RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 10a0148p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT _________________

R.C. OLMSTEAD, INC.,

 Plaintiff-Appellant,

v.

CU INTERFACE, LLC; THOMAS BURKHART;

SOFTWARE PROPERTIES, LLC,

Defendants-Appellees.

X

-

-

-

-

>

,

-

-

-

N

No. 09-3428

Appeal from the United States District Court

for the Northern District of Ohio at Akron.

No. 08-00234—Sara E. Lioi, District Judge.

Argued: April 28, 2010

Decided and Filed: May 19, 2010 

Before: GIBBONS, ROGERS, and KETHLEDGE, Circuit Judges.

_________________

COUNSEL

ARGUED: David A. Campbell, III, VORYS, SATER, SEYMOUR AND PEASE LLP,

Cleveland, Ohio, for Appellant. Andrew Mills Holford, ANELLI HOLFORD, LTD.,

Dublin, Ohio, for Appellees. ON BRIEF: David A. Campbell, III, VORYS, SATER,

SEYMOUR AND PEASE LLP, Cleveland, Ohio, Daniel J. Clark, VORYS, SATER,

SEYMOUR AND PEASE LLP, Columbus, Ohio, for Appellant. Andrew Mills Holford,

ANELLI HOLFORD, LTD., Dublin, Ohio, for Appellees.

ROGERS, J., delivered the opinion of the court, in which GIBBONS, J., joined.

KETHLEDGE, J. (p. 21), delivered a separate concurring opinion.

_________________

OPINION

_________________

ROGERS, Circuit Judge. R.C. Olmstead appeals the district court’s grant of

summary judgment to defendants in this copyright and trade secret infringement case

brought by one provider of credit union software against the developer of a competing credit

1
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 2

union software. Olmstead challenges several of the district court’s discovery rulings, which

Olmstead argues unfairly inhibited its ability to prove its claims. Among other things, the

district court rejected plaintiff’s inadequate expert report under F.R.C.P. 26, and refused to

draw adverse inferences based on a third party’s destruction of evidence. The district court

granted summary judgment for defendant CUI after determining that Olmstead had failed to

raise a genuine issue of material fact as to whether CUI created its software by copying

Olmstead’s software, and that Olmstead’s end use product was not a trade secret. Because

the district court did not abuse its discretion with respect to its subsidiary rulings, and

because Olmstead did not create a genuine issue of material fact with respect to either the

copyright claim or the trade secret claim, the district court properly granted summary

judgment. 

I.

R.C. Olmstead, Inc., (“Olmstead”) develops and sells data processing software,

hardware, and related services to credit unions. One of the credit unions to which Olmstead

sold its software was Canton School Employees Federal Credit Union (“the CSE Credit

Union”). In 1999, Olmstead and the CSE Credit Union entered into a data processing

agreement whereby Olmstead licensed the use of its hardware and RCO-1 credit union

processing software to the CSE Credit Union for a term of five years. Under the terms of

the agreement, Olmstead provided several pieces of hardware, including the server upon

which the RCO-1 software was to run. The server contained the executable version of the

Olmstead code, which used emulators to run the software through “dumb terminals,” which

could be emulated by personal computers connected to the server. The agreement did not

expressly limit access to the software or the emulators on which it would run, but the

agreement did state that Olmstead would maintain ownership of all software and hardware.

On the subject of support, the agreement stated: “Personal computers may be integrated with

the R.C. Olmstead system through the use of terminal emulation software. It is the Credit

Union’s responsibility to acquire a local Personal Computer support firm to perform

maintenance, and support of all personal computers.” 

As permitted by the agreement, the CSE Credit Union hired CU Interface, LLC, and

its independent contractor, Thomas Burkhardt (collectively “CUI”), a developer, marketer
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 3

and seller of credit union data processing software, to provide its maintenance and support.

Among other things, CUI had developed a terminal emulation program that enabled older

dumb terminal applications, such as RCO-1, to run on personal computers using Windows.

In 2003, CUI and the CSE Credit Union entered into a Software Development Agreement

to develop a credit union data software processing system. Under the terms of the

development agreement, the CSE Credit Union identified certain software programs that CUI

was to develop according to a schedule contained in the agreement. The CSE Credit Union

was to pay CUI a development fee, retain a perpetual license to use the software programs

that were developed, and have an option to purchase a 30% ownership interest in the

software catalog. 

As part of the development process, CUI programmer Jason Akin interviewed

several CSE Credit Union employees regarding their needs in developing credit union

software. Neither CUI nor the CSE Credit Union placed limits on what Akin could discuss

during these interviews, and Akin asked at least one teller, Tracie Rodriguez, about her

experiences with the Olmstead software. During this time, Akin was provided with a tellerlevel username and password to the Olmstead software at the CSE Credit Union facility.

This allowed him to access the RCO-1 interface, but not its source code. Akin testified at

his deposition that he accessed the Olmstead software several times per week over the course

of the development project.

One of CUI’s other main programmers, Jay Lash, was a former CSE Credit Union

teller with some educational background in computer programming. Lash began to do small

projects for CUI in early 2004, while he was still employed by the CSE Credit Union, and

he joined CUI officially in 2005. Lash testified that, while employed at CUI as an

independent contractor (and later as an employee of CUI), he wrote most of the interface for

the CUI software—the visual representation of the program on the computer screen that the

customers and tellers would see. Lash was familiar with the Olmstead interface from his

time as a teller, but he also testified that he had worked with a few different systems. Lash

testified that all of the software systems with which he had worked had the same basic

functions, but that Olmstead’s software was an account-based system, whereas CUI’s

software was a person-based system. While he was employed at CUI, Lash retained his CSE
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 4

Credit Union username and password, and he also interviewed several CSE Credit Union

employees about their needs regarding credit union software. 

As CUI developed portions of its software, the CSE Credit Union ran those programs

alongside the Olmstead software. One CSE Credit Union employee, Tracie Rodriguez,

testified as follows about the final transition from Olmstead to CUI software:

A. What I remember is that one day we were using R.C. Olmstead and

the next day we were not. 

Q. Okay, so by taking that answer, am I correct that you don’t

remember any formal training as to hey, here it is, it’s just a

seamless transition?

A. That I can recall, yes. 

Q. Okay. Do you recall it being a seamless transition?

A. There was work involved. I mean, there was [sic] problems at first.

Rodriguez also testified that she received training on the CUI interface software, but that she

could not recall when she received that training. Lash testified that there was “a lot” of

support for employees when the conversion from Olmstead to CUI software took place, and

that there was “quite a bit” of training on the new system, although Lash could not recall

exactly how much. Lash testified that overall, there were “a couple weeks” dedicated to

explaining the new software to CSE Credit Union employees. 

Olmstead and the CSE Credit Union extended their original license agreement, but

Olmstead exercised its option to terminate the agreement when it discovered that the CSE

Credit Union was developing its own software. Olmstead informed the CSE Credit Union

that it would be collecting the hardware and software leased to the CSE Credit Union under

the terms of the agreement. When the CSE Credit Union learned that the representative sent

by Olmstead to collect the hardware was accompanied by a third-party computer forensic

analyst, the CSE Credit Union refused to allow Olmstead to remove the software because

of concerns over the customer financial information stored on the server. Olmstead wanted

to have the server examined by a computer forensic expert because it believed those experts

could determine whether and when CUI employees had access to the literal elements of the

Olmstead software, the Olmstead source code. The CSE Credit Union’s CEO, Stanley

Barnes, eventually destroyed the servers by drilling holes through them. 
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 5

Olmstead brought suit against CUI, the CSE Credit Union, and Burkhardt, alleging

misappropriation of trade secrets, tortious interference with contractual and business

relationships, copyright infringement, violations of the Digital Millennium Copyright Act

(DMCA), unjust enrichment, breach of contract, and spoliation. During discovery, the

parties agreed to a protective order, under which discovery material was classified as “highly

confidential,” which only experts and attorneys could view; and “confidential,” which the

parties could view in addition to experts, counsel and their staff. Defendant CUI stated that

no Olmstead employee would be able to view the CUI end use product—its software

interface—and Olmstead filed a motion to compel discovery, stating that it needed access

to CUI’s interface to show that the two software products were substantially similar. The

district court determined that CUI’s end use product should be classified as highly

confidential material under the protective order and could only be viewed by experts and

counsel. 

Olmstead retained Robert Reid as its only expert witness, and CUI provided Reid

with access to its software in controlled conditions. Reid filed a two-page expert report and

attached nearly two-hundred pages of exhibits showing various screenshots of the Olmstead

and CUI interfaces. CUI moved to bar the use of Reid’s report for failure to comply with

Federal Rule of Civil Procedure 26(a), which requires that expert reports be detailed and

complete, and for failing to meet the requirements of Federal Rules of Evidence 402 and 702.

Olmstead argued in response that “Reid’s report plainly complies with Rule 26(a)(2)(B),”

and submitted a more detailed declaration from Reid that identified specific similarities

between the interfaces of the Olmstead and CUI software and contained some of the specific

information required by Rule 26(a), such as Reid’s compensation and his history as an expert

witness.

The district court granted CUI’s motion to bar the use of Reid’s testimony after

determining that the report failed to comply with Federal Rule of Civil Procedure

26(a)(2)(B). The court reasoned that Reid’s report failed to satisfy five of the six

requirements listed in Rule 26(a)(2)(B) and thus could not be used under Federal Rule of

Civil Procedure 37(c)(1). The court stated that “Reid woefully fails to provide any reasoning

or logical support for his conclusions. Reid vaguely lists a sampling of ‘similarities’ between

the [Olmstead] and CU Interface softwares, but he never explains why the alleged
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 6

similarities indicate actual copying of Plaintiff’s software rather than that the softwares

simply perform similar functions (and thus would be expected to function similarly).”

Because the court barred the use of Reid’s report for failing to comply with Rule 26(a), the

court did not address CUI’s argument that the court should exclude the report under the

Federal Rules of Evidence.

Following the exclusion of Reid’s report, CUI filed a motion for modification of the

case management order. CUI stated that it did not intend to use any expert testimony for

summary judgment practice, and therefore requested that the court not require the defendants

to identify experts and provide reports until 45 days after ruling on the parties’ motions for

summary judgment. Olmstead protested, arguing that CUI should be required to comply

with the case management order. Olmstead stated that it had already assembled a

workstation for Craig Minch, one of CUI’s experts, to view and compare the software

programs, and that dismantling and rebuilding the workstation after summary judgment

would create a burdensome expense. The court and the parties agreed to modify the case

management order as requested by CUI, but the parties also agreed that CUI would provide

an expert report from Minch by the original deadline. Shortly after CUI provided Olmstead

with Minch’s report, Olmstead attempted to subpoena Minch for deposition, but CUI

objected and argued that Olmstead could not depose Minch until after the court had ruled on

the pending summary judgment motions. The court requested briefing on the matter, and

CUI submitted a brief stating that it had re-classified Minch as a non-testifying expert and

that Minch was therefore not subject to deposition. 

The district court held that because Minch was a non-testifying expert, Olmstead was

not entitled to depose him. The court examined the case law on whether a party could shield

an expert from deposition by re-classifying that expert as a non-testifying expert and

determined that the majority rule that such a move did shield an expert from deposition was

consistent with the purposes of the Federal Rules of Civil Procedure governing discovery of

expert witnesses. The court determined that “[Olmstead] may not depose Minch unless and

until Minch is designated as a testifying expert witness,” and that “[i]n the event Minch is

redesignated as a testifying witness but [Olmstead] is not given an adequate opportunity to

depose him before trial, the Court will consider an appropriate motion at that time.” 
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 7

1

 The court also granted summary judgment for CUI on Olmstead’s DMCA claim, Olmstead’s

tortious interference with contractual and business relationships claim, and Olmstead’s unjust enrichment

claim. Olmstead has not challenged those decisions on this appeal. 

The parties filed cross motions for summary judgment, but before the district court

ruled on those motions, the CSE Credit Union and Olmstead reached a settlement agreement

and the CSE Credit Union was dismissed as a party to the case. The district court then

granted summary judgment for CUI on all of Olmstead’s remaining claims. The court

determined that Olmstead was not entitled to any adverse evidentiary inference against CUI

for the CSE Credit Union’s alleged spoliation of evidence because Olmstead had not alleged

any fault on the part of CUI. The court also determined that there was no evidence in the

record to indicate that CUI had accessed Olmstead’s source code, and that although CUI had

access to Olmstead’s end use product based on the teller-level access to the CSE Credit

Union’s programs, the RCO-1 interface was not a trade secret protected under Ohio law and

CUI had not engaged in any misappropriation as defined by Ohio law. Finally, the district

court determined that Olmstead had not produced any direct evidence of copying to sustain

a copyright infringement claim, and its indirect evidence was insufficient to create a question

of fact as to whether copying occurred.1

 Olmstead filed this timely appeal. 

II.

A. Discovery Issues

1. The Protective Order

The district court did not abuse its discretion in denying Olmstead employees

access to the CUI end use product (the CUI software interface) because the district

court’s decision to grant Olmstead’s experts access to the software properly balanced the

need for Olmstead to have access to relevant and necessary information with CUI’s

interest in preventing a potential competitor from having access to its software. 

In response to discovery requests for access to the CUI software, CUI asserted

that its end use product—the “Circa 2005 CUPD” software—contained trade secrets and

that the disclosure of that software to a competitor could cause CUI considerable harm.

Olmstead contended that its employees were in the best position to evaluate the software
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 8

because those employees are also familiar with Olmstead’s software. The district court

resolved the issue by allowing Olmstead’s expert to review and run the CUI software in

the presence of counsel at a location mutually agreeable to both parties. The court

reasoned that the parties had reached an agreement that information designated “Highly

Confidential Material” could only be viewed by counsel and experts, and noted that

Olmstead had not challenged CUI’s position that its end use product contained trade

secrets. Federal Rule of Civil Procedure 26(c)(1)(G) permits a district court to require

that “a trade secret or other confidential research, development, or commercial

information not be revealed or be revealed only a specified way.” “It is within the sound

discretion of the trial court to decide whether trade secrets are relevant and whether the

need outweighs the harm of disclosure. Likewise, if the trade secrets are deemed

relevant and necessary, the appropriate safeguards that should attend their disclosure by

means of a protective order are also a matter within the trial court’s discretion.”

Centurion Indus., Inc. v. Warren Steurer & Assocs., 665 F.2d 323, 326 (10th Cir. 1981).

Balancing the competing interests, the district court decided that the CUI interface would

be treated in the manner that the parties had agreed would be appropriate for highly

confidential material. As the district court stated, “Limiting the review of CU Interface’s

software to Olmstead’s experts and counsel will assist Olmstead in defining the nature

of its copyright infringement claims while protecting CU Interface’s trade secrets and

proprietary information.” While the court limited access to CUI’s software to

Olmstead’s expert and counsel, Olmstead also had opportunities to depose CUI

employees who had worked with both Olmstead and CUI software. 

To show the district court abused it discretion in allowing only Olmstead’s

counsel and expert access to the CUI software, Olmstead points to this court’s

unpublished opinion in Bell Data Network Communications, Inc. v. Symbol

Technologies, Inc., 114 F.3d 1186 (6th Cir. 1997) (table), but that case is inapposite. In

Bell, this court held that a district court abused its discretion by not allowing the

plaintiffs adequate time for discovery when the district court disregarded its own

continuance allowing the plaintiffs to depose witnesses whose affidavits the defendants

used in their motion for summary judgment. Id. at *2. We also noted that the district
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 9

court had stated that the plaintiffs were given six-and-one-half months for discovery

when discovery had only been open for five-and-one-half months and the parties were

preoccupied with legal motions during three of those months. Id. Olmstead can point

to no similar errors of fact or law in the district court’s decision to deny Olmstead

employees access to CUI’s software; therefore the district court did not abuse its broad

discretion in refusing to compel additional discovery. 

2. Robert Reid’s Expert Report 

The district court did not abuse its discretion in barring the use of Robert Reid’s

expert report because the report failed to comply with the requirements of Federal Rule

of Civil Procedure 26(a)(2)(B). Reid’s two-page report did not meet Rule

26(a)(2)(B)(i)’s requirement that an expert report be “a complete statement of all

opinions the witness will express and the basis and reasons for them.” Federal Rule of

Civil Procedure 37(c)(1) states that “[i]f a party fails to provide information or identify

a witness as required by Rule 26(a) or (e), the party is not allowed to use that

information or witness to supply evidence on a motion, at a hearing, or at a trial, unless

the failure was substantially justified or is harmless.” Although Olmstead argues before

this court that any deficiencies in Reid’s report were harmless and remedied by the

submission of an affidavit further explaining Reid’s report, Olmstead did not argue

harmlessness before the district court. Instead, Olmstead argued only that Reid’s expert

report met the requirements of Rule 26(a). Because Reid’s expert report did not satisfy

Rule 26(a)(2)(B) and Olmstead did not meet its burden of showing that the error was

justified or harmless, the district court did not abuse its discretion in excluding the

report. 

Rule 26(a)(2)(B) requires all expert reports to contain the following:

(i) a complete statement of all opinions the witness will express and the

basis and reasons for them; 

(ii) the data or other information considered by the witness in forming

them;

(iii) any exhibits that will be used to summarize or support them;

(iv) the witness’s qualifications, including a list of all publications

authored in the previous 10 years;
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 10

(v) a list of all other cases in which, during the previous four years, the

witness testified as an expert at trial or by deposition; and

(vi) a statement of the compensation to be paid for the study and

testimony in the case.

The district court clearly outlined the deficiencies in Reid’s report. Most troubling of

the violations that the district court described is Reid’s failure, in violation of Rule

26(a)(2)(B)(i), to give “a complete statement of all opinions the witness will express and

the basis and reasons for them.” Reid provided only cursory support for his conclusion

that the “CU[I] software was developed by copying the Olmstead software.” Reid did

identify four examples of similarities between the CUI and Olmstead software and stated

that he could identify other similarities, but he failed to discuss the basis of his

conclusion that the alleged similarities were the result of copying of the Olmstead

software by CUI. “[A]n expert opinion must ‘set forth facts’ and, in doing so, outline

a line of reasoning arising from a logical foundation.” Brainard v. Am. Skandia Life

Assur. Corp., 432 F.3d 655, 657 (6th Cir. 2005). After reading Reid’s report, CUI was

only slightly more informed about the basis of Olmstead’s argument that CUI had copied

Olmstead than CUI would have been by merely reading Olmstead’s complaint. The lack

of reasoning describing why any alleged similarities indicated copying, Reid’s statement

that he could identify other similarities, and Reid’s failure to tie any alleged similarities

between the CUI and Olmstead software to the screenshot exhibits in the appendix

together show that the report failed to meet the requirements of the rule. Under Rule

26(a), a “report must be complete such that opposing counsel is not forced to depose an

expert in order to avoid an ambush at trial; and moreover the report must be sufficiently

complete so as to shorten or decrease the need for expert depositions and thus to

conserve resources.” Salgado v. Gen. Motors Corp., 150 F.3d 735, 742 n.6 (7th Cir.

1998) (citing Sylla-Sawdon v. Uniroyal Goodrich Tire Co., 47 F.3d 277, 284 (8th Cir.

1995)). “Expert reports must include ‘how’ and ‘why’ the expert reached a particular

result, not merely the expert’s conclusory opinions.” Id. Reid’s report plainly failed to

clear this hurdle.
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 11

In arguing that Reid’s report satisfied Rule 26(a), Olmstead asserts that much of

the information not contained in the report was already known to the opposing parties

and the court. Specifically, Olmstead points to the production of Reid’s resume prior to

the production of the report, and the fact that the district court and CUI determined the

manner of Reid’s review of the software. However, these arguments do not remedy the

critical error in the report—its failure to explain the basis for Reid’s conclusion. On this

critical point, Olmstead states only that “Reid viewed the features of the two software

products and concluded that the similarities between them were such that copying was

obvious.” Without more explanation of how Reid came to this conclusion, the report

does not satisfy the requirements of Rule 26(a). 

Federal Rule of Civil Procedure 37(c)(1) states that “[i]f a party fails to provide

information or identify a witness as required by Rule 26(a) or (e), the party is not

allowed to use that information or witness to supply evidence on a motion, at a hearing,

or at a trial, unless the failure was substantially justified or is harmless.” Because Reid’s

report failed to meet the requirements of Rule 26(a), the district court did not abuse its

discretion in barring Olmstead from using the report under Rule 37(c)(1). “Federal Rule

of Civil Procedure 37(c)(1) requires absolute compliance with Rule 26(a), that is, it

‘mandates that a trial court punish a party for discovery violations in connection with

Rule 26 unless the violation was harmless or is substantially justified.’” Roberts v.

Galen of Virginia, Inc., 325 F.3d 776, 782 (6th Cir. 2003) (quoting Vance v. United

States, No. 98-5488, 1999 WL 455435, at *3 (6th Cir. June 25, 1999)). The burden is

on the potentially sanctioned party to prove harmlessness. Id. Because Olmstead argued

before the district court only that Reid’s report plainly satisfied Rule 26(a) and did not

argue that any deficiencies were justified or harmless, the district court did not abuse its

discretion in excluding the report. 

Olmstead argues, for the first time on appeal, that “[r]egardless of whether Reid’s

report strictly complied with Rule 26, the exclusion of his testimony was unwarranted.”

The thrust of Olmstead’s argument is that because CUI was not required to identify its

own expert until several months after the production of Reid’s initial report and because
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 12

any deficiencies in Reid’s report were cured by Reid’s supplemental declaration, which

was produced two months before the deadline for CUI to identify its expert, CUI

suffered no harm as a result of the report’s shortcomings. At first blush, the exclusion

of Reid’s report seems particularly damaging to Olmstead when combined with the

district court’s holding that only experts and counsel would be able to view the CUI

software. It is true, also, that “Rule 37(c)(1) does not compel the district judge to

exclude testimony in its entirety.” Roberts, 325 F.3d at 784. However, as discussed

below in relation to Olmstead’s copyright claim, even Reid’s supplemental declaration

fell woefully short of the rigorous abstraction-filtration-comparison analysis required to

find substantial similarity in copyright claims. Neither Reid’s report nor his additional

declaration makes any attempt to identify those elements of the Olmstead software that

are unique and original, rather than necessary to the function of any credit union

software. Therefore, Olmstead has not met its burden of showing that its Rule 26 errors

were harmless or justified. 

3. The Deposition of Craig Minch

Olmstead was not entitled to take the deposition of Craig Minch because CUI redesignated Minch as a non-testifying expert. Federal Rule of Civil Procedure

26(b)(4)(A) states that a “party may depose any person who has been identified as an

expert witness whose opinions may be presented at trial.” In the case of a non-testifying

expert, a party is only entitled to take the deposition of another party’s expert upon a

showing of special circumstances. Fed. R. Civ. P. 26(b)(4)(B).

The district court correctly determined that Olmstead was not entitled to depose

Minch before the court ruled on the pending motions for summary judgment, even

though CUI originally designated Minch as a testifying expert. As the district court

stated, “the overwhelming majority of courts hold that a party may re-designate an

expert as non-testifying, and that this insulates the expert from deposition by other

parties absent a showing of ‘exceptional circumstances.’” See, e.g., In re Shell Oil

Refinery, 132 F.R.D. 437, 440 (E.D. La. 1990). This position is consistent with the
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 13

purpose of Rule 26(b), which is to help lawyers prepare to cross-examine expert

witnesses who will testify at trial. Fed. R. Civ. P. 26, advisory committee’s note (1970).

Olmstead argues that CUI’s re-designation of Minch was an unfair attempt to

prevent CUI from deposing Minch and a violation of Rule 26(b)(4)(A). However, Rule

26(b)(4)(A) says nothing about the timing of the deposition of an expert witness, except

that if the expert witness is required to file a report, the deposition may only occur after

the report is provided. Olmstead has not pointed to any case or rule stating that a district

court abuses its discretion in not allowing an opposing party to take an expert witness’s

deposition before ruling on summary judgment motions. Olmstead seeks to use Minch’s

deposition testimony to survive summary judgment, hoping that Minch will testify that

there were enough similarities between Olmstead’s software and CUI’s software to

create a genuine issue of material fact. Such use of an opponent’s experts is what the

revisers of Rule 26 sought to avoid: 

Past judicial restrictions of discovery on an adversary’s expert,

particularly as to his opinions, reflect the fear that one side will benefit

unduly from the other’s better preparation. The procedure established in

subsection (b)(4)(A) holds the risk to a minimum. Discovery is limited

to trial witnesses, and may be obtained only at a time when the parties

know who their expert witnesses will be. A party must as a practical

matter prepare his own case in advance of [the time when the parties

designate their expert witnesses], for he can hardly hope to build his case

out of his opponent’s experts.

Fed. R. Civ. P. 26, advisory committee’s note (1970). Olmstead sought to do what the

procedure mandated by Rule 26 sought to proscribe—build a case on the basis of an

opponent’s expert. Therefore, the district court did not abuse its discretion in refusing

to compel the deposition of Craig Minch. 

B. Spoliation

The district court did not abuse its discretion in declining to sanction CUI for the

CSE Credit Union’s destruction of Olmstead’s hard drives, which prevented Olmstead’s

forensic experts from determining whether CUI programmers had accessed the Olmstead

software source code, because the district court’s decision balanced the lack of any
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 14

assertion of wrongdoing by CUI with the harm caused to Olmstead’s claims, and

because Ohio law provides a remedy for a party injured by another party’s spoliation of

evidence.

That the CSE Credit Union’s destruction of the hard drives may have constituted

spoliation of evidence does not require a different result. “[A] federal court’s inherent

powers include broad discretion to craft proper sanctions for spoliated evidence.”

Adkins v. Wolever, 554 F.3d 650, 651 (6th Cir. 2009) (en banc). This power “arises not

from substantive law, but, rather, ‘from a court’s inherent power to control the judicial

process.’” Id. at 652 (quoting Silvestri v. Gen. Motors Corp., 271 F.3d 583, 590 (4th

Cir. 2001)). As this court and its “sister circuits have recognized, a proper spoliation

sanction should serve both fairness and punitive functions.” Id. The district court based

its decision not to sanction CUI for the CSE Credit Union’s destruction of evidence on

CUI’s lack of fault, thereby addressing the punitive aspect of the sanctions inquiry.

Olmstead argues that the court erred in failing to consider the fairness aspect, stating that

“CUI should not be permitted to benefit from the act of spoliation committed by its joint

venturer, CSE.” But this fairness aspect cuts both ways, as the potential for unfairness

exists if CUI were sanctioned for conduct in which it was not involved. Several

jurisdictions have addressed these fairness concerns raised by third-party spoliation by

recognizing an independent tort of spoliation. See Phoebe L. McGlynn, Note, Spoliation

in the Product Liability Context, 27 U. Mem. L. Rev. 663, 691-92 (1997). As the district

court discussed, Ohio recognizes intentional spoliation of evidence as an independent

cause of action that may be brought against either the primary defendant to an action or

the third party to the action. See Smith v. Howard Johnson Co., 615 N.E.2d 1037, 1038

(Ohio 1993). Olmstead brought an independent claim of intentional spoliation against

the CSE Credit Union under Ohio law, and Olmstead eventually settled all claims with

the CSE Credit Union. Thus, Olmstead was not left without a remedy for any harm

caused by the CSE Credit Union’s spoliation, and the district court did not abuse its

discretion in declining to impose a sanction on CUI. 
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 15

C. Copyright Infringement

On the merits, CUI was entitled to summary judgment with respect to Olmstead’s

copyright infringement claims because Olmstead has not produced any direct evidence

of copying and Olmstead’s indirect evidence of copying was not sufficient to create a

fact question as to whether copying occurred. To prevail in an action for copyright

infringement, “a plaintiff must establish that he or she owns the copyright creation, and

that the defendant copied it.” Kohus v. Mariol, 328 F.3d 848, 853 (6th Cir. 2003). A

plaintiff can show copying in two ways, either through direct evidence of copying, or by

indirect evidence. Id. at 853-54. When there is no direct evidence of copying, “a

plaintiff may establish ‘an inference of copying by showing (1) access to the allegedlyinfringed work by the defendant(s) and (2) a substantial similarity between the two

works at issue.’” Id. (quoting Ellis. v. Diffie, 177 F.3d 503, 506 (6th Cir. 1999)).

Because Olmstead has no direct evidence of copying and was not able to create a triable

question of fact through indirect evidence, CUI was entitled to summary judgment on

Olmstead’s copyright infringement claim. 

The district court correctly determined that Olmstead presented no direct

evidence of copyright infringement. All of the facts Olmstead listed as direct evidence

of copying require a factfinder to infer that copying occurred based on circumstantial

evidence. According to Olmstead, “CUI’s programmers accessed the Olmstead software

multiple times per week while engaged in their development work”; CUI’s programmers

met with CSE Credit Union employees who had worked as tellers and had experience

with the Olmstead system; a former CSE Credit Union employee who was familiar with

the Olmstead software was responsible for designing the CUI interface; and one CSE

Credit Union teller stated that although she eventually received training on the CUI

system, she did not receive any training on the day that the CSE Credit Union transferred

from the Olmstead software to the CUI system. Even construed in the light most

favorable to Olmstead for summary judgment, all of this evidence still requires a

factfinder to infer that copying occurred; therefore the district court correctly

determined that Olmstead did not produce any direct evidence of copying. 
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 16

Olmstead’s indirect evidence of copying is also not sufficient to create a fact

question as to whether copying occurred. In order to prove copying through indirect

evidence, a plaintiff must show “(1) access to the allegedly-infringed work by the

defendant(s) and (2) a substantial similarity between the two works at issue.” Kohus,

328 F.3d at 854. It is not disputed that CUI programmers were able to access the nonliteral elements of Olmstead’s software—the user interface—but it is at the substantial

similarity inquiry that Olmstead’s claim fails. The elements of the copyrighted work that

are copied must be original, and “before comparing similarities between two works a

court should first identify and eliminate those elements that are unoriginal and therefore

unprotected.” Id. at 853. In Kohus, this court applied a two-step approach for

determining whether substantial similarity exists, where the factfinder first asks what

aspects of the copyrighted work, if any, are protected, and then asks whether the second

work involves elements that are substantially similar to the protected elements of the

original work. Id. at 855. Kohus involved alleged copying of a latch designed for use

in playground equipment, and we determined that expert testimony was likely necessary

to “establish what elements, if any, are necessary to the function of any latch designed

for the upper arm of a collapsible playyard.” Id. at 856. Here, CUI has maintained

throughout the litigation that any alleged similarities arose from the fact that both

software programs were designed to serve the functions of credit unions, yet Olmstead

has not attempted to identify any original elements of its software that CUI copied.

Because Olmstead has failed to produce evidence creating a question of fact as to

whether CUI copied original elements of its software, CUI was entitled to summary

judgment on Olmstead’s copyright infringement claims. 

The only indirect evidence offered by Olmstead in support of substantial

similarity is Tracie Rodriguez’s testimony regarding the transition between the CUI and

Olmstead software, but this testimony fails to create a triable question of fact. As the

district court discussed, Rodriguez stated about the transition that “[t]here was work

involved, I mean, there was problems at first.” Moreover, Lash testified that CUI

employees were provided with “a lot” of support during the transition, and that there
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 17

2

 Of the more than 25 similarities in the software specifically identified in Reid’s additional

declaration, many are still vague. For example, Reid writes, “RCO pgs 113, 114 and UC 29 are very

similar;” Reid also states, “RCO 123, 124 and UC 37, Audit trial is similar.” Moreover, the only analysis

possibly related to originality occurs when Reid lists the use of the terms “base accounts” and “sub

accounts” in both programs as “unique,” and when Reid states that both programs have the ability to keep

customer records forever and that Olmstead told Reid during his interview with Olmstead that this was a

unique feature of their system. 

were “a couple weeks” dedicated to providing “quite a bit” of training to CSE Credit

Union employees on the new software.

Notably, in its brief before this court, Olmstead blames its inability to provide

any real analysis of substantial similarity on the district court’s evidentiary rulings.

However, as discussed earlier, the district court did not abuse its discretion in governing

discovery in this case. Moreover, the evidence that Olmstead did obtain, even if

considered by the district court, would not be sufficient to create a question of fact as to

whether CUI copied original elements of Olmstead’s software. Neither Reid’s report,

nor Reid’s additional declaration provided by Olmstead in an attempt to cure the

deficiencies in the report, even begins to provide the kind of abstraction-filtrationcomparison analysis we applied in Kohus, id. at 855 n.1, and that the district court found

lacking. As mentioned above, under Kohus, the factfinder determines substantial

similarity first by asking what aspects of the copyrighted work, if any, are protected, and

then by asking whether the second work involves elements that are substantially similar

to the protected elements of the copyrighted work. Id. at 855. All of the evidence

offered by Olmstead clearly lacks the abstraction and filtration elements. Olmstead has

not attempted to identify those elements of its software that are original; thus its

substantial similarity analysis does not filter elements that would be expected to be

common to any credit union software, those dictated by the particular business practices.

Although the additional Declaration of Robert Reid improves upon Reid’s initial expert

report in that it specifically identifies certain elements of CUI’s software that are similar

to Olmstead’s software, Reid does not opine on whether those elements are original

elements.2

 Thus, even Reid’s additional report fails to create a question of fact as to

whether CUI copied original elements of Olmstead’s software. 
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 18

Because Olmstead has not created a triable question of fact as to whether CUI

copied original elements of the Olmstead software, CUI was entitled to summary

judgment on Olmstead’s copyright infringement claims.

D. Trade Secrets

The district court correctly held that Olmstead’s end user product—the RCO-1

interface—was not a trade secret because Olmstead did not take reasonable steps to

maintain its secrecy. CUI was therefore entitled to summary judgment with respect to

Olmstead’s trade secrets claim because Olmstead’s end use product was not a trade

secret and Olmstead did not produce any evidence indicating that CUI accessed the

Olmstead source code. 

The summary judgment evidence showed that the RCO-1 interface was not a

trade secret. In Ohio, “trade secret” means:

information . . . that satisfies both of the following:

(1) It 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. 

(2) It is the subject of efforts that are reasonable to maintain its secrecy.

O.R.C. § 1333.61(D). The district court held that Olmstead’s end user product was not

a trade secret because Olmstead did not take reasonable steps to maintain its secrecy. 

The court stated that Olmstead’s own president had testified that the Olmstead interface

is not a trade secret, that Olmstead’s contract with the CSE Credit Union did not contain

any confidentiality provisions preventing third parties from viewing the interface, and

that the agreement expressly contemplated that the CSE Credit Union would use a thirdparty personal computer support firm to assist with support and to provide the terminal

emulation software. These factors, combined with Olmstead’s inability to identify any

affirmative steps it took to maintain the secrecy of its user interface, amply support the

district court’s determination that the Olmstead user interface was not a trade secret, so

that summary judgment was proper on Olmstead’s trade secrets claim. 
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 19

 Olmstead argues that the district court erred in concluding that the CSE Credit

Union was permitted to issue CUI programmers passwords under the terms of the license

agreement, but that does not change the fact that Olmstead did not take sufficient steps

to maintain the secrecy of its user interface. Because the CSE Credit Union is no longer

a party to this case, the question is not whether the CSE Credit Union breached any

implied covenants in the contract not to compete (as Olmstead suggests by citing SAS

Institute, Inc. v. S&H Computer Systems, Inc., 605 F. Supp. 816, 827 (M.D. Tenn.

1985)), or whether the CSE Credit Union was, in fact, authorized to issue passwords to

anyone it wished, but whether Olmstead took reasonable steps to protect the secrecy of

its user interface. The license agreement between the CSE Credit Union and Olmstead

stated that “[p]ersonal computers may be integrated with the R.C. Olmstead system

through the use of terminal emulation software,” and that “[i]t is the Credit Union’s

responsibility to acquire a local Personal Computer support firm to perform

maintenance.” Although Olmstead disputes the degree of access that third-party

developers and support providers could have had by providing emulation software or

support services, nothing in the agreement limited the ability of those third parties to

view the software. Olmstead acknowledged that various third parties had developed

programs to work with the Olmstead software, and it was in this capacity that Burkhardt

and Akin began working with the CSE Credit Union and the Olmstead software. The

record lacks any evidence of affirmative steps that Olmstead took to protect its alleged

trade secret—its software interface.

In claiming that the RCO-1 interface is a trade secret, Olmstead relies almost

entirely on its factually incorrect claim that the district court determined that CUI’s

interface was a trade secret, based on the district court’s discovery ruling limiting

Olmstead’s access to the CUI software. As Olmstead sees it, fairness, the law-of-thecase doctrine, and the doctrine of estoppel all mandate that the trade secret status of the

Olmstead interface is at least a question of fact, but this argument fails for two reasons.

First, a finding that CUI’s interface is a trade secret does not necessitate a finding that

the RCO-1 interface is a trade secret. The RCO-1 interface is not a trade secret, due at

least in part to Olmstead’s lack of efforts to maintain its secrecy; that factor has no
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 20

bearing on whether CUI’s end use product is a trade secret. Second, as the district court

noted, it never determined that CUI’s interface was a trade secret. In holding that only

Olmstead’s attorneys and experts could view the CUI end use product, the court stated

that it “must acknowledge that CU Interface’s end use product is proprietary in nature

and its disclosure could cause CU Interface considerable damage.” Yet Federal Rule of

Civil Procedure 26(c)(1)(G) permits a district to court to protect, in addition to trade

secrets, other types of confidential commercial information, research, or development.

Moreover, as the district court noted in its discovery ruling, Olmstead did not challenge

CUI’s position that the end user product contains trade secrets, and the protective order

to which the parties agreed mandated that only attorneys and experts could view “highly

confidential material.” The district court therefore based its order “solely upon RCO’s

concession—at no point did the Court make factual findings or hold as a matter of law

that CUDP Circa 2005 was a trade secret.”

The district court correctly determined that CUI was entitled to summary

judgment on Olmstead’s trade secrets claim. 

III.

For these reasons, the order of the district court granting summary judgment to

the defendants on all remaining claims is affirmed.
No. 09-3428 R.C. Olmstead, Inc. v. CU Interface, LLC, et al. Page 21

_________________

CONCURRENCE

_________________

KETHLEDGE, Circuit Judge, concurring. I join the court’s opinion, and write

briefly to emphasize that it was not only permissible, but salutary that the district court

chose to enforce Rule 26(a)(2)(B) by striking Olmstead’s expert report. The report was

patently noncompliant with the Rule. Olmstead contends that it should have been given

another chance to comply—that, essentially, it was entitled to a free violation—but in

my view the district court was entirely right to reject that contention. The time to

comply with the Rules is when the district court’s scheduling order says to comply, not

weeks later when faced with a motion for noncompliance. Every violation of the Rules

has consequences; the question is who will bear them. Too often the consequences are

borne only by the innocent party, who must live with the violation (here, a useless

report) or else pay to brief and argue a motion to compel the offending party to do what

the Rules required it to do all along. Better instead to make the offending party pay a

price, and thereby also to remind others that they, too, should comply the first time.