Monday, February 15, 2010

Sixth Circuit - Confidentiality Agreements For the Development of Copyrighted Works - CAD and 3D

Dodge Avenger
Chrysler Sebring

In Multimatic Inc. v. Faurecia Interior Systems USA, 2009 WL 4927957 (6th Cir. Dec. 22, 2009), the Sixth Circuit Court of Appeals considered the question of whether a confidentiality agreement entered into by two parties protected intellectual property (trade secrets and copyright) developed during the course of the confidential relationship.

Multimatic agreed to develop cross-beam systems for the DaimlerChrysler Avenger and Sebring lines for Faurecia, a supplier to Chrysler.   There was no agreement on price, but the agreement implied that if Multimatic used Faurecia's 3D CAD designs, the parties would work together.

Instead, Faurecia gave Multimatic's designs to a third party.  Multimatic sued and won.   The Sixth Circuit opinion contains a good discussion of confidentiality agreements:  they are governed by state law under the state's contract law, but they deal with copyrightable subject matter, the source of Faurecia's rights under the Copyright Act in the 3D models. 17 U.S.C. Section 102(a)(5) ["pictorial, graphic, and sculptural works"].   Drafter's note: the Sixth Circuit found that the use of the PRESENT tense includes FUTURE rights.  Thus, neither the confidentiality agreement nor Multimatic's course of conduct in submitting the designs to Chrysler transferred the copyrights to Faurecia or anyone else, because Multimatic did not sign a writing transferring copyright ownership (as required by Section 204(a) of the Copyright Act) which provides:

§ 204. Execution of transfers of copyright ownership

(a) A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.

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