or ‘attenuated’ 

contacts do not cause a defendant to be haled into a jurisdiction.” Id. A defendant 

need not have been physically present in a forum state to have purposefully availed 

himself of the privilege of doing business in the state. Id. at 1264. However, 

entering into a contract, without more, is insufficient to establish limited 

jurisdiction. Id. at 1265. 

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 In CompuServ, the Sixth Circuit held that an out-of-state defendant 

purposefully availed himself of the privilege of doing business in Ohio when he 

obtained a subscription to a software-sharing website in Ohio and repeatedly 

submitted his own software for sale on the site. Id. at 1263. The defendant had 

entered into a written contract with the site providing for the application of Ohio 

law and “perpetuated the relationship . . . via repeated communications” with the 

website. Id. at 1264. The Court noted that the relationship was “intended to be 

ongoing in nature; it was not a ‘one-shot affair.’” Id. at 1265. As a result, the Court 

found “ample contacts” to support the exercise of jurisdiction. Id. 

 DeLuca argues that he did not avail himself of the privilege of doing business 

in Michigan; he only signed a contract. But the record shows that he did more than 

that. By obtaining subscriptions for seven different accounts, he signed seven 

contracts. (Complaint, ¶ 97). Each time he did so, he agreed to ACDelco’s Terms of 

Use—including the terms consenting to jurisdiction in Michigan—and to ACDelco’s 

End User License Agreement. (Id. at ¶ 95). And DeLuca obtained these 

subscriptions in his own name. (Id. at ¶ 99). While he listed Autel.US’s address 

and phone number, the complaint does not state that he identified himself in his 

corporate capacity. 

 The Terms of Use that he agreed to made DeLuca “solely responsible” for the 

use of his accounts. (Terms of Use, Dkt. 1, Ex. A). Yet DeLuca allegedly shared his 

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user names with people in China (Complaint, ¶ 20), leading to higher than normal 

use (id. at ¶ 103) and logged on himself several times (id. at ¶ 21). 

 These accounts registered thousands of recalibration events—all attributable 

to DeLuca as the owner of the subscriptions. (Id. at ¶ 104). As explained in the 

complaint, each recalibration event involves the download of calibration files from 

GM’s TIS software. (Id. at ¶¶ 86-89). This is similar to the defendant’s continued 

connections with the website in Compuserv, except that unlike the defendant in 

that case, DeLuca was downloading software from ACDelco, rather than uploading 

software as in Compuserv. Every time one of DeLuca’s accounts executed a 

recalibration event, he was reaching into Michigan because ACDelco is hosted on 

servers in Michigan. (Id. at ¶¶ 90-91). And like those in Compuserv, DeLuca’s 

subscriptions allowed his continued use of the website; his relationship was 

“intended to be ongoing in nature; it was not a ‘one-shot affair.” Because DeLuca 

created substantial contacts with Michigan, the purposeful availment prong is met. 

(ii) Arising From 

 

 The “arising from” element “does not require that the cause of action formally 

arise from defendant’s contacts with the forum; rather, this criterion requires only 

that the cause of action, of whatever type, have a substantial connections with the 

defendant’s in-state activities.” Third Nat. Bank in Nashville v. WEDGE Grp. Inc., 

882 F.2d 1087, 1091 (6th Cir. 1989) (emphasis in original) (internal quotation 

marks omitted). “Only when the operative facts of the controversy are not related 

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to the defendant’s contact with the state can it be said that the cause of action does 

not arise from that [contact].” Id. (internal citation omitted). 

 DeLuca’s contacts with Michigan (broadly defined as the improper 

attainment of his ACDelco accounts and unauthorized use of the software available 

from that site) are clearly related to the operative facts of the controversy. 

Consequently, the cause of action arises from the contacts with the forum. 

(iii) Reasonable 

 “[W]hen the first two elements are met, an inference arises that the third, 

fairness, is also present; only the unusual case will not meet the third criterion.” 

Third National Bank, 882 F.2d at 1092. Nonetheless, the Court must still ensure 

that its exercise of jurisdiction comports with notions of “fair play and substantial 

justice.” Burger King, 471 U.S. at 472. “A court must consider several factors in 

this context, including [1] the burden on the defendant, [2] the interest of the forum 

state, [3] the plaintiff’s interest in obtaining relief, and [4] the interest of other 

states in securing the most efficient resolution of controversies.” Compuserv, 89 

F.3d at 1268 (internal quotation marks omitted. 

 These factors weigh in favor of jurisdiction. Although DeLuca is a New York 

resident, his burden of litigating in Michigan is lessened by the fact that he is 

represented by the same counsel that represents Autel. Second, Michigan has a 

strong interest in protecting Michigan-based companies from unfair competition 

and trademark and copyright violations. The third factor also weighs in favor of 

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jurisdiction as GM has an interest in securing relief in its home forum. Finally, 

because the defendant’s alleged actions targeted intellectual property located in 

Michigan, no other place would be a more appropriate forum to afford an efficient 

resolution of the conflict. 

 For the reasons explained above, DeLuca is subject to limited jurisdiction in 

Michigan. His motion to dismiss for lack of personal jurisdiction is denied.3

2. Dismissal for Failure to State a Claim 

 Defendants also claim that GM has failed to state a claim entirely as to 

DeLuca and failed to state a claim against Autel as to Counts IV, V, VI, VIII, and 

IX. The Court will address these arguments in turn. 

a. GM has Adequately Plead its Claims Against DeLuca 

 

 Defendants argue that GM’s claims against DeLuca must be dismissed for 

two reasons: (1) as a corporate officer, DeLuca is not liable in his personal capacity; 

(2) GM has not plead that DeLuca personally took any actions. 

 As a threshold matter, Defendants’ first contention is misplaced. “It is well 

established that a corporate officer or agent is personally liable for torts committed 

by him even though he was acting for the benefit of the corporation.” In re Interstate 

Agency, Inc., 760 F.2d 121, 125 (6th Cir. 1985) (citing A & M Records, Inc. v. M.V.C. 

 

3 Although not argued by GM, the Terms of Use’s forum selection clause, which requires users to 

consent to jurisdiction in Michigan, could provide an alternate basis for jurisdiction. Under 

Michigan law, parties can waive personal jurisdiction through forum selection clauses. See ViSalus 

Inc. v. Smith, No. 13-10631, 2013 WL 2156031, at *5-6 (E.D. Mich. May 17, 2013). 

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Distributing Corp., 574 F.2d 312, 314-15 (6th Cir.1978) (holding a corporate officer 

liable for breach of fiduciary duty) (emphasis in original). 

 In addition to torts, corporate officers may be held liable in their personal 

capacities for trademark infringement, copyright infringement, and unfair 

competition. “A trademark, like a patent or a copyright, may be infringed by an 

individual as well as a corporation and all participants, including those acting 

merely as officers of a corporation, may be jointly and severally liable.” 4 McCarthy 

on Trademarks and Unfair Competition § 25:24 (4th ed.). “Corporate officers, in a 

proper case, have been found liable for infringement of a patent, copyright, 

trademark or trade name.” 3A Fletcher Cyclopedia of the Law of Corporations § 

1158. “This principle applies where the conduct constitutes unfair competition.” 

Donsco, Inc. v. Casper Corp., 587 F.2d 602, 606 (3d Cir. 1978). 

 To be sure, a corporate officer will not be personally liable for “the mere fact 

of being an officer or director of an infringing corporation.” 3A Fletcher Cyclopedia 

of the Law of Corporations § 1158. Personal liability requires that officers 

“personally take part in infringing activities or specifically direct employees to do 

so.” 4 McCarthy on Trademarks and Unfair Competition § 25:24 (4th ed.); accord 

Coach, Inc. v. D & N Clothing, Inc., No. 10-12813, 2011 WL 2682969, at *3 (E.D. 

Mich. July 11, 2011) (“An individual corporate officer, director, owner, or employee 

can be liable for trademark infringement by the corporation where the individual is 

either personally involved in the infringement or is willfully blind to infringing 

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activity.”). It also “generally requires a culpable intent, i.e., the officer or director 

must actively and knowingly assist or induce the corporations infringement.” 3A 

Fletcher Cyclopedia of the Law of Corporations § 1158. 

 Defendants rely on authority which is inapposite. Both Telling v. BellowsClaude Neon Co., 77 F.2d 584, 585 (6th Cir. 1935) and FM Industries, Inc. v. 

Citicorp Credit Servs., Inc., No. CIV.A. 07 C 1794, 2007 WL 4335264, at *4 (N.D. Ill. 

Dec. 5, 2007) stand for the general proposition that corporate officers are not 

personally liable solely for the fact that they are officers. See Telling, 77 F.2d at 583 

(“an officer of a corporation is not liable for damages and profits on infringement 

unless he inflicted the wrong otherwise than through the usual relations between 

officer and corporation, or . . . that infringement by officers must be as individuals 

before they can be held liable.”); FM Industries, 2007 WL 4335264 at *4 (“for 

personal liability to extend to Brown and Gillard as corporate officers, a special 

showing must be made that they acted willfully and knowingly, and personally 

participated in the infringing activities or otherwise used CCSI to carry out their 

own deliberate infringement.”). Similarly, Nimmer restates the general rule that 

“an officer of an infringing corporation will be personally liable if he either 

participates personally (and other than merely in his corporate capacity) in the 

manufacture and sale of an infringing article[.]” Nimmer on Copyright § 

12.04(A)(1).4

 

4 Defendant also relies on Ross v. Consumers Power Co., 420 Mich. 567, 625-26 (1984). But Ross

deals with the scope of governmental immunity under Michigan’s Government Tort Liability Act 

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 Applying these principles to the case at bar, it is clear that GM has 

adequately plead its claims against DeLuca. GM does not base its claims on the 

mere fact that DeLuca is the Vice President of Autel.US. The complaint claims that 

Deluca “acting individually and/or on behalf of Autel.US” obtained subscriptions in 

his name to AC Delco (Complaint, ¶¶ 16, 99) and transferred the user names 

related to these accounts to other people within Autel (id. at ¶ 102). It further 

states that DeLuca did this as part of a scheme to unlawfully access GM’s 

intellectual property contained within ACDelco (see id. at ¶¶ 105-06) and that this 

conduct was “intentional” (id. at ¶¶ 23-25).5 The complaint clearly alleges that 

DeLuca was personally involved in the alleged wrongful conduct and that he did 

this with the intent to facilitate and execute a scheme to harm GM. Defendants’ 

motion to dismiss GM’s claims against DeLuca under Rule 12(b)(6) is therefore 

denied. 

b. GM’s Claims Against Autel 

 Defendants also seek dismissal of Counts IV, V, VI, VIII, and IX. The Court 

will address the contentions in turn. 

 

(GTLA), it does not address the issue of whether and when officers of a private company may be held 

liable. Moreover, the holding of Ross has been clarified and limited. See In re Bradley Estate, 494 

Mich. 367, 389 (2013) (“If the action permits an award of damages to a private party as compensation 

for an injury caused by the noncontractual civil wrong, then the action, no matter how it is labeled, 

seeks to impose tort liability and the GTLA is applicable.”). 

5 Although these paragraphs refer to Autel’s actions, the complaint defines Autel to include DeLuca. 

(Id. at p. 1) (“Plaintiffs General Motors . . . bring their Complaint against Defendants Autel.US Inc. 

(‘Autel.US’), Autel Intelligent Technology Co., Ltd. (‘Autel ITC’), and Gary DeLuca (‘DeLuca’) 

(collectively, ‘Autel’ or ‘Autel Defendants[.]’)”). 

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(i) GM has Adequately Plead its DMCA Claims in Counts IV and V 

 GM raises two Digital Millennium Copyright Act (“DMCA”) counts against 

Autel: Count IV for circumvention of its copyrights under 17 U.S.C. § 1201(a)(1)(A)6

and Count V for trafficking in products designed to circumvent a technological 

measure that effectively controls access to a copyrighted work under 17 U.S.C. § 

1201(a)(2).7 

 In Count IV, Defendants claim that GM has effectively plead itself out of 

court pursuant to the reverse engineering provision of 17 U.S.C. § 1201(f)(1). 

Section 1201(f)(1) provides: 

Notwithstanding the provisions of subsection (a)(1)(A), a person 

who has lawfully obtained the right to use a copy of a computer 

program may circumvent a technological measure that effectively 

controls access to a particular portion of that program for the sole 

purpose of identifying and analyzing those elements of the 

program that are necessary to achieve interoperability of an 

independently created computer program with other programs, 

and that have not previously been readily available to the person 

 

6 Section 1201(a)(1)(A) states that “[n]o person shall circumvent a technological measure that 

effectively controls access to a work protected under this title.” 

7 Section 1201(a)(2) provides that “[n]o person shall manufacture, import, offer to the public, provide, 

or otherwise traffic in any technology, product, service, device, component, or part thereof, that— 

 (A) is primarily designed or produced for the purpose of circumventing a 

 technological measure that effectively controls access to a work 

 protected under this title; 

 (B) has only limited commercially significant purpose or use other than to 

 circumvent a technological measure that effectively controls access to a 

 work protected under this title; or 

 (C) is marketed by that person or another acting in concert with that 

 person with that person's knowledge for use in circumventing a 

 technological measure that effectively controls access to a work protected 

 under this title. 

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engaging in the circumvention, to the extent any such acts of 

identification and analysis do not constitute infringement under 

this title. 

 Setting aside GM’s persuasive arguments that it is premature to consider the 

reverse engineering provision and that Autel waived its right to reverse engineer, 

the Court finds that GM has not plead itself into the reverse engineering provision. 

 GM claims that it protects its copyrighted software by requiring authorized 

users to enter a user name and password to access ACDelco. (Complaint, ¶ 182). 

The copyrighted software includes the calibration files that act as a key to allow the 

reprogramming of otherwise locked electronic vehicle modules. (Id. at ¶ 183). GM 

claims throughout its complaint that Autel has unlawfully accessed its software. 

Accepting these facts as true, as the Court must do at this stage, the reverse 

engineering provision does not bar GM’s claim because this provision requires that 

a person lawfully obtain the right to use a computer program. 

 Count V also withstands Autel’s Rule 12(b)(6) challenge. Section 1201(f)(2) 

provides: 

Notwithstanding the provisions of subsections (a)(2) and (b), a 

person may develop and employ technological means to 

circumvent a technological measure, or to circumvent protection 

afforded by a technological measure, in order to enable the 

identification and analysis under paragraph (1), or for the 

purpose of enabling interoperability of an independently created 

computer program with other programs, if such means are 

necessary to achieve such interoperability, to the extent that 

doing so does not constitute infringement under this title. 

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 GM’s complaint does not claim that Autel is circumventing its technological 

means for the purposes of achieving interoperability with Autel’s independently 

created computer programs. It claims that Autel is taking GM’s software and 

making an illegal copy of it—not that Autel is circumventing its technological 

security measures for the purpose of achieving interoperability with an 

independently created computer program. (Complaint, ¶¶ 184-85). This provision is 

further inapplicable because GM claims that Autel’s actions constitute infringement 

under the DMCA. 

 Because GM has not plead itself into the reverse engineering provisions, 

Defendants’ motion to dismiss Counts IV and V is denied. 

(ii) GM has Adequately Plead its CFAA Claim 

 In Count VI, GM alleges that Defendants violated five provisions of the 

Computer Fraud and Abuse Act (“CFAA”), including 18 U.S.C. §§ 1030(a)(2)(C), 

(a)(4), (a)(5)(B), (a)(5)(C), and (a)(6). Defendants allege that the Court must dismiss 

this count because GM has not plead that they acted “without authorization” when 

they accessed GM’s computers and software and because GM has not properly plead 

statutory damage as required by §§ 1030(a)(5)(B) and (a)(5)(C). The Court will 

address each contention in turn. 

(a) GM has plead that Defendants acted “without authorization” 

 Courts disagree on whether the terms “without authorization” under the 

CFAA should be interpreted broadly or narrowly. Under a broad interpretation, a 

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party accesses a computer “without authorization” if he violates the computer’s 

terms of use, or breaches a duty of loyalty. Ajuba Int'l, L.L.C. v. Saharia, 871 F. 

Supp. 2d 671, 686 (E.D. Mich. 2012). Under the narrow interpretation, “an 

employee’s misuse or misappropriation of an employer’s business information is not 

‘without authorization’ so long as the employer has given the employee permission 

to access such information.” Id. 

 Courts in this district have adopted the narrow interpretation. See Ajuba 

Int'l, L.L.C. v. Saharia, 871 F. Supp. 2d 671, 687 (E.D. Mich. 2012) (“Accordingly, a 

violation for accessing ‘without authorization’ under the CFAA occurs only where 

initial access is not permitted and a violation for ‘exceeding authorized access’ 

occurs only where initial access is permitted but the access of certain information is 

not permitted.”); Am. Furukawa, Inc. v. Hossain, 103 F. Supp. 3d 864, 873 (E.D. 

Mich. 2015) (“The Court agrees with the other courts in this district who have 

adopted the ‘narrow’ approach to give meaning to the CFAA's ‘without 

authorization’ language.”). 

 Other district courts in this Circuit have likewise read the statute narrowly. 

See Dana Ltd. v. Am. Axle & Mfg. Holdings, Inc., No. 1:10-CV-450, 2012 WL 

2524008 (W.D. Mich. June 29, 2012); ReMedPar, Inc. v. AllParts Med., L.L.C., 683 

F.Supp.2d 605, 609 (M.D. Tenn. 2010); Black & Decker, Inc. v. Smith, 568 F. Supp. 

2d 929 (W.D. Tenn. 2008). 

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 Even under the narrow interpretation, GM’s allegations are sufficient to 

plead that Autel accessed its systems without authorization. The complaint states 

numerous times that Autel accessed GM’s software “without authorization.” 

(Complaint, ¶¶ 23, 105). It states that DeLuca obtained seven subscriptions and 

accounts in his own name. (Id. at ¶ 99). Although DeLuca used Autel.US’s address 

and phone number when he obtained the subscriptions, Autel does not argue that 

GM knew or should have known that it was actually Autel who was obtaining these 

subscriptions. In fact, GM alleges that DeLuca had to transfer his log-in credentials 

to Autel so that Autel could access ACDelco. (Id. at ¶¶ 102, 105). Accepting these 

allegations as true, GM has plead that Autel did not have authorization to access 

ACDelco. 

 As for DeLuca, Autel’s argument that his use was authorized under the 

narrow view carries more force. DeLuca had valid user names and passwords to 

access ACDelco. However, all of the cases before the Court that interpret “without 

authorization” narrowly are in the context of an employment relationship. It is 

unclear whether this interpretation should be applied when the user is not an 

otherwise authorized employee but is rather an outsider who is allegedly obtaining 

a subscription for access under false pretenses and in violation of the terms of use. 

As the parties have not adequately addressed this issue, the Court finds that GM 

has sufficiently plead that DeLuca lacked authorization for Rule 12(b)(6) purposes. 

(b) GM has adequately plead damage 

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 Defendants also contend that GM’s claims under §§ 1030(a)(5)(B) and 

(a)(5)(C) should be dismissed because GM has failed to adequately plead “damage” 

to its computer systems or data as required in the CFAA. Both of these statutory 

provisions require that a defendant cause “damage” in order to be liable.8 Section 

1030(e)(8) defines the term “damage” as “any impairment to the integrity or 

availability of data, a program, a system, or information.” 

 Defendants claim that GM has not plead statutory damage because GM is 

only alleging that Defendants copied and transferred GM’s software. Defendants’ 

rely on NetApp, Inc. v. Nimble Storage, Inc., No. 5:13-CV-05058-LHKHRL, 2015 WL 

400251, at *11 (N.D. Cal. Jan. 29, 2015) for support. In NetApp, the court held that 

“the mere copying of information does not constitute a claim of ‘damage’ within the 

meaning of the CFAA.” Id. at *14. NetApp involved a former employee who copied 

information from his employer’s secured server and transferred it to a non-secure 

location. Id. at *14. The court reasoned that mere copying of information does not 

“impair the information’s ‘integrity’ as that term is commonly defined.” Id. at *13. 

The court also noted that “[t]he majority of district courts to have considered the 

question agree that the mere copying of information does not plead a recognizable 

claim of ‘damage’ under § 1030(a)(5).” Id. at 11 (collecting cases). “Moreover, these 

courts have decided [that] the mere copying of information does not constitute 

 

8 Section 1030(a)(5)(B) applies when a person “intentionally accesses a protected computer without 

authorization, and as a result of such conduct, recklessly causes damage[.]” Section 1030(a)(5)(C) 

applies when a person “intentionally accesses a protected computer without authorization, and as a 

result of such conduct, causes damage and loss[.]” 

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‘damage’ where, as NetApp alleges here, a former employee is accused of taking 

information from his former employer to give it to a competitor.” Id. at 12. 

 However, as NetApp acknowledged, “district courts are divided on this issue.” 

Id. In fact, a district court in this Circuit has held that the mere copying and 

transferring of information can be sufficient to establish damage. “[T]he allegations 

in the Complaint . . . support a finding that the Defendant caused ‘damage’ . . . 

when he transferred documents from a secure server to a nonsecure drive.” Black & 

Decker, 568 F. Supp. 2d at 937-38. The court explained that the “legislative history 

of the [CFAA] supports the conclusion that intentionally rendering a computer 

system less secure should be considered ‘damage’ under § 1030(a)(5)(A), even when 

no data, program, or system, is damaged or destroyed.” Id. at 937. 

 The Court need not resolve this question here.9 GM has plead not only that 

Defendants copied and transferred information from its servers but that DeLuca 

unlawfully shared his usernames with unauthorized users in China (Complaint, ¶ 

102) which led to extensive unauthorized use of the accounts. (Id. at ¶¶ 101-104). 

GM makes a plausible claim that this improper sharing of usernames and 

subsequent downloading of GM’s software for use in a competitor’s product caused 

an impairment to the integrity of their system. GM strictly limited access to 

ACDelco to paying subscribers in the United States, Canada, and Australia. 

 

9 The Court does note, however, that unlike in NetApp, Defendants here were not employees of GM. 

Whether the copying and transferring of information by outside parties and converting such 

information to the use of the outsiders would be sufficient to establish damage was not addressed by 

the court in NetApp. 

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(Complaint, ¶ 94). By sharing these accounts, DeLuca arguably impaired the 

integrity of GM’s systems and caused damage. 

 This conclusion is consistent with NetApp. NetApp held that the mere 

copying of information did not constitute impairment because “copying information 

does not necessarily render computer systems less secure, because copying 

information on its own does not necessarily allow a hacker to access other systems, 

programs, or data.” 2015 WL 400251 at *14. In contrast, the improper sharing of 

passwords with outside parties allows unauthorized users—including hackers—

access to systems, programs and data that they would not otherwise have. 

 Accordingly, Defendants’ motion to dismiss as to Count VI is denied. 

(iii) GM has Adequately Plead its State Law Claims 

 Lastly, Defendants seek dismissal of Count VIII for misappropriation of trade 

secrets under the Michigan Uniform Trade Secrets Act (“MUTSA”) and Count IX for 

unjust enrichment. 

 GM has adequately plead misappropriation of trade secrets under Count 

VIII. GM has stated that its trade secrets consist of “vehicle data, data files, data 

compilations, data arrays, calibration files, lookup tables, software and firmware.” 

(Complaint, ¶ 222). The MUTSA defines a trade secret to include a “formula, 

pattern, compilation, program, device, method, technique, or process” which: 

(i) Derives independent economic value, actual or potential, from 

not being generally known to, and not being readily ascertainable 

by proper means by, other persons who can obtain economic value 

from its disclosure or use. 

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(ii) Is the subject of efforts that are reasonable under the 

circumstances to maintain its secrecy. 

Mich. Comp. Laws § 445.1902(d). Here, GM has plead that its trade secrets are 

valuable because they help service millions of vehicles “in an efficient and optimum 

way.” (Complaint, ¶ 223). It states that its trade secrets are not generally known 

and that they derive economic value from not being generally known. (Complaint, ¶ 

224). Further, it claims that it “uses reasonable security measures to maintain the 

secrecy of its trade secrets.” (Id. at ¶ 226). The Court finds that GM has adequately 

plead its misappropriation count. 

 GM has also adequately plead unjust enrichment under Count IX. “Section 8 

of the Michigan Uniform Trade Secrets Act (‘MUTSA’) preempts claims based on 

conflicting state tort law and provides civil remedies for misappropriation of trade 

secrets.” Am. Furukawa, 103 F.Supp. 3d at 884. “The critical inquiry for courts in 

determining whether a claim is displaced by the MUTSA is whether the claim in 

question is based solely on the misappropriation of a trade secret.” Id. (emphasis in 

original). “If a claim is based solely upon the misappropriation of a trade secret, the 

claim must be dismissed.” Id. (internal quotation marks and citation omitted). 

 GM claims that Defendants have “wrongfully benefitted from the 

development and sale of their competing devices.” (Complaint, ¶ 243). This claim is 

not “based solely” on Defendants’ misappropriation of its trade secrets. Throughout 

its complaint, GM alleges that Defendants’ products wrongfully infringe on its 

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trademarks and copyrights. GM simply does not base its unjust enrichment claim 

solely on Defendants’ alleged misappropriation of its trade secrets. Unlike in Ford, 

here GM bases its unjust enrichment claim on more conduct than theft of trade 

secrets. Cf. Ford, 2015 WL 5729067 at *10 (“Plaintiffs state that ‘[b]y wrongfully 

acquiring Ford's trade secrets, by misappropriating them for Autel's own use, and 

by the related wrongdoing, Autel has received a benefit from Ford.’ This claim is 

based solely on Autel’s alleged misappropriation of Ford's trade secrets and 

accordingly, is preempted by MUTSA.”). Defendants’ motion to dismiss GM’s state 

law claims is therefore denied. 

III. CONCLUSION 

 For the reasons explained above, Defendants’ motion to dismiss is DENIED. 

SO ORDERED. 

Dated: March 29, 2016 s/Terrence G. Berg 

TERRENCE G. BERG 

UNITED STATES DISTRICT JUDGE 

Certificate of Service 

I hereby certify that this Order was electronically submitted on March 29, 

2016, using the CM/ECF system, which will send notification to all parties. 

 s/A. Chubb 

Case Manager 

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