In Quantum Sys. v. Sprint Nextel, 2009 WL 1931196 (4th Cir. July 7, 2009), the panel unpublished that they had followed the 9th Circuit’s MAI Sys. v. Peak ruling, which deems loading software into RAM the making a “copy,” which is “sufficiently fixed for purposes of copyright infringement.” Sprint had licensed Quantum software for “several hundred Sprint computers,” but then terminated the licenses. Thereafter, and still later after a settlement, Quantum had evidence that the software continued being loaded into RAM on less than nine Sprint computers, “when the computers were turned on or rebooted.” When this occurred, Quantum received “autoreporting” message, but the unlicensed software was not actually being used, rather the “software automatically loaded” and was not accessed.
Quantum called non-removal and each autoloading of the software an infringement of its copyright, to which Sprint rejoined that removal of the programs was not a requirement of the parties’ written agreements. Why not? Quantum also got past the defense, crafted from 4th Circuit precedent, that copyright infringement requires “volitional” conduct, viz., HAL 3000 can make you to an auto-infringer. One other practice pointer was the possible waiver of the attorney-client privilege due to in-house counsel’s affidavit in opposition to Quantum’s summary judgment motion. Two problems with that: potential waiver, and the magistrate allowed in-house counsel to be deposed “on a very limited basis.” Neither one is automatically fun.
Rather than enjoin those eight autoloading computers from doing their autoloads, the court adjudged Sprint liable for the $8,700 license fee, times eight. Of course, what with all these ads about ED, no not that, Electronic Discovery, there was sure to be a claim for attorneys fees larger than the damages awarded. Indeed, on top of the $69K in damages, the district court awarded $400K in fees and costs. The panel was “constrained to vacate” that $400K award because the reasons for it were not articulated. Noted too was the disparity between the fees/costs and the amount awarded as damages, and that the $69K in damages was “far less” than the $1M “originally sought.” Sorry Dave, I’m afraid I can’t do that.