Opinion ID: 4557824
Heading Depth: 4
Heading Rank: 2

Heading: Disgorgement Damages

Text: In addition to the actual damages suffered from the infringement, 17 U.S.C. § 504(b) also permits the copyright owner to recover “any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” At trial, ECIMOS submitted evidence—in the form of financial records and accompanying testimony— of Carrier’s gross revenues from its Collierville plant for a fifteen-month period (October 2015 to December 2016), which totaled more than $1.25 billion. The district court also permitted ECIMOS to ask the jury to disgorge Carrier of the entirety of its profits from its Collierville plant, which totaled $225,483,000. The jury concluded that damages worth $5 million were attributable to Carrier’s infringement of ECIMOS’s database-script source code. Carrier now claims that the $5 million award should be vacated, arguing that ECIMOS did not meet its purported burden of showing that Carrier’s profits were reasonably related to the infringing activity. Whether the district court erred in submitting a theory of disgorgement damages to the jury is an issue of law we review de novo. Thoroughbred Software, 488 F.3d at 358. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 19 i. Submitting Carrier’s Gross Profits to the Jury Was Not Legal Error Carrier contends that ECIMOS should have been required to show the amount of Carrier’s profits that were attributable to the infringement. In Carrier’s view, 17 U.S.C. § 504(b) requires the copyright holder to show the “profits of the infringer that are attributable to the infringement,” and ECIMOS never met this burden. Carrier further argues that the infringedupon code constituted only a small part of Carrier’s operations at Collierville. Carrier claims that it uses hundreds of different software packages and numerous other inputs that go into the manufacturing of HVAC units. Carrier therefore insists that its infringement of a particularly minor piece of code could not possibly have affected its entire profits. However, Carrier’s position is directly refuted by both the text of 17 U.S.C. § 504(b) and the cases that have addressed it. Section 504(b) states clearly that, “[i]n establishing the infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work” (emphasis added). Thus, the burden is on Carrier to prove the level of profits that were not attributable to the copyrighted work. All that ECIMOS must prove is Carrier’s gross revenue. Notwithstanding this explicit, textual directive, Carrier insists—relying on our decision in Balsley v. LFP, Inc.—that ECIMOS has the burden of showing that the “gross revenue number [submitted by the copyright holder to the jury] must have a reasonable relationship—relevance, in other words—to the infringing activity.” 691 F.3d 747, 769 (6th Cir. 2012). However, a deeper reading of Balsley defeats Carrier’s point. The plaintiff in Balsley won a copyright-infringement suit against Hustler magazine for publishing a photograph of her dancing in a “wet T-shirt contest.” Id. at 755. During the damages calculation, the defendant acknowledged that the gross revenue for the issue of Hustler in which the picture appeared was $1,148,000 and that “[t]he relationship of the infringement to that gross revenue number was demonstrated by the parties’ stipulation that the . . . photograph was published in” the issue. Id. at 770. We held that “[t]his evidence was all that was required of Plaintiffs under the statute.” Ibid (emphasis added). And we “reject[ed] Defendant’s contention that it is Plaintiffs’ burden to prove that Defendant profited from the . . . photograph, or to prove which portions of Hustler’s profit, if any, are attributable to the . . . Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 20 photograph. Plaintiffs have only one requirement: to prove Defendant’s gross revenue.” Id. at 769. Indeed, we held that “Section 504(b) unambiguously provides that the burden on the copyright owner is ‘to present proof only of the infringer’s gross revenue’ of the infringing product, while the infringer must show not only ‘expenses’ but also the amount of the ‘profit attributable to factors other than the copyrighted work.’” Id. at 767 (emphasis added) (quoting 17 U.S.C. § 504(b)); see also id. at 768 (“The only statutory requirement on a copyright owner is proving gross revenue, which is presumed to be the infringer’s profits until the infringer proves otherwise.”). Put simply, the burden is on the copyright infringer to prove whatever portion of its gross revenue was not attributable to the infringement: The phrase “attributable to” appears twice in the statute: First, the statute provides that a copyright owner is “entitled” to recover only those profits that are “attributable to” the infringement of its copyrighted material. The final sentence of the statute explains that the burden of proving which portions of that gross revenue are “attributable to” or not attributable to the infringement is on the infringer—not the copyright owner. “Where there is a commingling of gains, [the defendant] must abide the consequences, unless he can make a separation of the profits so as to assure to the injured party all that justly belongs to him.” Id. at 768–69 (alteration in original) (emphasis added) (quoting Sheldon v. Metro-Goldwyn Pictures Corp., 309 U.S. 390, 406 (1940)). And although Balsley suggested that the gross revenues must be “reasonably related” to the infringement, our full analysis of the issue stated: To the extent the phrase ‘attributable to’ is applicable to the copyright owner’s burden (though we believe that phrase should not be used in reference to the copyright owner’s burden in order to prevent confusion), it simply means that the gross revenue number that the copyright owner presents must have a reasonable relationship to the infringing activity. Id. at 769 (emphasis added). In other words, any relevant revenue that could be traced back to the infringement can be submitted to the jury, and that it is ultimately for the jury to decide how much profit—after hearing the infringer’s mitigating evidence—must be disgorged. That Section 504(b) requires the copyright holder to only present proof of the infringer’s gross revenues is a conclusion affirmed by other opinions from this court. For example, in Bridgeport Music, Inc. v. Justin Combs Publ’g, we affirmed a jury’s disgorgement award after Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 21 concluding that the plaintiffs had “met their initial burden of presenting proof of defendants’ gross revenue” by presenting “evidence of defendants’ profits” from the infringing album, even though the infringer had used the plaintiff’s copyrighted material only on one part of one song.3 507 F.3d 470, 483 (6th Cir. 2007). Although the jury returned a disgorgement award that reflected a calculation of “dividing the album profits by the number of tracks on the album”— effectively allowing plaintiffs to recover only for profits received from the one song that had infringed—evidence of the entire album’s profits were presented to the jury for consideration. Id. at 483. In affirming the award, we noted that the jury could have simply rejected the defendant’s proposed allocation of profits attributable to the infringement, but that the plaintiffs had met their burden under the copyright statute. Id. at 483–84. Indeed, the jury here seemed to have taken a similar approach to the jury in Bridgeport Music. Carrier’s entire revenues from Collierville were submitted to the jury, and ECIMOS asked for an award of $225,483,000. But the jury’s award of only $5 million, represented approximately only 2.2% of Carrier’s $225,483,000 profit or 0.4% of Carrier’s over $1.25 billion in revenue. When evaluated under this framework, there is ample evidence to conclude that ECIMOS met its burden of presenting proof of Carrier’s gross revenues, and that it was reasonably related to the infringement. The jury was presented with Carrier’s financial records from October 2015 to December 2016, and the jury heard testimony that the records were “created by Carrier’s finance department” and were prepared “in accordance with Generally Accepted Accounting Principles.” The testimony discusses estimates of Carrier’s monthly revenues, costs, and liabilities for the period in question. ECIMOS also limited its revenue presentation to the Collierville plant and, notably, Carrier does not dispute that Carrier’s estimates of its gross revenue or profits were accurate. Thus, ECIMOS clearly met its burden of presenting “proof only of the infringer’s gross revenue.” 17 U.S.C. § 504(b). 3 Bridgeport Music suggests that the copyright holder can meet its “initial burden of presenting proof of defendants’ gross revenue” by presenting evidence of the infringer’s profits. 507 F.3d at 483. We found no fault in this process and indeed, the plaintiffs arguably went beyond what was required of them under the copyright statute. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 22 ii. The Jury Could Have Inferred from the Trial Evidence that at Least $5 Million of Carrier’s Profits Were Attributable to the Infringing Activity Carrier next argues that, even if there was no error in permitting ECIMOS to ask the jury for the disgorgement of all of Carrier’s profits from Collierville, the $5 million disgorgement award was still excessive as there was insufficient evidence to suggest that even that amount was attributable to the infringement. We disagree. The $5 million awarded constituted only 2.2% of Carrier’s $225,483,000 in profits or 0.4% of Carrier’s over $1.25 billion in revenue from Collierville for the fifteen-month period in question (October 2015 to December 2016). These calculations reflect the jury’s assessment that only 0.4% of Carrier’s Collierville revenues were earned as a result of its infringing use of ECIMOS’s database-script source code. “[A] verdict is not excessive unless it clearly exceeds the maximum that a jury could reasonably find to be compensatory for the plaintiff’s loss,” and we will not disturb a disgorgement award “[u]nless the award is (1) beyond the range supportable by proof or (2) so excessive as to shock the conscience, or (3) the result of a mistake.” Balsley, 691 F.3d at 772 (first alteration in original) (citation omitted). In Balsley, we noted that the jury’s disgorgement award of $135,000 was only “8.5% . . . of the over one-million dollars that Defendant made from the” issue of Hustler in which the copyrighted photograph appeared, and we concluded that the “amount does not clearly exceed the maximum or shock the conscience, so it must be left intact.” Id. at 771. Balsley is particularly instructive, as we were not distressed by the jury’s conclusion that one photograph in a magazine that is likely to have contained dozens of similar photographs could have been responsible for 8.5% of the issue’s entire revenues. In our case, there is no dispute as to the fact that every Carrier HVAC unit would have undergone tests on the IPCS—and thus would have necessarily utilized aspects of the database where the test results were stored—before being shipped for sale. Thus, the impact of ECIMOS’s intellectual property on Carrier’s profits likely had an even larger impact than the copyrighted photograph had on Hustler’s profits in Balsley and yet the jury concluded that only 0.4% of Carrier’s revenues were attributable to its infringing use of the IPCS database. This is not excessive. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 23 Bridgeport Music provides further support. The jury in Bridgeport Music had awarded the plaintiffs $733,878 in disgorgement damages, but the defendant argued that the amount was not attributable to the infringement. 507 F.3d at 483. The defendant’s expert had testified that the value of the infringing material to the entire album was very low and, on appeal, the defendants argued that the large disgorgement award was not reflective of that testimony. However, we concluded that “the jury could have simply not believed the testimony of defendants’ expert witnesses in light of the jurors’ having heard the song” and in light of the fact that a plaintiffs’ witness had testified that the value of the infringing material would likely increase over time. Id. at 483–84. The jury’s decision to award the plaintiffs $733,878 was simply a reflection of its view of the evidence, and “permitting the jury to determine that defendants failed to meet their burden of proving profits attributable to factors other than the infringing material was not reversible error.” Id. at 484. In short, if there was at least plausible evidence from which the jury could have based the disgorgement award—or the disgorgement percentage—the award should be upheld. The same principle applies to this case. The jury heard ample evidence that the IPCS, as a whole, was an integral part of Carrier’s quality-control operations and that any inability to use the system would have resulted in decreased profits. For example, Steve Youngblood, Carrier’s Associate Director of Operations for Assembly at Collierville, testified that if Carrier were unable to use the IPCS to run its quality-control tests, the plant would have to “shut down” “until [Carrier] could find an alternative means to test our product.” Carrier claims that had the IPCS not been in place, it could have manually performed many of its quality-control tests, and that it had manually tested HVAC units for many years before first purchasing the IPCS in 1992. But this assertion strains credulity. Given the changes in technology and Carrier’s growth in business, it seems highly unlikely that Carrier could have maintained a similar level of revenue and profits if it were required to manually test its units. Moreover, there was no assurance that any alternative to the IPCS could have been implemented quickly. For example, the jury also heard evidence that the Amtec-developed RES “took thirteen months to develop, even with a copied database as a shortcut,” and so it seems unlikely that it would have been easy for Carrier to quickly replace the Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 24 IPCS with something of comparable quality. Even if Carrier chose to manually test all of its products, the jury heard evidence that manual testing would have dramatically slowed the manufacturing process because of the complexity of the tests that were performed. The jury could have thus quite reasonably concluded that the manual tests—even if they were an option— would have taken much longer to perform than the automated tests. The jury also heard evidence that the infringed-upon database code was an integral part of the IPCS, as the database stored test results. And although it is unlikely that the database code would have been responsible for the entirety of Carrier’s profits, that is not what the jury award reflected. The $5 million award constituted only 2.2% of Carrier’s Collierville profits or 0.4% of Carrier’s revenues which—given the evidence presented at trial—is not so unreasonable that it would shock the conscience or is “beyond the range supportable by proof.” Balsley, 691 F.3d at 771 (citation omitted). iii. The District Court Did Not Abuse Its Discretion by Refusing to Expand the Scope of the Disgorgement Award Despite being awarded $5 million from Carrier’s disgorged profits, ECIMOS remains unsatisfied. It contends that the district court should have granted its post-trial motion for additional disgorgement of Carrier’s future profits, for a period beginning January 1, 2017 and running until Carrier stopped using the infringing RES database. The district court denied the request, holding that it would not extrapolate additional disgorgement from the jury’s verdict as the jury was not asked to determine which portions of Carrier’s future profits could be attributable to the infringement. Because ECIMOS is seeking to alter or amend the judgment, we review the district court’s decision for an abuse of discretion. See Intera Corp. v. Henderson, 428 F.3d 605, 619 (6th Cir. 2005). “A district court abuses its discretion when it relies on clearly erroneous findings of fact, or when it improperly applies the law or uses an[] erroneous legal standard.” Id. at 619–20 (alteration in original) (citation omitted). We hold that the district court did not abuse its discretion when it rejected ECIMOS’s motion for additional disgorgement. First, ECIMOS is already being compensated for any posttrial use of its copyright by Carrier. The district court’s post-trial injunction requires Carrier to pay the equivalent of a licensing fee ($50 per month) for a period beginning August 1, 2018 for Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 25 each runtest station in its Collierville plant, and continuing until Carrier stops using its RES database. The $50 per station per month is a reasonable rate that was based on ECIMOS’s quoted figure for licensing fees in its 2014 proposal to Carrier. In short, the district court concluded that requiring Carrier to pay licensing fees for continued use of the RES database would put ECIMOS in no worse a position than if Carrier had actually obtained a valid license for use of the database at each runtest station. This is not unreasonable. Second, and more importantly, although courts can require the infringing party to pay reasonable royalty or licensing rates post-verdict where “the amount is not based on ‘undue speculation,’” any grant of future disgorgement would be highly speculative in this instance. Oracle Corp. v. SAP AG, 765 F.3d 1081, 1088 (9th Cir. 2014) (citation omitted). We acknowledge that the jury’s $5 million disgorgement award suggested that it believed 2.2% of Carrier’s over $225 million in profits were attributable to the infringement. But that amount was limited to the jury’s consideration of the fifteen-month period between October 2015 to December 2016, a period where the jury had access to Carrier’s financial records and other analyses to aid its decisionmaking. The 2.2% rate does not represent the jury’s consideration of whether any future profits would still be attributable to Carrier’s continued use of the infringing RES database at the same rate. Importantly, ECIMOS cites to no case that uses past disgorgement as the basis for a future licensing fee. Instead, all of the cases ECIMOS cites discuss whether licensing fees—calculated from hypothetical fair-market values of the copyright—are reasonable. They do not involve instances in which a jury’s disgorgement calculation became the basis for the licensing fee. See Amado v. Microsoft Corp., 517 F.3d 1353, 1361 (Fed. Cir. 2008); Veracode Inc. v. Appthority, Inc., 137 F. Supp. 3d 17, 84 (D. Mass. 2015). And although there are instances in which a court’s award of additional licensing fees either matched or exceeded the infringer’s profits, the awards were calculated based off of the fair-market value of the intellectual property, and were not calculated based on the infringer’s profits. See, e.g., Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d 1327, 1338 (Fed. Cir. 2004). In a case like this, where it is unclear how the jury arrived at its disgorgement rate and whether that rate would apply to future profits and where the district court has already ordered Carrier to pay a reasonable licensing fees to ECIMOS going forward, the court was not required Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 26 to impose additional disgorgement damages. Thus, the district court did not abuse its discretion, and we affirm the its decisions regarding the $5 million disgorgement in full. C. Breach-of-Contract Damages We next evaluate the $1.5 million that the jury awarded ECIMOS for Carrier’s breach of the parties’ licensing agreement. Carrier argues that, as a matter of law, the most that the jury could have awarded for the breach of contract was $283,250. We review a district court’s decision on possible remittitur for an abuse of discretion. Gregory, 220 F.3d at 443. “The purpose of assessing damages in a breach of contract suit is to place the plaintiff, as nearly as possible, in the same position he would have had if the contract had been performed.” Wilhite v. Brownsville Concrete Co., 798 S.W.2d 772, 775 (Tenn. Ct. App. 1990). And under Tennessee law, “[t]o support an award of damages there must exist proof of these ‘damages within a reasonable degree of certainty.’” Airline Constr. Inc. v. Barr, 807 S.W.2d 247, 256 (Tenn. Ct. App. 1990) (citation omitted). During closing arguments, ECIMOS asked the jury to award it $1,521,250 in contract-breach damages (the same amount that it asked for as actual-copyright damages)—$1,021,000 for the total upgrade fee of the IPCS and $474,150 for lost licensing fees (from April 2011 through June 2018).4 The jury returned a verdict finding that Carrier breached the parties’ 2004 licensing agreement in two ways: (1) “by failing to maintain the confidentiality of ECIMOS’s materials” and (2) by “failing to pay ECIMOS a licensing fee for installing and using ECIMOS’s software on the Windows 7 operating system.” The jury awarded ECIMOS $1.5 million. On appeal, Carrier does not contest the jury’s finding that it breached the parties’ contract, and it acknowledges that it owes ECIMOS at least $283,250 in unpaid licensing fees for using the IPCS software on Windows 7, which represents the $50/month licensing fee for each of Carrier’s 103 runtest stations between April 2011 to October 2015 (the period between when the software was migrated onto Windows 7 to when the RES went live at Collierville). However, Carrier argues that the $1.5 million award was “beyond the 4 The licensing fee of $50/month for the use of 103 stations for the 87 months from April 2011 through June 2018 adds up to $448,050, not $474,150. The $474,150 number is likely calculated from the $50/month licensing fee for 109 stations for 87 months. However, on appeal it appears that Carrier’s use of the ECIMOS system at only 103 stations is undisputed. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 27 maximum damages that the jury reasonably could find to be compensatory” for ECIMOS’s loss and must be reduced. Bridgeport Music, 507 F.3d at 484 (citation omitted). It may be helpful to re-summarize the facts. In 2004, ECIMOS began incorporating terms into its IPCS licensing contract that prohibited the “[u]nauthorized copying, reverse engineering, decompiling, disassembling, decrypting, translating, renting, sub-licensing, leasing, distributing, and/or creating derivative works based on the software, in whole or in part.” The terms also stated that “[t]he Software may not be duplicated or copied” except for specific purposes, and that “[n]o part of the software . . . may be reproduced or transmitted in any form or by any means.” It is undisputed that, in 2011, Carrier installed the VB6 software directly onto Windows 7, which the jury found to be a breach of the parties’ licensing contract. In 2014, ECIMOS proposed to sell Carrier an upgrade to the entire IPCS, which it quoted as costing a total of $1,021,000. The $1,021,000 figure included a $118,000 fee for “Software migration from VB6 to VB.net” for all runtest stations, as well as assorted other fees for: (1) software licensing (quoted at $600/year per station, which is $50/month); (2) specialized licensing fees (for special programs associated with VB.Net); and (3) hardware-repair fees to the runtest stations. Carrier rejected the proposal and, apart from the software migration of VB6 onto Windows 7, the record does not show that Carrier received any of the hardware repairs or the special software upgrades that ECIMOS offered in the proposal. These facts suggest that the only non-speculative damages that ECIMOS could be awarded must relate to Carrier’s actions in improperly migrating the VB6 software to Windows 7. The jury found that one aspect of Carrier’s breach was that it failed to pay “a licensing fee for installing and using ECIMOS’s software on the Windows 7 operating system.” Carrier and ECIMOS agree that the amount of licensing fees based on this aspect of the breach is $283,250, and the record demonstrates that ECIMOS’s assessment of the value of “installing and using” the VB6 software on Windows 7—from its own proposal—was $118,000. Thus, the only nonspeculative damages that can be supported from Carrier installing and using ECIMOS’s software on Windows 7 amount to $401,250. ECIMOS contends that the parties’ course of dealings going back to 1992 suggest that the full $1.5 million award is appropriate and, in support, it offers the fact that Carrier had paid over Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 28 $1 million for a similar IPCS upgrade in 2002 and that the total quoted price for the 2014 upgrade was $1,021,000. Although ECIMOS claims that it intentionally offered lower licensing fees to Carrier with the expectation that every few years Carrier would purchase a full system “upgrade” at an increased fee of around $1 million, it does not appear that Carrier ever agreed to any of the hardware-upgrade proposals that ECIMOS submitted in 2014. Indeed, the cost of the hardware upgrades cannot be factored into the calculation of contract-breach damages because the jury found only that Carrier breached the parties’ contract by “installing and using ECIMOS’s software” on Windows 7. ECIMOS also argues that the $1.5 million can be supported based on the jury’s other finding of breach—that Carrier “fail[ed] to maintain the confidentiality of ECIMOS’s materials.” ECIMOS argues that because it is especially jealous of its trade secrets with regard to its competitors, any breach of confidentiality would have had the effect of harming ECIMOS’s business. However, any assessment of damages based on potential lost profits from a breach of confidentiality would be speculative at best. Under Tennessee law, “[t]he party seeking damages has the burden of proving them,” and “[d]amages may never be based on speculation or conjecture.” Waggoner Motors, Inc. v. Waverly Church of Christ, 159 S.W.3d 42, 57 (Tenn. Ct. App. 1987). Although ECIMOS presented testimony at trial adverting to the fierce competition it faced, that testimony did not establish non-speculative proof of the level of damages that could be attributed to a breach in confidentiality. Put differently, ECIMOS never presented any evidence detailing how much profit it may have lost as a direct result of Carrier’s breach of confidentiality. Simply suggesting that it lost business or that its reputation was harmed is insufficient. Although “damages become too speculative only when the existence of damages is uncertain, not when the precise amount is uncertain,” the evidence in support of an award must still “prove the amount of damages with reasonable certainty.” Ibid. Here, the amount of damages related to the breach of confidentiality is not reasonably certain. ECIMOS did not present any witnesses that testified regarding the amount of damages that could be attributed to Carrier’s breach of confidentiality, nor presented any evidence regarding whether the breach led to a decrease in profit from customers other than Carrier. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 29 Accordingly, we reverse the district court’s upholding of the contract-breach damages award and reduce the amount to $401,250, as that is the only non-speculative amount of damages supported by the record. D. Stay of Injunction and Associated Trade-Secret Claims The last issue on appeal is ECIMOS’s claim that the scope of the district court’s post-trial injunction should be altered. We review the scope of a district court’s grant or stay of a permanent injunction for an abuse of discretion. Howe v. City of Akron, 801 F.3d 718, 753 (6th Cir. 2015). After trial, the district court granted a permanent injunction enjoining Carrier from using its RES database. However, it stayed the injunction until Carrier could implement a new, noninfringing database, meaning that Carrier was permitted to continue using the RES—subject to its payment of licensing fees—until then. The district court appointed a special master to oversee the process. At trial, the jury found that ECIMOS held a trade secret in (1) its software source code5 and (2) its assembled hardware drawings and wiring diagrams and that Carrier misappropriated these trade secrets by sharing information with Amtec. The district court thus also enjoined Carrier from disclosing the trade secrets but permitted Carrier to continue using them as long as Carrier paid ECIMOS a licensing fee. ECIMOS now objects to the scope of the injunction, arguing that (1) the stay of the injunction was an abuse of discretion; (2) the injunction should have prohibited Carrier from using ECIMOS’s trade secrets, not just from disclosing them; and (3) the injunction should have been expanded to prohibit Carrier’s disclosure and use of ECIMOS’s assembled hardware (not just the hardware drawings and wiring diagrams). We affirm the district court’s decisions regarding the injunction in full. The stay of the injunction was not an abuse of discretion. A district court abuses its discretion with regards to grants or stays of permanent injunctions only “when it relies on clearly 5 The jury found that Carrier did not infringe on ECIMOS’s copyright on its software-script source code, but it did find that ECIMOS held a trade secret in its “software source code including the algorithms for the valid test and test procedures and the way the software source code interacts with ECIMOS’s database.” The jury found that Carrier misappropriated those trade secrets by sharing them with Amtec, but that ECIMOS did not suffer any harm as a result of Carrier’s misappropriation and awarded no damages on that basis. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 30 erroneous findings of fact or when it improperly applies the law.” Herman Miller, Inc. v. Palazzetti Imps. & Exps., Inc., 270 F.3d 298, 317 (6th Cir. 2001). Here, ECIMOS does not suggest that the district court improperly applied the law. Instead, it submits that because Carrier is still using the RES database—almost two years after the jury verdict at the time of oral argument on appeal—that Carrier is not acting in good faith to develop a non-infringing database under the supervision of the special master. Carrier asserts that any delay in developing a new database is because ECIMOS has, in bad faith, attempted to delay it at every turn by filing frivolous objections before the district court. None of these arguments pertain to the legal implications of the district court’s decision to grant the stay. Nor do they point to any potentially erroneous factual basis upon which the original stay was granted. Indeed, it is a general principle that “[i]njunctions frequently demand ‘continuing supervision by the issuing court.’” See LFP IP, LLC v. Hustler Cincinnati, Inc., 810 F.3d 424, 426 (6th Cir. 2016) (quoting Sys. Fed’n No. 91, Ry. Emps.’ Dep’t v. Wright, 364 U.S. 642, 647 (1961)). And it appears that, to date, the special master has filed twenty reports updating the district court on the progress that the parties have made in coming to a satisfactory conclusion on the implementation of a non-infringing database. We therefore find no reason why this issue should not remain reserved for the district court to shepherd. In any event, given the deferential standard of review, we find no abuse of discretion in the district court’s decision to stay the injunction. We also hold that the district court did not abuse its discretion when it refused to enjoin Carrier from using ECIMOS’s trade secrets. Two facts regarding the district court’s injunction are important to note at the outset. First, ECIMOS never requested submission of the question of whether its assembled hardware was a trade secret to the jury. Instead, it first introduced the argument during its post-trial motions, and now it argues that—as a matter of law—the district court erred in failing to hold that the hardware was a trade secret. Second, even though the jury found that Carrier had misappropriated ECIMOS’s protectable trade secrets in its hardware drawings and wiring diagrams, the jury also found that ECIMOS did not suffer any detriment as a result of Carrier’s misappropriation. Based on these findings, the district court concluded that enjoining Carrier’s use of any of ECIMOS’s trade secrets—even if it agreed to pay ECIMOS a reasonable license fee for the use—would not aid ECIMOS, as it would not prevent any additional harm. ECIMOS argues that this conclusion was erroneous as a matter of law. More Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 31 specifically, it claims that the district court erred (1) by holding that ECIMOS’s assembled hardware (not just its hardware drawings or wiring diagrams) were not protectable copyrights or trade secrets and (2) by ruling that, in the alternative, the hardware was not a “derivative trade secret.” As an initial matter, it is important to note that there is no “derivative trade secret” as a matter of law, and that ECIMOS is essentially conflating two areas of intellectual property law: derivative works (which are protected by copyright) and trade secrets (which are protected under the common law). See Intera Co. v. Dow Corning Corp., 19 F.3d 19 (Table), 1994 WL 69582, at  (6th Cir. 1994) (per curiam) (noting that plaintiff’s claim was a “state law tort of trade secret misappropriation”). Thus, for ECIMOS’s arguments to succeed, it must demonstrate that its assembled hardware is either a derivative work or a trade secret. It can do neither. First, there is no evidence to support that the assembled hardware is derivative of any of ECIMOS’s protected copyrights. Trade secrets and copyrights are not the same, and ECIMOS has never claimed that its hardware drawings or wiring diagrams were protectable copyrights. It therefore cannot now claim that its actual hardware is a “derivative work” of the drawings or diagrams that is protected under copyright law. See Stewart v. Abend, 495 U.S. 207, 220 (1990) (noting that a copyright holder “holds a bundle of exclusive rights in the copyrighted work, among them the right to copy and the right to incorporate the work into derivative works” (emphasis added)). Second, ECIMOS’s assembled hardware is also not a trade secret. Under Tennessee law, a “trade secret” has a statutory definition. It is any: [I]nformation, without regard to form, including, but not limited to, technical, nontechnical or financial data, a formula, pattern, compilation, program, device, method, technique, process, or plan that: (A) 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; and (B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 32 Tenn. Code Ann. § 47-25-1702(4). What constitutes a trade secret is a question of fact and Tennessee courts have looked to several factors in making this determination, the most important of which is whether the information has been publicly disclosed or is easily acquired or duplicated by others. See Eagle Vision, Inc. v. Odyssey Med., Inc., 2002 WL 1925615, at  (Tenn. Ct. App. Aug. 14, 2002). “Matters of public knowledge or general knowledge in the industry or ideas which are well known or easily ascertainable, cannot be trade secrets. Similarly, matters disclosed by a marketed product cannot be secret.” Hickory Specialties, Inc. v. B&L Laboratories, Inc., 592 S.W.2d 583, 587 (Tenn. Ct. App. 1979) (citation omitted); see also Restatement (Third) of Unfair Competition § 39 cmt. F (1995) (“[I]nformation readily ascertainable from an examination of a product . . . is not a trade secret.”). In short, “if a matter is ‘disclosed by a marketed product [it] cannot be a secret.’” Eagle Vision, 2002 WL 1925615 at  (quoting Hickory Specialties, 592 S.W.2d at 587). Here, ECIMOS voluntarily disclosed its assembled hardware to third parties, including Carrier, by selling it as a product. Indeed, ECIMOS claimed throughout trial that it had customers other than Carrier, and so it is safe to presume that other third parties also received the hardware. Put simply, ECIMOS’s hardware was a marketed product that was sold and freely shared, and it is not a trade secret. Finally, ECIMOS argues that the court should invoke the “safe-distance rule”—a concept imported from trademark law—to prohibit Carrier from having even the possibility of future infringement. The safe-distance rule allows courts—after concluding that a defendant has infringed on a trademark—to “proscribe activities that, standing alone, would have been unassailable” thus “prevent[ing] known infringers from using trademarks whose use by noninfringers would not necessarily be actionable.” Innovation Ventures, LLC v. N2G Distrib., Inc., 763 F.3d 524, 544 (6th Cir. 2014) (citations omitted). However, the rule was crafted to address the fact that, in the trademark context, an infringing mark is likely to confuse consumers, and “that once an infringer has confused the public, that confusion is not magically remedied by a name change.” Taubman Co. v. Webfeats, 319 F.3d 770, 779 (6th Cir. 2003). Thus, the plaintiff can ask the court to craft equitable remedies to prohibit otherwise innocuous conduct or to require the infringer to secure a new mark “so far removed from any characteristic of the plaintiff so as to put the public on notice that the two are not related.” Ibid. The same concern of limiting confusion of different products is not apparent in the copyright context, and thus courts have Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 33 generally been reluctant to expand the rule to other areas of intellectual property. See PRL USA Holdings, Inc. v. U.S. Polo Ass’n, Inc., 520 F.3d 109, 118 (2d Cir. 2008) (collecting cases and concluding that plaintiffs “cite[d] no authority establishing that [a safe-distance rule] instruction must be given” in regard to the unique type of trademark claim the plaintiffs were asserting). Indeed, this lack of an expansion is likely because a safe-distance rule is most effective in the trademark context, where “the secondary mark is likely to cause confusion.” Ibid. ECIMOS does not cite any authority that would require an expansion of this rule into claims for software infringement. We thus hold that the district court did not err in failing to invoke the safedistance rule.