ECIMOS, LLC v. Carrier Corp.

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 20a0273p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
ECIMOS, LLC, ┐
Plaintiff-Appellee/Cross-Appellant, │
│
> Nos. 19-5436/5519
v. │
│
│
CARRIER CORPORATION, │
Defendant-Appellant/Cross-Appellee. │
┘
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 2:15-cv-02726—Jon Phipps McCalla, District Judge.
Argued: March 13, 2020
Decided and Filed: August 21, 2020
Before: BOGGS, CLAY, and GIBBONS, Circuit Judges
_________________
COUNSEL
ARGUED: K. Winn Allen, KIRKLAND & ELLIS LLP, Washington, D.C., for
Appellant/Cross-Appellee. Jason O’Neal Perryman, GIBSON PERRYMAN LAW FIRM,
Memphis, Tennessee, for Appellee/Cross-Appellant. ON BRIEF: K. Winn Allen, Michael A.
Francus, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellant/Cross-Appellee. Jason
O’Neal Perryman, Ralph T. Gibson, GIBSON PERRYMAN LAW FIRM, Memphis, Tennessee,
for Appellee/Cross-Appellant.
_________________
OPINION
_________________
BOGGS, Circuit Judge. Carrier and ECIMOS once had a long-standing business
relationship that has now deteriorated. Carrier is a leading manufacturer of residential Heating,
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Ventilation, and Air Conditioning (“HVAC”) systems and ECIMOS once produced the quality-
control system that tested completed HVAC units at the end of Carrier’s assembly line. The
present dispute centers on Carrier’s alleged infringement of ECIMOS’s copyright on its
database-script source code—a part of ECIMOS’s software that stores test results. ECIMOS
alleges that Carrier improperly used the database—indeed copied certain aspects of the code—to
aid a third-party’s development of a new testing software that Carrier now employs in its
Collierville, Tennessee manufacturing facility. ECIMOS sued for copyright infringement and
breach of contract and won a $7.5 million jury award.
Following trial, Carrier filed a renewed Rule 50 motion for a judgment as a matter of law
or, in the alternative, a Rule 59(e) motion to amend the judgment or for a new trial. It contended
that it did not infringe on ECIMOS’s copyright as a matter of law and objected to most of the
$7.5 million jury award. The district court denied most of the motion, finding that there was no
basis to conclude that there was no infringement as a matter of law; but it granted the motion in
part, reducing Carrier’s total damages liability to $6,782,800. Carrier now appeals those
decisions.
ECIMOS also filed a post-trial motion and asked the court to enjoin Carrier from using or
disclosing ECIMOS’s trade secrets and from using its third-party-developed database until a
new, non-infringing database could be developed from scratch. ECIMOS also moved to amend
the jury award so that it could receive even more damages from Carrier. The district court:
(1) enjoined Carrier from using its new database, but stayed the injunction until Carrier could
develop a new, non-infringing database subject to the supervision of a special master;
(2) enjoined Carrier from disclosing ECIMOS’s trade secrets, but also held that certain elements
of ECIMOS’s system were not protectable as trade secrets (such as ECIMOS’s assembled
hardware) and thus did not enjoin Carrier from using ECIMOS’s system; and (3) rejected
ECIMOS’s motion to amend the jury award. ECIMOS now appeals those decisions.
We hold that there are sufficient reasons to conclude that Carrier did infringe on
ECIMOS’s copyright, but that Carrier’s liability to ECIMOS based on its copyright infringement
and its breach of contract can total no more than $5,566,050. We also hold that the district court
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did not err when it crafted its post-trial injunctions. For the reasons that follow, we therefore
affirm in part and reverse in part the district court’s rulings.
I. BACKGROUND
A. Factual Background
Carrier is a leading manufacturer of residential HVAC systems. ECIMOS—originally
founded as “ECI” by a former Carrier employee—is the owner of an automated quality-control-
testing system that assesses each HVAC unit at the end of a manufacturer’s assembly line. The
system, called the Integrated Process Control System (“IPCS”), consists of a software program
and associated hardware that interacts with the HVAC unit to perform various tests. Carrier has
“runtest” stations at the end of its manufacturing line where an employee connects a completed
HVAC unit to the IPCS to perform quality-control tests to check for defects. The IPCS software
pulls up the tests that the employee wants the system to perform, and the hardware performs
those tests. The test results are then stored on a database within the IPCS software. The IPCS
aided Carrier by automating and speeding up much of the quality-control process. At the time
this dispute began, ECIMOS’s IPCS was installed in each one of Carrier’s 103 runtest stations in
its Collierville, Tennessee plant, with Carrier paying ECIMOS a licensing fee for each one.
The Carrier-ECIMOS relationship began in 1992, when ECIMOS first installed its IPCS
in Carrier’s Collierville plant. Originally, the IPCS software ran on Microsoft’s “MS-DOS”
operating system. In 2002, Carrier purchased an upgraded system from ECIMOS for $1.4
million. The upgrade included ECIMOS’s Visual Basic 6 (“VB6”) software which ran on
Microsoft’s Windows XP operating system. Throughout this first part of their relationship,
Carrier and ECIMOS had a practice under which ECIMOS performed regular maintenance on
the IPCS and then submitted a proposal for the maintenance work to Carrier, who then issued a
purchase order for the service. Carrier sometimes also purchased “service pack” hours from
ECIMOS in bulk, to pre-pay for expected maintenance work.
In 2004, ECIMOS began formally incorporating licensing terms into the proposals that it
sent to Carrier. These terms prohibited the “[u]nauthorized copying, reverse engineering,
decompiling, disassembling, decrypting, translating, renting, sub-licensing, leasing, distributing,
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and/or creating derivative works based on the software, in whole or in part.” This 2004 iteration
of the Carrier-ECIMOS contract is the operative contract that underlies the contract-breach-
damages argument on appeal.
After 2004, each party’s account of the state of the relationship begins to diverge.
ECIMOS claims that its relationship with Carrier was “ongoing” and “iterative.” In this
relationship, according to ECIMOS, Carrier developed new products and asked ECIMOS to
develop quality-control tests and procedures for them. In contrast, Carrier claims that it viewed
ECIMOS’s products and services as “poor” and “inadequate.” Carrier believed the IPCS storage
database was inefficient because it recorded results for every possible test that could be
performed, even if some tests were not actually run on a particular Carrier unit. Thus, even if
Carrier wanted to perform just one test on one component of an HVAC unit, the IPCS logged the
result as if every possible test had been performed, with the unperformed tests giving a result of
“0” that was then stored in its database. According to Carrier, this created a bulky and
unmanageable database file that often caused the system to lock up and delay production.
In August 2011, ECIMOS announced that it would no longer provide service or routine
maintenance to the IPCS VB6 software because Microsoft no longer supported Windows XP,
which was the operating system that VB6 ran on. ECIMOS claims that, at the time of the
announcement, it had already developed an upgraded software program for the IPCS called
VB.Net that ran on Windows 7—the new Microsoft operating system—and that it was planning
on submitting a proposal to Carrier to sell the upgrade. ECIMOS claims that it expected Carrier
to agree to the proposal just as it had done before, when the IPCS upgraded to VB6 and
Windows XP in 2002. However, unbeknownst to ECIMOS at the time, Carrier had already
installed the VB6 software directly onto the Windows 7 operating system in April 2011. And
Carrier continued operating the IPCS as before, even asking ECIMOS for maintenance of the
IPCS when initial problems with the migrated software arose. ECIMOS claimed that this action
breached the parties’ licensing agreement, which prohibited Carrier from copying or duplicating
the software without ECIMOS’s consent, or from making any “updates” or “upgrades” without
paying ECIMOS an additional licensing fee.
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Moreover, in late 2011, unbeknownst to ECIMOS, Carrier began discussing the
development of a new quality-control software with a third-party developer, Amtec Solutions
Group (“Amtec”). Ostensibly, Carrier wanted Amtec to develop a software and storage database
similar to the IPCS’s, but one that would run more smoothly. ECIMOS states that it suspected
that Carrier’s requests for maintenance during this time were actually veiled attempts at getting
ECIMOS to divulge more trade secrets to aid the development of the competing software. It is
during this period that ECIMOS accuses Carrier of improperly sharing its copyrights and trade
secrets. ECIMOS also claims that these actions breached the parties’ licensing contract.
Despite these developments, the two parties apparently interacted with each other without
change for a few years, with Carrier using the VB6 software on Windows 7 and ECIMOS
completing periodic maintenance on the IPCS. On March 6, 2014, ECIMOS formally submitted
a proposal to Carrier to sell the upgraded VB.Net software, along with several maintenance-
related repairs and upgrades to the IPCS hardware. The total quote for the entire upgrade was
$1,021,000. However, the proposal stipulated that the fee for the “[s]oftware migration from
VB6 to VB.Net” for all of Collierville’s runtest stations was only $118,000. ECIMOS believed
that Carrier would accept the upgrade just as it did in 2002 when ECIMOS migrated the IPCS
software from the MS-DOS operating system to Windows XP. However, Carrier never accepted
the proposal. Instead, in early 2015, Carrier accelerated its work with Amtec to develop a new,
competing quality-control system. This Amtec-developed system included both a software
application (the “Runtest Execution System” or “RES”) and a new storage database (the
“Manufacturing Execution System” or “MES”). For simplicity’s sake, we will refer to all
components of the Amtec-developed system as the “RES.” The RES went live at Carrier’s
Collierville plant in October 2015.
B. Procedural Background
ECIMOS filed suit against Carrier on October 26, 2015 in Tennessee state court. Carrier
later removed the case to federal court. Of note for this appeal, ECIMOS claimed that
(1) Carrier breached the parties’ software-licensing contract by disclosing confidential
information to third parties and by not paying a software-migration fee when it installed VB6
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 6
onto Windows 7; (2) Carrier misappropriated ECIMOS’s trade secrets in the development of the
RES; and (3) Carrier violated ECIMOS’s copyright on the IPCS database.1
The case proceeded to trial, where the jury found for ECIMOS and against Carrier on all
three claims. On the contract-breach claim, the jury found that Carrier breached its contract with
ECIMOS “by failing to pay ECIMOS a licensing fee for installing and using ECIMOS’s
software on the Windows 7 operating system” and by “failing to maintain the confidentiality of
ECIMOS’s materials relating to ECIMOS’s software and/or hardware drawings.” On the trade-
secrets claim, the jury found that Carrier misappropriated “ECIMOS’s software source code
including the algorithms for the valid test and test procedures and the way the software source
code interacts with ECIMOS’s database” as well as “ECIMOS’s assembled hardware drawings
and wiring diagrams.” And on the copyright claim, the jury found that Carrier infringed on
ECIMOS’s copyright on its “runtest database script source code.” Notably, the question of
whether Carrier also infringed on ECIMOS’s copyright on the IPCS software-source code was
submitted to the jury, but the jury found that—as a factual matter—Carrier did not infringe on
that copyright.
During trial, as part of its copyright-damages claim, ECIMOS sought disgorgement
damages for all of Carrier’s profits from its Collierville plant for a fifteen-month period (October
2015 to December 2016). ECIMOS presented evidence of Carrier’s gross revenue from
Collierville for the period, which totaled more than $1.25 billion. At closing, it asked the jury to
award it disgorgement damages for Carrier’s entire profits from the plant, which amounted to
asking the jury for over $225 million. Carrier objected but was overruled. ECIMOS also
submitted a $1.5 million contract-breach amount to the jury, to which Carrier also objected.
Carrier contended that the $1.5 million amount improperly included the $1,021,000 that
ECIMOS would have charged Carrier had Carrier agreed to the system upgrade included in
ECIMOS’s 2014 proposal. Carrier insisted that it never agreed to the full system upgrade
(including maintenance and upgrades to the IPCS hardware) and that ECIMOS should be limited
1
ECIMOS originally made four claims against Carrier: breach of contract, misappropriation of trade
secrets, a violation of the Digital Millennium Copyright Act, and copyright infringement. Carrier made a breach-of-
contract counterclaim against ECIMOS.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 7
to asking the jury for only the licensing fees that Carrier failed to pay when it used the VB6
software on Windows 7. The district court also overruled this objection. The jury ultimately
awarded a total of $7.5 million to ECIMOS: $1.5 million on the contract-breach claim,
$1 million for actual damages arising from Carrier’s copyright infringement, and $5 million for
disgorgement of Carrier’s profits because of the infringement. The jury also found that ECIMOS
did not suffer any damages as a result of Carrier’s misappropriation of trade secrets and so it
awarded no damages based on that claim.
Immediately following trial, Carrier filed a renewed Rule 50 motion for judgment as a
matter of law (it had previously filed the initial motion following ECIMOS’s presentation of its
evidence) or, in the alternative, a Rule 59(e) motion for an amended judgment or a new trial. In
addition to repeating the same objections that it had made at trial, Carrier argued that the
$1 million award for actual damages arising from the copyright infringement should be reduced.
The district court denied Carrier’s motion on the disgorgement and breach-of-contract claims.
However, it reduced the actual damages from the copyright infringement from $1 million to
$282,800, ruling that the maximum supportable amount of actual damages attributable to
Carrier’s infringement was $164,800 in licensing fees for the 103 run-test stations that the IPCS
was installed on, plus the $118,000 software-migration fee. Thus, the total amount of damages
awarded to ECIMOS was reduced from $7.5 million ($1.5 million for contract breach, $1 million
for copyright infringement, $5 million for disgorgement) to $6,782,800 ($1.5 million for contract
breach, $282,800 for copyright infringement, $5 million for disgorgement).
ECIMOS also filed a post-trial motion to permanently enjoin Carrier from using its
Amtec-developed RES database. Additionally, ECIMOS requested that the court enjoin Carrier
from using or disclosing the trade secrets that the jury found Carrier had improperly disclosed
(ECIMOS’s software source code and its assembled hardware drawings and wiring diagrams).
The district court granted the injunction to enjoin Carrier from using the RES, but it immediately
stayed the injunction until a point at which Carrier could implement a new, non-infringing
database for its runtest stations. The district court appointed a special master to oversee this
process. At the time this case was argued on appeal, Carrier was still using the RES and the
injunction was still stayed. The district court also enjoined ECIMOS from any further disclosure
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 8
of ECIMOS’s trade secrets but did not enjoin Carrier from using those trade secrets. The district
court concluded that because the jury found that ECIMOS suffered no damages as a result of
Carrier’s misappropriation of its trade secrets, Carrier could continue using ECIMOS’s trade
secrets as long as it paid ECIMOS a reasonable monthly licensing fee of $50 per runtest station
per month. This rate is from the amount that ECIMOS quoted Carrier in 2014 for the licensing
fees associated with its software ($600 per station per year).
In its post-trial motion, ECIMOS also sought to amend the disgorgement award. In
addition to the $5 million disgorgement amount that it had received for the fifteen-month period
between October 2015 and December 2016, ECIMOS sought further disgorgement for another
period, beginning from January 1, 2017 and continuing until a time when Carrier no longer used
the RES database. Specifically, ECIMOS sought a rate of $4 million per year for every year that
Carrier uses its RES “until a new database can be developed from scratch.” The district court
denied this motion, holding that the jury only awarded past profits, and that it would “not
extrapolate additional disgorgement of profits from the jury’s verdict.” This appeal followed.
Carrier’s arguments on appeal can be summarized thusly: (1) Carrier did not infringe on
ECIMOS’s copyright as a matter of law, and thus neither the disgorgement award nor copyright-
infringement award were proper; (2) regardless of whether any infringement occurred, the
actual-damages award attributable to the infringement should be further reduced from $282,800
to $164,800; (3) regardless of whether any infringement occurred, the district court erred by
allowing ECIMOS to ask the jury for $225 million in disgorgement, and the entire $5 million
disgorgement award should be vacated; and (4) the contract-breach damages of $1.5 million
should be reduced to only $283,250 because that is the only supportable amount of damages that
could be attributable to Carrier’s breach. Carrier does not dispute the jury’s finding that it
breached its licensing contract with ECIMOS.
ECIMOS cross appeals by arguing: (1) the actual-damages award attributable to the
copyright infringement should never have been reduced and the $1 million award should be
reinstated; (2) the disgorgement time period should be extended indefinitely from a period
beginning January 1, 2017 until a time when Carrier stops using the infringing RES database;
(3) the district court abused its discretion by staying the permanent injunction so that Carrier was
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 9
allowed to continue using the RES; and (4) the district court abused its discretion by not
enjoining Carrier’s use of ECIMOS’s trade secrets.
II. DISCUSSION
A. Copyright Infringement
We begin our analysis by addressing whether there was any copyright infringement as a
matter of law, which we review de novo. See Lexmark Int’l, Inc. v. Static Control Components,
Inc., 387 F.3d 552, 534 (6th Cir. 2004). At trial, the jury found that Carrier had infringed
protectable elements of ECIMOS’s database-script source code. ECIMOS also argued that
Carrier had infringed on the IPCS software-script source code, but the jury rejected that
argument and found—as a matter of fact—that Carrier did not infringe on that copyright. On
appeal, Carrier contends that it also did not infringe on ECIMOS’s copyright for its database-
script source code as a matter of law, and that the district court erred when it rejected this claim
in Carrier’s Rule 50 and Rule 59 motions. We also review a denial of a judgment as a matter of
law and denial of a motion to alter or amend judgment based on claims of legal error de novo.
See, e.g., Mosby-Meacham v. Memphis Light, Gas & Water Div., 883 F.3d 595, 602 (6th Cir.
2018); Tchankpa v. Ascena Retail Grp., 951 F.3d 805, 811 (6th Cir. 2020). A judgment as a
matter of law is warranted only if “a reasonable jury would not have a legally sufficient
evidentiary basis to find for the party” that prevailed. Fed. R. Civ. P. 50(a)(1). When making
this determination, we “must view the evidence in the light most favorable to the nonmovant,”
and must grant all reasonable inferences in the nonmovant’s favor. Mosby-Meacham, 883 F.3d
at 602. “A motion for judgment as a matter of law should be granted ‘only if reasonable minds
could not come to a conclusion other than one favoring the movant.’” Ibid. (citation omitted).
To succeed on a copyright-infringement claim, a plaintiff must establish “(1) ownership
of a valid copyright, and (2) copying of constituent elements of the work that are original.” Feist
Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). The first part “tests the
originality and non-functionality of the work” to ensure that it is a protectable expression rather
than an unprotectable idea. Registration of a valid copyright (as ECIMOS has done for its IPCS
database) is prima facie evidence that the work is entitled to protection. Lexmark, 387 F.3d at
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534. The second part of the analysis “test[s] whether any copying occurred (a factual matter)
and whether the portions of the work copied were entitled to copyright protection (a legal
matter).” Ibid. It is undisputed that ECIMOS holds a valid copyright in its IPCS database-script
source code. However, Carrier contends that it did not infringe upon any protectable element of
that copyright, and that—even if it did—any copying was de minimis and was not actionable as a
matter of law.
Testimony at trial established that Carrier had indeed copied certain aspects of
ECIMOS’s database-script source code and used it (or a variant of it) in developing the code for
the RES database. For example, it is uncontested that Carrier’s former IT manager, David Hoal,
used the IPCS database-script source code to create a similar data-storage procedure and data-
storage “results table” (the “Hoal Table”), which he sent to Amtec to aid Amtec’s development
of the RES database. A results table is a part of a quality-control system’s software that stores
the results of the tests run by the system. Peter O’Connor, a senior business analyst at Carrier,
testified that the Hoal Table “looked similar to the run test results data table” from the IPCS that
Carrier was “using at the time” that it was in correspondence with Amtec. O’Connor further
testified that the Hoal Table was later transferred directly into the RES database, but that it was
never used nor became a functional aspect of the RES database.
However, another trial witness, J.C. Stewart, a Carrier engineer, testified that a common
typo (“reults” instead of “results”) that originated from an error in the Hoal Table was likely to
have also been found throughout the usable portions of the RES database. Specifically, Stewart
noted that there were many stored procedures—saved portions of code that can be reused over
and over again to run the same procedure—with the same typo throughout the portions of the
RES database that were functional. Moreover, ECIMOS’s expert witness, William Carr, testified
that he performed a script-code analysis comparing the RES database’s code with the IPCS
database’s code, and concluded that the two programs were substantially similar.2 He noted the
2
Carr’s analysis followed this court’s dictates for an “abstraction-filtration comparison” when evaluating
whether there has been a copyright infringement in cases where evidence of direct copying—the actual sale of
copyrighted material— is sparse. See Kohus v. Mariol, 328 F.3d 848, 855 & n.1 (6th Cir. 2003). Developed by the
Second Circuit in its opinion in Computer Associates Int’l, Inc. v. Altai Inc., 982 F.2d 693, 706 (2d Cir. 1992), the
comparison proceeds (by most accounts) in three steps. First, protectable expression is separated from abstract
ideas. For example, the general function of a computer program—at the highest level—is an unprotectable idea, but
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 11
presence of sixty-two or sixty-three fields from each program’s results table that were exact
matches, and another ninety or so fields that were “aliased”—meaning that all of the substantive
aspects of the fields were identical with only slight distinctions between the two that did not
change the functional aspects of the code. Carr concluded that his analysis led him to believe
that there had been “direct copying” of the IPCS code into the Hoal Table, and Carr’s testimony
was buttressed by trial exhibits that showed several areas where the codes for the results tables of
the IPCS database and the RES database were identical.
At trial, ECIMOS contended that these pieces of evidence demonstrated that Carrier
impermissibly used ECIMOS’s copyrighted database-script source code to develop the RES
database. The jury agreed with ECIMOS as it found that “Carrier copied the protected elements
of ECIMOS’s runtest database script source code.” On appeal, Carrier does not dispute that the
Hoal Table has been incorporated into the RES code—in other words, it acknowledges that
elements of the IPCS database-script source code have been copied and incorporated into the
RES database. Indeed, Carrier cannot contest this point without arguing that the jury came to an
incorrect conclusion of fact. Instead, Carrier insists that the Hoal Table has never been a
necessary or even functional aspect of the RES database, and that it was inadvertently transferred
into the final version of the RES code. Carrier thus argues that the Hoal Table was not a
protectable element of ECIMOS’s copyright because any copying of ECIMOS’s database code
that led to the development of the Hoal Table (and its subsequent incorporation into the RES
database) was unintentional and de minimis, and that copyright protection is unwarranted for the
the code of the program that expresses a unique way to achieve the goals of the program is generally considered a
protectable form of expression. Id. at 706–07. Next, unprotectable elements of the work are “filtered” out from the
protectable expressive form. These unprotectable elements include “elements dictated by efficiency,” “stock”
elements that are common or expected in any type of code on that subject, and elements from the public domain. Id.
at 707–10. Finally, once the unprotectable elements of the work are filtered out, the remaining elements of both
programs are compared to see if they are substantially similar. Id. at 710–11. Carrier argues on appeal that the
district court erred by not performing an abstraction-filtration analysis to identify precisely which elements of the
IPCS database were entitled to copyright protection. However, Carrier never made this argument in any of its
dispositive motions before the district court before trial. Moreover, it seems quite apparent that the database-script
source code that contained the results table qualifies as a protectable copyright. The database-script source code,
and the results table in particular, are parts of ECIMOS’s IPCS results-storage database, and are not elements that
would be “filtered” out for being unoriginal (i.e., not “dictated by efficiency,” not a “stock” element common to all
types of code, etc.). Expert testimony such as that provided by Carr at trial furthered this conclusion, which we
often rely on in making such determinations. See Kohus, 328 F.3d at 857–58; see also MiTek Holdings, Inc. v. Arce
Eng’g Co., 89 F.3d 1548, 1555 (11th Cir. 1996) (suggesting that the district court did not err when it performed the
abstraction-filtration test for the first instance during trial, when it had the assistance of expert testimony).
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 12
Hoal Table as a matter of law. See Ringgold v. Black Ent. Television, Inc., 126 F.3d 70, 74 (2d
Cir. 1997) (“[D]e minimis in the copyright context can mean what it means in most legal
contexts: a technical violation of a right so trivial that the law will not impose legal
consequences.”).
This court recognizes the de minimis defense to copyright-infringement claims. Gordon
v. Nextel Commc’ns, 345 F.3d 922, 924 (6th Cir. 2003). The de minimis defense insulates a
defendant’s technical violations of a copyright from liability if the copying is “so trivial ‘as to
fall below the quantitative threshold of substantial similarity, which is always a required element
of actionable copying.’” Ibid. (quoting Ringgold 126 F.3d at 74). In determining whether the
allegedly infringing work is substantially similar, we “look to the amount of the copyrighted
work that was copied, as well as the observability of the copyrighted work in the allegedly
infringing work.” Ibid. For example, in Gordon, we held that the defendant’s use of an artist’s
“dental illustrations” in a television commercial advertising text messaging was de minimis
because the illustrations were not very observable in the advertisement and did not appear for a
very long time (less than a second). Ibid.
Carrier contends that any technical copyright violation that occurred from its
development and use of the Hoal Table was de minimis. In support, it notes that the Hoal Table
contained only 167 lines of code, whereas the IPCS database-script source code contained 2008
lines, and the entire IPCS software had around 27 million lines of code. Carrier also insists that
the Hoal Table has never been a functional or significant aspect of the RES database, and that it
is not needed for the RES database to run effectively. Carrier also points to a report drafted by
Carr, ECIMOS’s expert witness, who concluded that the Hoal Table was “unnecessary (and
nonfunctional)” in the RES due to several incompatible codes; although that same report also
concluded that the “table appears to be a derivative of the copyright-protected ECIMOS . . . table
. . . from the ECIMOS database.”
We reject Carrier’s de minimis defense. The fact that the Hoal Table only took up
167 lines of code is immaterial. What matters is not the quantity of code that was copied, but the
significance of the code to the program, and—more importantly—the inferences that can be
drawn from the copying. For example, in Oracle America, Inc. v. Google Inc., the Federal
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Circuit upheld a jury’s finding of a copyright infringement against Google even though it had
copied only nine lines of code for a function that represented a tiny fraction of the millions of
lines of code across the infringing application. 750 F.3d 1339, 1378–79 (Fed. Cir. 2014). The
Federal Circuit emphasized that although the copied code only took up nine lines, the lines were
significant because the code governed a function that was used “2,600 times just in powering on
the device.” Id. at 1379. Other courts have also emphasized that “[a] de minimis defense does
not apply where the qualitative value of the copying is material.” Dun & Bradstreet Software
Servs. Inc., v. Grace Consulting Inc., 307 F.3d 197, 208 (3d Cir. 2002); see also MiTek Holdings,
Inc. v. Arce Eng’g Co., 89 F.3d 1548, 1560 (11th Cir. 1996) (noting that although parts of the
computer program at issue were unquestionably copied, the copied aspects “were not of such
significance to the overall program to warrant” a finding of infringement). Carrier thus cannot
rely solely on the fact that only a small number of lines of code were copied to claim that the
copyright violation was de minimis.
Carrier insists that the Hoal Table was not a qualitative infringement because—although
it was incorporated into the RES database code—it was never a significant enough part of the
RES database to qualify as infringement. However, the problem for Carrier is that the Hoal
Table was not the only piece of evidence that the jury heard regarding Carrier’s infringement.
ECIMOS’s contention is not that Carrier infringed its copyright on the IPCS database-script
source code by copying only the Hoal Table. Instead, ECIMOS’s argument is that Carrier
infringed by using the database-script source code without authorization and then presenting the
copyrighted code to Amtec to develop a competing database, and that the Hoal Table was but
one piece of evidence to prove that theory. Under this view, the Hoal Table is merely indicative
of the copying of the overall database-script source code and should not be considered as the
only act of copying that occurred. We agree.
For example, the jury heard testimony that a common typo in the code that had
originated from the Hoal Table (“reults” instead of “results”) would likely have been found in
many stored procedures throughout the RES database, and that the error was not confined to only
the Hoal Table. The jury could have reasoned that the common typo was evidence that other
aspects of the Amtec-developed database had been copied from the IPCS database as well. In
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 14
addition to the Hoal Table and the “results” to “reults” typo, the jury also heard evidence that
Carrier had “aliased” the RES’s database tables by changing field names to be different from
similar fields in the IPCS database. For example, William Carr, ECIMOS’s expert witness,
testified that he found multiple instances in which the RES code simply changed field names to
be different from the IPCS code, but that the change did not change the functionality of the
program. These changes did nothing more than simply make the RES code appear different from
the IPCS code, and the jury could have credited this testimony as evidence of Carrier’s attempts
to hide its use of the database-code copying beyond just the Hoal Table. Thus, even if the Hoal
Table itself was nonfunctional and insignificant in the RES system, the jury heard evidence that
could have led them to infer that Carrier impermissibly copied certain aspects of the IPCS code
to help create the RES database, including the fact that the Hoal Table “appears to be a derivative
of the copyright-protected ECIMOS” database.
Indeed, the jury could have used any of these pieces of evidence to reason that Carrier
had used the IPCS database-script source code without authorization to create similar procedures
in the RES, which constitutes copyright infringement. See, e.g., 17 U.S.C. § 106(2)–(3) (noting
that the copyright owner has the exclusive right to prepare derivative works and to distribute
copies); Stromback v. New Line Cinema, 384 F.3d 283, 301 (6th Cir. 2004) (noting that a
copyright owner has the “exclusive right to ‘use’ a work”); Design Data Corp. v. Unigate Enter.,
Inc., 847 F.3d 1169, 1172 (9th Cir. 2017) (noting that unauthorized use of a copyrighted work is
actionable if it is “significant enough to constitute infringement” (citation omitted)). We
therefore affirm the district court’s refusal to overturn the jury’s verdict finding that Carrier
infringed upon ECIMOS’s copyright.
B. Actual and Disgorgement Damages Related to the Infringement
We next consider whether the district court erred in its rulings on the actual and
disgorgement damages to which ECIMOS was entitled as a result of Carrier’s infringement. Our
analysis is guided by the copyright statute. 17 U.S.C. § 504(b) states:
The copyright owner is entitled to recover the actual damages suffered by him or
her as a result of the infringement, and any profits of the infringer that are
attributable to the infringement and are not taken into account in computing the
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 15
actual damages. In establishing the infringer’s profits, the copyright owner is
required to present proof only of the infringer’s gross revenue, and the infringer is
required to prove his or her deductible expenses and the elements of profit
attributable to factors other than the copyrighted work.
The statute’s text makes clear that Congress wished to make two distinct types of monetary
recovery available to injured parties—“the actual damages suffered” as a result of the
infringement, and the disgorgement of the infringer’s profits that were “attributable to the
infringement.” 17 U.S.C. § 504(b).
In terms of the actual damages resulting from the infringement, the jury originally
returned a $1 million award, which the district court reduced to $282,800 after concluding that
was the total amount ECIMOS lost due to Carrier’s infringement. In terms of disgorgement, the
district court permitted ECIMOS to ask the jury for $225 million in disgorged profits from
Carrier, and the jury returned an overall award of $5 million. Aspects of both damages awards
are challenged on appeal. Carrier argues that the already reduced actual-damages award of
$282,800 should be further reduced to $164,250 while ECIMOS contends that the $1 million
amount should be reinstated. Carrier also contends that the $5 million disgorgement award
should be vacated entirely while ECIMOS claims that the amount should be increased.
We address each issue in turn.
1. Actual Copyright Damages
Following the post-trial motions, the district court reduced ECIMOS’s $1 million actual-
damages award to $282,800. “In the absence of undue passion and prejudice on the part of the
jury, we review for abuse of discretion the district court’s decision on the issue of remittitur,” but
“a jury verdict should not be remitted by a court ‘unless it is beyond the maximum damages that
the jury reasonably could find to be compensatory for a party’s loss.’” Gregory v. Shelby Cnty.,
220 F.3d 433, 443 (6th Cir. 2000) (quoting Jackson v. City of Cookeville, 31 F.3d 1354, 1358
(6th Cir. 1994)). “[A]n award must stand unless it is (1) beyond the range supportable by proof;
or (2) so excessive as to shock the conscience; or (3) the result of a mistake.” Ibid. Generally,
the amount of actual damages is “calculated with reference to the loss in the fair market value of
the copyright, often measured by the profits lost as a result of the infringement.” Cotter v.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 16
Christus Gardens, Inc., 238 F.3d 420 (Table), 2000 WL 1871698 at *3 (6th Cir. 2000) (quoting
Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1170 (1st Cir. 1994), overruled
on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010)). Actual damages can
thus be thought of as the anticipated amount that the copyright holder would have received had
the infringer not infringed. See Thoroughbred Software Int’l, Inc. v. Dice Corp., 488 F.3d 352,
358 (6th Cir. 2007) (acknowledging that the parties agreed that the actual damages should be the
amount the plaintiff would have received “but for” the defendant’s “unlawful copying of the
software”). “A plaintiff seeking actual damages ‘must prove the existence of a causal connection
between the . . . alleged infringement and some loss of anticipated revenue.’” Ibid. (alteration in
original) (citation omitted).
At trial, ECIMOS asked the jury for $1,521,250 in actual copyright damages, which
represented $1,021,000 for the total upgrade fee of the IPCS that ECIMOS quoted Carrier in
2014, and $474,150 in lost licensing fees for the period from April 2011 (the time when Carrier
installed the VB6 software onto Windows 7) through June 2018 (the beginning of trial). The
jury returned an award of $1 million and—following each parties’ post-trial motions—the
district court reduced the $1 million to $282,800. The district court concluded that the record
only supported $282,800 in lost money that ECIMOS would have earned as a result of the
infringement: $164,800 in unpaid licensing fees for the IPCS (at a rate of $50 per month for each
of the 103 runtest stations) from October 2015 (when the RES went online at Collierville) to July
2018 (when the trial concluded), and $118,000 for the one-time “software migration fee” that
ECIMOS quoted Carrier in its 2014 proposal for upgrading VB6 to VB.Net when the IPCS
transitioned to Windows 7. Carrier now contends that it should only be required to pay
copyright-infringement damages of $164,800 (only the cost of the lost licensing fees) while
ECIMOS claims that the full $1 million should be reinstated.
In calculating whether the district erred in reducing the actual-damages award, we must
calculate what ECIMOS would have earned had Carrier not infringed on the IPCS database-
script source code. Neither party disputes that an accurate assessment of actual damages would
include the $164,800 that ECIMOS lost in licensing fees that Carrier never paid for using its
infringing RES database. Nor does either party dispute that Carrier migrated the VB6 software
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 17
from Windows XP to Windows 7 in early 2011 but that it did not pay ECIMOS for the
migration. However, contrary to the district court’s conclusion, the software migration cannot be
a basis for actual copyright damages because the jury found that Carrier did not infringe on
ECIMOS’s software-script source code. Indeed, the jury was specifically asked to find whether
Carrier had infringed on aspects of ECIMOS’s “software script-source code,” and it concluded
that Carrier did not. Thus, the only foundation for a calculation of actual damages from the
infringement must be the profit that ECIMOS expected to receive from its database-script source
code; the award cannot be based on anything related to the IPCS software application.
The district court held that the history of proposals and purchase orders between the two
parties established that ECIMOS would have received the one-time software migration fee from
Carrier, because Carrier actually installed VB6 onto Windows 7, in contravention of the
licensing terms of the software. Yet, just because Carrier breached the terms of the licensing
agreement does not mean that such action can be the basis of a copyright-damages award.
ECIMOS does not provide any reason to suggest that the software migration from VB6 to
Windows 7 infringed its copyright on the database-script source code, and indeed acknowledges
in its briefing on appeal that the district court appears to have conflated “ECIMOS’s software
application with the database scripts.” The district court thus erred by including the $118,000
software-migration fee into the actual-damages award.
Yet this conclusion does not end the inquiry, as ECIMOS insists that the $1 million can
be supported from other evidence in the record. As quoted in the 2014 proposal to Carrier,
ECIMOS insists that the entire IPCS upgrade/system is worth $1,021,000. ECIMOS claims that
the entire system could not function without the infringed-upon database-script source code and
that the system’s hardware, software, and database were “inextricably linked.” However, that is
not how actual damages should be calculated. The $1,021,000 quote from ECIMOS contained
approximately $834,000 for runtest station repairs as well as other work associated with the
IPCS hardware. It also included a $3,600 for a software add-on that Carrier apparently did not
use. These additional aspects cannot support actual copyright damages for ECIMOS’s database-
script source code. Contrary to ECIMOS’s insistence, it can only recover damages that resulted
from “the loss in the fair market value of the copyright, measured by the profits lost due to the
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 18
infringement or by the value of the use of the copyrighted work to the infringer.” McRoberts
Software, Inc. v. Media 100, Inc., 329 F.3d 557, 566 (7th Cir. 2003) (emphasis added). The only
copyright that was infringed was ECIMOS’s database-script source code. Even if the IPCS
hardware and software applications were linked to the database, there is no evidence that the
database, by itself, had a fair-market value of anywhere close to $1 million. Although ECIMOS
provided Carrier with the 2014 proposal for a system upgrade, which totaled more than $1
million, there was nothing in the proposal that adverted to ECIMOS’s valuation of the database.
The only reasonable basis upon which to calculate the amount is ECIMOS’s valuation of how
much its IPCS software (which included the database) was worth on a license-per-station basis.
This amount was $50 per month for each of the 103 runtest stations at Carrier’s Collierville
plant. When this rate is factored alongside the amount of time that the infringement was ongoing
at Collierville before trial (32 months—from the time that the infringing RES database went live
at Collierville to the time that the trial started), the maximum supportable amount of actual
copyright damages is $164,800.
2. Disgorgement Damages
In addition to the actual damages suffered from the infringement, 17 U.S.C. § 504(b) also
permits the copyright owner to recover “any profits of the infringer that are attributable to the
infringement and are not taken into account in computing the actual damages.” At trial,
ECIMOS submitted evidence—in the form of financial records and accompanying testimony—
of Carrier’s gross revenues from its Collierville plant for a fifteen-month period (October 2015 to
December 2016), which totaled more than $1.25 billion. The district court also permitted
ECIMOS to ask the jury to disgorge Carrier of the entirety of its profits from its Collierville
plant, which totaled $225,483,000. The jury concluded that damages worth $5 million were
attributable to Carrier’s infringement of ECIMOS’s database-script source code. Carrier now
claims that the $5 million award should be vacated, arguing that ECIMOS did not meet its
purported burden of showing that Carrier’s profits were reasonably related to the infringing
activity. Whether the district court erred in submitting a theory of disgorgement damages to the
jury is an issue of law we review de novo. Thoroughbred Software, 488 F.3d at 358.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 19
i. Submitting Carrier’s Gross Profits to the Jury Was Not Legal Error
Carrier contends that ECIMOS should have been required to show the amount of
Carrier’s profits that were attributable to the infringement. In Carrier’s view, 17 U.S.C. § 504(b)
requires the copyright holder to show the “profits of the infringer that are attributable to the
infringement,” and ECIMOS never met this burden. Carrier further argues that the infringed-
upon code constituted only a small part of Carrier’s operations at Collierville. Carrier claims that
it uses hundreds of different software packages and numerous other inputs that go into the
manufacturing of HVAC units. Carrier therefore insists that its infringement of a particularly
minor piece of code could not possibly have affected its entire profits.
However, Carrier’s position is directly refuted by both the text of 17 U.S.C. § 504(b) and
the cases that have addressed it. Section 504(b) states clearly that, “[i]n establishing the
infringer’s profits, the copyright owner is required to present proof only of the infringer’s gross
revenue, and the infringer is required to prove his or her deductible expenses and the elements of
profit attributable to factors other than the copyrighted work” (emphasis added). Thus, the
burden is on Carrier to prove the level of profits that were not attributable to the copyrighted
work. All that ECIMOS must prove is Carrier’s gross revenue. Notwithstanding this explicit,
textual directive, Carrier insists—relying on our decision in Balsley v. LFP, Inc.—that ECIMOS
has the burden of showing that the “gross revenue number [submitted by the copyright holder to
the jury] must have a reasonable relationship—relevance, in other words—to the infringing
activity.” 691 F.3d 747, 769 (6th Cir. 2012). However, a deeper reading of Balsley defeats
Carrier’s point. The plaintiff in Balsley won a copyright-infringement suit against Hustler
magazine for publishing a photograph of her dancing in a “wet T-shirt contest.” Id. at 755.
During the damages calculation, the defendant acknowledged that the gross revenue for the issue
of Hustler in which the picture appeared was $1,148,000 and that “[t]he relationship of the
infringement to that gross revenue number was demonstrated by the parties’ stipulation that the .
. . photograph was published in” the issue. Id. at 770. We held that “[t]his evidence was all that
was required of Plaintiffs under the statute.” Ibid (emphasis added). And we “reject[ed]
Defendant’s contention that it is Plaintiffs’ burden to prove that Defendant profited from the . . .
photograph, or to prove which portions of Hustler’s profit, if any, are attributable to the . . .
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 20
photograph. Plaintiffs have only one requirement: to prove Defendant’s gross revenue.” Id. at
769.
Indeed, we held that “Section 504(b) unambiguously provides that the burden on the
copyright owner is ‘to present proof only of the infringer’s gross revenue’ of the infringing
product, while the infringer must show not only ‘expenses’ but also the amount of the ‘profit
attributable to factors other than the copyrighted work.’” Id. at 767 (emphasis added) (quoting
17 U.S.C. § 504(b)); see also id. at 768 (“The only statutory requirement on a copyright owner is
proving gross revenue, which is presumed to be the infringer’s profits until the infringer proves
otherwise.”). Put simply, the burden is on the copyright infringer to prove whatever portion of
its gross revenue was not attributable to the infringement:
The phrase “attributable to” appears twice in the statute: First, the statute provides
that a copyright owner is “entitled” to recover only those profits that are
“attributable to” the infringement of its copyrighted material. The final sentence
of the statute explains that the burden of proving which portions of that gross
revenue are “attributable to” or not attributable to the infringement is on the
infringer—not the copyright owner. “Where there is a commingling of gains, [the
defendant] must abide the consequences, unless he can make a separation of the
profits so as to assure to the injured party all that justly belongs to him.”
Id. at 768–69 (alteration in original) (emphasis added) (quoting Sheldon v. Metro-Goldwyn
Pictures Corp., 309 U.S. 390, 406 (1940)). And although Balsley suggested that the gross
revenues must be “reasonably related” to the infringement, our full analysis of the issue stated:
To the extent the phrase ‘attributable to’ is applicable to the copyright owner’s
burden (though we believe that phrase should not be used in reference to the
copyright owner’s burden in order to prevent confusion), it simply means that the
gross revenue number that the copyright owner presents must have a reasonable
relationship to the infringing activity.
Id. at 769 (emphasis added). In other words, any relevant revenue that could be traced back to
the infringement can be submitted to the jury, and that it is ultimately for the jury to decide how
much profit—after hearing the infringer’s mitigating evidence—must be disgorged.
That Section 504(b) requires the copyright holder to only present proof of the infringer’s
gross revenues is a conclusion affirmed by other opinions from this court. For example, in
Bridgeport Music, Inc. v. Justin Combs Publ’g, we affirmed a jury’s disgorgement award after
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 21
concluding that the plaintiffs had “met their initial burden of presenting proof of defendants’
gross revenue” by presenting “evidence of defendants’ profits” from the infringing album, even
though the infringer had used the plaintiff’s copyrighted material only on one part of one song.3
507 F.3d 470, 483 (6th Cir. 2007). Although the jury returned a disgorgement award that
reflected a calculation of “dividing the album profits by the number of tracks on the album”—
effectively allowing plaintiffs to recover only for profits received from the one song that had
infringed—evidence of the entire album’s profits were presented to the jury for consideration.
Id. at 483. In affirming the award, we noted that the jury could have simply rejected the
defendant’s proposed allocation of profits attributable to the infringement, but that the plaintiffs
had met their burden under the copyright statute. Id. at 483–84. Indeed, the jury here seemed to
have taken a similar approach to the jury in Bridgeport Music. Carrier’s entire revenues from
Collierville were submitted to the jury, and ECIMOS asked for an award of $225,483,000. But
the jury’s award of only $5 million, represented approximately only 2.2% of Carrier’s
$225,483,000 profit or 0.4% of Carrier’s over $1.25 billion in revenue.
When evaluated under this framework, there is ample evidence to conclude that ECIMOS
met its burden of presenting proof of Carrier’s gross revenues, and that it was reasonably related
to the infringement. The jury was presented with Carrier’s financial records from October 2015
to December 2016, and the jury heard testimony that the records were “created by Carrier’s
finance department” and were prepared “in accordance with Generally Accepted Accounting
Principles.” The testimony discusses estimates of Carrier’s monthly revenues, costs, and
liabilities for the period in question. ECIMOS also limited its revenue presentation to the
Collierville plant and, notably, Carrier does not dispute that Carrier’s estimates of its gross
revenue or profits were accurate. Thus, ECIMOS clearly met its burden of presenting “proof
only of the infringer’s gross revenue.” 17 U.S.C. § 504(b).
3
Bridgeport Music suggests that the copyright holder can meet its “initial burden of presenting proof of
defendants’ gross revenue” by presenting evidence of the infringer’s profits. 507 F.3d at 483. We found no fault in
this process and indeed, the plaintiffs arguably went beyond what was required of them under the copyright statute.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 22
ii. The Jury Could Have Inferred from the Trial Evidence that at Least $5 Million
of Carrier’s Profits Were Attributable to the Infringing Activity
Carrier next argues that, even if there was no error in permitting ECIMOS to ask the jury
for the disgorgement of all of Carrier’s profits from Collierville, the $5 million disgorgement
award was still excessive as there was insufficient evidence to suggest that even that amount was
attributable to the infringement. We disagree. The $5 million awarded constituted only 2.2% of
Carrier’s $225,483,000 in profits or 0.4% of Carrier’s over $1.25 billion in revenue from
Collierville for the fifteen-month period in question (October 2015 to December 2016). These
calculations reflect the jury’s assessment that only 0.4% of Carrier’s Collierville revenues were
earned as a result of its infringing use of ECIMOS’s database-script source code. “[A] verdict is
not excessive unless it clearly exceeds the maximum that a jury could reasonably find to be
compensatory for the plaintiff’s loss,” and we will not disturb a disgorgement award “[u]nless
the award is (1) beyond the range supportable by proof or (2) so excessive as to shock the
conscience, or (3) the result of a mistake.” Balsley, 691 F.3d at 772 (first alteration in original)
(citation omitted).
In Balsley, we noted that the jury’s disgorgement award of $135,000 was only
“8.5% . . . of the over one-million dollars that Defendant made from the” issue of Hustler in
which the copyrighted photograph appeared, and we concluded that the “amount does not clearly
exceed the maximum or shock the conscience, so it must be left intact.” Id. at 771. Balsley is
particularly instructive, as we were not distressed by the jury’s conclusion that one photograph in
a magazine that is likely to have contained dozens of similar photographs could have been
responsible for 8.5% of the issue’s entire revenues. In our case, there is no dispute as to the fact
that every Carrier HVAC unit would have undergone tests on the IPCS—and thus would have
necessarily utilized aspects of the database where the test results were stored—before being
shipped for sale. Thus, the impact of ECIMOS’s intellectual property on Carrier’s profits likely
had an even larger impact than the copyrighted photograph had on Hustler’s profits in Balsley
and yet the jury concluded that only 0.4% of Carrier’s revenues were attributable to its infringing
use of the IPCS database. This is not excessive.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 23
Bridgeport Music provides further support. The jury in Bridgeport Music had awarded
the plaintiffs $733,878 in disgorgement damages, but the defendant argued that the amount was
not attributable to the infringement. 507 F.3d at 483. The defendant’s expert had testified that
the value of the infringing material to the entire album was very low and, on appeal, the
defendants argued that the large disgorgement award was not reflective of that testimony.
However, we concluded that “the jury could have simply not believed the testimony of
defendants’ expert witnesses in light of the jurors’ having heard the song” and in light of the fact
that a plaintiffs’ witness had testified that the value of the infringing material would likely
increase over time. Id. at 483–84. The jury’s decision to award the plaintiffs $733,878 was
simply a reflection of its view of the evidence, and “permitting the jury to determine that
defendants failed to meet their burden of proving profits attributable to factors other than the
infringing material was not reversible error.” Id. at 484. In short, if there was at least plausible
evidence from which the jury could have based the disgorgement award—or the disgorgement
percentage—the award should be upheld.
The same principle applies to this case. The jury heard ample evidence that the IPCS, as
a whole, was an integral part of Carrier’s quality-control operations and that any inability to use
the system would have resulted in decreased profits. For example, Steve Youngblood, Carrier’s
Associate Director of Operations for Assembly at Collierville, testified that if Carrier were
unable to use the IPCS to run its quality-control tests, the plant would have to “shut down” “until
[Carrier] could find an alternative means to test our product.” Carrier claims that had the IPCS
not been in place, it could have manually performed many of its quality-control tests, and that it
had manually tested HVAC units for many years before first purchasing the IPCS in 1992. But
this assertion strains credulity.
Given the changes in technology and Carrier’s growth in business, it seems highly
unlikely that Carrier could have maintained a similar level of revenue and profits if it were
required to manually test its units. Moreover, there was no assurance that any alternative to the
IPCS could have been implemented quickly. For example, the jury also heard evidence that the
Amtec-developed RES “took thirteen months to develop, even with a copied database as a
shortcut,” and so it seems unlikely that it would have been easy for Carrier to quickly replace the
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 24
IPCS with something of comparable quality. Even if Carrier chose to manually test all of its
products, the jury heard evidence that manual testing would have dramatically slowed the
manufacturing process because of the complexity of the tests that were performed. The jury
could have thus quite reasonably concluded that the manual tests—even if they were an option—
would have taken much longer to perform than the automated tests. The jury also heard
evidence that the infringed-upon database code was an integral part of the IPCS, as the database
stored test results. And although it is unlikely that the database code would have been
responsible for the entirety of Carrier’s profits, that is not what the jury award reflected. The $5
million award constituted only 2.2% of Carrier’s Collierville profits or 0.4% of Carrier’s
revenues which—given the evidence presented at trial—is not so unreasonable that it would
shock the conscience or is “beyond the range supportable by proof.” Balsley, 691 F.3d at 771
(citation omitted).
iii. The District Court Did Not Abuse Its Discretion by Refusing
to Expand the Scope of the Disgorgement Award
Despite being awarded $5 million from Carrier’s disgorged profits, ECIMOS remains
unsatisfied. It contends that the district court should have granted its post-trial motion for
additional disgorgement of Carrier’s future profits, for a period beginning January 1, 2017 and
running until Carrier stopped using the infringing RES database. The district court denied the
request, holding that it would not extrapolate additional disgorgement from the jury’s verdict as
the jury was not asked to determine which portions of Carrier’s future profits could be
attributable to the infringement. Because ECIMOS is seeking to alter or amend the judgment,
we review the district court’s decision for an abuse of discretion. See Intera Corp. v. Henderson,
428 F.3d 605, 619 (6th Cir. 2005). “A district court abuses its discretion when it relies on clearly
erroneous findings of fact, or when it improperly applies the law or uses an[] erroneous legal
standard.” Id. at 619–20 (alteration in original) (citation omitted).
We hold that the district court did not abuse its discretion when it rejected ECIMOS’s
motion for additional disgorgement. First, ECIMOS is already being compensated for any post-
trial use of its copyright by Carrier. The district court’s post-trial injunction requires Carrier to
pay the equivalent of a licensing fee ($50 per month) for a period beginning August 1, 2018 for
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 25
each runtest station in its Collierville plant, and continuing until Carrier stops using its RES
database. The $50 per station per month is a reasonable rate that was based on ECIMOS’s
quoted figure for licensing fees in its 2014 proposal to Carrier. In short, the district court
concluded that requiring Carrier to pay licensing fees for continued use of the RES database
would put ECIMOS in no worse a position than if Carrier had actually obtained a valid license
for use of the database at each runtest station. This is not unreasonable.
Second, and more importantly, although courts can require the infringing party to pay
reasonable royalty or licensing rates post-verdict where “the amount is not based on ‘undue
speculation,’” any grant of future disgorgement would be highly speculative in this instance.
Oracle Corp. v. SAP AG, 765 F.3d 1081, 1088 (9th Cir. 2014) (citation omitted). We
acknowledge that the jury’s $5 million disgorgement award suggested that it believed 2.2% of
Carrier’s over $225 million in profits were attributable to the infringement. But that amount was
limited to the jury’s consideration of the fifteen-month period between October 2015 to
December 2016, a period where the jury had access to Carrier’s financial records and other
analyses to aid its decisionmaking. The 2.2% rate does not represent the jury’s consideration of
whether any future profits would still be attributable to Carrier’s continued use of the infringing
RES database at the same rate. Importantly, ECIMOS cites to no case that uses past
disgorgement as the basis for a future licensing fee. Instead, all of the cases ECIMOS cites
discuss whether licensing fees—calculated from hypothetical fair-market values of the
copyright—are reasonable. They do not involve instances in which a jury’s disgorgement
calculation became the basis for the licensing fee. See Amado v. Microsoft Corp., 517 F.3d
1353, 1361 (Fed. Cir. 2008); Veracode Inc. v. Appthority, Inc., 137 F. Supp. 3d 17, 84 (D. Mass.
2015). And although there are instances in which a court’s award of additional licensing fees
either matched or exceeded the infringer’s profits, the awards were calculated based off of the
fair-market value of the intellectual property, and were not calculated based on the infringer’s
profits. See, e.g., Golight, Inc. v. Wal-Mart Stores, Inc., 355 F.3d 1327, 1338 (Fed. Cir. 2004).
In a case like this, where it is unclear how the jury arrived at its disgorgement rate and
whether that rate would apply to future profits and where the district court has already ordered
Carrier to pay a reasonable licensing fees to ECIMOS going forward, the court was not required
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 26
to impose additional disgorgement damages. Thus, the district court did not abuse its discretion,
and we affirm the its decisions regarding the $5 million disgorgement in full.
C. Breach-of-Contract Damages
We next evaluate the $1.5 million that the jury awarded ECIMOS for Carrier’s breach of
the parties’ licensing agreement. Carrier argues that, as a matter of law, the most that the jury
could have awarded for the breach of contract was $283,250. We review a district court’s
decision on possible remittitur for an abuse of discretion. Gregory, 220 F.3d at 443.
“The purpose of assessing damages in a breach of contract suit is to place the plaintiff, as
nearly as possible, in the same position he would have had if the contract had been
performed.” Wilhite v. Brownsville Concrete Co., 798 S.W.2d 772, 775 (Tenn. Ct. App. 1990).
And under Tennessee law, “[t]o support an award of damages there must exist proof of these
‘damages within a reasonable degree of certainty.’” Airline Constr. Inc. v. Barr, 807 S.W.2d 247,
256 (Tenn. Ct. App. 1990) (citation omitted). During closing arguments, ECIMOS asked the
jury to award it $1,521,250 in contract-breach damages (the same amount that it asked for as
actual-copyright damages)—$1,021,000 for the total upgrade fee of the IPCS and $474,150 for
lost licensing fees (from April 2011 through June 2018).4 The jury returned a verdict finding
that Carrier breached the parties’ 2004 licensing agreement in two ways: (1) “by failing to
maintain the confidentiality of ECIMOS’s materials” and (2) by “failing to pay ECIMOS a
licensing fee for installing and using ECIMOS’s software on the Windows 7 operating system.”
The jury awarded ECIMOS $1.5 million. On appeal, Carrier does not contest the jury’s finding
that it breached the parties’ contract, and it acknowledges that it owes ECIMOS at least $283,250
in unpaid licensing fees for using the IPCS software on Windows 7, which represents the
$50/month licensing fee for each of Carrier’s 103 runtest stations between April 2011 to October
2015 (the period between when the software was migrated onto Windows 7 to when the RES
went live at Collierville). However, Carrier argues that the $1.5 million award was “beyond the
4
The licensing fee of $50/month for the use of 103 stations for the 87 months from April 2011 through June
2018 adds up to $448,050, not $474,150. The $474,150 number is likely calculated from the $50/month licensing
fee for 109 stations for 87 months. However, on appeal it appears that Carrier’s use of the ECIMOS system at only
103 stations is undisputed.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 27
maximum damages that the jury reasonably could find to be compensatory” for ECIMOS’s loss
and must be reduced. Bridgeport Music, 507 F.3d at 484 (citation omitted).
It may be helpful to re-summarize the facts. In 2004, ECIMOS began incorporating
terms into its IPCS licensing contract that prohibited the “[u]nauthorized copying, reverse
engineering, decompiling, disassembling, decrypting, translating, renting, sub-licensing, leasing,
distributing, and/or creating derivative works based on the software, in whole or in part.” The
terms also stated that “[t]he Software may not be duplicated or copied” except for specific
purposes, and that “[n]o part of the software . . . may be reproduced or transmitted in any form or
by any means.” It is undisputed that, in 2011, Carrier installed the VB6 software directly onto
Windows 7, which the jury found to be a breach of the parties’ licensing contract. In 2014,
ECIMOS proposed to sell Carrier an upgrade to the entire IPCS, which it quoted as costing a
total of $1,021,000. The $1,021,000 figure included a $118,000 fee for “Software migration
from VB6 to VB.net” for all runtest stations, as well as assorted other fees for: (1) software
licensing (quoted at $600/year per station, which is $50/month); (2) specialized licensing fees
(for special programs associated with VB.Net); and (3) hardware-repair fees to the runtest
stations. Carrier rejected the proposal and, apart from the software migration of VB6 onto
Windows 7, the record does not show that Carrier received any of the hardware repairs or the
special software upgrades that ECIMOS offered in the proposal.
These facts suggest that the only non-speculative damages that ECIMOS could be
awarded must relate to Carrier’s actions in improperly migrating the VB6 software to Windows
7. The jury found that one aspect of Carrier’s breach was that it failed to pay “a licensing fee for
installing and using ECIMOS’s software on the Windows 7 operating system.” Carrier and
ECIMOS agree that the amount of licensing fees based on this aspect of the breach is $283,250,
and the record demonstrates that ECIMOS’s assessment of the value of “installing and using” the
VB6 software on Windows 7—from its own proposal—was $118,000. Thus, the only non-
speculative damages that can be supported from Carrier installing and using ECIMOS’s software
on Windows 7 amount to $401,250.
ECIMOS contends that the parties’ course of dealings going back to 1992 suggest that the
full $1.5 million award is appropriate and, in support, it offers the fact that Carrier had paid over
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 28
$1 million for a similar IPCS upgrade in 2002 and that the total quoted price for the 2014
upgrade was $1,021,000. Although ECIMOS claims that it intentionally offered lower licensing
fees to Carrier with the expectation that every few years Carrier would purchase a full system
“upgrade” at an increased fee of around $1 million, it does not appear that Carrier ever agreed to
any of the hardware-upgrade proposals that ECIMOS submitted in 2014. Indeed, the cost of the
hardware upgrades cannot be factored into the calculation of contract-breach damages because
the jury found only that Carrier breached the parties’ contract by “installing and using
ECIMOS’s software” on Windows 7.
ECIMOS also argues that the $1.5 million can be supported based on the jury’s other
finding of breach—that Carrier “fail[ed] to maintain the confidentiality of ECIMOS’s materials.”
ECIMOS argues that because it is especially jealous of its trade secrets with regard to its
competitors, any breach of confidentiality would have had the effect of harming ECIMOS’s
business. However, any assessment of damages based on potential lost profits from a breach of
confidentiality would be speculative at best. Under Tennessee law, “[t]he party seeking damages
has the burden of proving them,” and “[d]amages may never be based on speculation or
conjecture.” Waggoner Motors, Inc. v. Waverly Church of Christ, 159 S.W.3d 42, 57 (Tenn. Ct.
App. 1987). Although ECIMOS presented testimony at trial adverting to the fierce competition
it faced, that testimony did not establish non-speculative proof of the level of damages that could
be attributed to a breach in confidentiality. Put differently, ECIMOS never presented any
evidence detailing how much profit it may have lost as a direct result of Carrier’s breach of
confidentiality. Simply suggesting that it lost business or that its reputation was harmed is
insufficient. Although “damages become too speculative only when the existence of damages is
uncertain, not when the precise amount is uncertain,” the evidence in support of an award must
still “prove the amount of damages with reasonable certainty.” Ibid. Here, the amount of
damages related to the breach of confidentiality is not reasonably certain. ECIMOS did not
present any witnesses that testified regarding the amount of damages that could be attributed to
Carrier’s breach of confidentiality, nor presented any evidence regarding whether the breach led
to a decrease in profit from customers other than Carrier.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 29
Accordingly, we reverse the district court’s upholding of the contract-breach damages
award and reduce the amount to $401,250, as that is the only non-speculative amount of damages
supported by the record.
D. Stay of Injunction and Associated Trade-Secret Claims
The last issue on appeal is ECIMOS’s claim that the scope of the district court’s post-trial
injunction should be altered. We review the scope of a district court’s grant or stay of a
permanent injunction for an abuse of discretion. Howe v. City of Akron, 801 F.3d 718, 753 (6th
Cir. 2015).
After trial, the district court granted a permanent injunction enjoining Carrier from using
its RES database. However, it stayed the injunction until Carrier could implement a new, non-
infringing database, meaning that Carrier was permitted to continue using the RES—subject to
its payment of licensing fees—until then. The district court appointed a special master to
oversee the process. At trial, the jury found that ECIMOS held a trade secret in (1) its software
source code5 and (2) its assembled hardware drawings and wiring diagrams and that Carrier
misappropriated these trade secrets by sharing information with Amtec. The district court thus
also enjoined Carrier from disclosing the trade secrets but permitted Carrier to continue using
them as long as Carrier paid ECIMOS a licensing fee. ECIMOS now objects to the scope of the
injunction, arguing that (1) the stay of the injunction was an abuse of discretion; (2) the
injunction should have prohibited Carrier from using ECIMOS’s trade secrets, not just from
disclosing them; and (3) the injunction should have been expanded to prohibit Carrier’s
disclosure and use of ECIMOS’s assembled hardware (not just the hardware drawings and
wiring diagrams). We affirm the district court’s decisions regarding the injunction in full.
The stay of the injunction was not an abuse of discretion. A district court abuses its
discretion with regards to grants or stays of permanent injunctions only “when it relies on clearly
5
The jury found that Carrier did not infringe on ECIMOS’s copyright on its software-script source code,
but it did find that ECIMOS held a trade secret in its “software source code including the algorithms for the valid
test and test procedures and the way the software source code interacts with ECIMOS’s database.” The jury found
that Carrier misappropriated those trade secrets by sharing them with Amtec, but that ECIMOS did not suffer any
harm as a result of Carrier’s misappropriation and awarded no damages on that basis.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 30
erroneous findings of fact or when it improperly applies the law.” Herman Miller, Inc. v.
Palazzetti Imps. & Exps., Inc., 270 F.3d 298, 317 (6th Cir. 2001). Here, ECIMOS does not
suggest that the district court improperly applied the law. Instead, it submits that because Carrier
is still using the RES database—almost two years after the jury verdict at the time of oral
argument on appeal—that Carrier is not acting in good faith to develop a non-infringing database
under the supervision of the special master. Carrier asserts that any delay in developing a new
database is because ECIMOS has, in bad faith, attempted to delay it at every turn by filing
frivolous objections before the district court. None of these arguments pertain to the legal
implications of the district court’s decision to grant the stay. Nor do they point to any potentially
erroneous factual basis upon which the original stay was granted. Indeed, it is a general principle
that “[i]njunctions frequently demand ‘continuing supervision by the issuing court.’” See LFP
IP, LLC v. Hustler Cincinnati, Inc., 810 F.3d 424, 426 (6th Cir. 2016) (quoting Sys. Fed’n No.
91, Ry. Emps.’ Dep’t v. Wright, 364 U.S. 642, 647 (1961)). And it appears that, to date, the
special master has filed twenty reports updating the district court on the progress that the parties
have made in coming to a satisfactory conclusion on the implementation of a non-infringing
database. We therefore find no reason why this issue should not remain reserved for the district
court to shepherd. In any event, given the deferential standard of review, we find no abuse of
discretion in the district court’s decision to stay the injunction.
We also hold that the district court did not abuse its discretion when it refused to enjoin
Carrier from using ECIMOS’s trade secrets. Two facts regarding the district court’s injunction
are important to note at the outset. First, ECIMOS never requested submission of the question of
whether its assembled hardware was a trade secret to the jury. Instead, it first introduced the
argument during its post-trial motions, and now it argues that—as a matter of law—the district
court erred in failing to hold that the hardware was a trade secret. Second, even though the jury
found that Carrier had misappropriated ECIMOS’s protectable trade secrets in its hardware
drawings and wiring diagrams, the jury also found that ECIMOS did not suffer any detriment as
a result of Carrier’s misappropriation. Based on these findings, the district court concluded that
enjoining Carrier’s use of any of ECIMOS’s trade secrets—even if it agreed to pay ECIMOS a
reasonable license fee for the use—would not aid ECIMOS, as it would not prevent any
additional harm. ECIMOS argues that this conclusion was erroneous as a matter of law. More
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 31
specifically, it claims that the district court erred (1) by holding that ECIMOS’s assembled
hardware (not just its hardware drawings or wiring diagrams) were not protectable copyrights or
trade secrets and (2) by ruling that, in the alternative, the hardware was not a “derivative trade
secret.”
As an initial matter, it is important to note that there is no “derivative trade secret” as a
matter of law, and that ECIMOS is essentially conflating two areas of intellectual property law:
derivative works (which are protected by copyright) and trade secrets (which are protected under
the common law). See Intera Co. v. Dow Corning Corp., 19 F.3d 19 (Table), 1994 WL 69582, at
*2 (6th Cir. 1994) (per curiam) (noting that plaintiff’s claim was a “state law tort of trade secret
misappropriation”). Thus, for ECIMOS’s arguments to succeed, it must demonstrate that its
assembled hardware is either a derivative work or a trade secret. It can do neither.
First, there is no evidence to support that the assembled hardware is derivative of any of
ECIMOS’s protected copyrights. Trade secrets and copyrights are not the same, and ECIMOS
has never claimed that its hardware drawings or wiring diagrams were protectable copyrights. It
therefore cannot now claim that its actual hardware is a “derivative work” of the drawings or
diagrams that is protected under copyright law. See Stewart v. Abend, 495 U.S. 207, 220 (1990)
(noting that a copyright holder “holds a bundle of exclusive rights in the copyrighted work,
among them the right to copy and the right to incorporate the work into derivative works”
(emphasis added)).
Second, ECIMOS’s assembled hardware is also not a trade secret. Under Tennessee law,
a “trade secret” has a statutory definition. It is any:
[I]nformation, without regard to form, including, but not limited to, technical,
nontechnical or financial data, a formula, pattern, compilation, program, device,
method, technique, process, or plan that:
(A) Derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by
other persons who can obtain economic value from its disclosure or use; and
(B) Is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 32
Tenn. Code Ann. § 47-25-1702(4). What constitutes a trade secret is a question of fact and
Tennessee courts have looked to several factors in making this determination, the most important
of which is whether the information has been publicly disclosed or is easily acquired or
duplicated by others. See Eagle Vision, Inc. v. Odyssey Med., Inc., 2002 WL 1925615, at *4
(Tenn. Ct. App. Aug. 14, 2002). “Matters of public knowledge or general knowledge in the
industry or ideas which are well known or easily ascertainable, cannot be trade secrets.
Similarly, matters disclosed by a marketed product cannot be secret.” Hickory Specialties, Inc.
v. B&L Laboratories, Inc., 592 S.W.2d 583, 587 (Tenn. Ct. App. 1979) (citation omitted); see
also Restatement (Third) of Unfair Competition § 39 cmt. F (1995) (“[I]nformation readily
ascertainable from an examination of a product . . . is not a trade secret.”). In short, “if a matter
is ‘disclosed by a marketed product [it] cannot be a secret.’” Eagle Vision, 2002 WL 1925615 at
*4 (quoting Hickory Specialties, 592 S.W.2d at 587). Here, ECIMOS voluntarily disclosed its
assembled hardware to third parties, including Carrier, by selling it as a product. Indeed,
ECIMOS claimed throughout trial that it had customers other than Carrier, and so it is safe to
presume that other third parties also received the hardware. Put simply, ECIMOS’s hardware
was a marketed product that was sold and freely shared, and it is not a trade secret.
Finally, ECIMOS argues that the court should invoke the “safe-distance rule”—a concept
imported from trademark law—to prohibit Carrier from having even the possibility of future
infringement. The safe-distance rule allows courts—after concluding that a defendant has
infringed on a trademark—to “proscribe activities that, standing alone, would have been
unassailable” thus “prevent[ing] known infringers from using trademarks whose use by non-
infringers would not necessarily be actionable.” Innovation Ventures, LLC v. N2G Distrib., Inc.,
763 F.3d 524, 544 (6th Cir. 2014) (citations omitted). However, the rule was crafted to address
the fact that, in the trademark context, an infringing mark is likely to confuse consumers, and
“that once an infringer has confused the public, that confusion is not magically remedied by a
name change.” Taubman Co. v. Webfeats, 319 F.3d 770, 779 (6th Cir. 2003). Thus, the plaintiff
can ask the court to craft equitable remedies to prohibit otherwise innocuous conduct or to
require the infringer to secure a new mark “so far removed from any characteristic of the plaintiff
so as to put the public on notice that the two are not related.” Ibid. The same concern of limiting
confusion of different products is not apparent in the copyright context, and thus courts have
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 33
generally been reluctant to expand the rule to other areas of intellectual property. See PRL USA
Holdings, Inc. v. U.S. Polo Ass’n, Inc., 520 F.3d 109, 118 (2d Cir. 2008) (collecting cases and
concluding that plaintiffs “cite[d] no authority establishing that [a safe-distance rule] instruction
must be given” in regard to the unique type of trademark claim the plaintiffs were asserting).
Indeed, this lack of an expansion is likely because a safe-distance rule is most effective in the
trademark context, where “the secondary mark is likely to cause confusion.” Ibid. ECIMOS
does not cite any authority that would require an expansion of this rule into claims for software
infringement. We thus hold that the district court did not err in failing to invoke the safe-
distance rule.
III. CONCLUSION
For the foregoing reasons, we conclude that the district court did not err in denying
Carrier’s motion for judgment as a matter of law or for a new trial, because ECIMOS’s database-
script source code was a protectable copyright that the jury determined Carrier had infringed
upon. We also conclude that ECIMOS properly met its burden of presenting proof of Carrier’s
gross revenue during the period of infringement, and thus the district court did not err in
allowing ECIMOS to ask the jury to disgorge Carrier of its entire profits from its Collierville
plant under 17 U.S.C. § 504(b). We therefore affirm the $5 million disgorgement award.
However, we conclude that the district court erred when it conflated aspects of ECIMOS’s
software package with its database-script source code in calculating the actual damages as a
result of the infringement. We therefore reduce the actual-damages award for Carrier’s
infringement to $164,250.
On the contract-breach damages, we hold that the district court abused its discretion in
upholding the entire $1.5 million jury award. The only non-speculative amount of damages that
could be related to Carrier’s breach by failing to maintain the confidentiality of ECIMOS’s
materials or by improperly installing and using ECIMOS’s software on Windows 7 is $401,250.
Our holding on damages thus further reduces ECIMOS’s total damages award from the district
court’s $6,782,800 to $5,566,050.
Nos. 19-5436/5519 ECIMOS, LLC v. Carrier Corp., et al. Page 34
We affirm the district court’s decisions regarding its post-trial injunctions in full. It did
not abuse its discretion when it issued an indefinite stay of the injunction prohibiting Carrier
from utilizing its infringing database. It also did not err when it concluded that ECIMOS’s
assembled hardware items were not protectable derivative works or trade secrets as a matter of
law, or in concluding that the safe-distance rule did not apply.
Accordingly, we affirm in part and reverse in part the district court’s rulings, and we
remand for further proceedings consistent with this opinion.