South-Western Legal Studies in Business

Consultants to Software Users May Not Copy and Resell Software
Description Appeals court held that the owner of a proprietary software program had a cause of action for copyright violation and trade secret misappropriation against a consultant who copied the program and incorporated it into its own proprietary program that it sold.
Topic Intellectual Property
Key Words Copyright; Trade Secret; Infringement
C A S E   S U M M A R Y
Facts Geac owns proprietary, copyrighted software called Millennium that was developed at great expense and contains trade secrets. Geac sued Grace and others for infringing on its property while in the course of providing consulting and maintenance services to companies licensed by Geac to use its software. The defendants contended that the alleged infringement was de minimis and the trial court dismissed the suit. Geac appealed.
Decision

Reversed. Defendant's copying of the software, which it incorporated into its own programs and sold to customers, was not de minimis. That software would not work without the Geac software in it. Further, the claim that the licensing agreement allowed copying of the software is wrong. The license allowed use of the software, not copying for commercial use by others. The Copyright Act does not preempt Geac's claim of trade secret misappropriation since the consultant violated its duty of trust and confidentiality when working on the software.

Citation Dun & Bradstreet Software Services v. Grace Consulting, 307 F.3d 197 (3rd Cir., 2002)

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