Copyright Litigator
2010-11-17 02:37:41 UTC
Plaintiffs have two main software products: their Windows RPC and
their Java RPC. At trial, Plaintiffs obtained a verdict that Mr.
Witte's employer, Chordiant Software, Inc., copied and distributed
both of those products without a license to do so. Prior to that, Mr.
Witte had obtained summary judgment that he was not vicariously liable
for that infringement. The following facts are necessary to understand
why granting Mr. Witte's motion for prevailing-party attorneys' fees
would be contrary to the purposes of the statute upon which it is
grounded -- 17 USC § 505.
In February 2004, Chordiant contacted Plaintiffs, represented it had a
license for Plaintiffs' Windows product, and sought technical help
with that product. Chordiant asserted its license covered 1000
runtimes. Plaintiffs gave the technical help, then asked how many of
the asserted 1000 runtimes had been used. Chordiant said "70." [Trial
Exhibit 1090].
On April 13, 2007, Chordiant again contacted Plaintiffs, again a
license for Plaintiffs' Windows product, and again sought technical
help. [Trial Exhibit 1162].
Plaintiffs gave the technical help, then, due to the passage of time,
again asked how many
copies Chordiant had used. [Trial Exhibit 1169]. This time Chordiant
referred the matter to
its in-house counsel, Mr. Witte. id., page 4.
Unbeknownst to Plaintiffs at that time, Chordiant did not have the
license it
claimed to have, and had licensed an unlimited number of runtimes for
Plaintiffs' Windows
product to each of hundreds of Chordiant's customers. Also unbeknownst
to Plaintiffs,
Chordiant was also copying and distributing unlimited runtimes for
Plaintiffs' Java product
to hundred of customers.
Mr. Witte's response to Plaintiff's request for the numbers of copies
made
was as follows:
1.
During the first week of September 2007, Mr. Witte had a
Chordiant employee send emails to 541 of Chordiant's approximately 400
licensees,2 asking each of them the following question: "In order to
continue providing you with the best possible support for you and your
Chordiant Marketing Director product, I am writing to you to request
information on how many CMD users you have at your site." [Trial
Exhibit 1544]. He didn't ask for the total copies they had made, only
how many users they currently had -- a lower number in most cases.3
The question was also phrased so that customers with more than one
site would only report the number of users at the site at which the
recipient of the inquiry worked. Accordingly, he knew or should have
known his inquiry was formulated to arrive at a lower than accurate
number of total runtimes used by that date.
2.
On September 17, 2007 Mr. Witte told Plaintiffs he was still
collecting information on the number of Windows copies actually made
by its customers pursuant to the unlimited licenses Chordiant gave
them. Mr. Witte did not reveal that Chordiant had only sent inquiries
to 54 of its hundreds of licensees. [Trial Exhibit 1164]. Mr. Witte
did not reveal that Chordiant was also copying the Java product, for
which it had no license. Mr. Witte did not reveal that
1 cf Daily Transcript 751:17 with Trial Exhibit 1544. 2 At trial,
Chordiant claimed it "only" had 202 licensees [Trial Exhibit 414], but
Plaintiffs'evidence showed 400 [Trial Exhibit 1942].3 e.g. Fairmont
Hotels responded that it had three current users [Trial Exhibit 1544
at 51 ("Three of us using Chordiant today")] but at trial testified
that it had made at least 10 copies. Trial Transcript at 851:23-852:6.
Chordiant had granted its customers unlimited licenses to use both the
Plaintiffs' Windows product and Plaintiffs' Java product.
1.
On September 27, 2007, the last of Chordiant's 54 customers who
Mr. Witte had asked to report current users had responded to him,
completing his inadequate inquiry regarding the extent of Chordiant's
copying, but he did not report that to Plaintiffs.
2.
On October 1, 2007, Chordiant's President and CEO ordered that
Plaintiffs' software be removed from the infringing product. [Trial
Transcript at 822:23-824:19].
3.
On October 4, 2007, Mr. Witte stalled Plaintiffs by falsely
telling them his inquiry was still in progress [Trial Exhibit 1169, at
1].
4.
From October through November 2007, Chordiant worked on a
"patch" to the infringing product that would enable it to falsely
claim it had replaced Plaintiffs' infringed products from the
infringing product in its upcoming release of version 6.2.0.3 of the
infringing product. [Trial Exhibit 1700].
5.
On December 11, 2007, Chordiant first released the "patched"
version of the infringing product. [Trial Exhibit 1763, at 6]
6.
On December 21, 2007, Chordiant closed what was by far the
largest sale of the infringing product it had ever or has since made
-- a $26.1 million sale to Vodafone. 4
7.
That same day, Mr. Witte finally reported the results of his
long-completed inquiry by falsely representing to Dr. Yue that only
953 copies of Plaintiffs' Windows product had been made under the
license Chordiant claimed, just 47 less than allowed under that
purported license, and that it had decided to replace Netbula's code
so that Chordiant would not make any more copies. [Trial Exhibit 1170]
Mr. Witte did not reveal that the 953 number was based on an inquiry
directed to only 54 of the hundreds of licensees of the infringing
product. Mr. Witte did not reveal that Chordiant was also copying the
Java product, for which it could claim no license. Mr. Witte did not
reveal that Chordiant had granted its customers unlimited licenses to
use both Plaintiffs' Windows product and Plaintiffs' Java product. Mr.
Witte did not reveal that the copies of the infringing product it
would continue shipping, including those to Vodafone, still included
the infringed software.5
4 Declaration of Dongxiao Yue filed herewith ("Yue Declaration"), at
¶¶ 4 & 5, andExhibits 2 & 3 thereto. 5 Trial Transcript, at 602:2-8.
On January 2, 2008, finally realizing that Chordiant had no license
for the Windows product despite the contrary representations of Mr.
Witte, Plaintiffs commenced this action with the pro se filing of a
complaint alleging copyright infringement against Chordiant, and
vicarious and contributory infringement against both its CEO, Mr.
Springfield, and Mr. Witte. [Complaint, Docket 1]
For five more months, until May 2008, Chordiant continued copying and
shipping a version of the infringing product containing Plaintiffs'
infringed products, though claiming it had removed them. [cf Daily
Transcript, at 602:2-12 with Trial Exhibit 1763, at 8].
In September 2008, Plaintiffs retained counsel to represent them.
Shortly thereafter, Mr. Witte's counsel informed Plaintiffs' counsel
that Dr. Yue had been provided with a draft Rule 11 sanctions motion
with respect to the vicarious and contributory infringement claims.6
Because Mr. Witte was continuing to conceal the fact that his
communications with Dr. Yue between September 27, 2007 and December
21, 2007 delayed this action, extending the period of infringement,
Plaintiffs did not have "evidentiary support"7 for the factual
contentions needed to withstand a Rule 11 motion with respect to a
contributory infringement claim against Mr. Witte, and therefore
dropped it from the First Amended Complaint, filed September 9, 2008.
[Docket 84] Plaintiffs did, however, have evidentiary support for the
factual contentions required for a vicarious infringement claim
against Mr. Witte. [see Part B.1, below]. For that reason, Plaintiffs
retained that claim in the First Amended Complaint, but,
unfortunately, not the original claim for contributory infringement.
On October 23, 2008, in response to concerns raised by Defendants,
Plaintiffs filed a Second Amended Complaint. [Docket 91] Because
Defendants continued to conceal Mr. Witte's role in delaying this
action until Chordiant could make the sale to Vodafone and claim it
had removed Plaintiff's software from the infringing product,
Plaintiffs still lacked evidentiary support for the factual
contentions required to state that claim.
On November 20, 2008, prior to the commencement of discovery,
Chordiant, maintaining its false claim to have a license for
Plaintiffs' Windows product, and concealing its use of the unlicensed
Java product, persuaded the Court to limit discovery to whether
Chordiant had a license and whether exceeded the terms of that
license. [Docket 97]
On December 28, 2008, Plaintiffs served Chordiant an Interrogatory No.
10 asking "How many copies of [Plaintiffs' Windows product] have you
ever used or possessed?" and a Document Request No. 7 asking for
"Documents sufficient to show the number of copies of Chordiant
Marketing Director software containing [Plaintiffs' Windows product]
that you have sold, licensed, or otherwise conveyed."
On January 30, 2009, Chordiant refused to answer Interrogatory 10 on
the ground that it is "not relevant to the Initial Phase to the extent
that it seeks information that does not pertain to Defendants' having
exceeded the scope of any provable license terms," objected to
Document Request No. 7 as "exceed[ing] the scope of the Initial Phase"
of discovery, and proceeded to withhold production of almost all
documentation of the number of copies licensed, including the
September 2007 emails requesting current usage which became Trial
Exhibit 1544.
On April 6, 2009, Plaintiffs filed a Third Amended Complaint. [Docket
130]. Because Defendants continued to withhold the September 2007
emails8 showing that Mr. Witte then already had the factual basis for
his December 21, 2007 false assertion that Chordiant had only made 953
copies, and the October, November, and December 2007 emails
documenting Chordiant's efforts to make a patch it could falsely claim
constituted "removal" of Plaintiffs' software from the infringing
products during that time,9 Plaintiffs still lacked an "evidentiary
basis" to withstand the Rule 11 motion Defendants threatened to bring
if Plaintiffs pled Contributory infringement against Mr. Witte, so
Plaintiffs still could not plead that cause of action in the Third
Amended Complaint.
On May 3, 2009, Plaintiffs asked the Court to allows discovery on
issues other than Chordiant's licensed-based defense. [Docket 132]
Immediately thereafter, on May 6, 2009, Chordiant and Mr. Witte
finally disclosed that Chordiant had, since 2001, been copying and
distributing Plaintiffs' unlicensed Java product, as well as their
Windows product. Exhibit 11 to Cortés Declaration. On May 29, 2009,
the Court issued an Order that lifted the restrictions Defendants used
to justify withholding the requested "Documents sufficient to show the
number of copies of Chordiant Marketing Director software containing
[Plaintiffs' Windows product] that you have sold, licensed, or
otherwise conveyed," which included the emails that showed that Mr.
Witte had, in September 2007, the documentary basis for his December
21, 2007 claim that only 953 copies of Plaintiffs' Windows product had
been made -- a false claim he persisted with through the close of
discovery.10
8 Eventually to become Trial Exhibit 1544. 9 Trial Exhibit 1700. 10
See Mr. Witte's Supplemental Response to Plaintiffs Interrogatory No.
6, verified October 12, 2009, Exhibit 13 to Cortés Declaration. Mr.
Witte did not thereafter amend that response. Cortés Declaration ¶ 14.
On May 29, 2009, Plaintiffs filed a Fourth Amended Complaint, adding a
claim for infringement of their Java product. Because Defendants
continued to withhold the documentary evidence of Mr. Witte's
contributory infringement, Plaintiffs remained prevented from making
that claim by Rule 11.
On August 7, 2009, Chordiant served an amended response to
Interrogatory No. 10 that persisted in refusing to tell Plaintiffs how
many copies of Netbula's Windows product it had ever used or
possessed.
In October 2009, the last month of discovery, buried among far more
than 10,975 pages of documents in a distinctly non-obvious location,11
Chordiant finally produced the email messages requested the previous
year, showing the basis of Mr. Witte's 953-copy representation,
showing that he completed that count on September 27, 2007, and
showing the Mr. Witte had stalled Plaintiffs so that Chordiant could
continue its infringement until it had completed the sale to Vodafone
and the patch it could claim stopped the infringement. Then, with an
alacrity notably absent in providing that evidence, Mr. Witte quickly
moved for summary judgment, severely limiting Plaintiffs' ability to
move to amend the complaint to add the claim for contributory
infringement those documents so amply warrant. See, e.g., Nguyen v. v.
United States, 792 F. 2d 1500, 1503 (9th Cir 1986) ("'Much of the
value of summary judgment . . . would be dissipated if a party were
free to rely on one theory in an attempt to defeat a motion for
summary judgment and then, should that theory prove unsound, come back
long thereafter and fight on the basis of some other theory.'") In
addition, at the same time Witte moved for summary judgment,
11
the time for dispositive motions expired, making a motion to amend
similarly unattractive to the Court's interest in moving its cases
toward resolution.
Had Defendants not improperly withheld the evidence of Mr. Witte's
contributory infringement, Plaintiffs could have timely re-instituted
their original claim for contributory infringement against Mr. Witte
in the Fourth Amended Complaint despite his threat of Rule 11
sanctions. Due to the strength of the withheld documentary evidence of
Mr. Witte's fraudulent concealment of Chordiant's infringement between
September and December 2007, Plaintiffs would most likely have
obtained a verdict of contributory infringement against him.
their Java RPC. At trial, Plaintiffs obtained a verdict that Mr.
Witte's employer, Chordiant Software, Inc., copied and distributed
both of those products without a license to do so. Prior to that, Mr.
Witte had obtained summary judgment that he was not vicariously liable
for that infringement. The following facts are necessary to understand
why granting Mr. Witte's motion for prevailing-party attorneys' fees
would be contrary to the purposes of the statute upon which it is
grounded -- 17 USC § 505.
In February 2004, Chordiant contacted Plaintiffs, represented it had a
license for Plaintiffs' Windows product, and sought technical help
with that product. Chordiant asserted its license covered 1000
runtimes. Plaintiffs gave the technical help, then asked how many of
the asserted 1000 runtimes had been used. Chordiant said "70." [Trial
Exhibit 1090].
On April 13, 2007, Chordiant again contacted Plaintiffs, again a
license for Plaintiffs' Windows product, and again sought technical
help. [Trial Exhibit 1162].
Plaintiffs gave the technical help, then, due to the passage of time,
again asked how many
copies Chordiant had used. [Trial Exhibit 1169]. This time Chordiant
referred the matter to
its in-house counsel, Mr. Witte. id., page 4.
Unbeknownst to Plaintiffs at that time, Chordiant did not have the
license it
claimed to have, and had licensed an unlimited number of runtimes for
Plaintiffs' Windows
product to each of hundreds of Chordiant's customers. Also unbeknownst
to Plaintiffs,
Chordiant was also copying and distributing unlimited runtimes for
Plaintiffs' Java product
to hundred of customers.
Mr. Witte's response to Plaintiff's request for the numbers of copies
made
was as follows:
1.
During the first week of September 2007, Mr. Witte had a
Chordiant employee send emails to 541 of Chordiant's approximately 400
licensees,2 asking each of them the following question: "In order to
continue providing you with the best possible support for you and your
Chordiant Marketing Director product, I am writing to you to request
information on how many CMD users you have at your site." [Trial
Exhibit 1544]. He didn't ask for the total copies they had made, only
how many users they currently had -- a lower number in most cases.3
The question was also phrased so that customers with more than one
site would only report the number of users at the site at which the
recipient of the inquiry worked. Accordingly, he knew or should have
known his inquiry was formulated to arrive at a lower than accurate
number of total runtimes used by that date.
2.
On September 17, 2007 Mr. Witte told Plaintiffs he was still
collecting information on the number of Windows copies actually made
by its customers pursuant to the unlimited licenses Chordiant gave
them. Mr. Witte did not reveal that Chordiant had only sent inquiries
to 54 of its hundreds of licensees. [Trial Exhibit 1164]. Mr. Witte
did not reveal that Chordiant was also copying the Java product, for
which it had no license. Mr. Witte did not reveal that
1 cf Daily Transcript 751:17 with Trial Exhibit 1544. 2 At trial,
Chordiant claimed it "only" had 202 licensees [Trial Exhibit 414], but
Plaintiffs'evidence showed 400 [Trial Exhibit 1942].3 e.g. Fairmont
Hotels responded that it had three current users [Trial Exhibit 1544
at 51 ("Three of us using Chordiant today")] but at trial testified
that it had made at least 10 copies. Trial Transcript at 851:23-852:6.
Chordiant had granted its customers unlimited licenses to use both the
Plaintiffs' Windows product and Plaintiffs' Java product.
1.
On September 27, 2007, the last of Chordiant's 54 customers who
Mr. Witte had asked to report current users had responded to him,
completing his inadequate inquiry regarding the extent of Chordiant's
copying, but he did not report that to Plaintiffs.
2.
On October 1, 2007, Chordiant's President and CEO ordered that
Plaintiffs' software be removed from the infringing product. [Trial
Transcript at 822:23-824:19].
3.
On October 4, 2007, Mr. Witte stalled Plaintiffs by falsely
telling them his inquiry was still in progress [Trial Exhibit 1169, at
1].
4.
From October through November 2007, Chordiant worked on a
"patch" to the infringing product that would enable it to falsely
claim it had replaced Plaintiffs' infringed products from the
infringing product in its upcoming release of version 6.2.0.3 of the
infringing product. [Trial Exhibit 1700].
5.
On December 11, 2007, Chordiant first released the "patched"
version of the infringing product. [Trial Exhibit 1763, at 6]
6.
On December 21, 2007, Chordiant closed what was by far the
largest sale of the infringing product it had ever or has since made
-- a $26.1 million sale to Vodafone. 4
7.
That same day, Mr. Witte finally reported the results of his
long-completed inquiry by falsely representing to Dr. Yue that only
953 copies of Plaintiffs' Windows product had been made under the
license Chordiant claimed, just 47 less than allowed under that
purported license, and that it had decided to replace Netbula's code
so that Chordiant would not make any more copies. [Trial Exhibit 1170]
Mr. Witte did not reveal that the 953 number was based on an inquiry
directed to only 54 of the hundreds of licensees of the infringing
product. Mr. Witte did not reveal that Chordiant was also copying the
Java product, for which it could claim no license. Mr. Witte did not
reveal that Chordiant had granted its customers unlimited licenses to
use both Plaintiffs' Windows product and Plaintiffs' Java product. Mr.
Witte did not reveal that the copies of the infringing product it
would continue shipping, including those to Vodafone, still included
the infringed software.5
4 Declaration of Dongxiao Yue filed herewith ("Yue Declaration"), at
¶¶ 4 & 5, andExhibits 2 & 3 thereto. 5 Trial Transcript, at 602:2-8.
On January 2, 2008, finally realizing that Chordiant had no license
for the Windows product despite the contrary representations of Mr.
Witte, Plaintiffs commenced this action with the pro se filing of a
complaint alleging copyright infringement against Chordiant, and
vicarious and contributory infringement against both its CEO, Mr.
Springfield, and Mr. Witte. [Complaint, Docket 1]
For five more months, until May 2008, Chordiant continued copying and
shipping a version of the infringing product containing Plaintiffs'
infringed products, though claiming it had removed them. [cf Daily
Transcript, at 602:2-12 with Trial Exhibit 1763, at 8].
In September 2008, Plaintiffs retained counsel to represent them.
Shortly thereafter, Mr. Witte's counsel informed Plaintiffs' counsel
that Dr. Yue had been provided with a draft Rule 11 sanctions motion
with respect to the vicarious and contributory infringement claims.6
Because Mr. Witte was continuing to conceal the fact that his
communications with Dr. Yue between September 27, 2007 and December
21, 2007 delayed this action, extending the period of infringement,
Plaintiffs did not have "evidentiary support"7 for the factual
contentions needed to withstand a Rule 11 motion with respect to a
contributory infringement claim against Mr. Witte, and therefore
dropped it from the First Amended Complaint, filed September 9, 2008.
[Docket 84] Plaintiffs did, however, have evidentiary support for the
factual contentions required for a vicarious infringement claim
against Mr. Witte. [see Part B.1, below]. For that reason, Plaintiffs
retained that claim in the First Amended Complaint, but,
unfortunately, not the original claim for contributory infringement.
On October 23, 2008, in response to concerns raised by Defendants,
Plaintiffs filed a Second Amended Complaint. [Docket 91] Because
Defendants continued to conceal Mr. Witte's role in delaying this
action until Chordiant could make the sale to Vodafone and claim it
had removed Plaintiff's software from the infringing product,
Plaintiffs still lacked evidentiary support for the factual
contentions required to state that claim.
On November 20, 2008, prior to the commencement of discovery,
Chordiant, maintaining its false claim to have a license for
Plaintiffs' Windows product, and concealing its use of the unlicensed
Java product, persuaded the Court to limit discovery to whether
Chordiant had a license and whether exceeded the terms of that
license. [Docket 97]
On December 28, 2008, Plaintiffs served Chordiant an Interrogatory No.
10 asking "How many copies of [Plaintiffs' Windows product] have you
ever used or possessed?" and a Document Request No. 7 asking for
"Documents sufficient to show the number of copies of Chordiant
Marketing Director software containing [Plaintiffs' Windows product]
that you have sold, licensed, or otherwise conveyed."
On January 30, 2009, Chordiant refused to answer Interrogatory 10 on
the ground that it is "not relevant to the Initial Phase to the extent
that it seeks information that does not pertain to Defendants' having
exceeded the scope of any provable license terms," objected to
Document Request No. 7 as "exceed[ing] the scope of the Initial Phase"
of discovery, and proceeded to withhold production of almost all
documentation of the number of copies licensed, including the
September 2007 emails requesting current usage which became Trial
Exhibit 1544.
On April 6, 2009, Plaintiffs filed a Third Amended Complaint. [Docket
130]. Because Defendants continued to withhold the September 2007
emails8 showing that Mr. Witte then already had the factual basis for
his December 21, 2007 false assertion that Chordiant had only made 953
copies, and the October, November, and December 2007 emails
documenting Chordiant's efforts to make a patch it could falsely claim
constituted "removal" of Plaintiffs' software from the infringing
products during that time,9 Plaintiffs still lacked an "evidentiary
basis" to withstand the Rule 11 motion Defendants threatened to bring
if Plaintiffs pled Contributory infringement against Mr. Witte, so
Plaintiffs still could not plead that cause of action in the Third
Amended Complaint.
On May 3, 2009, Plaintiffs asked the Court to allows discovery on
issues other than Chordiant's licensed-based defense. [Docket 132]
Immediately thereafter, on May 6, 2009, Chordiant and Mr. Witte
finally disclosed that Chordiant had, since 2001, been copying and
distributing Plaintiffs' unlicensed Java product, as well as their
Windows product. Exhibit 11 to Cortés Declaration. On May 29, 2009,
the Court issued an Order that lifted the restrictions Defendants used
to justify withholding the requested "Documents sufficient to show the
number of copies of Chordiant Marketing Director software containing
[Plaintiffs' Windows product] that you have sold, licensed, or
otherwise conveyed," which included the emails that showed that Mr.
Witte had, in September 2007, the documentary basis for his December
21, 2007 claim that only 953 copies of Plaintiffs' Windows product had
been made -- a false claim he persisted with through the close of
discovery.10
8 Eventually to become Trial Exhibit 1544. 9 Trial Exhibit 1700. 10
See Mr. Witte's Supplemental Response to Plaintiffs Interrogatory No.
6, verified October 12, 2009, Exhibit 13 to Cortés Declaration. Mr.
Witte did not thereafter amend that response. Cortés Declaration ¶ 14.
On May 29, 2009, Plaintiffs filed a Fourth Amended Complaint, adding a
claim for infringement of their Java product. Because Defendants
continued to withhold the documentary evidence of Mr. Witte's
contributory infringement, Plaintiffs remained prevented from making
that claim by Rule 11.
On August 7, 2009, Chordiant served an amended response to
Interrogatory No. 10 that persisted in refusing to tell Plaintiffs how
many copies of Netbula's Windows product it had ever used or
possessed.
In October 2009, the last month of discovery, buried among far more
than 10,975 pages of documents in a distinctly non-obvious location,11
Chordiant finally produced the email messages requested the previous
year, showing the basis of Mr. Witte's 953-copy representation,
showing that he completed that count on September 27, 2007, and
showing the Mr. Witte had stalled Plaintiffs so that Chordiant could
continue its infringement until it had completed the sale to Vodafone
and the patch it could claim stopped the infringement. Then, with an
alacrity notably absent in providing that evidence, Mr. Witte quickly
moved for summary judgment, severely limiting Plaintiffs' ability to
move to amend the complaint to add the claim for contributory
infringement those documents so amply warrant. See, e.g., Nguyen v. v.
United States, 792 F. 2d 1500, 1503 (9th Cir 1986) ("'Much of the
value of summary judgment . . . would be dissipated if a party were
free to rely on one theory in an attempt to defeat a motion for
summary judgment and then, should that theory prove unsound, come back
long thereafter and fight on the basis of some other theory.'") In
addition, at the same time Witte moved for summary judgment,
11
the time for dispositive motions expired, making a motion to amend
similarly unattractive to the Court's interest in moving its cases
toward resolution.
Had Defendants not improperly withheld the evidence of Mr. Witte's
contributory infringement, Plaintiffs could have timely re-instituted
their original claim for contributory infringement against Mr. Witte
in the Fourth Amended Complaint despite his threat of Rule 11
sanctions. Due to the strength of the withheld documentary evidence of
Mr. Witte's fraudulent concealment of Chordiant's infringement between
September and December 2007, Plaintiffs would most likely have
obtained a verdict of contributory infringement against him.