Reliability Research v. Computer Associates

Citation: Reliability Research, Inc. v. Computer Assocs. Int'l, Inc., 793 F. Supp. 68 (E.D.N.Y. 1992).

Factual Background
In 1979, Plaintiff, Reliability Research Incorporated (RRI), entered into a contract with University Computing Company (UCC) where RRI licensed to UCC copyrighted programs referred to as “Reliability Plus.” In 1984, the parties entered into a new agreement on such licensing. The 1984 agreement included a provision that gave RRI ownership of certain computer programs made by UCC. In 1987, Defendant, Computer Associates International, Inc. (CA) took over UCC.

Trial Court Proceedings
RRI filed a lawsuit asserting that CA breached the provision of the 1984 agreement. CA defended by claiming a misuse of copyright. RRI now moves to strike CA’s copyright misuse defense pursuant to Rule 12(f) of the Federal Rules of Civil Procedure on the ground of legal insufficiency.

In this action, RRI seeks ownership in some of CA’s programs on the basis of the provision in the 1984 agreement. CA argues that the programs in question do not fall “within the area of computer reliability” as that phrase was intended to mean by the parties to the contract. CA further argues that if the phrase in question is interpreted to include those programs, then that provision is an unenforceable misuse of copyright because it extends rights in RRI’s copyrights well beyond their lawful scope. In the present motion, RRI moves to strike this copyright misuse defense on the ground that the defense does not exist here.

RRI argues that there was no misuse of copyright because its copyrights were not used as leverage to obtain ownership of CA’s copyrights because the 1984 “amendment” did not transfer any rights to RRI’s copyrights.

The Court held that RRI’s argument fails because the 1984 agreement was not an amendment to the 1979 agreement, but was an entirely new one where the copyrighted programs were exchanged for new royalties and rights to UCC’s programs. Thus, the question of whether there is a legal distinction under the copyright misuse doctrine between a copyright license agreement and an amendment to a pre-existing copyright license agreement is not before the Court. Therefore, the Court holds that RII’s motion to strike is denied without prejudice to renew on a partial summary judgment motion after discovery is complete.