UIRC-GSA Holding (Plaintiff) acquires and operates properties leased to the U.S. General Services Administration (GSA) to be financed by the sale of bonds through its subsidiaries. William Blair & Company (Defendant or Blair) was Plaintiff’s investment banker and placement agent for certain bond offerings, the proceeds of which were used to acquire a portfolio of real estate properties.
Between 2012 and the close of discovery, Plaintiff executed a total of six bond offerings. To market the bond offerings, Plaintiff created and used a Private Placement Memorandum (PPM) and an Indenture of Trust. Plaintiff registered copyrights in the PPM for the transactions, as well as the preliminary and final versions of the PPM and the Indenture of Trust. “Plaintiff could not copyright the entire document, and the Copyright Office required Plaintiff to disclaim ‘standard legal language.’ At issue, then, are several paragraphs within these documents.”
Defendants noted that Plaintiff’s documents appeared to be revised versions of offering documents from an earlier deal involving third parties unrelated to Plaintiff, namely the Idaho Housing and Finance Association. Plaintiff concedes that its attorneys provided the Idaho deal documents as a template, but claims that its top executives “spent about six months painstakingly writing and re-writing the critical sections of the [PPM],” and “did almost all of the work themselves.” Defendant contests this assertion, noting that Plaintiff’s documents have substantial overlap with the Idaho deal documents, such that they are verbatim or near verbatim. It is undisputed that Plaintiff did not receive permission to use the Idaho deal documents. It is also undisputed that Defendant played no meaningful role in the drafting process for Plaintiff’s documents.
At some point in late 2014, a competitor of Plaintiffs, Rainier, completed a bond offering very similar to Plaintiff’s. Blair acted as the investment banker and placement agent for Rainier. Plaintiff asserts that Blair approached Rainier and helped Rainier “mimic” Plaintiff’s successful bond offerings, using Plaintiff’s copyrighted documents. “Rainier’s confidential placement memorandum and indenture of trust appears to have striking similarities to Plaintiff’s PPM.” Plaintiff further claimed that this overlap was intentional, and that Defendant actively encouraged and personally directed Blair’s employees and Blair’s outside counsel to use the infringing materials to solicit other clients, including Rainier.
Defendants dispute Plaintiff’s characterization, arguing that only 5% of the Rainer confidential placement memorandum is alleged to be copied from Plaintiff’s documents, and even less for Rainier’s indenture of trust. Defendants also note that they did not draft Rainier’s documents, rather the law firm Mayer Brown did.
Blair moved for summary judgment, arguing that Plaintiff’s documents are not entitled to copyright protection because they are unauthorized derivative works and lack originality.
Defendants argued that the copyrighted portions of Plaintiff’s documents lack the requisite modicum of creativity and originality, are unauthorized derivative works based on the Idaho deal documents, and are largely unprotectable facts, ideas, or fragmented or functional phrases, such as definitions of terms. Plaintiff responded that their executives painstakingly rewrote their documents such that they are unique and original. Plaintiff further argued that the works cannot be derivative unless the underlying work is also subject to copyright protection, and there is no indication that the Idaho documents were copyrighted.
The District Court concluded that Plaintiff’s documents lacked originality and were not sufficiently creative to warrant copyright protection.