PAR Microsystems Inc v. Pinnacle Devel Corp

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 96-10245
_____________________
PAR MICROSYSTEMS, INC.,
Plaintiff-Appellant,
versus
PINNACLE DEVELOPMENT CORP., ET AL.,
Defendants,
and
ROBERT S. JOHNSON,
Defendant-Appellee.
_________________________________________________________________
Appeal from the United States District Court for the
Northern District of Texas, Dallas
(3:93-CV-2114-D)
_________________________________________________________________
December 30, 1996
Before JOLLY, JONES, and PARKER, Circuit Judges.
PER CURIAM:*
This appeal presents two questions: (1) whether the district
court erred in granting summary judgment in favor of Robert S.
Johnson (“Johnson”) on all claims of copyright infringement alleged
by PAR Microsystems, Inc. (“PAR”); and (2) whether the district
*
Pursuant to Local Rule 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
court abused its discretion in refusing to consider new evidence
presented by PAR in its motion to reconsider the grant of summary
judgment. After reviewing the record, studying the briefs, and
considering the arguments presented to this court, we conclude
that, under the particular circumstances of this case, the district
court abused its discretion in refusing to consider the new
evidence and arguments presented by PAR in its motion to
reconsider.
PAR filed its complaint against Johnson, Data National
Corporation (“DNC”) and Pinnacle Development Corporation
(“Pinnacle”) alleging copyright infringement and various state law
tort claims resulting from the alleged wrongful copying of a
computer software program.1 Johnson, Pinnacle and DNC moved for
summary judgment contending that PAR’s claims were barred by the
running of the applicable three-year statute of limitations. In
response, PAR argued only that the claims should not be barred,
based on the discovery rule, because the statute of limitations did
not begin running until they conclusively determined that a claim
existed, instead of the earlier date, alleged by the defendants,
when PAR first became aware of the facts giving rise to the claim.
The district court granted the motion for summary judgment and
1
PAR and Data National Corporation have entered into a
settlement agreement.
2
dismissed the complaint.2 Under our earlier cases, a cause of
action for copyright infringement arises when a party has knowledge
of the violation or notice of facts that, in the exercise of due
diligence, would have led to such knowledge. Jensen v. Snellings,
841 F.2d 600 (5th Cir. 1988). Thus, the district court did not err
in determining that the statute of limitations began running at the
time--over three years before commencement of this action--that PAR
became aware of the similarities between the two software programs;
therefore, the grant of summary judgment on this ground for all
claims accruing three years before the filing of the complaint was
not erroneous.
After summary judgment was granted, PAR filed a motion for
reconsideration arguing that the entire complaint should not have
been dismissed. In support of this motion, PAR contended that the
infringement was a continuing activity, that there were separate
acts of infringement occurring within the limitations period and
that the claims against Pinnacle could not be barred because the
company was formed less than three years prior to the filing of the
complaint. PAR offered evidence, although its admissibility was
disputed, of timely additional acts of infringement. The district
court concluded that PAR had “reserved” this evidence and argument,
2
The district court also granted summary judgment as to the
state law claims. PAR does not appeal that ruling.
3
in spite of the fact that it could have been fully presented at the
time the motion for summary judgment was decided. The court
refused to consider the evidence offered in support of the motion
for reconsideration except to rule that Pinnacle’s corporate non-
existence at the time in question prevented the commencement of the
running of the statute of limitations as to it.3 The court
therefore reinstated the complaint as to Pinnacle only.
We review the refusal of a district court to consider new
evidence presented on a motion for reconsideration under Federal
Rule of Civil Procedure 59(e) for abuse of discretion. Fields v.
City of South Houston, Texas, 922 F.2d 1183, 1188 (5th Cir. 1991).
When deciding whether to consider new evidence in connection with
a Rule 59(e) motion, district courts should consider the following
factors: (1) the reasons for the party’s default in presenting the
evidence earlier; (2) the importance of the evidence to the party’s
case; (3) the availability of the evidence at the time of the
response to the motion for summary judgment; and (4) the likelihood
that the defendants will suffer unfair prejudice if the case is
reopened. Lavespere v. Niagara Machine & Tool Works, Inc., 910
F.2d 167, 174 (5th Cir. 1990). Here the matter is very close,
especially because much of the blame for the plaintiff-non-movant’s
3
This appeal is before the court by virtue of Federal Rule of
Civil Procedure Rule 54(b) judgment. PAR’s claim against Pinnacle
remains before the district court.
4
current predicament must be placed on its own failings. We
conclude, however, that, in the light of all the circumstances, the
district court abused its discretion in not considering the
evidence and arguments offered by PAR: There was a clear error in
the application of the law because each act of infringement gives
rise to a separate cause of action. Makewdwe Pub. Co. v. Johnson,
37 F.3d 180, 182 (5th Cir. 1994). Thus, the assignment of a single
accrual date to all of PAR’s copyright claims was error. Although
as we have noted, this error is attributable largely to the failure
of the parties to address this issue at the summary judgment stage,
nevertheless, the legal error occurred, and the error significantly
impacted the rights of the plaintiff. Furthermore, the complaint
has not been dismissed against Pinnacle and this action will
proceed in any event. Therefore, the unfair prejudice resulting
from reconsideration is minimal with respect to the defendant
Johnson. We therefore conclude that the district court should have
considered PAR’s evidence and arguments offered in support of the
motion for reconsideration.
We therefore REVERSE the judgment of the district court and
REMAND this action for further proceedings not inconsistent with
this opinion.
REVERSED and REMANDED.
5