DMCA doesn’t block reverse engineering of vehicle diagnosis software but TM might

Ford Motor Co. v. Autel US Inc., No.14-13760 (E.D. Mich.
Sept. 30, 3015)
 
Apart from cars and trucks, Ford sells automotive repair
products. Among them is Ford’s Integrated Diagnostic System (IDS system) which
diagnoses potential problems with Ford vehicles and guides their service and
repair. The hardware components of the IDS system include a 16-pin diagnostic
link which sends information from the vehicle to the on-board computer system.  The software component  receives information from the hardware and
produces diagnoses and recommends repairs based on the information it receives.
 
The IDS software contains various data compilations. Ford
alleged that some of the compilations within the IDS software were trade
secrets.  One compilation was the “FFData
file,” allegedly a trade secret protected through encryption and obfuscation
technology (the latter being designed to defeat reverse engineering by making
the code obscure to any unauthorized attempted reverse engineer).  Autel allegedly created a program to
circumvent Ford’s security measures and access the FFData file without
authorization, then inserted the FFData file into a vehicle diagnosis and
repair product that competes with Ford’s IDS System.
 
Ford also alleged trademark infringement, because a screenshot
of the Autel DS708’s electronic menu screen shows the Ford Oval alongside the
logos of Chrysler and General Motors on the “USA” menu option.
 
Copyright: In the Sixth Circuit, pleading copyright
infringement requires greater particularity than usual because of the potential
for harassment suits.  Ford’s copyright
registration for a data compilation, CALID_VIDQID_REC, presumptively
established its originality. But Ford didn’t adequately plead copying of
protectable elements—the copyright in a factual compilation is thin.  Ford alleged that “detailed technical
analysis of data files stored on Autel’s DS708 device shows that the FFData
file is duplicated on Autel’s DS708 device.” 
This didn’t necessarily mean that the selection, coordination, and arrangement
of the data, which was all that Ford could protect, were copied on Autel’s
device.  General allegations of
infringement that don’t identify specific infringing materials are insufficient
to state a claim under Rule 12(b)(6), and the plaintiff needs to describe the
manner in which the defendant’s work infringes.
 
Ford’s § 1201 claim was also inadequately pled.  Ford apparently alleged violations of §§
1201(a)(1) and 1201(a)(2): circumvention of access controls and trafficking in
access control circumvention devices. 

The court first, mistakenly, accepted Autel’s argument that Ford failed to
allege that it owned a valid copyright at the time of the alleged
circumvention, because Ford’s registration of its compilation was
post-circumvention.  Registration, of
course, is not a condition of validity, though Ford apparently didn’t offer any
argument on this point.  Lexmark said that §1201 requires a
plaintiff “to show that the ‘technological measure’ at issue “controls access
to a work protected under this title,” which means the claimed work has to be
original enough to protect (but not registered).
 
Second, Autel argued that Ford failed to allege that Autel’s
circumvention was for an improper purpose. 
The Sixth Circuit has stated that “the DMCA’s anti-circumvention
provision was designed to support the efforts of copyright owners to protect
their works from piracy behind digital walls such as encryption codes or
password protections by banning the use, manufacture, or sale  of technologies that circumvent digital
copyright controls,” and adopted Judge Merritt’s concurrence in Lexmark finding that
 
The legislative history of the DMCA
makes clear that the anti- circumvention provision is not intended to function
as a comprehensive ban on all circumvention technologies; rather, its purpose
is to prevent those technologies from being used as a tool for copyright
infringement and to provide remedies for copyright holders against individuals
and entities who facilitate the widespread unauthorized reproduction of
copyrighted works by making such technologies available to the public.
 
That means plaintiffs must plead and prove “a purpose to
pirate on the part of defendants.”  This
the complaint did not allege.  Thus the
court didn’t reach Autel’s third argument, which was that its circumvention was
permissible reverse engineering.
 
The trademark infringement claims, however, survived (they
didn’t need particularity, though the abusive litigation concern seems just as
large with trademark as with copyright). 
Ford argued that Autel’s use of its logos and listing of the program
“Ford V2.10” under the Ford Oval in Autel’s DS708 device. Autel argued that
source confusion was unlikely because it was only using the Ford Oval, along
with the GM Logo and the Chrysler Logo, so that the DS708’s users could choose
the correct diagnostic program that will be compatible with their respective
vehicle manufacturer.  The court found
the allegations sufficient: Autel’s use of Ford’s allegedly world-famous logo
was “on its menu screen,” and it used the actual logo with distinctive shape,
color and lettering.  Plus, post-sale
confusion is actionable in the Sixth Circuit. 
Nor could fair use be evaluated on a motion to dismiss.  (The court mashed up descriptive and
nominative fair use, quoting the descriptive fair use test but apparently
understanding that the use was, according to Autel, referential/nominative,
citing Volkswagen AG v. Dorling Kindersley Pub., Inc., 614 F. Supp. 2d 793, 800
(E.D. Mich. 2009) (“the Court finds that the VW EMBLEM is used only to describe
the actual vehicle. Accordingly, the claim is barred by the fair use defense as
a matter of law.”).)
 
Ford’s state law trademark claim survived, as did its claim
under the Michigan Uniform Trade Secrets Act. 
I would have assumed that reverse engineering was a lawful means of
acquiring the relevant information even if Ford tried to block the reverse
engineering.  Thus, though Ford didn’t
need to plead with particularity what about its program was a trade secret, I
don’t understand how it pled an improper method of acquisition.  Ford’s state law unjust enrichment claim was,
however, based solely on Autel’s alleged misappropriation of Ford’s trade
secrets and thus was preempted by the state trade secrets statute.

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