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1

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

MERIDIAN PROJECT SYSTEMS,

INC.,

Plaintiff,

v. NO. CIV. S-04-2728 FCD DAD

MEMORANDUM AND ORDER

HARDIN CONSTRUCTION COMPANY,

LLC, and COMPUTER METHODS

INTERNATION CORP., 

Defendants.

___________________________/

COMPUTER METHODS INTERNATION

CORP., and HARDIN CONSTRUCTION

COMPANY, LLC, 

Counterclaimants,

v.

MERIDIAN PROJECT SYSTEMS,

INC., and JAMES OLSEN, JOHN

BODROZIC, and MIKE CARRINGTON,

Counterdefendants.

_____________________________/

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1 Because oral argument will not be of material

assistance, the court orders the matter submitted on the briefs. 

E.D. Cal. L. R. 78-230(h).

2 Pursuant to a protective order issued by the magistrate

judge assigned to this case, the parties submitted all documents

relating to plaintiff’s motion for partial summary judgment under

seal. The court may, on its own motion, unseal portions of the

record. See Encyclopedia Brown Productions, Ltd. v. Home Box

Office, Inc., 26 F. Supp. 2d 606 (S.D.N.Y. 1998); Bijan Designer

for Men, Inc. v. Katzman, 1997 WL 51504 (S.D.N.Y. 1997). 

On April 3, 2006, the court issued a minute order, informing

the parties of its intent to unseal all documents submitted in

relation to this motion and ordering any oppositions by the

parties to be filed by April 5, 2006. Plaintiff filed a letter

stating its non-opposition to the unsealing of the documents. 

(Letter regarding unsealing documents, filed Apr. 5, 2006). 

Defendants Hardin and CMIC object only to the unsealing of

Exhibit A to the declaration of Scott W. Pink, filed December 23,

2005, due to the disclosure of non-public information that could

cause CMIC harm in the marketplace. (Statement of Defs.

regarding unsealing documents, filed Apr. 5, 2006). 

Accordingly, the court unseals all documents submitted in

relation to plaintiff’s motion for partial summary judgment,

except Ex. A to the declaration of Scott W. Pink, filed 

Dec. 23, 2005. (Docket numbers 94-96, 98, 115-121, 139-145 and

159). The court will refer to information contained in this

exhibit, but not to any content that discloses information that

defendants assert could cause CMIC harm in the marketplace. 

2

----oo0oo----

This matter is before the court on plaintiff Meridian

Project Systems, Inc.’s (“Meridian”) motion for partial summary

judgment on its claims of breach of contract and copyright

infringement against defendant Hardin Construction Company, LLC

(“Hardin”). Defendant Hardin opposes the motion. For the

reasons set forth below,1 plaintiff’s motion is GRANTED in part

and DENIED in part.2

BACKGROUND

Meridian is a software company that provides software

solutions related to the management of physical infrastructure

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3

management and programs. (Def. Hardin’s Resp. to Pl.’s Statement

of Undisputed Facts (“RUF”), filed Feb. 3, 2006, ¶ 1). One of

Meridian’s primary products is a project management software

called Prolog Manager (“Prolog”), which enables users to automate

all aspects of the construction process, from project design to

closeout. (RUF ¶¶ 2-3). Defendant Hardin is a construction

company and customer of Meridian for the Prolog product. (RUF ¶

16).

Starting in 1996, Hardin purchased licenses to use various

versions of Prolog Manager. (RUF ¶ 17). As part of its standard

practice and policy regarding the license and delivery of Prolog

versions 5.1 and 6.0, Meridian sends each customer a standard

form box containing a CD loaded with the Prolog software. (RUF ¶

21). The box containing the Prolog CD also contains Meridian’s

applicable End User License Agreement (“EULA”) and a user manual. 

(RUF ¶ 22). The EULA provides restrictions relating to the use

of Prolog. (RUF ¶ 30). Hardin had the ability to return the

Prolog product if it did not agree with the EULA, but did not do

so; Hardin used Prolog in connection with its business since 1996

without ever returning a single copy that it had registered and

installed. (RUF ¶ 25). Hardin never objected to the terms of

the EULA. (RUF ¶ 26). 

In or around 2000, Hardin first discussed with defendant

Computer Methods International Corp. (“CMIC”) the possibility of

integrating Prolog with CMIC’s existing accounting package. (RUF

¶ 33). In late March 2001, however, Hardin’s Executive Committee

decided to switch from Meridian’s project management software,

Prolog, to CMIC’s project management software. (RUF ¶ 34). 

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4

Hardin and CMIC discussed producing a document, describing the

project management software specifications, that could be

included as part of their contract. (Dep. of Danny Philip

Bensley, attached as Ex. B to Decl. of Scott W. Pink (“Pink

Decl.”), filed Jan. 3, 2006, (“Bensley Dep.”) at 82:15-23). It

was further discussed that a Hardin employee, Chris Wright, would

prepare that document. (Id. at 82:24-25). 

Wright prepared drafts of desired specifications to be

included in the Hardin-CMIC contract. (Id. at 269:3-6). On

April 12, 2001, Danny Bensley, Chief Information Officer of

Hardin, sent Jeff Weiss, Vice President of Sales and Marketing

for CMIC, an e-mail containing the drafts prepared by Wright. 

(Id. at 268:20-269:10). Meridian asserts that the attachments to

this e-mail contained over thirty pages of detailed descriptions

copied from the Prolog help files. (See Supplemental Decl. of

Thomas A. McManus (“Supp. McManus Decl.”), filed Feb. 17, 2006, ¶

3; Ex. A to Supp. McManus Decl. (“E-mail Attachments”)). 

On April 27, 2001, Hardin and CMIC entered into a Master

Software Acquisition Agreement for CMIC’s software package. (RUF

¶ 42). This agreement contained several attachments, including

an attachment named Schedule H. (RUF ¶ 57). Schedule H is the

schedule attached to the CMIC that contains the project

management specifications and is also referred to as the project

management requirements document. (Bensley Dep. at 90:15-18;

Dep. of Jeffrey R. Traeger, attached as Ex. A to Pink Decl.,

filed Jan. 3, 2006, (“Traeger Dep.”) at 247:12-14, filed under

seal). Wright produced the specifications that were incorporated

into Schedule H. (Bensley Dep. At 83:4-7). The Schedule H

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document was signed by Jeffrey Traeger, Senior Vice President for

Hardin, and by Jeff Weiss. Meridian asserts that a large

portions of the Schedule H document was copied from Prolog’s help

files text. (See Supp. McManus Decl. ¶ 4).

Meridian filed claims against defendant Hardin for breach of

contract, breach of the implied covenant of good faith and fair

dealing, fraud, interference with contractual relations,

intentional interference with prospective economic advantage,

unfair competition, and copyright infringement. Meridian’s

claims for breach of contract and copyright infringement against

defendant Hardin are based upon Hardin’s alleged copying of

Prolog help file language into the e-mail attachments and the

Schedule H document. On December 23, 2005, Meridian filed a

motion for partial summary judgement. Meridian seeks summary

adjudication regarding Hardin’s liability for breach of the EULA

and for copyright infringement. Meridian does not seek

determination of damages for the breach of contract claim, nor

determination of the applicability of affirmative defenses

available to Hardin for the copyright infringement claim. Hardin

opposes the motion. 

STANDARD

Pursuant to Rule 56 of the Federal Rules of Civil Procedure,

summary judgment is appropriate when “there is no genuine issue

as to any material fact and . . . the moving party is entitled to

judgment as a matter of law.” Fed. R. Civ. P. 56(c). Under this

standard, an issue is “genuine” if there is sufficient evidence

for a reasonable jury to find for the nonmoving party and a fact

is “material” when it may affect the outcome of the case under

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the substantive law that provides the claim or defense. Anderson

v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). The

determination is made based solely upon admissible evidence. Orr

v. Bank of America, 285 F.3d 764, 773 (9th Cir. 2002). 

Furthermore, the court must view inferences made from the

underlying facts in the light most favorable to the nonmoving

party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970). 

The moving party has the initial burden to demonstrate the

absence of a genuine issue of material fact. Celotex Corp. v.

Catrett, 477 U.S. 317, 323 (1986). If the moving party is

without the ultimate burden of persuasion at trial, it may either

produce evidence negating an essential element of the opposing

party’s claim, or demonstrate that the nonmoving party does not

have enough evidence to carry its ultimate burden of persuasion

at trial. Nissan Fire & Marine Insurance Co. v. Fritz Companies,

Inc., 210 F.3d 1099, 1106 (9th Cir. 2000). If the moving party

meets this initial requirement, the burden then shifts to the

opposing party to go beyond the pleadings and set forth specific

facts that establish a genuine issue of material fact remains for

trial. Matsushita Elec. Indust. Co. v. Zenith Radio Corp., 475

U.S. 574, 585-87 (1986). Summary judgment should not be granted

where “there are any genuine factual issues that properly can be

resolved only by a finder of fact because they may reasonably be

resolved in favor of either party.” Anderson, 477 U.S. at 250.

Following this same rubric, a court may grant summary

adjudication on part of a claim or defense, based on the

standards applicable to a motion for summary judgment. See Fed. 

R. Civ. P. 56(a),(b); State of California v. Campbell, 138 F.3d

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3 Hardin asserts in its opposition that summary judgment

should not be granted because plaintiff has not presented

evidence of damages. However, Meridian brings this motion for

the limited purpose of establishing that there was a breach of

contract by defendant. Therefore, evidence of damages is not

dispositive of plaintiff’s motion for partial summary judgment. 

4 “The ‘shrinkwrap license’ gets its name from the fact

that retail software packages are covered in plastic or

cellophane ‘shrinkwrap,’ and some vendors . . . have written

licenses that become effective as soon as the customer tears the

wrapping from the package.” ProCD, Inc. v. Zeidenberg, 86 F.3d

1447, 1449 (7th Cir. 1996). Meridian’s EULA does not become

effective upon the tearing of shrinkwrap, but the license is

contained within the packaging of the Prolog software, not on the

outside of the box. As such, courts consider this type of EULA a

“shrinkwrap license.” See id.

7

772, 780 (9th Cir. 1998). 

ANALYSIS

A. Breach of Contract

Plaintiff Meridian moves for partial summary judgment on its

claim of breach of contract against defendant Hardin. Meridian

seeks to establish only liability through this motion.3 Hardin

argues that summary judgment is inappropriate because (1) the

Ninth Circuit has not decided whether an End User Licence

Agreement (“EULA”) of the type used by Meridian is valid and

enforceable; (2) plaintiff’s contract claims are preempted by the

federal Copyright Act; and (3) the terms of the contract are

ambiguous and cannot be resolved on a motion for summary

judgment. 

1. End User License Agreement

Hardin argues that plaintiff’s motion for partial summary

judgment should be denied because the validity of “shrinkwrap

licenses”4 has not been decided by the Ninth Circuit. However,

the validity of “shrinkwrap licenses” is a question of law, not a

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5 These cases are not directly on point with the issue

presented by Meridian’s EULA in this case. In Softman, the court

did not reach the issue of whether “shrinkwrap licenses” were

enforceable because the court found that the plaintiff never

loaded the software, and thus never assented to the EULA. 171 F.

Supp. 2d at 1088. In Step-Saver, the court was presented with a

battle-of-the-forms case, in which the parties exchanged forms

with different conditions and obligations, and the court

addressed whether the “shrinkwrap license” controlled. 939 F.2d

91. Finally, in Vault, the court did not reach the issue of the

validity of “shrinkwrap licenses” generally because the court

found that the buyer knew the terms of the license before

purchasing the software. 847 F.2d at 268-70. 

8

question of fact for the jury. Therefore, this question may

properly be resolved on plaintiff’s motion for summary judgment. 

See Local Motion, Inc. v. Niescher, 105 F.3d 1278, 1280 (9th Cir.

1997) (citing Hanagami v. China Airlines, Ltd., 688 P.2d 1139,

1145 (1984)).

Whether contracts such as Meridian’s EULA are valid is a

much-disputed question. See ProCD, Inc., 86 F.3d 1447; StepSaver Data Sys., Inc. v. Wyse Tech., 939 F.2d 91 (3d Cir. 1991);

Softman Products Co., LLC., v. Adobe Sys., Inc., 171 F. Supp. 2d

1075, 1088 (C.D. Cal. 2001). Courts that have found these types

of licenses invalid characterize them as contracts of adhesion

that are unacceptable pursuant to the Uniform Commercial Code. 

Softman Products, 171 F. Supp. 2d at 1088 (citing Step-Saver, 939

F.2d 91; Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th

Cir. 1988))5; Klocek v. Gateway, Inc., 104 F. Supp. 2d 1332 (D.

Kan. 2000). However, other courts have held that these types of

licences are valid and enforceable contracts. See ProCD, 86 F.3d

1447 (7th Cir. 1996); see also Lexmark Int’l, Inc. v. Static

Control Components, Inc., 387 F.3d 522, 563 n.10 (6th Cir. 2004);

Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997); MuddCase 2:04-cv-02728-FCD-DAD Document 166 Filed 04/06/06 Page 8 of 27
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Lyman Sales & Serv. Corp. v. United Parcel Service, Inc., 236 F.

Supp. 2d 907, 911-12 (N.D. Ill. 2002); I. Lan Sys., Inc. v.

Netscout Serv. Level Corp., 183 F. Supp. 2d 328 (D. Mass. 2002). 

In ProCD, the Seventh Circuit held that “shrinkwrap licences” are

enforceable, relying on the policy considerations behind such

licences. ProCD, 86 F.3d at 1451. The Eastern District of

California favorably cited the Seventh Circuit’s approach to

these types of licences. Pollstar v. Gigimania, Ltd., 170 F.

Supp. 2d 974, 980-81 (E.D. Cal. 2000) (finding that a “browse

wrap” license may be arguably enforceable and valid). The

Northern District of California has also implicitly upheld the

validity of licenses similar to plaintiff’s EULA. See Adobe Sys.

Inc. v. Stargate Software Inc., 216 F. Supp. 2d 1051 (N.D. Cal.

2002); Adobe Sys. Inc. v. One Stop Micro, Inc., 84 F. Supp. 2d

1086 (N.D. Cal. 2000).

In ProCD, the court considered various common transactions

where the consumer purchases prior to getting the detailed terms

of the contract. ProCD, 86 F.3d at 1450. For example, an

insurance buyer remits the premium prior to getting the policy; a

traveler reserves a seat, pays and then, receives a ticket, which

may contain elaborate terms and conditions, accepted upon use of

the ticket; a concert or theater goer also purchases the ticket

in advance and agrees to conditions of attending the performance. 

Id. at 1451. The court noted that these transactions could be

structured differently in order to allow the consumer to agree 

first and pay later, but nonetheless, the contracts are

enforceable in the pay first, agree later form. Id. 

The ProCD court also noted the policy considerations in the

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software industry. Id. at 1451-52. In particular, the court

noted that only a minority of sales take place over the counter,

where there are boxes to peruse. Id. at 1451. Rather, many

purchases are made over the Internet by consumers who have never

seen a box. Id. As such, the reality of the industry lends

little support to the argument that the license should not be

enforceable because the consumer was not able to read the license

on the box before buying the product. Therefore, the Seventh

Circuit upheld the validity of the “shrinkwrap license” where the

consumer paid first, received the license upon opening the box,

and had an opportunity to return the software if the consumer

“conclude[d] that the terms of the license make the software

worth less than the purchase price.” Id. at 1452.

The court finds the Seventh Circuit’s rationale in ProCD

compelling. The EULA is not rendered invalid merely because

defendant purchased the Prolog software and then received the

EULA after opening the package. There is no dispute that

defendant purchased licenses to use various versions of

plaintiff’s Prolog software. (RUF ¶ 17). Defendant had notice

of the EULA, and the EULA was included in the box containing the

software and the user manual. (RUF ¶¶ 17, 22). Defendant does

not dispute that it had an opportunity to return Prolog to

Meridian if it did not agree to the EULA, but did not do so. 

(RUF ¶ 24). Further, defendant never objected or sought an

amendment to the terms of the EULA. (RUF ¶¶ 26-27). Under these

facts, this is not an unconscionable contract or a contract of

adhesion. Therefore, Meridian’s EULA may be an enforceable

contract.

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2. Preemption by the Copyright Act

Defendant Hardin also argues that even if the EULA is a

valid contract, it is preempted by the Copyright Act, 17 U.S.C. §

301(a). The Copyright Act protects the rights of reproduction,

preparation of derivative works, distribution, and display. 17

U.S.C. § 106; Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079,

1089(9th Cir. 2005). Section 301 provides, in relevant part,

that “all legal or equitable rights that are equivalent to any of

the exclusive rights within the general scope of copyright” are

preempted by federal law. 17 U.S.C. § 301. Therefore, in order

for claims under state law to be preempted, (1) the work at issue

must come within the subject matter of copyright, and (2) the

state law rights must be equivalent to the exclusive rights of

copyright. Grosso v. Miramax Film Corp., 383 F.3d 965, 968 (9th

Cir. 2004). 

The dispositive preemption issue in this case is whether the

rights protected by Meridian’s EULA are equivalent to the rights

protected by copyright. To survive preemption, the state law

claim must include an “extra element” that makes the right

asserted qualitatively different from those protected by the

copyright act. Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079,

1089 (9th Cir. 2005) (citing Summit Mach. Tool Mfg. v. Victor CNC

Sys., 7 F.3d 1434, 1439-40 (9th Cir. 1993)). In Altera, the

Ninth Circuit held that “[a] state law tort claim concerning the

unauthorized use of the software’s end product is not within the

rights protected by the federal Copyright Act.” Id. at 1090. 

The Altera court also noted that “[m]ost courts have held that

the Copyright Act does not preempt the enforcement of contractual

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6 The Ninth Circuit also favorably discussed the Eight

Circuit’s finding of no federal preemption in National Car Rental

System,991 F.2d at 432, where the court distinguished between use

and reproduction. Altera, 424 F.3d at 1089-90.

12

rights.” Id. (citing Bowers v. Baystate Techs. Inc., 320 F.3d

1317, 1323-24 (Fed. Cir. 2003); Nat’l Car Rental Sys. Inc. v.

Computer Assocs. Int’l, 991 F.2d 426, 431 (8th Cir. 1993); ProCD,

Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996)); see also

Wrench LLC v. Taco Bell Corp, 256 F.3d 446, 457 (6th Cir. 2001);

Taquino v. Teledyne Monarch Rubber, 893 F.2d 1488, 1501 (5th Vir.

1990); Acorn Structures v. Swantz, 846 F.2d 923, 926 (4th Cir.

1988). 

In reaching its finding of no federal preemption in Altera,

the Ninth Circuit found compelling the Seventh Circuit’s analysis

of a similar issue in ProCD.

6 Id. at 1089. In ProCD, the

Seventh Circuit enforced contractual rights provided by the

“shrinkwrap license” which allowed only for the private use of

the software. ProCD, 86 F.3d at 1454-55. The court focused its

analysis on the purpose of federal preemption; to prevent “states

from substituting their own regulatory systems for those of the

national government.” Id. at 1455. The Seventh Circuit noted

that courts usually read preemption clauses to leave private

contracts unaffected. Id. at 1454 (citing American Airlines,

Inc. v. Wolens, 513 U.S. 219 (1995). As such, the court

analogized that “[j]ust as § 301 [of the Copyright Act] does not

itself interfere with private transactions in intellectual

property, so it does not prevent states from respecting those

transactions.” Id. “A copyright is a right against the world. 

Contracts, by contrast, generally affect only their parties;

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7 The Seventh Circuit did acknowledge that some

applications of the law of contract could interfere with the

attainment of nations objectives and thus come within the domain

of § 301(a). Id. However, general enforcement of the

“shrinkwrap license” did not present such a problem. Id.

13

strangers may do as they please, so contracts do not create

‘exclusive rights.’” Id. at 1454. The “extra element” was the

mutual assent and consideration required by a contract claim. 

See id.; see also Bowers, 320 F.3d at 1325. Therefore, the

enforcement of the “shrinkwrap license” involved in that case did

not interfere with the “attainment of national objectives” within

the domain of § 301(a). Id. at 1455.7

In this case, Hardin seeks to dismiss Meridian’s breach of

contract claim on the basis of federal preemption. However,

Meridian seeks to enforce the terms of its EULA through this

action, very similar to the type of license analyzed by the

Seventh Circuit in ProCD. See id. at 1455. This type of license

is “a simple two-party contract” that, whether general or

restrictive, “is not ‘equivalent to any of the exclusive rights

within the general scope of copyright,’” and therefore may be

enforced.” Id.

Meridian also argues that the breach of contract claim is

not preempted because the EULA prohibits defendant from reverse

engineering the Prolog product. Reverse engineering is not

within the scope of the exclusive rights of copyright. See 17

U.S.C. § 106. Section 2(b) of the EULA provides that the

licensee agrees not to reverse engineer the Software. (Traeger

Dep. at 234:22-235:10, filed under seal). To the extent that

Meridian’s EULA prohibits reverse engineering by defendant

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Hardin, plaintiff’s breach of contract claim is also not

preempted because the contract protects a qualitatively different

right than those protected by the Copyright Act. Bowers, 320

F.3d at 1324-25. 

3. Terms of the Contract

Finally, defendant contends that summary judgment is

inappropriate because the terms of the EULA are ambiguous. Under

California law, interpretation of a contract is an issue of law

if “(a) the contract is not ambiguous; or (b) the contract is

ambiguous but no parole evidence is admitted or the parole

evidence is not in conflict.” Centigram Argentina, S.A. v.

Centigram Inc., 60 F. Supp. 2d 1003, 1007 (N.D. Cal. 1999)

(citing WYDA Assocs. v. Merner, 42 Cal. App. 4th 1702, 1710

(1996). Whether a contract provision is ambiguous is a question

of law. “[W]hen two equally plausible interpretations of the

language of a contract may be made parole evidence is admissible

to aid in interpreting the agreement.” Centigram Argentina, 60

F. Supp. 2d at 1007 (internal quotations omitted). Further, a

party may present extrinsic evidence to show that a facially

unambiguous contract is susceptible of another interpretation. 

Maffei v. Northern Ins. Co., 12 F.3d 892, 898 (9th Cir. 1993)

(citing Brobeck, Phleger & Harrision v. Telex Corp., 602 F.2d

866, 873 (9th Cir. 1979). If a contract provision is ambiguous,

summary judgment is generally improper “because differing views

of the intent of parties will raise genuine issues of material

fact.” Id. (citing United States v. Sacramento Mun. Util. Dist.,

652 F.2d 1341, 1344 (9th Cir. 1981)).

/////

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Meridian contends that Hardin copied Meridian’s “help files”

and attached them as part of the e-mail attachments sent to

defendant CMIC and included them in the Schedule H document. 

Meridian asserts that Hardin breached the EULA in doing so

because it copied and distributed copies of Prolog “Software or

Documentation” as prohibited by section 2(a) of the EULA. Hardin

contends that it is unclear that the “help files” are either part

of Meridian’s “Software” or “Documentation” under the terms of

the EULA.

In support of its contention that the terms of the EULA is

ambiguous, Hardin cites to the EULA. Section 1 of the EULA

provides that the licensee is supposed to use the “software in

accordance with the Documentation.” Hardin also points statments

made by plaintiff’s director of operations, J.R. Hamel, that

Meridian sends each customer a box containing a CD loaded with

Prolog software. (Declaration of J.R. Hamel in Supp. of Mot. For

Summ. J. (“Hamel Decl.”), filed Dec. 23, 2005, ¶ 9). Hardin

contends that if the CD contains the “Software,” the

“Documentation” must be the user manual and EULA also provided in

the box. Therefore, Hardin argues that copying language from a

computer screen (specifically the “help files”) neither involves

copying the “Software” or the “Documentation.” 

Hardin also presents the deposition of its vice-president,

Jeff Traeger, which stated that a Hardin employee probably copied

portions of Prolog into the e-mail attachments sent to CMIC. 

(Traeger Dep. at 253:21-23, filed under seal). However, Traeger

also denied that Hardin sent copies of the software to CMIC

because he believed that action would violate the EULA. (Id. at

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225:8-14, filed under seal). Hardin argues that these

statements, taken together, demonstrate that Hardin did not

intend or understand the term “Software” to include help file

text that appeared on the computer screen. 

Meridian argues that the “help files” text is both

“Software” and “Documentation.” The text is “Software” because

it is part of the on-screen tutorial that is contained within the

Prolog software and the text is “Documentation” because such

files are an on-screen document that accompanies the software. 

Meridian’s own argument demonstrates the ambiguity of the terms

included in its EULA. Meridian argues that any ambiguity is

meaningless because the “help files” can be considered either

“Software” or “Documentation” or can be considered to be both

“Software” and “Documentation.” 

However, the court finds that the help files could also be

considered neither “Software” or “Documentation.” Defendant

Hardin has presented evidence indicating that it did not

understand or interpret the EULA to encompass the “help files”

text as either “Software” or “Documentation.” As such, it has

raised an ambiguity regarding the meaning of the terms in the

EULA as applied to the help files at issue. This ambiguity

precludes the court from interpreting the terms of the contract

on a motion for summary judgment. See Maffei v. Northern Ins.

Co., 12 F.3d at 898. Therefore, plaintiff’s motion for summary

judgment for its breach of contract claim against defendant

Hardin is DENIED.

/////

///// 

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B. Copyright Infringement

Plaintiff Meridian also moves for partial summary judgment

on its claim of copyright infringement against defendant Hardin. 

Meridian seeks summary adjudication on the issue of whether

defendant Hardin infringed upon plaintiff’s copyright in the

Prolog software when it allegedly copied portions of Prolog’s

help files text into e-mail attachments sent to defendant CMIC

and into the Schedule H document. Plaintiff does not seek

adjudication of defendant Hardin’s affirmative defenses, such as

fair use, to the alleged infringement. Because defendant’s

affirmative defenses were not raises in plaintiff’s initial

summary judgment motion, the court will not address the issues

raised by the affirmative defenses; those defenses remain viable

in the litigation. See Stillman v. Travelers Ins. Co., 88 F.3d

911, 913-14 (11th Cir. 1996); Books a Million, Inc. v. H & N

Enterprises, Inc., 140 F. Supp. 2d 846, 851 (S.D. Ohio 2001).

The Copyright Act gives the holder of a registered copyright

a right to sue. 17 U.S.C. § 501(b). To prevail on a claim of

copyright infringement, the plaintiff must prove (1) ownership of

a valid copyright, and (2) copying of constituent elements of the

work that are original. Feist Publications, Inc. v. Rural Tel.

Serv. Co., 499 U.S. 340, 361 (1991) (citing Harper & Row,

Publishers, Inc. v. Nation Enters., 471 U.S. 539, 548 (1985)). 

Defendant Hardin contends that plaintiff does not have a valid

copyright in the help files text at issue because it not

“protectable expression.” Hardin also contends that summary

judgment is improper because issues of fact remain regarding the

copying of plaintiff’s help files.

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1. Valid Copyright

To qualify for copyright protection, the work must be (1)

copyrightable subject matter; 2) original to the author; and (3)

fixed in a tangible medium of expression. See Feist, 499 U.S. at

348. Under the Copyright Act, a registration certificate is

prima facie evidence of the validity of the copyright and the

facts stated in the certificate. 17 U.S.C. § 410(c); Johnson

Controls, Inc. v. Phoenix Controls Sys., Inc., 886 F.2d 1173,

1175 (9th Cir. 1989). Meridian’s Prolog Manager 5.1 has been

registered with the U.S. Copyright Office. (RUF ¶ 8; Ex. A to

Declaration of Gabriel Nacht in Supp. of Mot. for Summ. J., filed

Dec. 23, 2005). This registration is prima facie evidence of

ownership by Meridian and of originality. See Johnson, 886 F.2d

at 1175. Defendant Hardin does not dispute that the Prolog

software was fixed in a tangible medium of expression.

2. Copying

In order for plaintiff to prevail on its claim of copyright

infringement, it must present evidence of copying by defendant

Hardin. Apple Computers, 35 F.3d at 1442. “Copying may be shown

by circumstantial evidence of access and substantial similarity

of both the general ideas and expression between the copyrighted

work and the allegedly infringing work.” Id. In this case,

access is clear. Defendant Hardin licensed the Prolog program

from plaintiff Meridian. (RUF ¶ 17). Hardin used Prolog in

connection with its business since 1996. (RUF ¶ 25). Therefore,

the gravamen of the parties’ dispute revolves on the analysis of

substantial similarity. 

/////

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The Ninth Circuit has established a two-part test for

analyzing whether copying sufficient to constitute infringement

has taken place. Id.; Krofft, 562 F.2d at 1164. The test

involves both an “extrinsic” and “intrinsic” component. Id. The

extrinsic prong requires an analysis of the similarity of ideas

and expression based upon external criteria, such as analytic

dissection and expert testimony. Id. The intrinsic prong

requires the analysis of the similarity of expression from the

standpoint of the ordinary reasonable observer without expert

assistance. Id. The intrinsic prong is a subjective test of

expression. Id.

The Ninth Circuit has held that the extrinsic analysis

should be performed by the court as the initial inquiry in

determining whether illicit copying took place because the

inquiry will define the scope of copyright protection before

considering the work as a whole. Id. at 1443 (citations

omitted). The Ninth Circuit has also set forth a three step

analysis to guide courts in the discussion of the extrinsic

component of the test. Id. First, “the plaintiff must identify

the source of the alleged similarity between his work and the

defendant’s work.” Id. Second, “the court must determine

whether any of the allegedly similar features are protected by

copyright.” Id. Third, the court must set the appropriate

standard for a subjective comparison of the works, depending on

whether the copyright protection is “broad” or “thin.” Id. 

Defendant Hardin asserts that plaintiff is claiming

exclusive ownership over concepts such as “request for

information” and “submittals.” Hardin contends that these

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concepts are not protected by plaintiff’s copyright. However,

defendant misstates the basis of Meridian’s copyright

infringement claim. Meridian’s claim of copyright infringement

is based upon Hardin’s alleged copying of the Prolog program’s

help files text in its attachments e-mailed to CMIC and in the

Schedule H document. 

Meridian’s claims are not based upon infringement of an

idea, which is clearly not within the scope of copyright

protection. See Feist, 499 U.S. at 344-45 (1991) (“The most

fundamental axiom of copyright law is that ‘no author may

copyright his ideas or the facts he narrates.’”) (quoting Harper

& Row, 471 U.S. at 556). Rather, Meridian’s claim is based upon

infringement of the expression of idea, specifically, the manner

it which it chose to convey the facts set forth in the help files

text. The original expression of an idea is protected by

copyright. See id. at 348 (“Others may copy the underlying facts

from the publication, but not the precise words used to present

them.”).

Although the manner in which facts are expressed is

protected by copyright, the extent of protection may be narrowed

by other limiting doctrines. The primary objective of copyright

is “[t]o promote the Progress of Science and useful Arts.” Art.

I., § 8, cl. 8.; Twentieth Century Music Corp. v. Aiken, 422 U.S.

151, 156 (1975). Feist, 499 U.S. at 349. “To this end, copyright

assures authors the right to their original expression, but

encourages others to build freely upon the ideas and information

conveyed by a work.” Feist, 499 U.S. at 349-50. This principle

is known as the idea/expression dichotomy and applies to all

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works of authorship. Id. at 350. “The scope of protection or

the degree of substantial similarity required to show

infringement will vary according to the type of work and the

ideas expressed in it.” Smart Inventions, Inc. v. Allied

Communications Corp., 94 F. Supp. 2d 1060, 1066 (C.D. Cal. 2000)

(quoting Landsberg v. Scrabble Crossword Game Players, Inc., 736

F.2d 485, 488 (9th Cir. 1984). The idea/expression dichotomy

serves to severely limit the scope of protection in fact-based

works. Feist, 499 U.S. at 350. “Some ideas can be expressed in

myriad ways, while others allow only a narrow range of

expression.” Landsberg, 736 F.2d at 488. Authors that convey

facts in original works often can only choose from a narrow range

of expression. Similarly, “a subsequent author wishing to

express the same facts will probably be required to use similar

language.” Smart Inventions, 94 F. Supp. 2d at 1066. Therefore,

the scope of protection afforded factual works is thin. Id.;

Apple Computer, Inc. v. Microsoft Corp., 35 F.3d 1435, 1442 (9th

Cir. 1994) (“[C]onsidering the . . . limited number of ways that

the basic ideas of the Apple GUI can be expressed differently, we

conclude that only ‘thin’ protection . . . is appropriate.”).

The Ninth Circuit also recognizes the application of

limiting doctrines that narrow the scope of copyright protection

available to certain works. The merger doctrine serves as one

such limitation. Apple Computer, 35 F. 3d at 1444. “When an

idea or an expression are indistinguishable, or ‘merged,’ that

expression will only be protected against nearly identical

copying.” Id. (citing Sid & Marty Krofft Television Prods., Inc.

v. McDonald’s Corp., 562 F.2d 1157, 1167-68 (9th Cir. 1977);

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8 Defendant Hardin argues that the scenes a faire

doctrine applies to the facts of this case. Plaintiff Meridian

interprets this doctrine as an affirmative defense, which was not

raised in their initial motion for summary judgment and

therefore, should not be addressed by the court on this motion. 

However, the merger doctrine and the related scenes a faire

doctrine serve as limiting principles that narrow the extent of

copyright protection, not as affirmative defenses. As such, the

court will address these arguments because they directly relate

to plaintiff’s motion for partial summary judgment regarding

copyright infringement. However, the court does not find that

mere application of the doctrine precludes a motion for summary

judgement as suggested by defendant. Rather, application of the

doctrine serves to establish the appropriate standard needed to

prove copying. 

22

Herber Rosentahl Jewelry Corp. v. Kalpakian, 446 F.2d 738, 742

(9th Cir. 1971)). The Ninth Circuit explained that the limiting

doctrine of scenes a faire is closely related to the merger

doctrine.8 Id. The scenes a faire doctrine provides that where

certain features are, as a practical matter indispensable, or at

least standard, in the treatment of a given issue, they are

treated like ideas. Frybarger v. Int’l Bus. Machines Corp., 812

F.2d 525 (9th Cir. 1987). “[T]he mere indispensable expression

of these ideas . . . may be protected only against virtually

identical copying.” Id.; Rachel v. Banana Republic, Inc., 831

F.2d 1503, 1507 (9th Cir. 1987).

At issue in this case, is the protection afforded to

Meridian’s help files text in the Prolog program. Such text is

entitled to at least some protection. See Harper House, Inc v.

Thomas Nelson, Inc., 889 F.2d 197, 205 (9th Cir. 1989) (finding

the text of instructions protectable by copyright). Meridian

presents evidence that Prolog’s help files provide text

describing the features, functions, and operations of the

program, including their selection, sequence, and organization. 

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(Hamel Decl. ¶ 10). In presenting such evidence, plaintiff

itself demonstrates that the help files text is a fact-based work

that describes ideas. (Id.) Because the expression set forth in

the help files text are intertwined with the ideas conveyed

through the text, to give Meridian broad copyright protection

over the text would be to confer a monopoly of the ideas

expressed in the text upon the copyright owner, in violation of

17 U.S.C. 102(b). Shaw v. Lindheim, 919 F.2d 1353, 1360 (9th

Cir. 1990). Subsequent authors wishing to convey the same facts

as those described in Meridian’s help files text can only choose

from a narrow range of expression. See Landsberg, 736 F.2d at

488. Because the range of protectable and unauthorized

expression is narrow, the Prolog help files text at issue is

closer akin to a game strategy book. See id. In this context,

“similarity of expression may have to amount to verbatim

reproduction or very close paraphrasing before a [] work will be

deemed infringed.” Id.; see Apple Computer, 35 F.3d at 1439

(“When the range of protectable and unauthorized expression is

narrow, the appropriate standard for illicit copying is virtual

identity.”) Thus, because it is entitled to only “thin”

protection, to demonstrate infringement, plaintiff must produce

evidence that defendant’s works are virtually identical to

Meridian’s works. 

Meridian argues that this case should be government by the

substantial similarity standard. In support of this position,

Meridian argues that the help files do not describe general

industry processes, but the unique way in which Prolog operates. 

However, this distinction is irrelevant. Under either

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9 Meridian asserts that the court should compare only the

“applicable” help files to the allegedly infringing work. The

court is not persuaded by this argument. The help files text can

be analogized to an instruction manual or handbook. While the

court may consider the selected similarities between one handbook

and another infringing work, the court must also compare the

handbook as a whole. See Landsberg, 736 F.2d at 489. Therefore,

the court must examine the entirety of the help files. 

10 Defendant Hardin argues that the court should compare

the Prolog software in its entirety to the Hardin-CMIC contract

in its entirety. The court is not persuaded by this argument. 

The applicable protected material in this case is plaintiff’s

Prolog help files, not the Prolog software in its entirety. 

Therefore, the protected material to be examined by the court is

the text of the help files. Likewise, the alleged infringing

(continued...)

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circumstance, the “help files” text describes facts and ideas,

which Meridian’s copyright cannot protect. Only the expression

of these facts is protected, and for the reasons set forth above,

such expression is entitled to only thin copyright protection.

In order to prevail on its claim of copyright infringement

arising out of defendant Hardin’s alleged copying of Prolog’s

help files text, Meridian must show that defendant’s e-mail

attachments and Schedule H document are virtually identical in

both ideas and expression to the help files text. The intrinsic

analysis requires the court to evaluate the similarity of

expression from the standpoint of the ordinary reasonable

observer. Apple Computer, 35 F.3d at 1442. This is a subjective

analysis, conducted without expert assistance. Id. Summary

judgment for plaintiff in this case can only be granted if no

reasonable trier of fact could find that the allegedly infringing

works were not virtually identical to the Prolog help files text. 

The court must compare the Prolog help files text as a

whole9 to the allegedly infringing works.10 The court turns first

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10(...continued)

work is the Schedule H document attached to the Hardin-CMIC

contract, not the contract in its entirety. The parties do not

dispute that this document, describing the requirements of the

project management software, was prepared separately from the

other aspects of the contract. (Bensley Dep. at 82:18-84:18). 

The Schedule H document is a discrete attachment. As such, the

court will compare the help files in their entirety to Schedule

H. 

11 While the court cannot comment upon the actual ordering

of the help files text as it appears in the program, within each

printed page the ordering is the exactly the same as set forth in

the e-mail attachments. Only the spacing, text size, and bullet

point preference is different in most cases.

25

to the comparison between the help files text and the documents

sent as attachments in defendant Hardin’s e-mail to CMIC. See

(Ex. C to Supplemental Briefing per Mar. 31, 2006 Minute Order,

filed Mar. 31, 2006 (“Help Files”); E-mail Attachments). Almost

every page of the e-mail attachments contains verbatim copying of

plaintiff’s help files. (E-mail attachments). Only 4 pages of

the 38 page document do not contain verbatim copying from

Prolog’s help files. (Id. at H00897, H00912, H00915, H00919). 

Of the remaining 34 pages, only 2 contain less than half a page

of verbatim copying from Prolog’s help files. The e-mail

attachments include the same structure, phrasing, and vocabulary

as the help files text.11 Further, the e-mail attachments

replicate verbatim the “notes” and “tips” provided by the Prolog

help files text. Finally, the e-mail attachments actually

reference “Prolog manager” at times, as opposed to inserting the

phrase “the system” in its place, as defendant’s did in other

sections of the document. (See e.g., id. at H00899, H00901,

H00903, H00905-07, H00013-14). 

/////

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Hardin argues that the portion of the help files text that

may have been copied is insubstantial in light of the work as a

whole. However, the Supreme Court has held that in analyzing the

portion of the copyrighted work, courts should evaluate “the

qualitative nature of the taking.” Harper & Row, Publishers,

Inc. v. Nation Enterprises, 471 U.S. 539, 564-65 (1985). “[T]he

fact that a substantial portion of the infringing work was copied

verbatim is evidence of the qualitative value of the copied

material, both to the originator and to the plagiarist.” Id. at

565. In view of the key role performed by plaintiff’s protected

work in the e-mail attachments, the court cannot find that

defendants took an insubstantial portion of plaintiff’s original

language. See id. at 566.

Based upon its comparison between the help files text and

the e-mail attachments, the court concludes that no reasonable

juror could find that the e-mail attachments were not copied

verbatim from the help files, and thus, a reasonable juror must

find that the attachments are virtually identical. Therefore,

plaintiff’s motion for summary judgment regarding infringement as

to defendant’s e-mail attachments is GRANTED. However, this

finding does not preclude defendant from asserting any

affirmative defenses that may apply to this claim and may negate

liability.

The court now turns to the comparison between plaintiff’s

help files text and Schedule H. (Help Files; Supplemental

Briefing per Mar. 30, 2006 Minute Order, filed Mar. 31, 2006

(“Schedule H”)). While 15 pages of the 18 page document referred

to as Schedule H contain some similarities with the Prolog help

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files, the similarities are not nearly as striking as in the email attachments. Many of the 15 pages that contain similar text

only contain a small amount of similar text. (See, e.g., id. at

CMiC00496, CMiC00498, CMiC00500, CMiC00501, CMiC00503, CMiC00506,

CMiC00507, CMiC00508). Further, within the similar text in

Schedule H, there are differences in the style, organization, and

phrasing of the expressed ideas. The Schedule H document also

contains numerous subject headings that are not cross-referenced

to Prolog help files headings. (See Ex. A to Decl. Of Thomas A.

McManus, filed Jan. 3, 2006 (“McManus Decl.”). Given these

differences, the court cannot find as a matter of law that the

Schedule H document is virtually identical to the Prolog help

files. A reasonable juror could conclude that defendant’s

Schedule H document does not infringe plaintiff’s copyright in

the protected help files text. Therefore, plaintiff’s motion for

partial summary judgment regarding copyright infringement based

upon defendant’s Schedule H document is DENIED. 

CONCLUSION

For the reasons stated herein, plaintiff’s motion for

partial summary judgment against defendant Hardin is GRANTED in

part and DENIED in part.

IT IS SO ORDERED.

DATED: April 5, 2006.

/s/ Frank C. Damrell Jr. 

FRANK C. DAMRELL, Jr.

UNITED STATES DISTRICT JUDGE

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