## Facts

- ATC distributed transmission parts and, through acquisition of Hester Transmission Parts (HTP), obtained the right to use HTP’s transmission-parts catalog and employed Kenny Hester and several North Carolina employees.
- The catalog organized parts by categories and subcategories and used a structured part-numbering system keyed to functional attributes (e.g., brand and transmission type), including gaps intended for later additions; many subcategory numbers were essentially arbitrary.
- The catalog included illustrations created by copying photos from another distributor’s catalog rather than from original depictions of the parts.
- Hester’s noncompete expired in August 1999; he left ATC in October 1999 and soon formed a competing distributor, Whatever It Takes Transmissions & Parts, Inc. (WITT).
- In March 2000, several North Carolina employees resigned over two days and joined WITT; they took copies of ATC materials, including customer lists and the catalog.
- WITT used the ATC catalog as a template to create a catalog that was nearly identical in format and numbering and used a flyer stating WITT was “formerly Hester Transmission.”
- ATC sued asserting multiple federal and state claims; the district court granted summary judgment to defendants on nearly all claims, and ATC appealed selected rulings.

## Issues

1. Whether ATC’s catalog compilation, including its part-numbering and classification scheme, met copyright’s originality requirement.
2. Whether the catalog’s illustrations were protectable and owned by ATC for purposes of a copyright infringement claim.
3. Whether state-law unfair competition and related claims based on copying or use of catalog content were preempted by the Copyright Act.
4. Whether ATC produced sufficient evidence under Kentucky law that its customer lists and related business information were trade secrets and were misappropriated.

## Decision

- The Sixth Circuit affirmed summary judgment for defendants on all claims challenged on appeal.
- The court held the catalog’s numbering/classification scheme was functional and too mechanical to satisfy the minimal creativity required for copyright protection.
- The court held ATC failed to show it owned valid copyrights in the illustrations because they were copied from another source and not shown to contain ATC’s original authorship.
- The court held state-law theories that sought to bar copying or use of the catalog material were preempted by 17 U.S.C. § 301 because they asserted rights equivalent to copyright within copyright’s subject matter.
- The court held ATC failed to establish protectable trade secrets because the customer and pricing information was readily ascertainable through legitimate means and lacked the required secrecy and protection measures.

## Legal Principles

- Copyright protects original expression, not functional “systems” or methods of operation; a numbering or classification scheme that is primarily utilitarian and routine may lack the required modicum of creativity.
- A plaintiff must show ownership of valid copyrights in the allegedly infringed material; copied images that do not reflect the plaintiff’s original authorship do not support an infringement claim by the copier.
- Copyright Act preemption applies when (1) the work falls within copyright’s subject matter and (2) the state-law claim seeks rights equivalent to copyright’s exclusive rights, even if the asserted work ultimately proves uncopyrightable for lack of originality.
- Under Kentucky trade-secret law, information must derive economic value from not being generally known and must be subject to reasonable secrecy efforts; customer lists and pricing data that are readily obtainable through ordinary industry sources are not trade secrets.

## Conclusion

The Sixth Circuit affirmed dismissal of ATC’s claims because the catalog’s functional numbering system lacked copyrightable originality, the illustrations were not shown to be ATC’s original work, state-law claims targeting copying were preempted, and ATC’s customer and pricing information did not qualify as trade secrets under Kentucky law.


ATC Distrib. Grp., Inc. v. Whatever It Takes Transmissions & Parts, Inc., 402 F.3d 700 (6th Cir. 2005)