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Intellectual Property Keyed to Merges
Computer Associates International v. Altai, Inc
Facts
Computer Associates International (CA) (Plaintiff) designed, developed, and marketed numerous types of computer programs, including “CA-Scheduler,” a job-scheduling program containing a subprogram named “Adapter.” Adapter was a wholly integrated component of CA-Scheduler with no capacity for independent use. In 1982, Altai, Inc. (Defendant) started to market its own job-scheduling program named “Zeke.” Then, Defendant decided to rewrite Zeke to run in conjunction with a different operating system, and Altai’s (Defendant) president, Williams, approached Arney, a computer programmer who work for Plaintiff, about working for Defendant. When Arney left Plaintiff to work for Defendant, he took copies with him of the source code for two versions of Adapter and used them to design Altai’s (Defendant) new component-program, “Oscar” (Version 3.4). Arney copied approximately 30% of Oscar’s code from Plaintiff’s Adapter program. When Plaintiff discovered that Defendant may have appropriated parts of Adapter, it brought this copyright and trade secret misappropriation action against Altai (Defendant). A rewrite of Oscar began, named Oscar 3.5. The district court awarded Plaintiff $364,444 in actual damages and apportioned profits for copyright infringement regarding Oscar 3.4. However, the court denied relief on Plaintiff’s second claim, finding that Oscar 3.5 was not substantially similar to Adapter. In addition, the court concluded that Plaintiff’s state law trade secret misappropriation claim against Defendant was preempted by the federal copyright act. On appeal, Altai (Defendant) conceded liability for the copying of Adapter into Oscar 3.4 and raised no challenge to the award of damages. Therefore, only CA’s (Plaintiff) second and third claims were addressed on appeal.
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