On September 6 2016 the US Court of Appeals for the Ninth Circuit in Direct Technologies v Electronic Arts partially reversed a trial court's determination that a flash drive design was not sufficiently "original" to qualify for copyright protection. The Ninth Circuit held that there was a genuine issue of material fact as to whether the cutaway design for the USB flash drive was sufficiently non-functional and non-trivial to warrant copyright protection. The case was remanded for a jury trial.

Facts
Electronic Arts (EA) is the owner of The Sims, a popular video game in which players create virtual people and live virtual lives. Whenever a player controls a specific Sim, a green PlumbBob icon (copyrighted by EA and shown below) appears above the character's head.

In conjunction with the release of The Sims 3, EA ordered the production of USB flash drives shaped like a PlumbBob to use as promotional items. EA engaged Lithomania, a print production company, to find a manufacturer for the PlumbBob drives. Lithomania asked Direct Technologies (DT) to produce prototype samples. After EA approved the prototypes, the parties began negotiating a vendor agreement.

Within two weeks of beginning negotiations, Lithomania sent the DT prototype to a Chinese company without informing DT. The Chinese company offered to make identical PlumbBob USB drives for $0.50 less per unit. Lithomania did not tell DT that it had been cut out, and one day after Lithomania told EA that it was ready to begin production with the Chinese manufacturer Lithomania sent DT a vendor agreement stating that Lithomania would purchase the USB drive from DT. In the next few weeks, Lithomania had DT sign agreements and assignments of IP interests, but without actually telling DT that it had lost the project. DT began to suspect there was an issue, but did not know for sure until it saw the PlumbBob USB drive available in stores.

DT sued Lithomania for fraud and contract-related claims and the parties settled. DT then sued EA, seeking a declaratory judgment that DT was joint author of a copyright work in the PlumbBob drive, and thus was entitled to an equal share of the profits related to sales of the drive. The district court initially dismissed the case since DT had signed a vendor agreement, but on the appeal the Ninth Circuit reversed, holding that DT could prevail if the contract was fraudulently induced.  

On remand, DT added a claim for trade secret misappropriation. The district court ultimately granted summary judgment in favour of EA on both the copyright and trade secret claims. With regard to the copyright issue, the district court concluded that DT's contributions to the drive were either trivial or functional, and that even if they had not been, DT was not a joint author.

Decision
On appeal, the Ninth Circuit affirmed the trade secret ruling, but reversed the federal copyright claim. Because EA held the copyright in the original PlumbBob icon, the central issue is whether DT's three-dimensional rendition of the PlumbBob as a USB flash drive was copyrightable as a "derivative work". Courts apply a two-step inquiry to determine whether a derivative work is original enough to be separately copyrightable:

  • whether any aspects of the derivative work seeking copyright protection are purely functional, utilitarian or mechanical; and
  • whether the alleged original aspects of a derivative work are:
    • more than trivial;
    • reflect the degree to which it relies on pre-existing material; and
    • must not in any way affect the scope of copyright protection in any way in the pre-existing material.

On the first step, DT claimed that it made a non-functional contribution by designing the flash drive portion to fit into the PlumbBob portion with a futuristic cutaway look at a unique angle (shown below).

The Ninth Circuit agreed that there was a genuine issue of material fact as to whether this design was merely functional or utilitarian. The mere feature of having a flash drive that was removable from the PlumbBob portion is not copyrightable, but the cutaway manner and futuristic appearance may be. The court observed that there were several other design options DT considered with different aesthetic characteristics, and a reasonable jury could resolve this issue in either party's favour.

Similarly, with regard to the second step, the Ninth Circuit looked at whether the differences between the PlumbBob drive and the pre-existing PlumbBob icon were non-trivial. If a jury determined that the DT design was artistic and non-functional, it also could find that the DT design was sufficiently original to warrant protection. However, the court was careful to note that DT as a derivative copyright holder would only have a copyright in its unique contribution (ie, the manner in which the USB flash drive was designed to fit into the PlumbBob component).

Finally, the Ninth Circuit rejected that DT could not be a joint author as a matter of law. One of the most important factors for determining joint authorship is identifying who is "exercising control". Here the evidence, viewed in the light most favourable to DT, could lead a jury to find that DT was not subject to the ultimate control of EA over the drive's design.