Opinion ID: 73592
Heading Depth: 3
Heading Rank: 1

Heading: Breach of Paragraph 1.03(h)

Text: In establishing the scope of review for this issue, the district court instructed the parties that “the only relevant inquiry . . . is whether EPL copied USA’s translated VISION program” and that the expert’s “review of the source codes and related materials should be viewed with an eye to duplication, not general similarity.” We agree with the district court that (1) the agreement is unambiguous and barred EPL from selling or marketing USA’s VISION A product, and (2) paragraph 1.03(h), when harmonized with paragraph 7.17, does not limit EPL’s marketing or selling of any other VISION A product.4 The district court, in granting partial summary judgment in favor of EPL, relied upon the expert report of Appelbe, EPL’s expert, that focused on changes or “patches” between USA’s modified VISION version 109 program and 4 Accordingly, because we agree with the district court that the contract is unambiguous, we also hold that the district court did not err in excluding parol evidence. See Archer v. Carson, 444 S.E.2d 82, 85 (Ga. Ct. App. 1994). 8 EPL’s VISION 3.0 program. According to the district court, Appelbe’s analysis focused on three specific issues: First, he wanted to see what extent the respective patches were similar. Second, he wanted to determine whether the similarities were caused by exigencies of the COBOL programming language and the Unisys Series A computer environment on which the modified programs were intended to be used. Third, Dr. Appelbe wanted to determine whether the similarities were attributable to “obviousness”; that is, whether the similarities were caused by the fact that it would be obvious to any programmer that a given change or patch should be made in a certain way. The district court found that EPL satisfied its initial summary judgment burden, and that the burden then shifted to USA to produce evidence that raised a genuine issue of fact that the parties must resolve at trial. USA produced the reports of two experts, Schlag and Kimpel, which the district court discounted because: (1) the reports focused on similarity between the programs in general, as opposed to the similarity between the parties’ patches to the underlying program; (2) Schlag’s conclusion -- that a 50.9 percent overlap existed between the two programs (USA’s modified VISION version 111 program and EPL’s VISION 2.0 program) – was insufficient as a matter of law to establish a breach of the agreement; and (3) Schlag’s conclusion that a 50.9 percent overlap existed between the two programs actually strengthened EPL’s argument that it did not copy or market USA’s modified VISION because “a high degree of similarity between the modified programs would be expected” as they originated from the same ancestor. USA contends that the district court erred in limiting its review to the patches between the USA and EPL programs because changed lines are not the only object of a conversion effort. USA further argues that the reports of Schlag and Kimpel more accurately analyze and reflect the procedure for comparing two converted programs and that additional record evidence demonstrates that EPL used USA’s ideas without its consent in contravention of paragraph 9 1.03(h).5 Schlag’s report compared the expanded source code of sub-programs within the two computer programs, found that an average of 50.9 percent of the lines in these expanded source codes matched and concluded that “from an analysis of the sample sub-programs . . . a significant number of code lines in the USA Credit Union version of V111 are duplicates of the ones in the EPL Vision 2.0 code.” Schlag’s report also raised several other issues, including: (1) duplicates of earlier code dominate the code, data structure and program structure of EPL’s VISION 2.0/3.0 products, including retention of comment lines from early programmers; (2) EPL failed to use any of the new COBOL compilers to develop a “wholly new” product; and (3) EPL retained the same data base structure of the VISION 2.0/3.0 product that it had in the earlier version of the software. Schlag’s report also questioned many of Appelbe’s findings. Kimpel, an employee of Progeni who expanded the source codes from the programs that EPL provided to USA, also offered a report that questioned Appelbe’s analysis and conclusion. Kimpel raised the following issues: (1) Appelbe’s methodology could only analyze for code differences, as opposed to code duplication; (2) Appelbe failed to examine complete VISION products, omitting a majority of the source files from USA and EPL; (3) Appelbe failed to compare the appropriate release levels of VISION; (4) Appelbe based his analysis of EPL-300 on inaccurate data; (5) Appelbe did not restrict his analysis to significant differences; (6) Appelbe presumed “that which is not changed is converted”; and (7) Appelbe’s relation of conversion effort to file size is without foundation. Kimpel concluded that 5 Among the evidence that USA argues demonstrates breach of paragraph 1.03(h) is: (1) evidence from Progeni that the availability of USA’s source code would provide a “major benefit” to EPL’s conversion effort, and (2) evidence indicating that EPL retained a copy of USA’s work. 10 Appelbe’s methods for analyzing the EPL and USA source files are too far removed from the actual products to be very useful, let alone determining. He restricts his analysis only to “patch” files, not the full source files, examining out of context only the lines which have been added or changed, and ignoring the lines which were deleted. His methodology does not demonstrate either the presence or the absence of code duplication from USA’s products in EPL-300. . . . Appelbe erred in applying his methods: he did not compare appropriate releases of the products, did not examine anywhere near the complete set of source files for either version, and in the case of EPL-300, did not even base his analysis on EPL’s actual changes. We hold that the reports of USA’s experts create genuine issues of material fact regarding whether EPL “copied USA’s translated VISION program,” and that the district court erred in granting partial summary judgment for EPL on this issue. USA, through its experts’ reports and evidence, has gone beyond the pleadings and presented competent evidence designating “specific facts showing that there is a genuine issue for trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 334 (1986). A jury should hear evidence regarding EPL’s retention of USA’s VISION A product, and decide between the differing methods of analyses of the parties’ experts as well as their conflicting conclusions. In other words, a “fair-minded” jury could find, based on the evidence and expert reports of Schlag and Kimpel, that EPL copied and marketed USA’s translated VISION program, in contravention of paragraph 1.03(h). See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).