First Circuit Vacates Dismissal of Situation Management’s Training Manual Infringement Suit Against ASP. Consulting

Holding:

The U.S. Court of Appeals for the First Circuit has vacated a dismissal of plaintiff Situation Management Systems, Inc.’s copyright infringement suit against defendants ASP. Consulting LLC and ASP. Consulting Group (“ASP”). The U.S. District Court for the District of Massachusetts found that ASP did indeed copy SMS’s copyrighted training manuals, but held that such copying was not actionable because ASP’s works were not substantially similar to the copyrighted aspects of SMS’s works. On appeal, the First Circuit held that the district court's analysis of substantial similarity improperly excluded from consideration large portions of SMS's works under the mistaken belief that they are unoriginal or a non-copyrightable process or system, making its assessment of substantial similarity clearly erroneous. The fact that SMS’s works describe processes or systems does not make their expression non-copyrightable, the First Circuit clarified. SMS’s creative choices in describing those processes are subject to copyright protection. On the basis of the foregoing, the First Circuit remanded the case for further proceedings consistent with its opinion.

Detailed Summary:

For more than thirty years, plaintiff SMS has provided consulting services aimed at improving employee communication and negotiation skills within the workplace. As part of its services, SMS has developed a series of training materials focused on teaching effective communication and negotiation techniques. Companies buy these materials from SMS and use them in employee training workshops.

A number of SMS employees, including Dane Harwood and Alexander Moore, left SMS after Sharon Malouf acquired the company through bankruptcy proceedings in 2001. Following the end of Harwood’s noncompete period, Harwood and Moore, along with an executive from a former European sublicensee of SMS,…

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