WilliamsMcCarthy LLP attorneys John Holevas and Joel Huotari won summary judgment in a multi-million-dollar case on behalf of Arctic Cat on March 15, 2017.  The case, Driveline Systems v. Arctic Cat (N.D. Ill. 2008), featured allegations that Arctic Cat breached its supply contract with Driveline, breached a supply contract confidentiality provision, breached a Driveline predecessor’s confidentiality provision, and committed copyright infringement by sharing drawings of its parts with the vendor that Arctic Cat began using in place of Driveline.  Driveline’s expert opined that Driveline’s damages on these counts exceeded $11 million.

However, the Honorable District Judge Frederick J. Kapala ruled in Arctic Cat’s favor on each of those counts.  After analyzing the parties’ respective contractual rights and obligations under the Uniform Commercial Code (“UCC”), the Court determined that Arctic Cat’s termination of its contracts with Driveline was justified by Driveline’s failure to ship parts to Arctic Cat in a timely manner.

The Court also conducted a “battle of the forms” analysis of the parties’ purchase orders and invoices under 810 ILCS 5/2-207(3), and ultimately accepted Arctic Cat’s argument that Driveline’s confidentiality provisions were not a part of the parties’ contract.  Moreover, since the confidentiality provision from Driveline’s predecessor’s invoices was superseded by the confidentiality provisions within Arctic Cat’s purchase order, that count was deficient as well.

Finally, with respect to the copyright infringement claims, Arctic Cat demonstrated that Driveline actually copied the subject drawings from third parties, rather than creating them independently.  “[I]n order to establish copyright infringement, a plaintiff must . . .  copying of constituent elements of the work that are original.’” Mid Am. Title Co. v. Kirk, 59 F.3d 719, 721 (7th Cir. 1995).  “Originality is both a statutory and constitutional requirement.” Id.  “Original, as the term is used in copyright, means only that the work was independently created by the author.” Id. Because Driveline’s drawings were not “original,” it could not enforce its copyrights in those drawings against Arctic Cat, causing Driveline to withdraw its copyright claim in the face of Arctic Cat’s motion for summary judgment.  

Arctic Cat’s counterclaim for damages arising out of Driveline’s breach of contract remains pending along with Driveline’s open account claim, which are the subject of a forthcoming trial.