Triad Systems Corp. v. Southeastern Express Co.

Southeastern Express Company (“Southeastern”) appeals the district court’s grant of a preliminary injunction in favor of Triad Systems Corporation (“Triad”). The injunction followed a finding that Southeastern was infringing on Triad’s software copyrights. 1 *1333 The terms of the injunction substantially prohibit Southeastern from servicing Triad computer systems. In a consolidated appeal, two of Triad’s attorneys, Jeffrey Lederman and Michael Madison (“Lederman and Madison”), appeal the imposition of Rule 11 sanctions against them for filing a misleading declaration in support of Triad’s motion for injunc-tive relief.

For the reasons discussed below, we affirm the grant of the preliminary injunction against Southeastern and reverse the imposition of Rule 11 sanctions against Lederman and Madison.

I.

FACTS AND PROCEEDINGS BELOW

Triad manufactures computers for use by automotive parts stores and designs, sells, and licenses unique software to run its computers. The computer systems enable customers in the automotive parts industry to automate their sales, inventory, and accounting tasks. Southeastern is what is known as an independent service organization (“ISO”) that services…