Central Point Software, Inc. v. Global Software & Accessories, Inc.

880 F. Supp. 957, 1995 U.S. Dist. LEXIS 5451, 1995 WL 140154
CourtDistrict Court, E.D. New York
DecidedApril 21, 1995
DocketCV 93-2367
StatusPublished
Cited by4 cases

This text of 880 F. Supp. 957 (Central Point Software, Inc. v. Global Software & Accessories, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Point Software, Inc. v. Global Software & Accessories, Inc., 880 F. Supp. 957, 1995 U.S. Dist. LEXIS 5451, 1995 WL 140154 (E.D.N.Y. 1995).

Opinion

FINDINGS OF FACT AND CONCLUSIONS OF LAW

WEXLER, District Judge.

Plaintiffs Central Point Software, Inc., Computer Associates International, Inc., Da-tastorm Technologies, Inc., Quarterdeck Office Systems, Inc., Software Publishing Corporation, Symantec Corporation, Wordstar International, Inc., and Executive Systems, Inc. d/b/a XTree Company (collectively, “plaintiffs”), computer software manufacturers and members of the Software Publishers Association (“SPA”), bring this action against defendant Global Software & Accessories, Inc. (“Global”) alleging copyright infringement for violations of the Computer Software Rental Amendments Act of 1990 (the “Rental Amendment”), P.L. 101-650, which amended section 109 of the Copyright Act, 17 U.S.C. § 109. Plaintiffs seek injunctive relief and statutory damages. By order dated August 3, 1994, this Court denied plaintiffs’ motion for a preliminary injunction and directed an immediate trial. See Central Point Software, Inc. v. Global Software & Accessories, Inc., 859 F.Supp. 640 (E.D.N.Y.1994). The action was tried without a jury on September 7 and 8, 1994. The following constitutes this Court’s findings of fact and conclusions of law.

FINDINGS OF FACT

Plaintiffs are in the business of developing and marketing computer programs recorded on the medium of magnetic disks, commonly referred to as “computer software,” for use on microcomputers of the type commonly referred to as “personal computers” or “PCs.” Plaintiffs are the owners of copyrights in numerous computer software programs.

Global has been engaged in the business of, inter alia, renting computer software since 1988. Global operates three stores, each of which is located in New York. Global opened the last of the three stores in July 1993.

Plaintiffs claim that Global infringed their copyrights in various computer software programs-by renting copies of those programs in violation of the Rental Amendment. The Rental Amendment, which became law on December 1,1990, prohibits the unauthorized rental of computer software. The Rental Amendment provides in relevant part:

[Ujnless authorized by the ... owner of copyright in a computer program (including any tape, disk or other medium embodying such program),.... [no] person in possession of a particular copy of a computer program (including any tape, disk or other medium embodying such program), may, for the purposes of direct or indirect *960 commercial advantage, dispose of, or authorize the disposal of, the possession of that ... computer program (including any tape, disk or other medium embodying such program), by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending.

17 U.S.C. § 109(b)(1)(A). 1 As for violation of the rental prohibition, the Rental Amendment provides:

Any person who distributes ... a copy of a computer program (including any tape, disk or other medium embodying such program) in violation of paragraph (1) is an infringer of copyright under section 501 of this title and is subject to the remedies set forth in sections 502, 503, 504, 505, and 509.

Id. § 109(b)(4). The Rental Amendment, however, does not prohibit the rental of a particular copy of computer software acquired before December 1,1990; it prohibits rental of particular copies acquired on or after December 1, 1990. In this respect, the Rental Amendment provides that it

shall not affect the right of a person in possession of a particular copy of a computer program, who acquired such copy before the date of the enactment of this Act [ie., December 1, 1990], to dispose of the possession of that copy on or after such date of enactment in any manner permitted by section 109 of title 17, United States Code, as in effect on the day before such enactment.

Id. § 109 foll.; Pub.L. 101-650, § 804(b).

Global’s owner and president, William Morales (“Morales”), actively opposed the Rental Amendment. Indeed, Morales trav-elled to Washington, D.C. to lobby against the amendment and solicited the support of his computer software rental customers, 75% of whom signed a petition opposing the amendment.

On and after December 1, 1990, Global continued to rent copies of computer software that it had acquired before December 1, 1990, as permitted under the Rental Amendment. Accordingly, any such transactions are not at issue in this case. At issue is plaintiffs’ claim that Global has rented, and continues to rent, copies of plaintiffs’ copyrighted computer software that Global acquired on or after December 1, 1990 — software the Rental Amendment prohibits Global from renting — mostly through a scheme Global devised shortly after the amendment went into effect.

Global’s copies of computer software programs acquired before December 1,1990 became obsolete as the manufacturers of those programs released “upgrades,” ie., later versions, of those programs, requiring Global to devise marketing methods to maintain its rental business. One method was to rent copies of software programs it acquired on or after December 1, 1990 that were upgrades of programs it had acquired before December 1, 1990. Morales admitted that Global did this with the following software programs: Harvard Graphics, pcAnywhere, Pro-Comm Plus, QEMM and Q & A. To justify renting these upgrades, Global relies on a pamphlet published by the SPA, entitled “Is It Okay to Copy My Colleague’s Software” (the “SPA Pamphlet”). Morales claims Global received the SPA Pamphlet in or about August 1991, annexed to a letter, dated August 2, 1991, from the SPA to Global (the “SPA Letter”). The SPA Letter, however, references a different SPA pamphlet, one entitled “Software Use and the Law.” That pamphlet was not introduced as evidence, and plaintiffs do not dispute that Global received the SPA Pamphlet instead. The SPA Pamphlet is in question-and-answer (ie., “Q & A”) format. Morales claims that he interpreted the following Q & A in the pamphlet as permitting the rental of upgrades:

Q What happens when I receive an upgrade? Can I give my old version to someone else to use?
A The answer to this question is generally “no.” Upgrading your software doesn’t give you the right to sell or give away the earlier version. The upgrade is an improvement to the original software and not a new copy. The earlier version and the upgrade should be treat *961 ed as elements of the same copy of software.

Morales admits, however, that neither the SPA Letter nor the SPA Pamphlet deals with the rental of computer software or the Rental Amendment. Rather, both deal with duplication of software. 2

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880 F. Supp. 957, 1995 U.S. Dist. LEXIS 5451, 1995 WL 140154, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-point-software-inc-v-global-software-accessories-inc-nyed-1995.