Background information
Vault Corporation created and held the copyright for a program called PROLOK, which provided copy protection for software onActions and claims
Vault sought preliminary and permanent injunctions against Quaid to prevent them from advertising and selling RAMKEY. They also sought an order to impound all of Quaid's copies of RAMKEY, as well as $100,000,000 in monetary damages. Vault asserted the following claims: #Infringement of the exclusive right to copy by copying PROLOK into RAM for a purpose other than that intended by Vault # Contributory infringement by providing software that customers can use to infringe on Vault's and Vault's clients' copyrights #Creation of an infringingProcedural history
The district court initially dismissed Vault's complaint for lack of personal jurisdiction, but this was reversed by the circuit court. On remand, the district court denied Vault's motion for a preliminary injunction. After agreement by both parties to submit the case for final decision, the district court entered a final judgment based on its decision on the preliminary injunction. Vault subsequently appealed.Direct infringement claim
The district court held that Quaid's copying of the software into RAM was permissible under , which permits copies "created as an essential step." Vault argued that the §117(1) exemption does not apply when the program is used in a manner not intended by the copyright holder. The circuit court disagreed with this argument, writing that the statute does not contain "language to suggest that the copy it permits must be employed for a use intended by the copyright owner."Contributory infringement claim
'' Sony Corp. of America v. Universal City Studios, Inc.'' established the "substantial non-infringing use" test for contributory infringement. Quaid argued that RAMKEY passes this test because it can be used to create archival copies that are exempt under 17 U.S.C. §117(2). Vault argued that RAMKEY did not have any non-infringing use because one could create a sufficient archival copy without the use of RAMKEY. Vault asserted that the archival copy exemption of 17 U.S.C. §117(2) was designed to protect only against "destruction or damage by mechanical or electrical failure," but not against (for example) loss or destruction of a disk. The court declined to construe the archival exemption in this manner, saying that even though it had appeal, it was not the law and that only the Congress could decide to limit the exemption in that way.Derivative work claim
One version of RAMKEY contained approximately 30 characters of source code from PROLOK. Vault alleged that this constituted an infringing derivative work. The district court focused on the size of the copied code, arguing that it was not significant. Vault argued that the court should instead focus on the qualitative aspect of the copied code because the 30 characters were important to the correct operation of PROLOK. The circuit court rejected the argument that the copying was qualitatively significant on the basis that PROLOK and RAMKEY "serve opposing functions."Louisiana Software License Enforcement Act claim
The license agreement for PROLOK depended on the Louisiana Software License Enforcement Act to give it the authority to prohibit users from decompiling or disassembling the software. The Act purported to permit certain license agreements to contain "...prohibitions on translating, reverse engineering, decompiling, disassembling, and/or creating derivative works based on the computer software." Vault had included such a provision in its license agreement and claimed that Quaid violated this provision when it reverse engineered PROLOK. The district court held that the Louisiana License Act was unenforceable because it was preempted by the Copyright Act. The circuit court ruled only on the clause permitting a licensor to prohibit decompilation or disassembly, holding that this clause was preempted by the exemptions of 17 U.S.C. §117, which grant permission to make "essential step" and archival copies.See also
*'' Sony Corp. of America v. Universal City Studios, Inc.'' *External links
* /cyber.law.harvard.edu/ilaw/Contract/vault.htm Vault Corp. v. Quaid Software Ltd.(opinion full text) at the