Litigation

This summary also appears under Intellectual Property

 

Issues: Sanctions for "spoliated evidence"; Adkins v. Wolever (Adkins I & II); Beaven v. U.S. Dep't of Justice; Whether the spoliated evidence was relevant; One Beacon Ins. Co. v. Broadcast Dev. Group, Inc. (Unpub. 6th Cir.); Duty to maintain "backup tapes"; Zubulake v. UBS Warburg LLC (SD NY); The district court's determination that the failure to preserve evidence was "at most negligent"; Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Secs. (SD NY); Chin v. Port Auth. of NY & NJ (2nd Cir); Flagg v. City of Detroit; Whether two e-mail exhibits were subject to the "crime-fraud exception" to "attorney-client privilege"; In re Grand Jury Subpoenas; United States v. Zolin; Whether the plaintiff established "copyright infringement"; Feist Publ'ns, Inc. v. Rural Tel. Serv. Co.; Kohus v. Mariol; Lexmark Int'l, Inc. v. Static Control Components, Inc.; R.C. Olmstead, Inc. v. CU Interface, LLC; "Substantial similarity" analysis; Alexander v. CareSource; "Forfeiture" of the plaintiff's challenge to the res judicata determination; United States v. Olano; Single Copy Distribution System (SCDS)

Court: U.S. Court of Appeals Sixth Circuit

Case Name: Automated Solutions Corp. v. Paragon Data Sys., Inc.

e-Journal Number: 57456

Judge(s): Cleland, Cole, and Sutton

 

The plaintiff (ASC) was properly denied sanctions on its claim that the defendant (Paragon) "spoliated evidence" in this copyright dispute by not preserving computer hard drives, back-up tapes, and a server. Paragon was entitled to summary judgment on ASC's claim for copyright infringement because ASC failed to identify the protectable elements of its SCDS software. ASC offered no evidence that Paragon's software program, DRACI, was created by using the now-dead hard drives or the discarded server that was used to work on SCDS. The issue was not whether Paragon was negligent by failing to preserve the items but whether the items were "relevant" such that a reasonable trier of fact could find that they would support ASC's claim. The court concluded that the "district court did not clearly err in determining that a reasonable trier of fact could not find" that the missing hard drive and server would support ASC's claims. It also did not abuse its discretion in concluding that the back-up tapes were not subject to Paragon's duty to preserve evidence. The court found "ample support for the district court's determination that Paragon was at most negligent." The district court's decision to deny ASC's request for an in camera review and to strike the two e-mail exhibits from the record was reasonable because ASC did not establish that the crime-fraud exception to attorney-client privilege applied. Further, Paragon was entitled to summary judgment on all of ASC's claims. Its copyright-infringement claim failed because it did not establish a "substantial similarity between the protectable elements of the SCDS and DRACI." Review of the "record demonstrates that Paragon's motion for summary judgment put ASC on notice that its ability to satisfy the substantial similarity test was at issue, and its arguments to the contrary are without merit." Moreover, ASC failed to "show which portions of the SCDS were original, and therefore subject to copyright," a necessary element for applying the substantial similarity analysis. ASC's expert's testimony was insufficient because he did not explain the "how" and "why," and instead focused on his legal conclusion. Summary judgment in favor of Paragon based on ASC's inability to identify the protectable elements of the SCDS made the "adverse inference instruction" irrelevant. ASC forfeited the opportunity to challenge the district court's dismissal of its additional claims based on res judicata, because it inadequately briefed the issue. Affirmed.

 

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