API Systems Sues Clarvue for Allegedly Reverse Engineering Copyrighted Software

On Thursday, API Systems Inc. filed a complaint in the Central District of California against Clarvue Inc. for the defendant’s purported copyright infringement through its reverse engineering of API Systems’ copyrighted code, which also allegedly breached the parties’ licensing agreement.

According to the complaint, API Systems “is a corporation engaged in the development, sale and marketing of software, including software used to generate customizable surveys, user forms and data bases.” The plaintiff stated that its software “may be hosted on internet-accessible web servers for clients … to create database management systems.” 

API Systems noted that in 2005, software called SURVEY Web Code was created and assigned to API Systems, which has a registered copyright. API Systems stated that in 2019 it “licensed and delivered software comprising the copyrighted 2005 SURVEY Web Code (the 2019 SURVEY Web Code) to Clarvue.” API Systems asserted that in March 2020 the companies entered into a Limited Software License Agreement, pursuant to which Clarvue was provided with a “license to software entitled ‘nFormz’ comprised of 2019 SURVEY Web Code,” which was purportedly delivered to Clarvue. They contended that the 2019 SURVEY Web Code includes almost all of the protected portions of the 2005 SURVEY Web Code with improvements.

API Systems alleged that in May 2020, “Clarvue, its employees and contractors proceed to reverse engineer, replicate, and copy API’s object code to generate the source code version of the 2019 SURVEY Web Code.” As a result, API Systems proffered that Clarvue infringed its copyrighted code. API Systems reported that the Software agreement specifies that Clarvue “shall not reverse engineer the 2019 SURVEY Web Code” or “make any derivative works based on API Systems’ copyrighted material.” 

API Systems claimed that Clarvue’s infringing code “will generate output that is substantially similar to the output of the copyrighted code.” Clarvue’s conduct was performed without authorization from API Systems, according to the complaint. API Systems contended that Clarvue’s conduct was “willful, oppressive, malicious and with wrongful intent to infringe” and did not constitute fair use because it was allegedly used for a commercial purpose. Consequently, API Systems asserted that the purported infringement has caused it to suffer harm and substantial losses.  

Clarvue was accused of copyright infringement and breach of contract. API Systems seeks to permanently enjoin the defendant from further infringement or assisting or inducing infringement. The plaintiff asked the court for an injunction and an award for damages. 

API Systems is represented by Mandour & Associates APC.