Court Opinion

ID: 11225
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:02:41+00
Date Added: 2024-06-11T13:31:46.349462
License: Public Domain

IN THE UNITED STATES COURT OF APPEALS

                       FOR THE FIFTH CIRCUIT

                       _____________________

                            No. 96-10245
                       _____________________

PAR MICROSYSTEMS, INC.,

                                               Plaintiff-Appellant,

                               versus

PINNACLE DEVELOPMENT CORP., ET AL.,

                                                        Defendants,

                                 and

ROBERT S. JOHNSON,

                                              Defendant-Appellee.
_________________________________________________________________

      Appeal from the United States District Court for the
                Northern District of Texas, Dallas
                         (3:93-CV-2114-D)
_________________________________________________________________

                          December 30, 1996

Before JOLLY, JONES, and PARKER, Circuit Judges.

PER CURIAM:*

     This appeal presents two questions: (1) whether the district

court erred in granting summary judgment in favor of Robert S.

Johnson (“Johnson”) on all claims of copyright infringement alleged

by PAR Microsystems, Inc. (“PAR”); and (2) whether the district

     *
      Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
court abused its discretion in refusing to consider new evidence

presented by PAR in its motion to reconsider the grant of summary

judgment.     After reviewing the record, studying the briefs, and

considering the arguments presented to this court, we conclude

that, under the particular circumstances of this case, the district

court abused      its   discretion      in   refusing     to   consider    the   new

evidence    and     arguments   presented      by   PAR     in   its   motion      to

reconsider.

     PAR    filed    its    complaint    against    Johnson,      Data     National

Corporation       (“DNC”)     and    Pinnacle       Development        Corporation

(“Pinnacle”) alleging copyright infringement and various state law

tort claims resulting from the alleged wrongful copying of a

computer software program.1          Johnson, Pinnacle and DNC moved for

summary judgment contending that PAR’s claims were barred by the

running of the applicable three-year statute of limitations.                       In

response, PAR argued only that the claims should not be barred,

based on the discovery rule, because the statute of limitations did

not begin running until they conclusively determined that a claim

existed, instead of the earlier date, alleged by the defendants,

when PAR first became aware of the facts giving rise to the claim.

The district court granted the motion for summary judgment and

     1
      PAR and Data National             Corporation     have     entered    into    a
settlement agreement.

                                         2
dismissed the complaint.2    Under our earlier cases, a cause of

action for copyright infringement arises when a party has knowledge

of the violation or notice of facts that, in the exercise of due

diligence, would have led to such knowledge.   Jensen v. Snellings,

841 F.2d 600 (5th Cir. 1988).   Thus, the district court did not err

in determining that the statute of limitations began running at the

time--over three years before commencement of this action--that PAR

became aware of the similarities between the two software programs;

therefore, the grant of summary judgment on this ground for all

claims accruing three years before the filing of the complaint was

not erroneous.

     After summary judgment was granted, PAR filed a motion for

reconsideration arguing that the entire complaint should not have

been dismissed.   In support of this motion, PAR contended that the

infringement was a continuing activity, that there were separate

acts of infringement occurring within the limitations period and

that the claims against Pinnacle could not be barred because the

company was formed less than three years prior to the filing of the

complaint.   PAR offered evidence, although its admissibility was

disputed, of timely additional acts of infringement.   The district

court concluded that PAR had “reserved” this evidence and argument,

     2
      The district court also granted summary judgment as to the
state law claims. PAR does not appeal that ruling.

                                  3
in spite of the fact that it could have been fully presented at the

time the motion for summary judgment was decided.         The court

refused to consider the evidence offered in support of the motion

for reconsideration except to rule that Pinnacle’s corporate non-

existence at the time in question prevented the commencement of the

running of the statute of limitations as to it.3          The court

therefore reinstated the complaint as to Pinnacle only.

     We review the refusal of a district court to consider new

evidence presented on a motion for reconsideration under Federal

Rule of Civil Procedure 59(e) for abuse of discretion.    Fields v.

City of South Houston, Texas, 922 F.2d 1183, 1188 (5th Cir. 1991).

When deciding whether to consider new evidence in connection with

a Rule 59(e) motion, district courts should consider the following

factors: (1) the reasons for the party’s default in presenting the

evidence earlier; (2) the importance of the evidence to the party’s

case; (3) the availability of the evidence at the time of the

response to the motion for summary judgment; and (4) the likelihood

that the defendants will suffer unfair prejudice if the case is

reopened.   Lavespere v. Niagara Machine & Tool Works, Inc., 910

F.2d 167, 174 (5th Cir. 1990).       Here the matter is very close,

especially because much of the blame for the plaintiff-non-movant’s

     3
      This appeal is before the court by virtue of Federal Rule of
Civil Procedure Rule 54(b) judgment. PAR’s claim against Pinnacle
remains before the district court.

                                 4
current predicament must be placed on its own failings.                    We

conclude, however, that, in the light of all the circumstances, the

district   court   abused   its   discretion    in    not   considering   the

evidence and arguments offered by PAR:         There was a clear error in

the application of the law because each act of infringement gives

rise to a separate cause of action.        Makewdwe Pub. Co. v. Johnson,

37 F.3d 180, 182 (5th Cir. 1994).        Thus, the assignment of a single

accrual date to all of PAR’s copyright claims was error.           Although

as we have noted, this error is attributable largely to the failure

of the parties to address this issue at the summary judgment stage,

nevertheless, the legal error occurred, and the error significantly

impacted the rights of the plaintiff.          Furthermore, the complaint

has not been dismissed against Pinnacle and this action will

proceed in any event.       Therefore, the unfair prejudice resulting

from reconsideration is minimal with respect to the defendant

Johnson. We therefore conclude that the district court should have

considered PAR’s evidence and arguments offered in support of the

motion for reconsideration.

     We therefore REVERSE the judgment of the district court and

REMAND this action for further proceedings not inconsistent with

this opinion.

                                                     REVERSED and REMANDED.

                                     5