Re: JMRI case -- Implementation of the Federal Circuit's Opinion

[Alexander Terekhov]

http://jmri.sourceforge.net/k/docket/284.pdf

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Jacobsen’s Motion for Preliminary Injunction on Copyright Claim.

1. Legal Standard.

Plaintiff moves for preliminary injunction, seeking a court order
enjoining Defendants from willfully infringing Plaintiff’s copyrighted
material. A plaintiff is entitled to a preliminary injunction when it
can demonstrate either: (1) a combination of probable success on the
merits and the possibility of irreparable injury, or (2) the existence
of serious questions going to the merits, where the balance of hardships
tips sharply in plaintiff’s favor. GoTo.com, Inc. v. Walt Disney Co.,
202 F.3d 1199, 1204-05 (9th Cir. 2000). To establish copyright
infringement, a plaintiff must show (1) ownership of the copyrights, and
(2) copying of the protected expression by Defendants. Sun Microsystems,
Inc. v. Microsoft Corp., 188 F.3d 1115, 1109 (9th Cir. 1999).

Initially, when this matter was before the Court on a motion for
preliminary injunction, federal copyright law provided that a plaintiff
who demonstrates a likelihood of success on the merits of a copyright
claim was automatically entitled to a presumption of irreparable harm.
Id. at 1119 (citing Cadence Design Systems v. Avant! Corp., 125 F.3d
824, 826-27 (9th Cir. 1997)). “That presumption means that the balance
of hardships issue cannot be accorded significant – if any – weight in
determining whether a court should enter a preliminary injunction to
prevent the use of infringing material in cases where ... the plaintiff
has made a strong showing of likely success on the merits.” Sun, 188
F.3d at 1119 (citing Cadence, 125 F.3d at 830 (internal quotations
omitted)).

However, because of the passage of time, the governing law has changed.
Now, a plaintiff is not granted the presumption of irreparable harm upon
a showing of likelihood of success on the merits. Instead, a plaintiff
seeking a preliminary injunction must establish that he is likely to
succeed on the merits, that he is likely to suffer irreparable harm in
the absence of preliminary relief, that the balance of equities tips in
his favor, and that an injunction is in the public interest. Winter v.
Natural Resources Defense Council, 129 S. Ct. 365, 374 (2008) (citations
omitted). In this recent case, the Supreme Court found that the Ninth
Circuit’s standard of the likelihood of irreparable injury was too
lenient and held that a plaintiff must demonstrate that irreparable
injury is “likely in the absence of an injunction.” Id. at 375. “Issuing
a preliminary injunction based only a possibility of irreparable harm is
inconsistent with our characterization of injunctive relief as an
extraordinary remedy that may only be awarded upon a clear showing that
the plaintiff is entitled to such relief.” Id. at 375-76 (citing Mazurek
v. Armstrong, 520 U.S. 968, 972 (1997) (per curiam)). Because a
preliminary injunction is an extraordinary remedy, “[i]n each case,
courts ‘must balance the competing claims of injury and must consider
the effect on each party of the granting or withholding of the requested
relief.’ Id. at 376 (citing Amoco Production Co. v. Gambell, 480 U.S.
531, 542 (1987)). “‘In exercising their sound discretion, courts of
equity should pay particular regard for the public consequences in
employing the extraordinary remedy of injunction.’” Id. at 376-77
(citing Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982)).

2. Procedural History.

Plaintiff appealed this Court’s denial of his original motion for
preliminary injunction on the issue of copyright infringement. The
Federal Circuit court found that this Court had erred in its legal
finding that a copyright holder of work open and available to the public
free of charge under an “open source” nonexclusive copyright license may
not control future distribution and modification of such work under
federal copyright law, but may only pursue remedies under a breach of
contract theory. The Federal Circuit court found that Jacobsen may
maintain a cause of action for trademark infringement based on the facts
alleged in the complaint. In its decision, the appellate court found
that copyright holders who engage in open source licensing have the
right to control the modification and distribution of copyrighted
material and that the Artistic License present on the JMRI Project
website governed Jacobsen’s copyrighted material and required that any
downstream user follow the restrictive terms of the license. Because the
Federal Circuit found that this Court had erred in its legal finding,
and, having found that the terms of the Artistic License are enforceable
copyright conditions, the court vacated the denial of a preliminary
injunction and remanded “to enable the District Court to determine
whether Jacobsen has demonstrated (1) a likelihood of success on the
merits and either a presumption of irreparable harm or a demonstration
of irreparable harm; or (2) a fair chance of success on the merits and a
clear disparity in the relative hardships and tipping in his favor.”
Jacobsen v. Katzer, 535 F.3d at 1382-83.

The Federal Circuit was faced with an incomplete record and only the
allegations in the complaint, and made its determination as a matter of
legal interpretation. The appellate court did not make a finding that
Jacobsen is entitled to a preliminary injunction on the allegations of
his complaint. It only found that this Court erred in finding that a
cause of action for trademark infringement could not lie. This Court is
again faced with a perfunctory record and is bound by the legal finding
of the appellate decision. However, in the intervening time, the Supreme
Court precedent governing the standard to be applied in deciding whether
the extraordinary remedy of a preliminary injunction is appropriate has
changed. This Court is bound by such intervening authority. In order to
grant Jacobsen a preliminary injunction, the Court must find, based on
the entire record, that Jacobsen is likely to succeed of the merits,
that he is likely to suffer irreparable harm in the absence of
preliminary relief, that the balance of equities tips in his favor, and
that an injunction is in the public interest. Winter, 129 S. Ct. at 374.

3. Jacobsen Fails to Meet Heightened Burden of Demonstrating Harm.

In its opinion, the Federal Circuit found that in the open source field,
there are potential harms to copyright holders, although they may not be
exclusively monetary. The court found that 

the lack of money changing hands in open source licensing should not be
presumed to mean that there is no economic consideration, however. There
are substantial benefits, including economic benefits, to the creation
and distribution of copyrighted works under public licenses that range
far beyond traditional license
royalties. For example, program creators may generate market share for
their programs by providing certain components free of charge.
Similarly, a programmer or company may increase its international
reputation by incubating open source projects. Improvement to a product
can come rapidly and free of charge from an expert not even known to the
copyright holder. 

Jacobsen v. Katzer, 535 F.3d at 1379. On this basis, the court found
that there could indeed be harm based exclusively on a copyright
infringement theory.

However, the Federal Circuit did not find, based on the record of this
case, that there was indeed either actual, current infringement or that
there was a likelihood of irreparable harm that tipped the balance of
equities in Jacobsen’s favor. The Federal Circuit court’s list of
potential harms that a copyright holder may face in the open source
field are just that – potential harms. There is no showing on the record
before this Court that Jacobsen has actually suffered any of these
potential harms. The standard under Winter requires that Jacobsen
demonstrate, by the introduction of admissible evidence and with a clear
likelihood of success that the harm is real, imminent and significant,
not just speculative or potential. 129 S. Ct. at 374. Jacobsen has
failed to proffer any evidence of any specific and actual harm suffered
as a result of the alleged copyright infringement and he has failed to
demonstrate that there is any continuing or ongoing conduct that
indicates future harm is imminent.3 Because Jacobsen fails to meet the
burden of presenting evidence of actual injury to support his claims of
irreparable injury and speculative losses, the Court cannot, on this
record, grant a preliminary injunction. See Goldie’s Bookstore, Inc. v.
Superior Court, 739 F.2d 466, 472 (9th Cir. 1984) (holding that
speculative harm is insufficient to establish irreparable harm).

3 Although Jacobsen makes legal arguments regarding the alleged harm he
may suffer, for instance delays and inefficiency in development and time
lost in the open source development cycle, he has failed to put forward
any evidence of such harms. Jacobsen has failed to proffer evidence of
harm suffered or any evidence of a real or immediate threat of imminent
harm in the future. The Court also finds that Jacobsen has failed to
identify with the requisite particularity the extent of his copyright
ownership over the disputed underlying material. The JMRI Project
Decoder Definition Files incorporate many manufacturers’ specifications
data as well as rights to specific terms whose copyright is owned by
Defendants. Even if Jacobsen’s heavy burden to warrant injunctive relief
had been met, it is unclear how the Court would fashion an injunction
which would be narrowly tailored to enjoin only those allegedly
infringing uses of Jacobsen’s copyrighted content.

CONCLUSION

For the foregoing reasons, the Court GRANTS Defendants’ motion to
dismiss for mootness; GRANTS IN PART AND DENIES IN PART Defendants’
motion to dismiss for failure to state a claim; DENIES the motion to
strike; and DENIES Jacobsen’s motion for preliminary injunction.
Jacobsen may file an amended complaint within twenty days of the date of
this Order. If Jacobsen does not file a third amended complaint,
Defendants shall file an answer within twenty days of the deadline to
file the amended complaint. If Jacobsen elects to file a third amended
complaint in accordance with this Order, Defendants shall either file an
answer or move to dismiss within twenty days of service of the third
amended complaint. 
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<chuckles>

regards,
alexander.

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