is not only violating its licensing agreement, but is also guilty of infringement. Altech is equally liable for the customer's infringement as a "contributory infringer," since Altech knew (or should have known) that ISC's software is licensed, not sold, and that ISC customers have no authority to distribute ISC's copyrighted software to Altech or anyone else. Wales Industrial, Inc. v. Hasbro Bradley, Inc., 612 F.Supp. 510, 518 (S.D.N.Y.1985). Harrison v. Maynard, Merril & Co., 61 F. 689, 690-91 (2nd Cir.1894). And, it is no defense for Altech to argue, as it did in its pre-hearing brief at p. 9, that "ISC's Complaint is really with its customers who sell the ... disks in violation of its licensing agreements." The law is clear that ISC may sue any one or more of the participants in infringing activity, as it sees fit. Costello Publishing Co. v. Rotelle, 670 F.2d 1035, 1043 (D.C.Cir.1981).
30. In consequence, each and every time Altech obtains and uses ISC's copyrighted software, it is guilty of copyright infringement.
(iv). copying of ISC's copyrighted software programs by using them in a computer
31. Altech's possession of ISC software not only constitutes "contributory infringement," its subsequent use of that software, be it to diagnose and repair customer equipment, refurbish used equipment (so-called "hot-staging"), or otherwise, comprises additional acts of direct infringement by Altech. This is because in order to use an ISC software program, the program must be "loaded" into a computer's memory. Loading a computer's memory requires "copying" of the program from a disk into memory, and that copy is a direct infringement of the copyright. Nimmer On Copyright, § 8.08 (1989).
32. Therefore, whenever Altech uses ISC's copyrighted software, it necessarily makes an unauthorized copy of that software, and necessarily infringes ISC's copyright. Bly v. Banbury Books, Inc., 638 F.Supp. 983, 985 (E.D.Pa.1986). Micro-Sparc, Inc. v. Amtype Corp., 592 F.Supp. 33, 35 (D.Mass.1984).
33. Nor can Altech escape its liability for these direct "use" infringements by resort to 17 U.S.C. § 117. That section gives the lawful owner of copyrighted software the limited right to make certain types of copies of the software for its own internal use on its own machines. Apple Computer, Inc. v. Formula International, Inc., 594 F.Supp. 617, 621-23 (C.D.Cal.1984); Tandy Corp. v. Personal Micro Computers, Inc., 524 F.Supp. 171, 174 (N.D.Cal.1981). Section 117 affords no immunity whatsoever to infringers such as Altech that have come into unauthorized possession of the software. GCA Corp. v. Chance, 217 U.S.P.Q. 718, 720 (N.D.Cal.1982).
34. Moreover, even if § 117 did apply (which it does not) Altech's conduct in making multiple copies of ISC software, and using that software, at least in part, on other peoples machines, falls outside the scope of Section 117's limited exception to infringement liability. Apple Computer, 594 F.Supp. at 621-23.
(c). Balance Of Hardships And The Public Interest
35. The impact that an injunction would have on Altech's business merits little equitable consideration, since the evidence shows that Altech has knowingly engaged in infringing activities as a regular feature of its business. Atari, 672 F.2d at 620; Apple Computer, 714 F.2d at 1255. Moreover, Altech testified that the repair and refurbishment of ISC equipment was a minor part of its overall business.
36. In contrast, ISC will greatly benefit from an injunction. An injunction will provide much needed protection for, and help reduce the erosion in the value of, ISC's copyrighted works, and will allow ISC to recover the substantial investment it made in order to create the works in the first instance.
37. Consequently, the Court finds that the balance of hardships weighs heavily in favor of ISC and the issuance of a preliminary injunction.
38. The public interest also strongly favors the issuance of a preliminary injunction, as it will preserve the integrity of the copyright laws, which embody an important national policy of encouraging creativity. Atari, 672 F.2d at 620; Apple Computer, 714 F.2d at 1254.
39. ISC has met all the prerequisites to preliminary injunctive relief on its copyright claims. Under the sliding scale analysis, all of the relevant factors weigh decidedly in favor of the issuance of a preliminary injunction.
TRADE SECRET CLAIMS
(a). Likelihood Of Success On The Merits
40. ISC has established a strong likelihood of success on the merits of its trade secret claims against Altech.
41. The requisites for a "trade secret" are set forth in the Uniform Trade Secrets Act as follows:
"Trade secret" means information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that:
(1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons, who can obtain economic value from its disclosure or use; and