Copyright Office Deposit and Trade Secrets

Ever since the Supreme Court's 1974 decision in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, federal copyright and state trade secret protection have freely co-existed. The Copyright Office has been sensitive to the desire of owners of trade secrets embodied in copyrighted works to register, by promulgating regulations permitting the redaction of trade secret or other confidential business information, 27 C.F.R. sec. 202.20(c)(2)(vii)(A)(2):

( 2 ) Where the program contains trade secret material, the page or equivalent unit containing the copyright notice, if any, plus one of the following: the first and last 25 pages or equivalent units of source code with portions of the source code containing trade secrets blocked-out, provided that the blocked-out portions are proportionately less than the material remaining, and the deposit reveals an appreciable amount of original computer code; or the first and last 10 pages or equivalent units of source code alone with no blocked-out portions; or the first and last 25 pages of object code, together with any 10 or more consecutive pages of source code with no blocked-out portions; or for programs consisting of, or less than, 50 pages or equivalent units, entire source code with the trade secret portions blocked-out, provided that the blocked-out portions are proportionately less than the material remaining, and the remaining portion reveals an appreciable amount of original computer code. If the copyright claim is in a revision not contained in the first and last 25 pages, the deposit shall consist of either 20 pages of source code representative of the revised material with no blocked-out portions, or any 50 pages of source code representative of the revised material with portions of the source code containing trade secrets blocked-out, provided that the blocked-out portions are proportionately less than the material remaining and the deposit reveals an appreciable amount of original computer code. Whatever method is used to block out trade secret material, at least an appreciable amount of original computer code must remain visible.

Where material is redacted pursuant to this regulation, its trade secret status under state law is not compromised. But what if the material is not redacted? Does deposit with the Copyright Office result in forfeiture of trade secret protection? The issue is one of state law, and has been addressed a number of times, most recently in Third Party Verification, Inc. v. Signaturelink, Inc., 2007 WL 1288361 (M.D. Fla. May 2, 2007), in which it appears that only a two page version of the work with no redaction was made. Eight months after the close of discovery, plaintiff claimed that it intended to file more code, and in redacted form. As a sanction for making a later claim, the court limited plaintiff's claim to the two pages registered, an appropriate result in any event.

Section 408 of the Copyright Act sets forth the deposit requirements for copyright examination purposes and is relevant to placing copyright deposits on the public record. Pursuant to 17 U.S.C.A. § 704(a), material deposited becomes the property of the U.S. government. Section 705(b) mandates that all copies deposited with the Office shall be open to public inspection. The Copyright Office therefore has no authority to deny the public the right to inspect deposit copies. (The issue of making copies of material deposited with the Copyright Office is a separate matter from inspection of copies and is governed by a different statutory provision, 17 U.S.C.§ 706(b))

Although one court, Compuware Corporation v. Serena Software International, Inc., 77 F. Supp. 2d 816 (E.D. Mich. 1999), held that there was no forfeiture from the deposit of unredcated material, the Compuware court's discussion of the deposit practices of the Copyright Office reflects confusion between the making of copies and inspection. Other courts that have looked at the issue have correctly decided that deposit with the Copyright Office makes the deposit copy publicly available, and does therefore result in forfeiture of trade secret or confidential protection, Compuware Corp. v. Serena Software Intern., Inc., Tedder Boat Ramp Systems, Inc. v. Hillsborough County, Fla., 54 F. Supp. 2d 1300 (M.D. Fla. 1999); Cinebase Software, Inc. v. Media Guaranty Trust, Inc., 1998 WL 661465 (N.D. Cal. 1998) (preserving trade secrets only for redacted material); Phillips v. Avis, Inc., 1996 WL 288782 (N.D. Ill. 1996) (New York law). Although one court has seemingly held that the party arguing forfeiture provide evidence that individuals actually reviewed the material at the Copyright Office, See Computer Associates Intern., Inc. v. American Fundware, Inc., 831 F. Supp. 1516, 1529 (D. Colo. 1993) (“To prove that CA could no longer claim that the SPO programs were trade secrets, AFW would have to show that it or someone in the industry actually learned of CA's trade secrets by reviewing the limited information on file with the Copyright Office”). The Copyright Office keeps records of those who have obtained access to deposit copies, so where proof of such access is required, it should be available.