Assessment Technologies v. Wiredata

Citation

Assessment Technologies of WI LLC v. Wiredata, Inc., 350 F.3d 640 (7th Cir. 2003) (full-text).

Factual Background

The plaintiff, Assessment Technologies (AT) developed a database program that permitted county assessors to more easily capture and analysis information on buildings within their jurisdiction for property tax purposes. Previously, an assessor would fill out a paper form on each building being assessed, and those paper forms would then be input to a computer back at the assessor’s office. The AT software allows assessors to input that same information on their computers. The information is then stored on the AT database in 456 fields grouped into 34 master categories. Many counties who have adopted the AT program no longer generate the paper forms at all.

The defendant, Wiredata, uses some of the data collected by the assessors for use by real estate brokers. Wiredata used to obtain the information it needed from the paper assessor forms. However, because some assessors are now collecting the information electronically, and doing away with the forms, Wiredata can only get the information from the AT database. Some of the assessors refused to provide the data to Wiredata fearing that they would be violating the AT license agreement.

Trial Court Proceedings

When AT learned that Wiredata was attempting to get the assessors to provide it with the data collected by the assessors in the AT database, it sued Wiredata for copyright infringement and theft of trade secrets. The trial court entered a permanent injunction against Wiredata on the copyright infringement claim, but did not reach the trade secret claim (which was not raised by either party on appeal).

Appellate Court Proceedings

Judge Richard Posner wrote a scathing opinion, reversing the trial court’s decision. He couched the issue as “the right of the owner of . . . a copyright [in a compilation] to prevent his customers (that is, the copyright licensees) from disclosing the compiled data even if the data are in the public domain.” The court first noted that (i) the information collected by the assessors is merely facts, and not subject to copyright; and (ii) even if it were copyrightable subject matter, the copyright would be owned by the municipalities not AT.

The court noted that if the municipalities had given the data to Wiredata in exactly the same form as the AT database, then the municipalities would have violated their license agreement, which prohibited them from making copies of the AT databases. But here, Wiredata does not want the information in that form, but only wants the raw data, which it can organize in its own, non-infringing database.

The court then looked at how Wiredata (or the municipalities) could extract the raw data. One option is to use the AT software to perform the extraction. However, the county may not have the complete program (if they use outside contractors to collect the information), or might be in violation of the AT license if they do so, since the license forbids their disseminating the data collected by using the AT program. The second option was to use Microsoft Access (a readily available computer program not owned by AT) to extract the data. Again, the court was concerned that doing so would still violate the terms of the AT license.

AT argued that either way would violate its copyright by creating a derivative work. Calling that assertion “mysterious,” the court said that “[a] work that merely copies uncopyrighted material is wholly unoriginal and the making of such a work is therefore not an infringement of copyright.”

The court went on to say that AT would even lose the copyright claim “even if the raw data were so entangled with [AT’s program] that they could not be extracted without making a copy of the program.” Citing Sega Enterprises v. Accolade, Inc., the court held that “if the only way WIREdata could obtain public domain data about properties in southwestern Wisconsin would be by copying the compilation and not just the compiled data only because the data and the format in which they were organized could not be disentangled, it would be privileged to make such a copy. . . . For the only purpose of the [[copy]ing would be to extract noncopyrightable material, and not to go into competition with AT by selling copies of [the database program].”

Because the issue of breach of the AT license was not before the court, it did not decide whether the license prohibited municipalities from providing access to the data to Wiredata. However, the court did say that “[t]o try by contract or otherwise to prevent the municipalities from revealing their own data, especially when, as we have seen, the complete data are unavailable anywhere else, might constitute copyright misuse.” (emphasis in original).