Southern Credentialing Support Services, LLC. v. Hammond Surgical Hospital, LLC

         SECTION “H”

          ORDER AND REASONS

          JANE TRICHE MILAZZO, UNITED STATES DISTRICT JUDGE

         Before the Court are Defendant's Motion for Summary Judgment (Doc. 110) and Plaintiff's Motion for Partial Summary Judgment (Doc. 112). For the following reasons, the Defendant's Motion is DENIED, and Plaintiff's Motion is GRANTED IN PART.

         BACKGROUND

         Plaintiff, Southern Credentialing Support Services, LLC (“SCSS”), alleges that Defendants, Hammond Surgical Hospital, LLC d/b/a Cypress Pointe Surgical Hospital (“CPSH”), Hammond Surgical Hospital Management Co. LLC, and Christopher Beary, infringed on their copyright through the unauthorized use, reproduction, and distribution of Plaintiff's healthcare credentialing forms. On January 15, 2010, CPSH hired Plaintiff to provide healthcare credentialing services. Plaintiff alleges that after this relationship was terminated on April 10, 2013, CPSH continued to use its healthcare credentialing forms. The forms at issue consist of two packets-the Louisiana Hospital Credentialing Process Packet and the Louisiana Hospital Re-Credentialing Process Packet. Each packet consists of forms, applications, delineations, and other documents designed to streamline the healthcare credentialing process.

         Defendant CPSH moves for summary judgment on Plaintiff's claim that Defendants have infringed on its copyright, alleging that Plaintiff is not entitled to copyright protection because (1) it does not own a valid copyright, (2) it did not create the work, (3) it has waived its claims, and (4) it was not damaged. Plaintiff has likewise moved for summary judgment in its favor, arguing that it has established a valid claim for copyright infringement to which Defendant has no defense.

         LEGAL STANDARD

         Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”^[1] A genuine issue of fact exists only “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”^[2]

         In determining whether the movant is entitled to summary judgment, the Court views facts in the light most favorable to the non-movant and draws all reasonable inferences in his favor.^[3] “If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial.”^[4] Summary judgment is appropriate if the non-movant “fails to make a showing sufficient to establish the existence of an element essential to that party's case.”^[5] “In response to a properly supported motion for summary judgment, the non-movant must identify specific evidence in the record and articulate the manner in which that evidence supports that party's claim, and such evidence must be sufficient to sustain a finding in favor of the non-movant on all issues as to which the non-movant would bear the burden of proof at trial.”^[6] “We do not . . . in the absence of any proof, assume that the nonmoving party could or would prove the necessary facts.”^[7] Additionally, “[t]he mere argued existence of a factual dispute will not defeat an otherwise properly supported motion.”^[8]

         LAW AND ANALYSIS

         A. Copyright Infringement

         In order to show copyright infringement, Plaintiff must show that (1) it owns a valid copyright and (2) Defendant copied constituent elements of Plaintiff's work that are original.^[9] This Court will consider each element in turn.

         1. Valid Copyright

         At the outset, the parties dispute the validity of Plaintiff's copyright. Although it is undisputed that Plaintiff obtained copyright registration of the packets, such creates “only a rebuttable presumption that the copyrights are valid.”^[10] To qualify for copyright protection, ownership of a valid copyright must be established “by proving the originality and copyrightability of the material and compliance with the statutory formalities.”^[11] “The level of creativity required to make a work of authorship original is extremely low; even a slight amount will suffice.”^[12]

         Defendant argues that Plaintiff's health credentialing packets cannot meet the requisite level of creativity required for copyright protection because they are factual and do not contain any creative components. Specifically, Defendant alleges the contents of the forms at issue are required by regulation and CPSH's policies and procedures. It also argues that many of the forms were borrowed from a nearby hospital.

         Defendant is correct that facts are not copyrightable. “Facts themselves are not copyrightable because they are discovered rather than authored, so ‘[n]o one may claim originality as to facts.'”^[13] Plaintiff contends, however, that its credentialing packets constitute factual compilations. “Factual compliations . . . ‘may possess the requisite originality' because a ‘compilation author typically chooses which facts to include, in what order to place them, and how to arrange the collected data so that they may be used effectively by readers.'”^[14] “A work represents a copyrightable compilation if it involves the collection and assembly of existing facts, the selection and arrangement of those materials, and the creation, by virtue of selection, of an ‘original' work.”^[15]There are three requirements for a compilation to qualify for copyright protection: “(1) the collection and assembly of preexisting material, facts, or data; (2) the selection, coordination, or arrangement of those materials; and (3) the creation, by virtue of the particular selection, coordination, or arrangement, of an original work of authorship.”^[16] This Court holds that Plaintiff's credentialing packets meet this test.

         Although Plaintiff's credentialing packets contain facts derived from regulations and CPSH policy, Plaintiff has compiled them into an efficient and streamlined credentialing process that even Defendant admitted was “very efficient.”^[17]

The compilation author typically chooses which facts to include, in what order to place them, and how to arrange the collected data so that they may be used effectively by readers. These choices as to selection and arrangement, so long as they are made independently by the compiler and entail a minimal degree of creativity, are sufficiently original that Congress may protect such compilations through the copyright laws.^[18]

         Debra Caminita, Plaintiff's representative, testified as to her thought process in developing the packets and each form within. She testified that her credentialing packets and forms were designed to be streamlined and “get to the point” and that they vary from competing packets by eliminating unnecessary questions and information. Such decisions regarding selection and arrangement clearly necessitate at least some level of creativity.^[19]

         In addition, Defendant's complaint regarding Plaintiff's use of delineation forms from another hospital is unfounded. Even assuming that Plaintiff did borrow the delineation forms from another hospital, Plaintiff shows how most of her delineation forms differ from those Defendant contends she borrowed. These differences establish the requisite minimal amount of creativity required for copyright protection. In addition, “[t]he mere fact that component parts of a collective work are neither original to the plaintiff nor copyrightable by the plaintiff does not preclude a determination that the combination of such component parts as a separate entity is both original and copyrightable.”^[20]

         Accordingly, this Court finds that Plaintiff has a valid copyright in the healthcare credentialing packets as factual compilations. The Court notes, however, that such a copyright is considered a “thin” copyright with limited protection.^[21] “Notwithstanding a valid copyright, a subsequent compiler remains free to use the facts contained in another's publication to aid in preparing a competing work, so long as the competing work does not feature the same selection and arrangement.”^[22] The “copyright protects only the elements that owe their origin to the compiler-the selection, coordination, and arrangement of facts.”^[23]

         2. Copying

         To show the second element of a copyright infringement claim, copying, “a plaintiff must prove: (1) factual copying and (2) substantial similarity.”^[24]The first prong is easily satisfied in this case as Defendant does not deny using portions of Plaintiff's packets. The second prong, however, presents a more difficult question-one which has been glossed over by both parties.

         Although this Court has found that Plaintiff holds a valid copyright in the packets as factual compilations, Plaintiff has not alleged that Defendants used its entire compilation. Rather, it alleges that they used about seven of its base forms-the Bylaws Attestation, Medical Record Signature Form, Call Coverage Verification, Federal DEA and LA State Controlled Dangerous Substance Form, Practitioners Receiving Medicare/Champus Payments Notice, Health Statement Verification, Continuing Education Verification, and Tuberculosis Skin Testing and Influenza Verification-and the 33 provider-specific delineations. These forms make up only a portion of the packets at issue. Plaintiff contends that the substantial similarity prong is easily satisfied because Defendants do not dispute that they continued to use the aforementioned documents after their relationship with ...