Fourth Circuit Upholds Dismissal of Deque's Copyright Lawsuit Against BrowserStack Over Late Damages Filings

On June 5, 2026, the United States Court of Appeals for the Fourth Circuit affirmed a district court ruling that granted summary judgment to BrowserStack, Inc. and BrowserStack Software Pvt, Ltd. in a copyright and intellectual property suit brought by Deque Systems Inc. (Docket No. 25-1534). The appellate panel ruled that the United States District Court for the Eastern District of Virginia did not abuse its discretion when it excluded Deque's damages evidence as a sanction under Federal Rule of Civil Procedure 37(c)(1).

Background of the Dispute

Deque and BrowserStack compete in the digital accessibility testing market. Deque develops accessibility software, notably the DevTools browser extension and proprietary Rules Help Pages, which assist developers in detecting and resolving visual and hearing accessibility issues. Deque registered multiple versions of these tools with the United States Copyright Office.

In 2021, after unsuccessful discussions regarding a potential acquisition of Deque, more than 100 BrowserStack employees created accounts to access DevTools under Deque's Software License Terms and Terms of Use. In 2022, BrowserStack launched its own browser extension, Accessibility Toolkit, and published comparative promotional materials on its website claiming the toolkit was "5x faster" than Deque's product.

In February 2024, Deque sued BrowserStack alleging copyright infringement under 17 U.S.C. § 501(a), false advertising under 15 U.S.C. § 1125 and Virginia Code Ann. § 18.2-216, breach of contract, and unjust enrichment. Deque asserted that BrowserStack reverse-engineered DevTools code and copied the Rules Help Pages. Deque sought an injunction, an audit, attorney's fees, actual damages, lost profits, and disgorgement of profits.

Discovery Delays and Evidentiary Sanctions

Under the district court's scheduling order, initial disclosures under Federal Rule of Civil Procedure 26(a)(1) were due on June 7, 2024, expert disclosures on August 9, 2024, and discovery closed on October 11, 2024. Deque's June 7 initial disclosures did not contain a computation of damages. Deque similarly declined to provide specific calculations in response to interrogatories in July, stating that calculations were incomplete.

On September 6, 2024, four weeks after the expert disclosure deadline, Deque identified a damages expert. On October 8, 2024—three days before discovery closed—Deque served what it termed a "rebuttal" report from that expert, which estimated damages at over $30 million. In contrast, BrowserStack's timely expert report estimated Deque's damages, if any, between $3,000 and $67,149. Deque did not serve a formal supplemental damages computation under Rule 26(a)(1) until December 6, 2024, nearly two months after discovery closed.

BrowserStack moved in limine to exclude Deque's damages evidence under Rule 37(c)(1) and moved for summary judgment. The district court granted both motions, holding that Deque's failure to disclose damages calculations was neither substantially justified nor harmless under the framework established in Southern States Rack & Fixture, Inc. v. Sherwin-Williams Co. Because monetary evidence was excluded and Deque failed to show an ongoing violation justifying injunctive relief—BrowserStack having removed the challenged advertisement and updated its software—the district court entered judgment in BrowserStack's favor.

The Fourth Circuit's Decision

Writing for the unanimous Fourth Circuit panel, the court affirmed both the evidentiary exclusion and the grant of summary judgment.

The court rejected Deque's argument that its expert report was timely because it served as rebuttal testimony, clarifying that rebuttal cannot be used to introduce affirmative evidence on an issue where the party bears the burden of proof. The Fourth Circuit also held that Deque had waived any argument that the court had to evaluate the harsher dismissal sanction test under Wilson v. Volkswagen of America, Inc., as Deque raised that theory only in a Rule 59(e) motion for reconsideration.

Finally, reviewing the summary judgment record de novo, the panel concluded that Deque failed to show a genuine issue of material fact regarding ongoing or threatened infringement. BrowserStack demonstrated that it no longer distributed the allegedly infringing version of its toolkit and had removed the comparative advertisements. Because Deque did not inspect the current software source code or rebut BrowserStack's evidence, Deque could not support its claims for injunctive relief, leaving no viable remedies on any count.