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Sas Institute Inc. v. World Programming Limited

United States District Court, E.D. North Carolina, Western Division

April 30, 2014



JAMES E. GATES, Magistrate Judge.

This case comes before the court on a motion (D.E. 178) by defendant World Programming Limited ("WPL" or "defendant") to enforce the Amended Stipulated Protective Order ("Protective Order") (D.E. 106) and for sanctions against plaintiff SAS Institute Inc. ("SAS" or "plaintiff"). The motion has been fully briefed and referred to the undersigned for disposition pursuant to 28 U.S.C. § 636(b)(1)(A). ( See Minute Entry after D.E. 202). Pursuant to the undersigned's 8 April 2014 Order (D.E. 210), a hearing was held on this motion on 24 April 2014. In addition to counsel of record for the parties, three in-house counsel for SAS attended the hearing. For the reasons and on the terms set forth below, the motion will be allowed.


I. SAS's Claims

SAS alleges in its first amended complaint as follows:

SAS is a North Carolina corporation that produces business intelligence software and other software products, having its principal place of business in Cary, North Carolina. (Am. Compl. (D.E. 143) ¶ 2). WPL is incorporated under the laws of England and Wales and also develops software. ( Id. ¶¶ 3, 19).

SAS has developed SAS System software that enables users to access, manage, analyze, and present data. ( Id. ¶ 12). The SAS System has copyright protection. ( Id. ¶¶ 35, 36). Customers of the SAS System are required to enter into a license agreement, the SAS Master License Agreement ("SAS MLA"), which, among other things, prohibits the customer from using the SAS System for purposes other than the customer's own business. ( Id. ¶ 11).

SAS publishes a wide range of reference materials that describes the features of the SAS System and provides instructions and assistance to its users ("SAS Manuals"). ( Id. ¶¶ 9, 10). The SAS Manuals have copyright protection. ( Id. ¶¶ 37, 38).

In addition, SAS has developed software, known as SAS Learning Edition, that teaches individuals how to use the SAS System. ( Id. ¶ 12). It includes a selection of SAS Manuals. ( Id. ¶ 14). Before an individual is permitted to use SAS Learning Edition software, he is required to accept the terms of a license agreement that confers a nontransferable right to use it solely for the purpose of learning how to use the SAS System. ( Id. ¶¶ 15, 16, 18). The SAS Learning Edition software has copyright protection. ( Id. ¶ 36).

WPL has developed software, named the World Programming System ("WPS"), designed to reproduce central aspects of the SAS System and thereby to replace the SAS System for certain customers of SAS. ( Id. ¶¶ 19, 20). WPL has also developed a manual for WPS. ( Id. ¶ 31). WPL's marketing of WPS is primarily, if not entirely, directed at current SAS licensees and attempts to persuade them to license WPS in place of the SAS System. ( Id. ¶ 34).

To create WPS, WPL used one or more copies of the SAS System, although in 2008 SAS had refused to give WPL a license to use it. ( Id. ¶¶ 23, 24, 30). In addition, to be able to create WPS, WPL must have studied SAS Manuals to understand various aspects of the SAS System. ( Id. ¶ 29). WPL also copied substantial parts of the SAS Manuals in creating the manual for WPS. ( Id. ¶¶ 31-41).

Upon SAS's information and belief, WPL also acquired a copy of the SAS Learning Edition software and agreed to the terms of the associated license. ( Id. ¶ 25). Instead of or in addition to doing so, WPL, again upon SAS's information and belief, convinced a party that had entered into the SAS MLA to violate prohibitions in it by allowing WPL access to the SAS System, which WPL used to develop and test WPS software. ( Id. ¶ 54).

SAS filed its initial complaint (D.E. 1) on 19 January 2010. With leave of court ( see D.E. 138), SAS filed its first amended complaint on 14 August 2013, which added a claim that WPL obtained access to the SAS Learning Edition software by fraud. ( See 1st Am. Compl. ¶¶ 1, 50-52; Request for Relief ¶ D).

SAS asserts the following claims in its first amended complaint: copyright infringement with respect to the SAS System and SAS Learning Edition software ( id. ¶¶ 43-45) (count I); copyright infringement with respect to the SAS Manuals ( id. ¶¶ 46, 47) (count II); breach of contract, namely, the license agreement between SAS and WPL for the SAS Learning Edition software, by fraud ( id. ¶¶ 48-52) (count III); tortious interference with contract, that is, a SAS MLA for the SAS System SAS entered into with another party ( id. ¶¶ 53-57) (count IIIA); tortious interference with prospective economic advantage by inducing nonrenewal by SAS customers of their licenses with SAS ( id. ¶¶ 58-62) (count IV); and unfair and deceptive trade practices and unfair competition under the North Carolina Unfair and Deceptive Trade Practices Act, N.C. Gen. Stat. §§ 75-1.1, et seq. ( id. ¶¶ 63-65) (count V). SAS seeks compensatory damages, punitive damages, ...

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