Apprio, Inc. v. Zaccari

104 F.4th 897

APPRIO, INC., Appellee v. Neil ZACCARI, Appellant

No. 22-7057

United States Court of Appeals, District of Columbia Circuit

Argued November 6, 2023

Decided June 21, 2024

Appeal from the United States District Court for the District of Columbia (No. 1:18-cv-02180)

Gregory W. Keenan, pro hac vice, argued the cause for appellant. On the brief were Belinda D. Jones, Robert D. Michaux, Andrew B. Grimm, and Kirk T. Schroder.

John R. Hutchins argued the cause for appellee. With him on the brief were Christopher B. Roth and William Rauchholz.

Before: Wilkins and Walker, Circuit Judges, and Randolph, Senior Circuit Judge.

Wilkins, Circuit Judge:

This case concerns the enforceability of a contract that was digitally "acknowledged" but not explicitly "agreed" to. Between 2015 and 2017, Appellee Apprio, Inc. ("Apprio"), a government contractor in the business of helping clients automate and streamline operations, employed Appellant Neil Zaccari ("Zaccari") as a Senior Technical Manager responsible, in part, for technology development. Prior to his employment with Apprio, Zaccari, incidentally, had developed a regulatory compliance software (the "Initial Software"). During his tenure, Zaccari realized that his Initial Software might be helpful to Apprio, so he updated the Initial Software to create a new version: the Updated Software. Zaccari then brought the Updated Software to work and demonstrated it to both his colleagues and one of Apprio's clients. Apparently impressed by the Updated Software, Apprio asked Zaccari to hand it over. Zaccari obliged.

The next month, Apprio sent Zaccari a document titled "Proprietary Information and Assignment of Inventions Agreement" (the "Agreement"). The Agreement included provisions relevant to copyright assignment of the Updated Software. Zaccari accessed the Agreement through Apprio's human resources portal and admits that he both saw the document and had the opportunity to read it. Zaccari then closed the document by clicking on the "only option" he says he saw on the computer screen: a button that read "Acknowledge." J.A. 923.

Nearly a year later, Apprio fired Zaccari. Following his termination, Apprio requested Zaccari furnish all copies of the Updated Software in his possession. Zaccari refused to do so, and he instead copyrighted the Updated Software and sued Apprio for breaching the Agreement when Apprio allegedly forced him to turn over a copy of the Updated Software to an Apprio client. In response, Apprio filed this case, countersuing Zaccari for breaching the Agreement when he refused to assign his rights in the Updated Software to Apprio (among other attendant actions). The District Court combined the cases, dismissed Zaccari's case for failure to state a claim, and in Apprio's case, initially granted partial summary judgment for Apprio with respect to contractual assignment of rights in the Updated Software and later also granted full summary judgment for Apprio on its breach of contract claim.

Zaccari now appeals, arguing that the Agreement is not an enforceable contract and, in the alternative, that the Agreement neither supports the assignment of his rights in the Updated Software to Apprio nor a finding that he breached the Agreement. We disagree on all fronts. We hold that Zaccari's "acknowledgment" of the Agreement created an enforceable contract that requires Zaccari to assign his rights in the Updated Software to Apprio. Accordingly, Zaccari breached the binding Agreement by failing to assign those rights to Apprio and disclosing the Updated Software's underlying code to the U.S. Copyright Office ("Copyright Office") in order to obtain the copyright. For these reasons, we affirm the District Court.

I.

A.

Zaccari was employed at Apprio as a Senior Technical Manager between November 2015 and May 2017. While Zaccari worked there, Apprio was under contract with the Defense Contract Management Agency ("DCMA") to help the agency receive and review contracts more efficiently by developing, testing, and implementing automation tools. As relevant here, Zaccari was hired to work in a group specifically "charged with making recommendations for improving, among other things, the DCMA's contract receipt and review process." Id. at 922.

In 2008, prior to his employment at Apprio, Zaccari independently developed the Initial Software. The Initial Software is a regulatory compliance program that automates the generation of Microsoft Excel reports on key search terms. It works by allowing users to "set out regulatory compliance provisions," which the computer then uses to "search an uploaded document for key terms related to that provision," and then "create[ ] a report that list[s] the key terms . . . [with] the page, line number, and associated regulatory provision for each mention of the key terms." Id. at 921.

In 2016, upon realizing that his software could be useful to Apprio for "efficiently implement[ing] contract review" and "automat[ing] contract receipt and review processes[,]" Zaccari updated the Initial Software on his own time and equipment. Id. at 570-71. To accomplish this update, Zaccari made what he calls "superficial or very simple" changes, like "updat[ing] the code to allow a user to directly upload a [.]pdf file, rather than only a Word document" and other changes to "make the program compatible with newer versions of Microsoft Excel." Id. at 922. The "base code [that] contain[ed] the keyword lookup and the keyword search engine," however, was left untouched. Id. at 922.

These changes resulted in the Updated Software—a new version of the program. The Updated Software had "10 additional functions" and was realized from changing "[m]ore than half of the [underlying] code" from the Initial Software. J.A. 1754. After finishing the update, Zaccari brought the Updated Software to work to "show . . . [his] colleagues and a senior level government employee at DCMA." Id. at 923. He additionally "informed Apprio that he could use the existing capabilities of [the software he had developed] to automate the DCMA's manual contract receipt and review process." Id. at 699.

While some of the facts concerning what came next are disputed, the parties agree that, shortly after Zaccari's demonstration at work, Apprio asked Zaccari for the Updated Software and Zaccari provided it. Apprio then turned the Updated Software over to DCMA, which in turn deployed it to its own employees for use.

About a month after Zaccari's demonstration, in June 2016, Apprio sent Zaccari the Agreement through the company's human resources portal. Zaccari logged into the portal, "clicked a link and proceeded to the [Agreement] document." Id. at 923. The document included three provisions relevant here:

2.2 Prior Inventions[:] Inventions . . . which I made prior to the commencement of My Service are excluded from the scope of this Agreement and all inventions which I made prior to the commencement of My Service will be governed by assignment agreements I executed prior to the date hereof. To preclude any possible uncertainty, I have set forth on a Previous Inventions Disclosure Form . . . a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of My Service, and that I both (a) may use in connection with My Service and (b) consider to be my property . . . and that I wish to have excluded from the scope of this Agreement . . . . [Additionally,] Prior Inventions shall not include inventions that I have developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of My Service if I do not use such inventions in connection with My Service . . . . If no such disclosure is made, I represent that there are no Prior Inventions. If, in the course of My Service, I incorporate a Prior Invention into a Company product, process or machine, the Company is hereby granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple tiers of sublicensees) to make, have made, modify, use and sell such Prior Invention. Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated, Prior Inventions in any Company Inventions without the prior written consent of an authorized officer of the Company.

2.3 Assignment of Inventions[:] Subject to Section[ ] 2.4 . . . I hereby assign and agree to assign in the future . . . to the Company all my right, title and interest in and to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not patentable or registrable under copyright or similar statutes, made or conceived or reduced to practice or learned by me . . . during the period of My Service[ ] . . . .

2.4 Unassigned Inventions[:] I recognize that this Agreement will not be deemed to require assignment of any invention that was developed entirely on my own time without the Company's equipment, supplies, facilities, or trade secrets and neither related to the Company's actual or anticipated business, research or development, nor resulted from work performed by me for the Company.

Id. at 130-31. The Agreement also included a preamble that read "I hereby agree as set forth herein," id. at 130, and a conclusion that stated, in relevant part, "I acknowledge and agree that the language herein shall be deemed to be approved by all parties hereto . . . and that I have had an opportunity to consult with an attorney regarding the terms herein prior to signing this Agreement," id. at 133.

Zaccari admits to opening this document, to having had the opportunity to read it, and to then clicking the "Acknowledge" button, which he says was the "only option on the computer screen" available for closing the window. Id. at 923. Zaccari did not subsequently submit any Previous Inventions Disclosure Forms as...