## Facts

- Architectronics, Inc., a New York software developer, created prototypes (1986–87) for software that would simulate a CAD digitizer/graphics tablet on a computer screen and work with AutoCAD.
- The prototypes relied on a graphics board and an auxiliary display driver to integrate with AutoCAD.
- Architectronics entered agreements with Control Systems, Inc. (CSI) and related entities under which Architectronics provided prototypes/technology subject to confidentiality limits and CSI used them for joint venture purposes, including development of a derivative display driver.
- The contemplated commercial arrangement was that Architectronics would market the combined system and pay CSI royalties.
- After later changes in AutoCAD, the relationship deteriorated; Architectronics alleged defendants terminated or exceeded agreed rights and used Architectronics’ technology in competing products.
- Architectronics sued CSI, Artist Graphics Corp., CADSource, Inc., and Access Graphics, Inc. for trade secret misappropriation, breach of contract, tortious interference, and copyright infringement.
- Defendants moved for summary judgment on all claims under Federal Rule of Civil Procedure 56; the court granted the motion in part and denied it in part, and later granted reargument in part.

## Issues

1. Whether the principal agreements were “transactions in goods” governed by UCC Article 2 (and its four-year statute of limitations) or instead non-UCC development/licensing arrangements subject to New York’s six-year contract limitations period.
2. Whether Architectronics’ software code and related technical information qualified as trade secrets and whether defendants misappropriated them or violated confidentiality and scope-of-license limits.
3. Whether defendants’ later software/display driver infringed protectable elements of Architectronics’ copyrighted work, as distinct from unprotectable functional or interoperability-driven elements.
4. Whether certain affiliated defendants tortiously interfered with Architectronics’ contractual rights, and whether the evidence permitted those claims to proceed past summary judgment.

## Decision

- The court granted summary judgment in part and denied it in part, narrowing but not eliminating the case.
- The court treated the core arrangement as outside UCC Article 2 and applied New York’s six-year limitations period, allowing the breach-of-contract claim to proceed as timely.
- The court found genuine disputes of material fact on portions of the trade secret/confidentiality claims, precluding summary judgment on those portions.
- The court granted summary judgment for defendants on parts of the copyright claim involving unprotectable or authorized elements, but allowed other infringement allegations to proceed where similarity, protectability, and licensing scope were contested.
- The court granted summary judgment for some defendants on parts of the tortious-interference theory while allowing other aspects to proceed where evidence supported a role in inducing or participating in the alleged breach.
- On reargument, the court revisited and modified aspects of its earlier summary-judgment rulings in part.

## Legal Principles

- UCC Article 2 does not govern an agreement whose predominant purpose is joint software development, licensing, or other non-sale obligations; in that event, New York’s non-UCC contract limitations period applies.
- Summary judgment is improper where record evidence would permit a factfinder to conclude that proprietary technical information was kept confidential, derived economic value from secrecy, and was used outside authorized purposes.
- In software copyright disputes, protectability turns on separating original expression from elements dictated by function, efficiency, or interoperability constraints; infringement claims may proceed only as to protectable expression and disputed copying.
- Tortious-interference liability requires proof tied to each defendant’s conduct; claims fail at summary judgment where evidence does not show purposeful, causative interference distinct from mere affiliation.

## Conclusion

The court treated the parties’ software joint venture as a non-UCC licensing/development arrangement, applied the six-year contract limitations period, and denied summary judgment on substantial portions of the contract, trade secret, and copyright claims while dismissing other portions lacking protectable subject matter, adequate proof, or defendant-specific interference evidence.


Architectronics, Inc. v. Control Sys., Inc., 935 F. Supp. 425 (S.D.N.Y. 1996)