CAFC addresses injunction, DMCA issues in Storage Technology v. Custom Hardware

A decision of D. Mass. was vacated and remanded in Storage Technology (StorageTek) v. Custom Hardware (CHE).

StorageTek brought an action against CHE and its president David York alleging:

1. copyright infringement
2. violation of the anticircumvention provision of the Digital Millenium Copyright Act (DMCA, 17 USC 1201(a))
3. misappropriation of trade secrets
4. patent infringement

StorageTek obtained a preliminary injunction against CHE. Although the patent infringment claim was not part of the appeal, the CAFC (rather than the First Circuit) heard the appeal.

Of the copyright issue, CHE invoked 17 USC 117(a) and 117(c) as defenses. StorageTek invoked 117(c)(1) and 117(c)(2) to argue against the defenses.

The CAFC determined that the district court erred when it stated that CHE was unlikely to prevail, because CHE's conduct appears to fall within the safe harbor of 117(c).

Of the DMCA, the CAFC cited to its earlier decision in Chamberlain Group v. Skylink, 381 F.3d 1178 (CAFC 2004). Here, the CAFC determined that because CHE's activities did not constitute or facilitate copyright infringement, the DMCA was unavailable. The CAFC also cited to Lexmark v. Static Control, 387 F.3d 522 (CA6 2004) and Universal Studios v. Corley, 273 F.3d 429 (CA2 2001).

Of the trade secret claim, the CAFC noted that trade secret protection is not available for information that is not actually secret, citing Jet Spray v. Crampton, 282 NE2d 921 (Mass. 1972).

The CAFC found that D. Mass. abused its discretion in granting a preliminary injunction.

Judge Rader dissented, discussing primarily issues under 117(c).