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The “De Minimis” Copyright Exception for Northern California Software Companies

Northern California businesses rely on intellectual property protection for numerous business assets, particularly software. Copyright often offers the best protection for the various types of code that comprise software. Unauthorized use of copyrighted software may lead to liability for infringement under federal law. In order for unauthorized use of software to be actionable as infringement, however, the Ninth Circuit Court of Appeals has held that it must be “significant.” Newton v. Diamond, 388 F. 3d 1189, 1192-93 (9th Cir. 2004). The “de minimis” exception holds that, if the unauthorized use is not “significant,” there is no liability for infringement. The Newton decision specifically involved a sound recording, so it is worth looking at a more recent decision applying the de minimis exception to software, Design Data Corp. v. Unigate Enterprise, Inc., 63 F.Supp.3d 1062 (N.D. Cal. 2014).

Copyright protection is available under federal law for “original works of authorship fixed in any tangible medium of expression” that can be communicated to others. 17 U.S.C. § 102. The exclusive rights protected by copyright law include reproduction of the copyrighted work. Id. at § 106(1). In the case of software, this can mean making copies for sale to consumers or customers subject to a license agreement. In 1976, Congress revised the copyright law and added provisions specifically relating to software. See id. at § 117.

The de minimis exception takes its name from an old legal maxim, “the law does not concern itself with trifles” or “de minimis non curat lex.” Newton, 388 F.3d at 1193. The Ninth Circuit’s decision in Newton focused on the extent to which “the average audience would not recognize the appropriation.” Id. In that case, the defendant admitted to copying an audio clip that was three notes in length to use in a track by the hip hop group the Beastie Boys. The plaintiff also conceded that the original recording and the Beastie Boys track were “substantially dissimilar in concept and feel.” Id. at 1196. The court ruled that the de minimis exception applied, noting that “an average audience would not discern [the plaintiff’s] hand as a composer.” Id. See also VMG Salsoul, LLC v. Ciccone, 824 F. 3d 871, 874 (9th Cir. 2016) (copying “a 0.23-second segment of horns from an earlier song” was de minimis).

The district court had to adapt the analysis used by the Ninth Circuit in Newton in its ruling in Design Data, since audiences do not perceive computer code the way they do recorded music. The plaintiff owned a copyright for “structural steel detailing software.” Design Data, 63 F.Supp.3d at 1063. The defendants operated a business “providing steel detailing CAD files to customers.” Id. at 1064. They admitted to downloading an unauthorized copy of the software to an external hard drive, but denied that they ever installed the software or used it in their business.

The plaintiff argued that the mere act of downloading a copy constituted infringement, and that the fact that the “defendants copied the entire software code” meant that the de minimis exception did not apply. Id. at 1069. The court disagreed, holding that the defendants’ actions were de minimis “without any evidence that the copy was installed or used.” Id. at 1070.

James G. Schwartz, a Bay Area intellectual property attorney, advocates for their rights and interests of businesses and business owners in a range of litigation and transactional matters. Please contact us online or at (925) 463-1073 today to schedule a free and confidential consultation with a member of our knowledgeable and experienced team.

More Blog Posts:

Court Rules on the “De Minimis” Exception to Copyright Infringement, Pleasanton Business & Commerce Law Blog, August 8, 2018

Copyright Claim Dismissed by Ninth Circuit for Lack of “Substantial Similarity” Between Works, Pleasanton Business & Commerce Law Blog, June 14, 2018

U.S. Copyright Office Issues New Regulations Regarding “Safe Harbor” Protections for Websites Under the DMCA, Pleasanton Business & Commerce Law Blog, April 27, 2017