Wall Data, Inc. v. Los Angeles County Sheriff's Dep't, 447 F.3d 769 (9th Cir. 2006) (full-text).
Factual Background Edit
Plaintiff sold 3,663 software licenses to the defendant. The licenses (1) were non-exclusive; (2) permitted use of the software on a single computer; and (3) permitted transfer of the software once per month, if the software was removed from the original computer. The defendant installed the software onto 6,007 computers via hard drive imaging, which saved it from installing the software manually on each computer. It made an unverified claim that only 3,663 users could simultaneously access the software.
Trial Court Proceedings Edit
The plaintiff sued for copyright infringement, contending that the defendant violated the license by "over-installing" the software. The defendant raised the essential step defense, contending that its hard drive imaging was a necessary step in the installation process.
Appellate Court Proceedings Edit
On appeal, the Ninth Circuit held that the district court did not abuse its discretion in denying the defendant's request for a jury instruction on the essential step defense. The court held that the essential step defense does not apply where the copyright owner grants the user a license and significantly restricts the user's ability to transfer the software. Since the plaintiff's license imposed "significant restrictions" on the defendant's software rights, the defendant was a licensee and was not entitled to the essential step defense.