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Brief Statement of the Case
This case exposes the
new risks of doing business in “The Cloud.”
What happens when a
medical practice creates and store its patient data in The Cloud, and
the vendor refuses to give it to the doctors? Copyright law has
required that a copyright be registered in order to file a case for
copyright infringement. But, if the cloud vendor will not give it
to the owner, the owner cannot register it. Therefore, the most
culpable vendor would escape application of the law. Twenty-five
years ago, Congress could not have imagined that someone might create
copyrightable material but not have possession of it to register it.
On February 13, 2014,
this action was commenced in the United States District Court for the
Western District of Pennsylvania, Case No. 2:14-cv-00215-LPL, before The
Hon. Magistrate Judge Lisa Pupo Lenihan. All parties are residents
of the Commonwealth of Pennsylvania.
On April 14, 2014,
Defendant, The Cloud vendor, filed a Motion to Dismiss Complaint.
On June 9, 2014, the Chief Magistrate Judge dismissing the Complaint on
all counts with prejudice. The court below further denied Doctor's
pending Notice of Demand for Data Backup and pending Motion to Compel
Impoundment and/or Special Case Management Order as moot. The
Doctors simply asked the court to require that the vendor give the
Doctors the patient data so the Doctors could register the copyright and
maintain the claim.
History
With the advent of
significantly decreasing costs of Internet connectivity bandwidth to
transmit data, and the significantly decreasing cost of data storage,
the latest user technologies are being developed for The Cloud.
Advertising for The Cloud technologies is pervasive. The Cloud paradigm
is that the user software exists on the web (not physically on the
user’s personal computer) and/or the related data is stored on the
vendor website (not local to the user). The Cloud is industry
independent “horizontally”; that is, The Cloud technology is advertised
to attorneys, governmental agencies, doctors (such as in this case),
banks, artists, etc.
Traditionally,
mission-critical software and data were “housed” locally on-site, with
Internet connectivity being for communication, research, and software
updates and acquisition; accordingly, the owner of the subject-matter
retained power and control over mission-critical software and/or data.
However, the new paradigm of The Cloud, to some or the full extent,
removes ultimate possession, power and control from the owner of the
information.
The Cloud is particularly
attractive now because, when applications (apps) and related data are
stored exclusively remotely on the web, all disparate physical
equipment, including mobile phones, tablets as well as personal
computers, may seamlessly access the apps and the related data.
Therefore, doctors, lawyers and everyone else are baited, if not
effectively forced with increasing market pressure, to accept the new
paradigm, which is driven by manufacturers, top-down.
Notwithstanding that
Plaintiffs’ copyright property interest is legally cognizable pursuant
to 17 U.S.C. 102(a), a federal case for infringement of that recognized
proprietary interest could not be maintained without first registering
the copyright with the United States Copyright Office pursuant to 17
U.S.C. 411(a). Indeed, prior to 2010, if a plaintiff filed a federal
copyright infringement action without having first registered the
copyright, the case would be dismissed without prejudice on
subject-matter jurisdictional grounds, the federal courts then opining
that the federal courts did not have subject-matter jurisdiction.
These lower court rulings
were finally overruled by the United States Supreme Court in Reed
Elsevier v. Muchnick, 559 U.S. 154, 169 (2010). Now, with or
without the copyright registration, the federal courts have
subject-matter jurisdiction over the full scope of the recognized
proprietary interest. Thereby having jurisdiction, the federal courts
have the full power of the federal judiciary to hear a dispute and to
fashion the appropriate remedial justice following a full and fair
hearing on the matter presented.
Plaintiffs are a medical
doctor of podiatry, and his related medical practice. Defendant is a
purported professional billing service and was engaged as The Cloud
vendor. Doctors' medical data was created and stored on The Cloud,
controlled by The Cloud vendor; therefore, Doctors never acquired the
subject-matter of their creation, nor power for the purpose of
registration, or even for its backup and disaster control.
As a result, from a
copyright perspective, the scenario is simply that, Defendant has
refused to provide Plaintiffs their medical data, so Plaintiffs do not
have the subject-matter they created, and they cannot register the
copyright. Plaintiffs must use available legal process, or resort to
self-help, to acquire the subject-matter to perform the task of
registration. Plaintiff decided to move to a new vendor. However, of
course, Plaintiffs necessarily cannot move to a new vendor without their
medical data. The agreement referenced by the court below and attached
to the pleadings regards certain Allscripts add-on functionality
provided by the Defendant vendor; that is, Allscripts is a software
product owned by a third-party manufacturer for which Defen-dant is an
authorized representative, but Defendant claims a registered copyright
in certain Allscripts add-on data entry “templates” that physicians use
to enter medical data. Defendant expressly claims a copyright in the
templates.
Plaintiffs claim a
copyright in its medical data. If these categories were mutually
exclusive, some of the contention might have re-solved; however, the
templates are used in a manner by which some of the data from the
templates becomes entwined with, or “incorporated” into, the doctors’
own medical data.
When Plaintiffs demanded
their medical data, Defendant refused on the basis of its claim that
some of the medical data contained information from Defendant’s
copyrighted templates. Holding Plaintiffs’ medical data hostage, and
irrespective of how presented or coated by Defendant, Defendant’s
position is that Plaintiffs must concede to a delivery mechanism that
risks destruction of medical data, and results in a format different
from its native format, preventing seamless importing into the new
vendor’s software product, and jeopardizing the integrity. Plaintiffs’
position is simply that, to the extent that Defendant’s template data
has been incorporated into Plaintiffs’ medical data, there is no basis
to withhold all medical data, because the agreement reconciles that
condition with transfer to Plaintiffs for continued use. The agreement
only addresses Defendants’ claimed “template” subject-matter, not the
proprietary rights of Plaintiffs’ medical data. Therefore, as stated,
there are two separate copyrights at issue: Plaintiffs’ copyright to the
medical data and Defendant’s copyright to the templates. And, there is a
mixed question regarding Plaintiffs’ data that may be incorporated with
Defendant’s template information. From Plaintiffs’ perspective, Count
I-Declaratory Relief addresses the defensive posture, seeking relief
from Defendant’s threat of a violation of its copyright, and Count
VI-Infringement addresses the offensive posture, seeking an infringement
determination of Plaintiffs’ copyright. The agreement references the
mixed category so as to make it clear: to the extent that template data
actually has been incorporated with medical data, it is properly
returned as such to Plaintiffs. The frustration by Plaintiffs that they
cannot get their medical data is clear from the pleadings, attachment,
and documents of public record.. It is also clear from the Complaint
that there are two federal claims that rest on federal questions; to
wit, Plaintiffs’ defensive claim in Count I seeking declaratory relief
from Defendant’s threat of a violation of its registered copyright in
the templates if Plaintiffs exercise self-help, and Plaintiffs’ Count VI
infringement claim in the medical data grounded in Defendant’s refusal
to provide Plaintiffs’ medical data. Moreover, after filing the
Complaint, Plaintiffs filed a “Notice of Demand for Data Backup” as a
matter of public record. Even for any portion of the subject-matter
asserted to be owned by Defendant, the agreement expressly provides that
Plaintiff is entitled to a backup, which is also contemplated by 17
U.S.C. 117. Defendant further refused to provide a substantive response.
These documents were referenced during the motion practice. The reason
these documents were filed as such was to make an assured public record
of the fact that Defendant refuses not only to provide Plaintiffs’
copyrighted medical data, but further refuses even to provide the
medical data for disaster control backup purposes, notwithstanding the
copyright violation and the express contractual violation. What is
absolutely clear from the pleadings, exhibits, public records and motion
practice is, quite simply, that Defendant has Plaintiffs’ medical data
and refuses to give it to Plaintiffs, trespassing by copyright
violation, and if Plaintiffs try any form of self-help, legal action has
been threatened by Defendant.
Plaintiffs simply want
their patient medical data to serve the healthcare needs of their
patients and Defendant is preventing Plain-tiffs use and enjoyment of
its proprietary interests.
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