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Inspection Management Systems, Inc. v. Open Door Inspections

March 26, 2009

INSPECTION MANAGEMENT SYSTEMS, INC., PLAINTIFF,
v.
OPEN DOOR INSPECTIONS, INC., MICHAEL R. SCHEIDERICH; KEVIN SCHEIDERICH; BOB FISHER; RUN TANGENT, LLC, DEFENDANTS.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Through the present lawsuit, Plaintiff Inspection Management Systems, Inc. ("Plaintiff" or "IMS") seeks to prevent Defendants from marketing their software program for managing home inspections, on grounds that said program is unlawfully derived from software previously developed by IMS. IMS claims that Defendant Scheiderich subscribed to the IMS software and violated the contractual conditions of its use by making the software available to engineers in India for purposes of developing a competing product. IMS' initial request for a TRO was granted by the Court on January 16, 2009.

Because the initial date set for the hearing on Plaintiff's subsequent request for a preliminary injunction fell outside the time parameters for permitting injunctive relief to remain in place, the TRO expired. As set forth below, Plaintiff's Motion for a Preliminary Injunction will now be denied.

BACKGROUND

According to Plaintiff's First Amended Complaint, IMS has developed unique scheduling, management, and business automation software that allows home inspectors to automate key business processes. First Amended Complaint ("FAC"), ¶ 5. In February of 2007, Defendant Michael Scheiderich registered as a user of the IMS software, and according to the FAC, he simultaneously executed an electronic End User Licensing Agreement ("EULA") as part of his user registration process.*fn1 Under the terms of the EULA (a copy of which is attached to the FAC as Exhibit "A") a non-transferable license to use the IMS software was granted. The user also acknowledged IMS' exclusive proprietary rights in the system and agreed not to disclose any information, for a period of three years after accepting the EULA, to any person who has not also accepted the EULA. See EULA, Ex. "A" to Pl.'s FAC, ¶¶ 13, 18, 21. Paragraph 21(b) of the EULA contains the following stipulation:

"You agree that the information being provided by IMS, Inc. is confidential and derives its value, in part, from its confidential nonpublic nature. You further agree that in the event you breach this agreement, IMS, Inc., will suffer irreparable harm."

Id. at ¶ 21(b).

The FAC goes on to allege that on October 1, 2008, individuals both using Michael Scheiderich's IMS logon simultaneously accessed the IMS software from Georgia (where Scheiderich allegedly resided) and from India. Both users thereafter remained online utilizing the IMS program for approximately one hour. FAC, ¶¶ 14-15.

IMS contends that the simultaneous logon was orchestrated so that software engineers in India could emulate its software. IMS bases its contention in this regard on the fact that in November of 2008, IMS' President, Russell Colliau, attended a sales demonstration made by Michael Scheiderich to market new home inspection software called "Inspector Accelerator". That software was developed under the auspices of a new company established for that purpose, Defendant Run Tangent, LLC. During Scheiderich's sales demonstration, Colliau allegedly observed visual elements similar to those contained within the IMS software. This caused him to conclude that Defendants had both illegally copied portions of the IMS code and incorporated those copied portions into their own server code. See January 13, 2009 Colliau Decl., ¶¶ 31-32.

In support of that inference, Colliau cited both the similarities he observed in the software and the close relationship in time between the simultaneous logons to the IMS program, as delineated above, and the demonstration of Defendants' software thereafter. Id. In a subsequent February 12, 2009 Declaration, Colliau elaborated further on just what similarities he observed:

Many elements of the Inspector Accelerator program, including visual elements, specialized business processes and the handling of the relationships between the realtors, clients and home inspector were extremely similar to unique elements of the IMS system.

February 12, 2009 Colliau Decl., ¶ 11.

Based on the initial evidence provided by IMS, along with its claim that Defendants intended a launch of their new, allegedly infringing software, at a national home inspectors trade show to be held in Florida between January 21, 2009 and January 25, 2009, the Court granted IMS' initial request for a temporary restraining order on January 16, 2009 in order to protect against the threat of irreparable harm pending a more thorough review of the claims made by IMS.

In opposition to Plaintiff's request for preliminary injunctive relief, Defendants claim that IMS has submitted little more than innuendo and speculation to support its claims of Defendants' alleged wrongdoing. Scheiderich claims that the November 2008 sales presentation apparently attended by Colliau in fact showed only a very limited view of the Inspector Accelerator system, with only a few screen shots and without filling in any ...


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