Court Opinion

ID: 2996687
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:30:45.443383+00
Date Added: 2024-06-11T12:13:53.869893
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 03-2061
ASSESSMENT TECHNOLOGIES OF WI, LLC,
                                                 Plaintiff-Appellee,
                                v.

WIREDATA, INC.,
                                             Defendant-Appellant.
                         ____________
        Appeal from the United States District Court for the
                   Eastern District of Wisconsin.
        No. 01-C-789—Aaron E. Goodstein, Magistrate Judge.
                         ____________
  ARGUED NOVEMBER 3, 2003—DECIDED NOVEMBER 25, 2003
                         ____________

  Before POSNER, DIANE P. WOOD, and EVANS, Circuit Judges.
   POSNER, Circuit Judge. This case is about the attempt of a
copyright owner to use copyright law to block access to data
that not only are neither copyrightable nor copyrighted, but
were not created or obtained by the copyright owner. The
owner is trying to secrete the data in its copyrighted
program—a program the existence of which reduced the
likelihood that the data would be retained in a form in
which they would have been readily accessible. It would be
appalling if such an attempt could succeed.
  Assessment Technologies (AT, we’ll call it) brought
suit for copyright infringement and theft of trade secrets
2                                                 No. 03-2061

against WIREdata, and the district court after an evidentiary
hearing issued a permanent injunction on the basis of AT’s
copyright claim alone, without reaching the trade secret
claim. A sample database in the demo version of AT’s
product—a version freely distributed for promotional
purposes—reveals the entire structure of the database, thus
making the trade secret claim incomprehensible to us. But
we shall not make a formal ruling on the claim. It was not
addressed either by the district court or by the parties in
their submissions in this court, and conceivably if improba-
bly it has more merit than we can find in it.
  The copyright case seeks to block WIREdata from ob-
taining noncopyrighted data. AT claims that the data can’t
be extracted without infringement of its copyright. The
copyright is of a compilation, and the general issue that the
appeal presents is the right of the owner of such a copyright
to prevent his customers (that is, the copyright licensees)
from disclosing the compiled data even if the data are in the
public domain.
  WIREdata, owned by Multiple Listing Services, Inc.,
wants to obtain, for use by real estate brokers, data regard-
ing specific properties—address, owner’s name, the age of
the property, its assessed valuation, the number and type of
rooms, and so forth—from the southeastern Wisconsin
municipalities in which the properties are located. The mu-
nicipalities collect such data in order to assess the value
of the properties for property-tax purposes. Ordinarily
they’re happy to provide the data to anyone who will pay
the modest cost of copying the data onto a disk. Indeed,
Wisconsin’s “open records” law, Wis. Stat. §§ 19.31-.39; State
ex rel. Milwaukee Police Ass’n v. Jones, 615 N.W.2d 190, 194-96
(Wis. App. 2000), which is applicable to data in digital form,
see id. at 195-96; Wis. Stat. § 19.32(2), requires them to
furnish such data to any person who will pay the copying
No. 03-2061                                                  3

cost. However, three municipalities refused WIREdata’s
request. They (or the contractors who do the actual tax
assessment for them) are licensees of AT. The open-records
law contains an exception for copyrighted materials, id., and
these municipalities are afraid that furnishing WIREdata the
requested data would violate the copyright. WIREdata has
sued them in the state courts of Wisconsin in an attempt to
force them to divulge the data, and those suits are pending.
Alarmed by WIREdata’s suits, AT brought the present suit
to stop WIREdata from making such demands of the
municipalities and seeking to enforce them by litigation.
  The data that WIREdata wants are collected not by AT but
by tax assessors hired by the municipalities. The assessors
visit the property and by talking to the owner and poking
around the property itself obtain the information that we
mentioned in the preceding paragraph—the age of the
property, the number of rooms, and so forth. AT has
developed and copyrighted a computer program, called
“Market Drive,” for compiling these data. The assessor
types into a computer the data that he has obtained from his
visit to the property or from other sources of information
and then the Market Drive program, in conjunction with a
Microsoft database program (Microsoft Access), automati-
cally allocates the data to 456 fields (that is, categories
of information) grouped into 34 master categories known
as tables. Several types of data relating to a property, each
allocated to a different field, are grouped together in a table
called “Income Valuations,” others in a table called “Resi-
dential Buildings,” and so on. The data collected by the vari-
ous assessors and inputted in the manner just described are
stored in an electronic file, the database. The municipality’s
tax officials can use various queries in Market Drive or
Market Access to view the data in the file.
4                                                    No. 03-2061

  WIREdata’s appeal gets off on the wrong foot, with the
contention that Market Drive lacks sufficient originality to
be copyrightable. Copyright law unlike patent law does not
require substantial originality. Feist Publications, Inc. v. Rural
Telephone Service Co., 499 U.S. 340, 345-48 (1991). In fact, it
requires only enough originality to enable a work to be
distinguished from similar works that are in the public
domain, Bucklew v. Hawkins, Ash, Baptie & Co., 329 F.3d 923,
929 (7th Cir. 2003); Alfred Bell & Co. v. Catalda Fine Arts, Inc.,
191 F.2d 99, 102-03 (2d Cir. 1951), since without some
discernible distinction it would be impossible to determine
whether a subsequent work was copying a copyrighted
work or a public-domain work. This modest requirement is
satisfied by Market Drive because no other real estate
assessment program arranges the data collected by the as-
sessor in these 456 fields grouped into these 34 categories,
and because this structure is not so obvious or inevitable as
to lack the minimal originality required, Key Publications,
Inc. v. Chinatown Today Publishing Enterprises, Inc., 945 F.2d
509, 513-14 (2d Cir. 1991), as it would if the compilation
simply listed the data in alphabetical or numerical order.
Feist Publications, Inc. v. Rural Telephone Service Co., supra, 499
U.S. at 362-64. The obvious orderings, the lexical and the
numeric, have long been in the public domain, and what is
in the public domain cannot be appropriated by claiming
copyright. Alternatively, if there is only one way in which
to express an idea—for example, alphabetical order for the
names in a phone book—then form and idea merge, and in
that case since an idea cannot be copyrighted the copying of
the form is not an infringement. Ets-Hokin v. Skyy Spirits,
Inc., 225 F.3d 1068, 1082 (9th Cir. 2000); Kregos v. Associated
Press, 937 F.2d 700, 705-07 (2d Cir. 1991). That is not the
situation here.
   So AT has a valid copyright; and if WIREdata said to
itself, “Market Drive is a nifty way of sorting real estate data
No. 03-2061                                                 5

and we want the municipalities to give us their data in the
form in which it is organized in the database, that is, sorted
into AT’s 456 fields grouped into its 34 tables,” and the
municipalities obliged, they would be infringing AT’s
copyright because they are not licensed to make copies of
Market Drive for distribution to others; and WIREdata
would be a contributory infringer (subject to a qualification
concerning the fair-use defense to copyright infringement,
including contributory infringement, that we discuss later).
But WIREdata doesn’t want the Market Drive compilation.
It isn’t in the business of making tax assessments, which is
the business for which Market Drive is designed. It only
wants the raw data, the data the assessors inputted into
Market Drive. Once it gets those data it will sort them in
accordance with its own needs, which have to do with pro-
viding the information about properties that is useful to real
estate brokers as opposed to taxing authorities.
   But how are the data to be extracted from the database
without infringing the copyright? Or, what is not quite the
same question, how can the data be separated from the
tables and fields to which they are allocated by Market
Drive? One possibility is to use tools in the Market Drive
program itself to extract the data and place it in a separate
electronic file; this can be done rapidly and easily with just
a few keystrokes. But the municipalities may not have the
program, because the inputting of the data, which did of
course require its use, was done by assessors employed by
firms to do this work as independent contractors of the
municipalities. And if the municipalities do have the
program, still their license from AT forbids them to dis-
seminate the data collected by means of it—a restriction that
may or may not be in violation of the state’s open-records
law, a question we come back to later. A second extraction
possibility, which arises from the fact that the database is a
6                                                No. 03-2061

Microsoft file accessible by Microsoft Access, is to use
Access to extract the data and place it in a new file, bypass-
ing Market Drive. But there is again the scope of the license
to be considered and also whether the method of extraction
is so cumbersome that it would require more effort than the
open-records law requires of the agencies subject to it. It
might take a programmer a couple of days to extract the
data using Microsoft Access, and the municipalities might
lack the time, or for that matter the programmers, to do the
extraction. But that should not be a big problem, because
WIREdata can hire programmers to extract the data from
the municipalities’ computers at its own expense.
   From the standpoint of copyright law all that matters is
that the process of extracting the raw data from the database
does not involve copying Market Drive, or creating, as AT
mysteriously asserts, a derivative work; all that is sought is
raw data, data created not by AT but by the assessors, data
that are in the public domain. A derivative work is a
translation or other transformation of an original work and
must itself contain minimum originality for the same
evidentiary reason that we noted in discussing the re-
quirement that a copyrighted work be original. Pickett v.
Prince, 207 F.3d 402, 405 (7th Cir. 2000); Gracen v. Bradford
Exchange, 698 F.2d 300, 304-05 (7th Cir. 1983). A work that
merely copies uncopyrighted material is wholly unoriginal
and the making of such a work is therefore not an infringe-
ment of copyright. The municipalities would not be in-
fringing Market Drive by extracting the raw data from the
databases by either method that we discussed and handing
those data over to WIREdata; and since there would thus be
no direct infringement, neither would there be contributory
infringement by WIREdata. It would be like a Westlaw
licensee’s copying the text of a federal judicial opinion that
he found in the Westlaw opinion database and giving it to
No. 03-2061                                                7

someone else. Westlaw’s compilation of federal judicial
opinions is copyrighted and copyrightable because it in-
volves discretionary judgments regarding selection and
arrangement. But the opinions themselves are in the public
domain (federal law forbids assertion of copyright in federal
documents, 17 U.S.C. § 105), and so Westlaw cannot prevent
its licensees from copying the opinions themselves as
distinct from the aspects of the database that are copy-
righted. See Matthew Bender & Co. v. West Publishing Co., 158
F.3d 693 (2d Cir. 1998); Matthew Bender & Co. v. West
Publishing Co., 158 F.3d 674 (2d Cir. 1998).
  AT would lose this copyright case even if the raw data
were so entangled with Market Drive that they could not be
extracted without making a copy of the program. The case
would then be governed by Sega Enterprises Ltd. v. Accolade,
Inc., 977 F.2d 1510, 1520-28 (9th Cir. 1992). Sega manufac-
tured a game console, which is a specialized computer, and
copyrighted the console’s operating system, including the
source code. Accolade wanted to make computer games that
would be compatible with Sega’s console, and to that end it
bought a Sega console and through reverse engineering
reconstructed the source code, from which it would learn
how to design its games so that they would activate the
operating system. For technical reasons, Accolade had to
make a copy of the source code in order to be able to obtain
this information. It didn’t want to sell the source code,
produce a game-console operating system, or make any
other use of the copyrighted code except to be able to sell a
noninfringing product, namely a computer game. The court
held that this “intermediate copying” of the operating
system was a fair use, since the only effect of enjoining it
would be to give Sega control over noninfringing products,
namely Accolade’s games. See also Sony Computer Entertain-
ment, Inc. v. Connectix Corp., 203 F.3d 596, 602-08 (9th Cir.
8                                                 No. 03-2061

2000); Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1539-40 n. 18
(11th Cir. 1996); Atari Games Corp. v. Nintendo of America,
Inc., 975 F.2d 832, 842-44 (Fed. Cir. 1992). Similarly, if the
only way WIREdata could obtain public-domain data about
properties in southeastern Wisconsin would be by copying
the data in the municipalities’ databases as embedded in
Market Drive, so that it would be copying the compilation
and not just the compiled data only because the data and
the format in which they were organized could not be
disentangled, it would be privileged to make such a copy,
and likewise the municipalities. For the only purpose of the
copying would be to extract noncopyrighted material, and
not to go into competition with AT by selling copies of
Market Drive. We emphasize this point lest AT try to
circumvent our decision by reconfiguring Market Drive in
such a way that the municipalities would find it difficult or
impossible to furnish the raw data to requesters such as
WIREdata in any format other than that prescribed by
Market Drive. If AT did that with that purpose it might be
guilty of copyright misuse, of which more shortly.
  AT argues that WIREdata doesn’t need to obtain the data
in digital form because they exist in analog form, namely in
the handwritten notes of the assessors, notes that all agree
are not covered by the Market Drive copyright. But we were
told at argument without contradiction that some assessors
no longer make handwritten notes to copy into a computer
at a later time. Instead they take their laptop to the site and
type the information in directly. So WIREdata could not
possibly obtain all the data it wants (all of which data are in
the public domain, we emphasize) from the handwritten
notes. But what is more fundamental is that since AT has no
ownership or other legal interest in the data collected by the
assessor, it has no legal ground for making the acquisition
of that data more costly for WIREdata. AT is trying to use its
No. 03-2061                                                 9

copyright to sequester uncopyrightable data, presumably in
the hope of extracting a license fee from WIREdata.
  We are mindful of pressures, reflected in bills that have
been pending in Congress for years, Jonathan Band &
Makoto Kono, “The Database Protection Debate in the 106th
Congress,” 62 Ohio St. L.J. 869 (2001), to provide legal
protection to the creators of databases, as Europe has al-
ready done. Jane C. Ginsburg, “Copyright, Common Law,
and Sui Generis Protection of Databases in the United States
and Abroad,” 66 U. Cinc. L. Rev. 151 (1997). (Ironically,
considering who owns WIREdata, the multiple-listing
services are pressing for such protection. Ron Eckstein, “The
Database Debate,” Legal Times, Jan. 24, 2000, p. 16.) The
creation of massive electronic databases can be extremely
costly, yet if the database is readily searchable and the data
themselves are not copyrightable (and we know from Feist
that mere data are indeed not copyrightable) the creator
may find it difficult or even impossible to recoup the
expense of creating the database. Legal protection of
databases as such (as distinct from programs for arranging
the data, like Market Drive) cannot take the form of copy-
right, as the Supreme Court made clear in Feist when it held
that the copyright clause of the Constitution does not
authorize Congress to create copyright in mere data. But
that is neither here nor there; what needs to be emphasized
in this case is that the concerns (whether or not valid,
as questioned in Ginsburg, supra, and also J.H. Reichman
& Pamela Samuelson, “Intellectual Property Rights in
Data?” 50 Vand. L. Rev. 51 (1997), and Stephen M. Maurer &
Suzanne Scotchmer, “Database Protection: Is It Broken and
Should We Fix It?” 284 Sci. 1129 (1999)) that actuate the
legislative proposals for database protection have no
relevance because AT is not the collector of the data that go
into the database. All the data are collected and inputted by
10                                                No. 03-2061

the assessors; it is they, not AT, that do the footwork, the
heavy lifting.
   AT points to the terms of its license agreements with the
municipalities, which though ambiguous might be inter-
preted to forbid the licensees to release the raw data, even
without the duplication, or revelation of any copyrighted
feature, of Market Drive. But AT is not suing for breach of
the terms of the agreements—it can’t, since WIREdata is not
a party to them. Nor is it suing for intentional interference
with contract, Frandsen v. Jensen-Sundquist Agency, Inc., 802
F.2d 941, 947-48 (7th Cir. 1986) (Wisconsin law); Dorr v.
Sacred Heart Hospital, 597 N.W.2d 462, 478 (Wis. App. 1999);
Cudd v. Crownhart, 364 N.W.2d 158, 160-61 (Wis. App. 1985),
which would be the logical route for complaining about
WIREdata’s inviting the municipalities that are AT’s
licensees to violate the terms of their license. The licenses do
nothing for AT in this case.
  So it is irrelevant that ProCD, Inc. v. Zeidenberg, 86
F.3d 1447, 1453-55 (7th Cir. 1996), holds that a copyright
owner can by contract limit copying beyond the right that
a copyright confers. See also Bowers v. Baystate Technologies,
Inc., 320 F.3d 1317, 1323-26 (Fed. Cir. 2003). Like other
property rights, a copyright is enforceable against persons
with whom the owner has no contractual relations; so a
property owner can eject a trespasser even though the tres-
passer had not contractually bound himself to refrain from
entering the property. That is why AT is suing WIREdata
for copyright infringement rather than for breach of con-
tract. The scope of a copyright is given by federal law, but
the scope of contractual protection is, at least prima facie,
whatever the parties to the contract agreed to. The existence
of contractual solutions to the problem of copying the
contents of databases is one of the reasons that Professor
No. 03-2061                                                    11

Ginsburg and others are skeptical about the need for legis-
lative protection of databases. But our plaintiff did not
create the database that it is seeking to sequester from
WIREdata; or to be more precise, it created only an empty
database, a bin that the tax assessors filled with the data. It
created the compartments in the bin and the instructions for
sorting the data to those compartments, but those were its
only innovations and their protection by copyright law is
complete. To try by contract or otherwise to prevent the
municipalities from revealing their own data, especially
when, as we have seen, the complete data are unavailable
anywhere else, might constitute copyright misuse.
  The doctrine of misuse “prevents copyright holders
from leveraging their limited monopoly to allow them
control of areas outside the monopoly.” A&M Records, Inc. v.
Napster, Inc., 239 F.3d 1004, 1026-27 (9th Cir. 2001);
see Alcatel USA, Inc. v. DGI Technologies, Inc., 166 F.3d 772,
792-95 (5th Cir. 1999); Practice Management Information Corp.
v. American Medical Ass’n, 121 F.3d 516, 520-21 (1997),
amended, 133 F.3d 1140 (9th Cir. 1998); DSC Communications
Corp. v. DGI Technologies, Inc., 81 F.3d 597, 601-02 (5th Cir.
1996); Lasercomb America, Inc. v. Reynolds, 911 F.2d 970, 976-
79 (4th Cir. 1990). The data in the municipalities’ tax-
assessment databases are beyond the scope of AT’s copy-
right. It is true that in Reed-Union Corp. v. Turtle Wax, Inc., 77
F.3d 909, 913 (7th Cir. 1996), we left open the question
whether copyright misuse, unless it rises to the level of
an antitrust violation, is a defense to infringement; our
earlier decision in Saturday Evening Post Co. v. Rumbleseat
Press, Inc., 816 F.2d 1191, 1200 (7th Cir. 1987), had intimated
skepticism. No effort has been made by WIREdata to
show that AT has market power merely by virtue of its
having a copyright on one system for compiling valuation
data for real estate tax assessment purposes. Cases such
as Lasercomb, however, cut misuse free from antitrust,
12                                                No. 03-2061

pointing out that the cognate doctrine of patent misuse is
not so limited, 911 F.3d at 977-78, though a difference is that
patents tend to confer greater market power on their owners
than copyrights do, since patents protect ideas
and copyrights, as we have noted, do not. The argument for
applying copyright misuse beyond the bounds of antitrust,
besides the fact that confined to antitrust the doctrine would
be redundant, is that for a copyright owner to use an
infringement suit to obtain property protection, here in data,
that copyright law clearly does not confer, hoping to force
a settlement or even achieve an outright victory over an
opponent that may lack the resources or the legal sophistica-
tion to resist effectively, is an abuse of process.
   We need not run this hare to the ground; nor decide
whether the licenses interpreted as AT would have us in-
terpret them—as barring municipalities from disclosing
noncopyrighted data—would violate the state’s open-
records law. Cf. Antisdel v. City of Oak Creek Police & Fire
Comm’n, 600 N.W.2d 1, 3 (Wis. App. 1999); Gordie Boucher
Lincoln-Mercury Madison, Inc. v. J & H Landfill, Inc., 493
N.W.2d 375, 378 (Wis. App. 1992); State ex rel. Sun Newspa-
pers v. Westlake Board of Education, 601 N.E.2d 173, 175 (Ohio
App. 1991); but cf. Pierce v. St. Vrain Valley School District,
981 P.2d 600, 605-06 (Colo. 1999). WIREdata is not a licensee
of AT, and AT is not suing to enforce any contract it might
have with WIREdata. It therefore had no cause to drag the
licenses before us. But since it did, we shall not conceal our
profound skepticism concerning AT’s interpretation. If
accepted, it would forbid municipalities licensed by AT to
share the data in their tax-assessment databases with each
other even for the purpose of comparing or coordinating
their assessment methods, though all the data they would
be exchanging would be data that their assessors had
collected and inputted into the databases. That seems an
absurd result.
No. 03-2061                                                  13

  To summarize, there are at least four possible methods by
which WIREdata can obtain the data it is seeking without
infringing AT’s copyright; which one is selected is for the
municipality to decide in light of applicable trade-secret,
open-records, and contract laws. The methods are: (1) the
municipalities use Market Drive to extract the data and
place it in an electronic file; (2) they use Microsoft Access to
create an electronic file of the data; (3) they allow program-
mers furnished by WIREdata to use their computers to
extract the data from their database—this is really just an
alternative to WIREdata’s paying the municipalities’ cost of
extraction, which the open-records law requires; (4) they
copy the database file and give it to WIREdata to extract the
data from.
  The judgment is reversed with instructions to vacate the
injunction and dismiss the copyright claim.
            REVERSED AND REMANDED, WITH INSTRUCTIONS.

A true Copy:
        Teste:

                           _____________________________
                            Clerk of the United States Court of
                              Appeals for the Seventh Circuit

                    USCA-02-C-0072—11-25-03