Court Opinion

ID: 1024601
Source: CourtListenerOpinion
Date Created: 2013-07-05 06:35:54.245476+00
Date Added: 2024-06-11T12:27:23.426391
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 06-2260

PHOENIX RENOVATION CORPORATION, a/k/a Plumbing
Express,    a/k/a     Phoenix    Construction,
Incorporated,

                                               Plaintiff - Appellant,

           versus

PETER   RODRIGUEZ;     RADEK    KOCI;    ATLANTIC
REPLUMBING, LLC,

                                              Defendants - Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. James C. Cacheris, Senior
District Judge. (1:05-cv-01196-JCC)

Argued:   November 1, 2007               Decided:    December 17, 2007

Before WILLIAMS, Chief Judge, and TRAXLER and KING, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: David Glenn Barger, WILLIAMS MULLEN MAUPIN TAYLOR, McLean,
Virginia, for Appellant.    Lawrence J. McClafferty, MCCLANDISH &
LILLARD, Leesburg, Virginia, for Appellees. ON BRIEF: David H.
Bruns, Kathleen J. L. Holmes, Thomas J. McKee, Jr., WILLIAMS MULLEN
MAUPIN TAYLOR, McLean, Virginia, for Appellant.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

     Phoenix Renovation Corp. (“Phoenix”) appeals the district

court’s order finding Peter Rodriguez, Radek Koci, and Atlantic Re-

Plumbing, LLC (“Atlantic”) (collectively “Appellees”) not liable

for damages for copyright infringement and entering judgment in

favor of Appellees on Phoenix’s tort and contract claims under

Virginia law.    Phoenix argues that the district court erroneously

failed to shift the burden of proof on its copyright claim to

Appellees pursuant to 17 U.S.C.A. § 504(b) (West 2000 & Supp.

2006), resulting in the mistaken conclusion that none of Atlantic’s

revenue was attributable to the copyright infringement.            Phoenix

further contends that the district court erred in finding that

Rodriguez and Koci did not breach their Independent Contractor

Agreements with Phoenix by using their memories of the locations at

which they had performed work for Phoenix in marketing their

competing     business   and   did   not   violate   Virginia’s   Business

Conspiracy Statute, Va. Code Ann. § 18.2-499 (2004 & Supp. 2007) by

infringing the copyrighted contract. For the following reasons, we

affirm.

                                     I.

     The parties do not dispute the relevant facts, which are as

follows:

                                      2
                         A. Phoenix’s Business

     Phoenix     specializes   in    providing    polybutylene     (“PB”)

replacement services.     PB replacement represents a niche business

within the plumbing industry that arose after it was discovered

that PB pipes are defective and can leak.              The market for PB

replacement services is finite because once a house’s PB pipes have

been replaced, there will never be further need for such services

in that house.

     Phoenix developed and continues to maintain records of the

names and addresses of its former customers in a proprietary

database.      Phoenix   considers   the   addresses   contained   in   the

database to be valuable confidential information, because there are

no public records identifying buildings that contain PB pipes.

Houses with PB pipes, however, are often found on the same street

or in the same neighborhoods as other houses with PB.        As a result,

a company that learns of the existence of PB pipes in one house can

often accurately predict that nearby houses also contain PB.

Phoenix has therefore developed a system of targeted direct mailing

that uses the homes of former customers as “center points” given to

direct mail vendors, who then send solicitations to all addresses

within defined radii.     (J.A. at 340.)

         B. Appellees’ Employment/Contracts with Phoenix

     Phoenix hired both Rodriguez and Koci as employees in 1995.

Rodriguez performed drywall work, and Koci was a licensed master

                                     3
plumber.   During the course of their employment with Phoenix, both

Rodriguez and Koci asked to be treated as independent contractors

rather than employees, and Phoenix agreed.     Koci entered into a

written Subcontractor Agreement with Phoenix on February 25, 2000,

and Rodriguez signed a nearly identical Subcontractor Agreement on

March 23, 2000.

     The Subcontractor Agreements contained a provision entitled

“Disclosure of Trade Secrets and Confidential and Proprietary

Information,” which provides as follows:

     The Subcontractor shall not, during or at any time after
     termination of the subcontract, without prior written
     authorization of the Company, disclose to, or make use
     of, any trade secret or confidential or proprietary
     information of the Company or its affiliates.       Trade
     Secrets and confidential or proprietary information
     include, but are not limited to: customer lists, price
     lists, insurance and other third party contracts,
     marketing and sales plans and concepts, identity of key
     customer or client personnel and their phone numbers, the
     identity and requirements of customers and clients,
     bidding and pricing information, personnel policies and
     procedures, compensation and fringe benefit programs and
     offer sales, business plans and methods, computer
     programs and copyrightable work (models, processes,
     designs,   drawings,   plans,   prototypes,   inventions,
     devices, parts, improvements and other physical and
     intellectual property), that were disclosed to the
     Subcontractor or known by the Subcontractor as a
     consequence of the subcontract and/or used by the
     Subcontractor to carry out its duties under this
     Agreement. . . .

(J.A. at 25.)1

     1
      The Subcontractor Agreements also contained a provision
entitled “Non-Solicitation and Covenant Not to Compete,” which
formed the basis of some of Phoenix’s claims before the district
court, but is not relevant on appeal.

                                 4
     While still working for Phoenix, Rodriguez and his then-

roommate,   Kenneth   Cocolin   began   to   discuss    forming   a   new   PB

replacement business to compete with Phoenix.2 They recruited Koci

to join their venture.     In early June 2003, prior to terminating

their subcontractor relationship with Phoenix, Rodriguez and Koci

performed several PB replacement jobs in neighborhoods in which

they had previously done PB replacement work for Phoenix.             Also in

June 2003, they took steps to organize their business, which they

named “Atlantic Re-Plumbing.”     (J.A. at 346.)       On or about June 18,

2003, Rodriguez and Koci terminated their subcontractor agreements

with Phoenix.

  C. Appellees’ Use of Information Gained from Their Employment
                           with Phoenix

     Rodriguez and Koci initially marketed Atlantic’s services

primarily through the distribution of fliers on the same streets

and neighborhoods in which they had performed PB replacement work

for Phoenix.    In determining which areas to target, Rodriguez and

Koci relied on their own memories; neither ever had access to

Phoenix’s database of customer information.3

     2
      Cocolin and Rodriguez soon disagreed about the nature and
scope of Cocolin’s duties, causing Cocolin to terminate his
relationship with the business after approximately two months.
     3
      Phoenix did provide Rodriguez and Koci with “job worksheets”
containing the address to which they were to report for each job
they did for Phoenix, but neither Rodriguez nor Koci retained any
of these job worksheets after forming Atlantic, and at no point did
they use the job worksheets to compete with Phoenix.

                                    5
     Rodriguez and Koci eventually began to market Atlantic’s

services through targeted direct mailing.          They compiled mailing

lists based on “center points,” which were generally locations at

which they had performed PB replacement work for Phoenix.

     In addition to using their prior knowledge of PB replacement

sites   to   market   their   services   in   competition   with   Phoenix,

Rodriguez and Koci also used their knowledge of Phoenix’s pricing

structure to gain a competitive advantage.         Rodriguez had learned

of Phoenix’s pricing structure for PB replacement services during

his employment and subcontractor relationship with Phoenix.             He

used this knowledge in an attempt to offer Atlantic’s services at

a lower rate than Phoenix’s.        Rodriguez and Koci also relied on

their memories of what Phoenix had paid them as subcontractors in

determining what to pay Atlantic’s subcontractors and employees.

Although Koci did come across a Phoenix “pay sheet” while moving

Atlantic into a new office, neither he nor Rodriguez used or

purposefully retained a Phoenix “pay sheet” for use in competition

with Phoenix.

 D. Appellee’s Use of Phoenix’s 2002 Interior Re-Pipe Agreement

     In its PB replacement business, Phoenix uses a consumer

contract known as the “2002 Interior Re-Pipe Agreement.”             While

Rodriguez and Koci worked with Phoenix, the 2002 Interior Re-Pipe

Agreement was neither marked as copyrighted nor kept hidden from

                                     6
independent contractors, and Rodriguez and Koci were not advised

that it was confidential or protected by copyright.

       Rodriguez and Koci retained a copy of the 2002 Interior Re-

Pipe Agreement after terminating their Subcontractor Agreements

with Phoenix.   In or about June 2003, they retained an attorney to

determine    whether   they   could   use     the   2002   Interior   Re-Pipe

Agreement in their new business.           The attorney advised Rodriguez

and Koci that they were entitled to use the document, which was not

subject to copyright protection.          Nevertheless, Rodriguez and Koci

requested that Pugh draft a new consumer contract for Atlantic’s

use.    Pugh drafted the new contract (hereinafter “the Infringing

Contract”) by making minor revisions to the 2002 Interior Re-Pipe

Agreement.

       Appellees first used the Infringing Contract on August 30,

2003.   They then used the Infringing Contract intermittently until

mid-to-late October 2005, at which point they began to use the

Infringing Contract on virtually all of their PB replacement jobs.

Prior to that time, Appellees had been using a form contract

purchased from an office supply store to serve the same ends.            The

switch to the Infringing Contract reflected Rodriguez and Koci’s

belief that “it looked more professional” than the form contract

they had been using.     (J.A. at 114.)

       Generally, execution of the written agreement with a customer

was the final step before Atlantic began work.              First, Atlantic

                                      7
visited the potential work site, performed an estimate of the cost

of its services, and quoted the proposed price to the customer.        If

a customer accepted the proposal, Atlantic scheduled a work date.

Atlantic never sent the Infringing Contract to a customer until

after the customer had accepted its proposal and scheduled a work

date. In many cases, Atlantic did not send the Infringing Contract

to the customer until the customer had paid a deposit equal to one-

third of the estimated price.

     Appellees did not use the Infringing Contract to market

Atlantic’s    services.    Rather,   they   obtained   business   through

fliers, signs, and postcards, as well as through neighborhood

referrals, the Long & Foster Home Service Connection, and their own

website.     Customers selected Atlantic for a variety of reasons,

including experience and price. No customer ever told Rodriguez or

Koci that he or she selected Atlantic based on the Infringing

Contract.

     On several occasions, Appellees relied on the Infringing

Contract to collect balances owed by customers.           Specifically,

Atlantic issued written correspondence citing specific provisions

of the Infringing Contract to five customers: Oakley, Polk, Bennet,

Quagliata, and Neal.      Oakley remitted a sum fully satisfying the

unpaid balance, accompanied by a note stating that he paid because

he was pleased with Atlantic’s work.        Polk failed to pay in full,

and Atlantic spent approximately $1,500 in legal fees to collect

                                     8
the $1,606 owed.        Bennet did not respond to two attempts at

collecting   payment,     and   Atlantic    eschewed   further     efforts   to

collect the $400 owed, concluding that it would have been more

costly to enforce the contract than to collect the unpaid balance.

Atlantic spent approximately $7,000 in legal fees to collect the

balance of $3,618 owed by Quagliata.          Atlantic also spent between

$1,000 and $1,500 in legal fees trying to enforce the Infringing

Contract against Neal, but failed to collect any of the funds he

owed to Atlantic.

       On August 4, 2005, Phoenix registered the 2002 Interior Re-

Pipe   Agreement   with   the   United     States   Copyright    Office.     In

September 2005, Appellees’ counsel informed Rodriguez and Koci that

they were not entitled to use the Infringing Contract.              Appellees

then paid counsel $2,711 to draft a new contract.               Nevertheless,

Appellees continued to use the Infringing Contract consistently

until December 12, 2005, and then intermittently until January

2006, when, after 626 total uses, they ceased using the Infringing

Contract altogether.

                        E. The Present Litigation

       On October 14, 2005, Phoenix filed a nine-count complaint

against Appellees in the United States District Court for the

Eastern District of Virginia, alleging: Copyright Infringement

against   Atlantic,     Koci,   and   Rodriguez     (Count   I);   Breach    of

Subcontractor Agreement against Koci and Rodriguez (Counts II-III);

                                      9
Tortious Interference with Contract & Business Expectancy claims

against Atlantic, Koci, and Rodriguez (Counts IV-VI); Violation of

Virginia’s Business Conspiracy Statute against Atlantic, Koci, and

Rodriguez (Count VII); Unfair Competition against Atlantic, Koci,

and Rodriguez (Count VIII); and Common Law Conspiracy against

Atlantic, Koci, and Rodriguez (Count IX).4

     Appellants filed a Motion to Dismiss the complaint.               On

December 8, 2006, the district court denied the motion with respect

to Counts I-VII and Count IX, but granted the motion with respect

to Count VIII (unfair competition).

     Thereafter,    the   parties   filed   cross-motions   for   partial

summary judgment.    In addressing the motions, the district court

found that as of August 5, 2005, the date the United States

Copyright Office registered the 2002 Interior Re-Pipe Agreement as

an original work authored by Phoenix, Phoenix possessed a valid,

registered copyright.      Accordingly, the district court granted

summary judgment in favor of Phoenix on the issue of liability on

Count I.   It denied Appellees’ motion for partial summary judgment

on the issue of damages for the copyright infringement, reserving

the question for trial.    The court also held that the covenant not

to compete contained in the Subcontractor Agreements was invalid

     4
      Phoenix had previously filed a state court action against
Appellants on August 27, 2003. Phoenix voluntarily nonsuited that
action, however, in order to bring a copyright claim in federal
court.

                                    10
under Virginia law and therefore granted Appellees’ motion for

partial summary judgment to the extent that it sought dismissal of

the claims based on that provision.

     A three-day bench trial took place in July 2006.        Thereafter,

on October 25, 2006, the district court entered judgment in favor

of Phoenix on the copyright claim (Count I), and in favor of

Appellees on the remaining counts.         The district court enjoined

Appellees    from   further   infringement   of   the   copyrighted   2002

Interior Re-Pipe Agreement, but found that Appellees were not

liable for any damages.

     Phoenix noted a timely appeal, and we have jurisdiction

pursuant to 28 U.S.C.A. § 1291 (West 2006) (providing for appellate

jurisdiction over “final decisions” of the district courts).

                                   II.

     We review de novo the district court’s legal conclusions.

Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505, 512

(4th Cir. 2002).      We review factual findings for clear error,

meaning that we “may only set aside such a finding when we are left

with the definite and firm conviction that a mistake has been made,

and we may not do so simply because we might have found to the

contrary.”    Id.   In considering mixed questions of law and fact,

“we review the factual portion of the inquiry for clear error and

the legal conclusions de novo.”      Id.

                                   11
      Phoenix raises three principal issues on appeal, arguing that

the district court erred in finding: (1) that Phoenix was not

entitled to damages for Appellees’ infringement of its copyrighted

contract,       (2)    that      Koci   and       Rodriguez       did    not   violate      their

Subcontractor         Agreements        in    marketing       Atlantic;        and    (3)    that

Appellees’       copyright        infringement         did    not       violate      Virginia’s

Business Conspiracy statute.                  We address each argument in turn.

                                                  A.

      The district court granted summary judgment to Phoenix on the

issue     of    liability        for    infringement         of    the    copyrighted        2002

Interior       Re-Pipe     Agreement,         a    determination         Appellees      do    not

appeal.        A finding of liability, however, does not, without more,

establish an entitlement to damages.                       Under Section 504(b) of the

Copyright Act, a copyright owner “is entitled to recover the actual

damages suffered by him or her as a result of the infringement, and

any   profits         of   the    infringer         that    are     attributable        to   the

infringement and are not taken into account in computing the actual

damages.”         17 U.S.C.A. § 504(b).                In this case, Phoenix did not

seek actual damages, limiting its claim to so-called “infringer’s

profits.”5

      5
      Phoenix also recognized that it could not seek statutory
damages under 17 U.S.C.A. § 504(c) (West 2000 & Supp. 2006) because
the infringement commenced prior to the effective date of the
copyright registration. 17 U.S.C.A. § 412 (West 2005); Bouchat v.
The Bon-Ton Dep’t Stores, Inc., --- F.3d ---, 03-2173 slip op. at
30-34 (4th Cir.     Oct. 17, 2007) (explaining that a copyright
plaintiff is not entitled to statutory damages for continuing

                                                  12
      Section 504(b) contains a burden shifting provision which

provides 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.”                     17

U.S.C.A. § 504(b).     Thus, “§ 504(b) creates an initial presumption

that the infringer’s profits attributable to the infringement are

equal to its gross revenue.”      Bonner v. Dawson, 404 F.3d 290, 294

(2005) (internal quotation marks and alteration omitted). Once the

copyright holder establishes the infringer’s gross revenue, “the

burden shifts to the infringer to prove either that part or all of

those revenues are ‘deductible expenses’ (i.e., are not profits),

or that they are attributable to factors other than the copyrighted

work.”     Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d

514, 520 (4th Cir. 2003) (internal quotation marks omitted).

      In Bouchat, we established that because the phrase “gross

revenue” in § 504(b) refers only to revenue reasonably related to

the infringement, “a copyright holder must show more than the

infringer’s total gross revenue from all of its revenue streams” in

order to meet its initial burden under the statute.               Bonner, 404

F.3d at 294.     Accordingly, before the burden-shifting provision of

§ 504(b) is triggered, the copyright owner must “demonstrat[e] some

infringement commenced before registration).

                                      13
causal link between the infringement and the particular profit

stream.”        Id.

        Here,     in       denying    Appellees’      Partial     Motion     for    Summary

Judgment as to damages for the copyright infringement, the district

court found that Phoenix had met its initial burden of proof.

First,      the        district       court     noted      that     Phoenix        did   not

indiscriminately seek the totality of Appellees’ profits without

regard to the source, but rather “anticipate[d] presenting evidence

at   trial      that       [Appellees’]       use   of   Phoenix’s    Interior       Repipe

Agreement enabled [them] to enter into 626 transactions in which

they received approximately $2.6 million in revenue.”                              (J.A. at

68.)6        Next,         the     district    court     identified        three    factors

demonstrating a causal connection between the use of the Infringing

Contract     and       the       claimed   revenue:      (1)    Virginia    law    required

Atlantic to have a written contract to engage in residential

contracting,           a    requirement       Atlantic    met     through    use    of   the

Infringing Contract; (2) use of the Infringing Contract allowed

Appellees to market Atlantic as a less expensive version of Phoenix

and to appear polished and professional, thereby generating more

customers and more revenue for Atlantic; and (3) the Infringing

Contract had a “revenue-saving effect” because Atlantic used it to

        6
      The district court also stated that it might well have been
appropriate for Phoenix to offer the totality of Atlantic’s profits
as “gross revenue” because Atlantic had only one revenue stream –-
income from PB replacement services.

                                               14
collect payments from customers with overdue balances.                  (J.A. at

71-73.)     Finally, the district court stated that Phoenix had

provided    non-speculative   evidence      of   a   causal    connection    and

determined that “[b]ecause the claimed revenue ha[d] a reasonable

relation    to   the   infringement,    .   .    .   summary    judgment     for

[Appellees] would be inappropriate.”         (J.A. at 73.)

     Following the bench trial, however, the district court changed

course, finding Appellees not liable for damages.              The court found

that Phoenix failed to provide evidence supporting each of its

three purported causal links. With regard to Phoenix’s theory that

the contract assisted Atlantic in marketing itself to customers,

the district court concluded that Appellees had presented credible

evidence establishing that customers hired Atlantic for reasons

such as its experience and price, not the appearance of its

contract, while “Phoenix ha[d] not presented any evidence that

supports this particular causation theory.”             (J.A. at 358.)        It

therefore    deemed    the   “purported     causal     link     .   .   .   mere

speculation.” (J.A. at 358.) The district court further concluded

that although use of the Infringing Contract allowed Atlantic to

comply with Virginia’s requirement that residential contractors

make use of written contracts for a time without incurring the

expense necessary to do so, any cost avoidance was temporary and

did not permanently contribute to Atlantic’s revenues because

Atlantic later paid an attorney to draft a new contract.                Finally,

                                   15
the district court found that none of Atlantic’s revenue was

attributable to its use of the Infringing Contract in collecting

balances owed because Atlantic only collected more money than it

cost to enforce the terms of the contract on one occasion, and the

proceeds from that collection effort were more than offset by the

$7,000 Atlantic spent to collect $3,618 owed on another occasion.

Moreover, Atlantic had proven unsuccessful in other collection

attempts.      The district court therefore concluded that “Phoenix

ha[d]    not   proven   the   existence   of     a    causal     link    between

[Appellee’s] infringement of the Re-Pipe Agreement and their gross

revenue from polybutylene replacement jobs where the Infringing

Contract was used.”      (J.A. at 360.)        Accordingly, it determined

that    “the    burden-shifting   provisions         of   §     504(b)    [were]

inapplicable to this case” and Phoenix was not entitled to damages.

(J.A. at 360.)

       Phoenix argues that the district court’s about face improperly

denied it the benefit of § 504(b)'s burden shifting provision,

depriving it of damages to which it is entitled.              Phoenix claims to

have met its minimal initial burden of demonstrating some causal

link between the infringement and the revenue stream by showing

that (1) customers’ obligation to pay Atlantic arose out of the

Infringing Contract, and (2) Atlantic benefitted from the use of

the contract, which allowed it to appear more professional, conduct

its business in accordance with Virginia law, and collect payment

                                    16
from reluctant customers.7         Appellees counter that the district

court correctly applied our holding in Bouchat that a defendant

should prevail if either (1) there exists no conceivable casual

connection      between   the   infringement   and    a    particular    revenue

stream, or (2) despite the existence of a conceivable connection,

the copyright holder offers only speculation as to the existence of

a causal link between the infringement and the claimed revenues.

Bouchat, 346 F.3d at 522-23.

     As an initial matter, we agree with Phoenix that the district

court erred in failing to shift the burden of proof to Appellees

pursuant   to    §   504(b).     Although   Bouchat       held   that   copyright

plaintiffs may not meet their initial burden under the statute

simply by submitting evidence of an infringer’s gross profits from

all of its revenue streams, in requiring proof of a causal link

between the infringement and a particular profit stream or streams,

we did not purport to saddle plaintiffs with an onerous evidentiary

burden.

     Bouchat involved a suit for “infringer’s profits” by the

author of an original drawing that became the basis for the

     7
      Phoenix also argues that the district court’s conclusions in
its summary judgment order represent the “law of the case,” that
could not be altered by subsequent orders of the district court.
Because Phoenix does not suggest that we are similarly bound by the
district court’s initial conclusions, we need not address this
argument.   We thus limit our review to the correctness of the
district court’s judgment, not its consistency with any earlier
(non-final and unappealable) orders.

                                      17
Baltimore Ravens football team’s logo. The Ravens obtained revenue

from a variety of sources, including a subset of merchandise sales,

“minimum guarantee” shortfalls and “free merchandise” requirements

established by the Ravens’s licensing agent (National Football

League Properties, Inc.), that could not fluctuate in response to

consumer behavior.     We held that Bouchat had not met his initial

burden of proof under § 504(b) only with regard to those sources

because   Bouchat   could    not   establish   a   conceivable   connection

between the revenue from the “minimum guarantee” shortfalls and

“free merchandise” requirement and the copyright infringement.

Bouchat, 346 F.3d at 524.

     Our subsequent decision in Bonner clarified the extent of the

causal connection required under Bouchat.          There, we distinguished

Bouchat on the ground that Bonner was not seeking all gross

revenues from a defendant with multiple streams of income, but

rather only the revenue derived from the leasing arrangements of an

infringing building.        We concluded that because “[t]he building

generating the funds was designed based upon Bonner’s copyright,”

Bonner had satisfied Bouchat’s requirement of a causal connection

between the infringement and the revenue stream.          Bonner, 404 F.3d

at 294.     We reversed the district court’s conclusion to the

contrary, holding that the district court had “misinterpreted the

level of connection between infringement and profits that is

required under Bouchat” when it determined that Bonner had not met

                                     18
his initial burden because it was not clear that the building’s

design formed the basis of the profits from the lease.                Id.; see

also Konor Enter. Inc. v. Eagle Publ’ns Inc., 878 F.2d 138, 140

(4th Cir. 1989) (holding that where a defendant’s only product was

a military telephone directory that infringed on a plaintiff’s

copyright, the burden of proof shifted to the defendant pursuant to

§ 504(b), because “[i]t [wa]s plausible, absent proof to the

contrary,    that     all   profits   were     a   direct    result   of   [the]

infringement of [the] copyright”).

      In this case, the district court’s summary judgment order

correctly followed Bouchat and Bonner to conclude that Phoenix had

met   its   initial     burden   under     §   504(b)   of   demonstrating    a

conceivable connection between the copyright infringement and the

revenue obtained from jobs on which Appellees used the Infringing

Contract.   Such a connection exists because customers’ obligation

to pay arose out of their contract with Atlantic and because it is

conceivable that the Infringing Contract generated revenue by: (1)

enabling Atlantic to attract customers by looking like a less

expensive version of Phoenix; (2) comply with state law governing

its business; and (3) collect past due balances.                 The district

court erred in concluding to the contrary in the opinion and order

entering the final judgment.

      Nevertheless, we agree with Appellees that this flaw in the

district court’s analysis did not affect the outcome of the case.

                                      19
A review of the record compels the conclusion that the district

court’s finding that Phoenix was not entitled to damages ultimately

was based on its finding that the evidence was entirely one-sided,

not on its allocation of the burden of proof.    The court credited

Appellees’   evidence   that   none   of   Atlantic’s   revenue   was

attributable to the Infringing Contract and found that Phoenix had

offered only speculation to the contrary.       Thus, the district

court’s finding that Phoenix failed to supply any non-speculative

evidence to counter Appellees’ showing that Atlantic’s revenue

stemmed from sources other than the copyright infringement, if

correct, compels the conclusion that Phoenix was not entitled to

damages.8

     8
      Phoenix argues that its satisfaction of its initial burden of
proof under § 504(b) established its entitlement to damages. It
claims that the district court might find that Atlantic has met its
burden of proving some of its revenue attributable to sources other
than the Infringing Contract and apportion damages accordingly, but
that it cannot properly determine that none of Atlantic’s revenue
was attributable to the Infringing Contract. This contention
contradicts our precedent, which plainly provides that a defendant
may prove that no portion of its revenue derives from its
infringement of a plaintiff’s copyrighted work.      In Bouchat v.
Baltimore Ravens Football Club, Inc., 346 F.3d 514 (4th Cir. 2003),
although Bouchat had met his initial burden of proof by
establishing a conceivable connection between infringement of his
copyrighted drawing and the Ravens’ revenue from sources other than
merchandise sales, we upheld a grant of summary judgment to the
Ravens on the issue of damages related to those sources.         We
concluded that Bouchat’s speculation that the alleged connection in
fact existed was insufficient to overcome the Ravens’ proof that
the non-merchandise revenue was attributable to sources other than
the infringement because “[a] party opposing a properly supported
motion for summary judgment may not rest upon the mere allegations
or denials of [his] pleadings,” but rather must set forth specific
facts showing that there is a genuine issue for trial.” Id. at 525

                                 20
     With regard to Phoenix’s argument that the Infringing Contract

aided Atlantic in attracting customers, the district court found

that “Phoenix ha[d] not presented any evidence that supports this

particular causation theory.”           (J.A. at 358.)         In contrast, it

credited Appellees’ evidence that customers chose Atlantic for

reasons such as experience and price and that the contract merely

reflected   the    final   step    in   entering   into   an   agreement     with

customers that had already decided to do business with Atlantic.

Phoenix argues that Koci’s testimony that some customers “didn’t

like” or “even refused to sign” the Infringing Contract shows that

Atlantic’s use of the Infringing Contract did affect its revenues.

(Appellant’s Br. at 32.)        That some customers may have been turned

off by the Infringing Contract, however, does not demonstrate that

others employed Atlantic because of it.              The record contains no

evidence    that   a   single     customer   chose   Atlantic     due   to    the

Infringing Contract or that any customer declined to do business

with Atlantic based on the form contract it first used or the non-

infringing contract it developed in 2005. Accordingly, we can find

no basis to overturn the district court’s finding that Phoenix

(internal quotation marks omitted).      Similarly, in Bonner v.
Dawson, 404 F.3d 290 (2005), we concluded that a plaintiff that was
erroneously deprived of the benefit of § 504(b)’s burden-shifting
scheme was not entitled to judgment as a matter of law after a jury
failed to award any damages because the defendants had presented
sufficient evidence for a jury to conclude that they had met their
burden of proving that none of their profits in fact stemmed from
the infringement. Bonner, 404 F.3d at 294-95.

                                        21
presented no evidence in support of its theory that the Infringing

Contract assisted Appellees in attracting customers.

     The district court’s conclusion concerning Appellee’s use of

the Infringing Contract to satisfy the requirements of Virginia law

is likewise well-founded.    Because Appellees presented evidence

that they paid a lawyer to draft a new contract, the district court

found that any cost savings the Infringing Contract provided

Appellees in meeting Virginia’s statutory requirement that licensed

residential contractors “make use of a legible written contract

clearly specifying the terms and conditions of the work to be

performed” was merely temporary.      18 Va. Admin. Code § 50-22-

260(b)(8)   (2007).   Indeed,   Appellees’   use   of   the   Infringing

Contract may have caused them to spend more money than they

otherwise would have because they first paid an attorney to consult

with them and draft the Infringing Contract and were later obliged

to pay a different attorney for another contract.              Moreover,

Appellees demonstrated that before they began using the Infringing

Contract, they were able to comply with applicable law through the

use of a form contract from an office supply store.

     Turning to the issue of whether use of the Infringing Contract

enabled Atlantic to obtain revenue from customers who otherwise

would not have paid, we first note that Phoenix does not contest

the district court’s finding that although Atlantic relied on

“revenue-saving” language in the Infringing Contract to collect

                                 22
payments on five occasions, the cost of collection outweighed the

revenue received. Rather, Phoenix contends that the district court

arbitrarily selected for discussion a handful of cases, ignoring

that they did not represent the only instances in which Appellees

quoted or referred to the Infringing Contract when dealing with

customers.    We cannot, however, characterize the district court’s

focus on the five occasions as arbitrary.                     The district court

discussed in its opinion those contracts that Phoenix discussed at

trial; after trial, Phoenix submitted to the judge’s clerk boxes of

documents containing 600 additional job files that it had not

specifically addressed in its arguments to the district court.

     Moreover, the district court could properly differentiate

between   instances       when   Atlantic       enforced   specific     contractual

provisions against customers that refused to comply with the

agreement    from   occasions      in    which     Atlantic    simply    quoted   or

referenced the contract when it sent out a bill for services

rendered.    In the latter case, there is no indication that the

customer would not have returned payment but for the specific

“revenue saving” language in the Infringing Contract.                   Indeed, one

of the instances on which Phoenix focuses seems to undermine its

argument that Atlantic successfully used the Infringing Contract’s

“revenue-saving” provision to collect full payment while avoiding

responsibility      for    certain      types    of   property   damage    claims.

Phoenix supplied documents from the “Baer case” as an example of

                                         23
the particular effectiveness of the Infringing Contract.              In that

case, however, the Baers paid for Atlantic’s work, but then lodged

a complaint with the Better Business Bureau because they believed

that a reduction in the price was warranted due to delays and

inconvenience caused by Atlantic.            Ultimately, Atlantic sent the

Baers a $400 “monetary settlement” despite its belief that it was

not required to do so under the contract.              (J.A. at 495.)         We

therefore conclude that the district court’s finding that the

Infringing    Contract’s   “revenue-saving”        language    “did   not,   in

actuality, contribute to [Appellees’] gross revenue,” (J.A. at

360), was not clearly erroneous.

     In light of the district court’s findings that Appellees’ use

of the Infringing Contract to comply with 18 Va. Admin. Code § 50-

22-260(b)(8) and to collect balances owed from reluctant customers

did not augment its revenues and Phoenix’s failure to provide more

than speculation that the Infringing Contract aided Appellees in

marketing Atlantic’s services, we conclude that the district court

did not err in finding Appellees not liable for damages for

copyright infringement.

                                    B.

     We next address Phoenix’s breach of contract claim.                Under

Virginia    law,   when   the   terms   of    a   contract    are   clear    and

unambiguous, the interpretation of those terms presents a question

of law.    Musselman v. Glass Works, L.L.C., 533 S.E.2d 919, 921 (Va.

                                    24
2000).   Whether a contractual provision is ambiguous is also a

question of law.    Id.9

     The confidentiality agreement contained in Rodriguez’s and

Koci’s Subcontractor Agreements prohibited the use or disclosure of

“any trade secret or confidential or proprietary information of

[Phoenix],”    including,    among    other    things,    “the    identity     and

requirements of customers and clients.”                 (J.A. at 25.)          The

district court found that Rodriguez and Koci used knowledge gained

from their work for Phoenix in conducting their business.                 It then

concluded that this information could not properly be characterized

as   trade    secrets,    confidential       information,    or       proprietary

information.      The    district    court    further    concluded      that   the

contractual     provision    prohibiting       disclosure        of   customers’

identity, on its face, did not prohibit the use or disclosure of

     9
      Under Virginia law, an agreement in restraint of trade must
be strictly construed against the drafter. Simmons v. Miller, 544
S.E.2d 666, 678 (Va. 2001).     Although Virginia courts have not
directly addressed the issue, a number of other state courts have
construed confidentiality provisions that operate to restrict
competition as contracts in restraint of trade.         See, e.g.,
Carolina Chem. Equip. Co. v. Muckenfuss, 471 S.E.2d 721, 723-24
(S.C. 1996) (stating that an agreement not to divulge trade secrets
will be judged by the same criteria as a covenant not to compete
when the former has the same effect as the latter). The district
court treated the confidentiality provision contained in the
subcontractor agreements as a restraint on trade and strictly
construed the provision against Phoenix. Because the language of
the contract is plain, the same result would obtain whether or not
it were strictly construed against Phoenix. Accordingly, we need
not address this issue on appeal.

                                      25
the addresses of customers for whom Phoenix had previously done

work.

       Phoenix      contends   that     the   district     court     erred   in   its

interpretation of the contract. Phoenix’s arguments rest primarily

on the fact, acknowledged by the district court, that knowledge of

the addresses of houses with PB pipes can represent valuable

information because it enables a PB replacement business to target

its marketing to areas in which people will have a need for their

services.      The mere fact that Koci’s and Rodriguez’s memories of

the addresses proved useful in marketing or valuable to their

competing business, however, does not establish that the knowledge

is   covered     by    the   specific    provisions       of   the   Subcontractor

Agreement or properly recognized as a trade secret under Virginia

law.

       The confidentiality agreement’s reference to the “identity and

requirements of customers,” given its ordinary and plain meaning,

unambiguously refers to who Phoenix’s customers are and what they

need.    See Twardy v. Twardy, 419 S.E. 2d 848, 855 (Va. Ct. App.

1984) (“Where there is no ambiguity in the terms of a contract, we

must construe it as written, and give the terms their plain and

ordinary    meaning.”        (internal    quotation       marks    and   alteration

omitted)).     It     cannot   logically      be   read   as   inclusive     of   the

addresses of former customers.           Phoenix easily could have included

a specific reference to the addresses in the agreement, but did

                                         26
not, and we must construe the contract as written, not as Phoenix

wishes it had been drafted.       See Wilson v. Holyfield, 313 S.E. 396,

398 (Va. 1992) (explaining that “courts are bound to say that the

parties intended what the written instrument plainly declares” and

“cannot read into contracts language which will add to or take away

from the meaning of the words already contained therein” (internal

quotation marks omitted)).

     Phoenix contends that even if the specific reference to the

“identity and requirements of customers” does not extend to the

addresses of former customers, the addresses are nevertheless

covered by the confidentiality agreement’s generalized reference to

“trade   secret[s]   or     confidential    or   proprietary    information.”

Under Virginia law, however, Rodriguez’s and Koci’s knowledge of

Phoenix’s customers and their addresses was neither a trade secret

nor confidential or proprietary information belonging to Phoenix.

See Peace v. Conway, 435 S.E.2d 133, 135 (Va. 1993) (holding that

former employees who formed a competing business and used a list

compiled   solely    from    their   memories    to   solicit   their   former

employer’s customers had not misused confidential information,

because they “did not . . . utilize any property that belonged to

[their former employer] when contacting his customers”). Rodriguez

and Koci did not use Phoenix’s proprietary database in conducting

their marketing campaign.            And, although their memory of the

addresses represented valuable information, it was neither secret

                                       27
nor solely in Phoenix’s possession because the customers (and

possibly their neighbors and friends) knew who they were.                 We

therefore conclude that Koci and Rodriguez did not breach their

Subcontractor Agreements by relying on their memories of addresses

at which they had done work for Phoenix in marketing Atlantic’s

services.     Cf. Plains Cotton Coop. Ass’n v. Goodpasture Computer

Serv., Inc., 807 F.2d 1256, 1263 (5th Cir. 1987) (“While an

employee owes a duty to his employer not to disclose any knowledge

of that employer's trade secrets, the employee, upon terminating

his employment relationship with his employer, is entitled to take

with him the experience, knowledge, memory, and skill, which he

gained     while   there   employed.”   (internal    quotation    marks   and

alteration omitted)).

                                      C.

      Finally, we consider Phoenix’s statutory conspiracy claim.

Virginia’s Business Conspiracy statute makes it unlawful for two or

more persons to “combine, associate, agree, mutually undertake or

concert together for the purpose of . . . willfully and maliciously

injuring another in his reputation, trade, business or profession

. . . .”    Va. Code Ann. § 18.2-499.      Phoenix claimed that Appellees

violated the statute by conspiring to infringe on their copyright.

The   district     court   granted   judgment   in   favor   of   Appellees,

reasoning that the claim failed for a number of reasons.             First,

there could have been no conspiracy to infringe upon the copyright

                                      28
in    2003    because      the   2002    Interior         Re-Pipe       Agreement   was    not

copyrighted at that time. Second, the requirement that two or more

persons       act    in     concert      was        not    met     because,      under     the

Intracorporate Immunity doctrine, a corporate entity, which acts

only    through      its    agents,      cannot       conspire         with   itself,     so   a

conspiracy could not exist if Rodriguez and Koci were both agents

of Atlantic and were acting within the scope of their agency.

Third,       the    infringement        occurring         after        the    copyright    was

registered was not willful or malicious.

       Phoenix      challenges      each       basis      for     the    district    court’s

decision, arguing that (1) it was irrelevant that the copyright was

not    actually       registered        until        2005;       (2)    the    doctrine        of

intracorporate immunity does not apply because Rodriguez and Koci

began conspiring to infringe on the copyright while they were still

subcontractors of Phoenix, before they formed Atlantic; and (3)

Appellees acted willfully and maliciously in using the contract

over Phoenix’s objection.               Because the question of intracorporate

immunity is dispositive, we address only that issue.

       Under Virginia law, a corporation cannot conspire with its

agents, nor can agents of a corporation, acting within the scope of

their agency, conspire together.                    Such a “conspiracy” is a legal

impossibility because the actors are not separate persons for

purposes of the conspiracy statute, but rather form part of a

single entity, the corporation, which cannot conspire with itself.

                                               29
See Charles E. Brauer Co. v. NationsBank of Va., N.A., 466 S.E.2d

382, 386-87 (Va. 1996); Fox v. Deese, 362 S.E.2d 699, 708 (Va.

1987).

       Phoenix’s assertion that Rodriguez and Koci conspired to use

the 2002 Interior Re-Pipe Agreement before forming Atlantic is

unsupported by the record.         Rodriguez and Koci formed Atlantic in

June 2003, and there is no evidence that, prior to June 2003, they

agreed to use the 2002 Interior Re-Pipe Agreement in their new

business.    To the contrary, Appellees used a form contract from an

office supply store on their initial jobs and did not use the

Infringing Contract until August 30, 2003, after requesting that an

attorney    draft    them    a   contract       for   use   in    their   business.

Accordingly,   we    conclude     that    the     doctrine       of   intracorporate

immunity applies, and because Phoenix cannot establish concerted

activity by two or more persons, its statutory conspiracy claim

must fail.

                                       III.

         In sum, we conclude that although the district court erred

in concluding that Phoenix failed to meet its initial burden of

proof under § 504(b) of the Copyright Act, its judgment in favor of

Appellees was nevertheless sound because it correctly concluded

that   there   was   no     evidence     that    Appellees’       infringement   of

Phoenix’s copyright contributed to Atlantic’s revenues. We further

                                         30
conclude that the district court did not err in entering judgment

in favor of Appellees on Phoenix’s claims under Virginia law

because the Subcontractor Agreements do not prohibit the use of

Rodriguez’s   and   Koci’s   memories   of   addresses   at   which   they

performed work for Phoenix in targeting Atlantic’s marketing and

because the doctrine of intracorporate immunity bars the statutory

conspiracy claim.   Accordingly, the judgment of the district court

is

                                                               AFFIRMED.

                                  31