Vault Corp. v. Quaid Software, Ltd. - 847 F.2d 255 (5th Cir. 1988)

Rule:

To constitute a derivative work, the infringing work must incorporate in some form a portion of the copyrighted work.

Facts:

Plaintiff Vault Corporation was the owner of software that when used in conjunction with other vendor's software, prevented the unauthorized copying of the latter software. Defendant Quaid Software Limited developed software that made plaintiff's software inactive. Plaintiff brought an action for copyright infringement and for injunctions claiming defendant violated plaintiff's copyright by copying plaintiff's program onto defendant's computer for the purpose of developing defendant's software. Plaintiff alleged defendant committed contributory infringement and violated state copyright law. The trial court held for defendant and denied an injunction where there was no reasonable probability of success on the merits.

Issue:

Could the defendant be held liable for copyright infringement? 

Answer:

No.

Conclusion:

The court affirmed the trial court’s decision, holding that defendant did not infringe plaintiff's exclusive right to reproduce its program in copies and that no contributory infringement occurred. According to the court, defendant’s actions clearly fell within the Section 117(1) exemption. Where the defendant copied plaintiff's software onto defendant's computer, this was exempted from infringement as an essential step in software utilization. The court also held that the defendant’s software was not a derivative work. To constitute a derivative work, the infringing work must incorporate in some form a portion of the copyrighted work. In this case, the court found that the defendant’s software was not a substantial copy of the plaintiff’s software.