Greenberg, Inc. v. Sir-Tech

• Decision Date: 15 February 2005
• Citation: 791 N.Y.S.2d 504,4 N.Y.3d 185,824 N.E.2d 944
• Parties: ANDREW GREENBERG, INC., Appellant, v. SIR-TECH SOFTWARE, INC., et al., Defendants, and SIR-TECH CANADA, LTD., et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

4 N.Y.3d 185

824 N.E.2d 944

791 N.Y.S.2d 504

ANDREW GREENBERG, INC., Appellant, v. SIR-TECH SOFTWARE, INC., et al., Defendants, and SIR-TECH CANADA, LTD., et al., Respondents.

Court of Appeals of the State of New York.

Argued January 12, 2005.

Decided February 15, 2005.

Weiss & Associates, P.C., New York City (Matthew J. Weiss of counsel), for appellant.

Drew, Davidoff & Edwards Law Offices, LLP, Monticello (Michael Davidoff of counsel), for respondents.

Chief Judge KAYE and Judges G.B. SMITH, CIPARICK, READ and R.S. SMITH concur; Judge GRAFFEO taking no part.

OPINION OF THE COURT

ROSENBLATT, J.

This appeal concerns New York's long-arm statute (CPLR 302 [a]) and its reach over certain Canadian defendants who, asserting a purported lack of jurisdiction over them, seek dismissal of the complaint. Plaintiff Andrew Greenberg, Inc. (AGI) has alleged that in 1979 it created the name, concept and plot for a computer fantasy role-playing game known as "Wizardry." Two years later, AGI and defendant Sir-Tech Software, Inc. (Sir-Tech S.I.)—both New York corporations—entered into an agreement granting Sir-Tech S.I. or a subsidiary the right to manufacture and market Wizardry, related products and any subsequent versions of the game.

The 1981 agreement called upon Sir-Tech S.I. to pay AGI a license royalty fee and a percentage of gross sales revenues. It further provided that Sir-Tech S.I. was to copyright the Wizardry games and related products in the name of AGI. The contract also stated that its provisions were binding on the parties' successors and assigns, and that Sir-Tech S.I. would not disclose any Wizardry game or related product, information or source of materials to anyone without written permission from AGI. In addition, all decisions concerning the assignment of rights under the agreement required the consent of both parties.

The Wizardry game became successful, eventually resulting in several different versions and assorted related merchandise, as well as sublicensing agreements. In 1991, however, Sir-Tech S.I. stopped sending royalty payments and accounting statements to AGI. AGI alleges that Sir-Tech S.I. nevertheless continued to manufacture and sell subsequent versions of the Wizardry game and related products without furnishing AGI with any accounting or payment.

In 1992, AGI sued Sir-Tech S.I. and Svane, Inc., its subsidiary, alleging that they had refused to pay royalties or account for them. After extensive discovery, AGI learned that Sir-Tech S.I. had closed its office in St. Lawrence County, dissolved the corporation and transferred its assets, the Wizardry trademarks and its domain name registration to Sirtech Canada, Ltd. and 1259190 Ontario, Inc., Canadian corporations formed by the same principals who owned Sir-Tech S.I.

After successfully joining the two Canadian corporations, AGI served its second amended complaint, seeking an accounting as a basis for a money judgment under the 1981 contract. AGI also alleged breach of contract, trade secret misappropriation and tortious interference. In essence, AGI asserted that Sir-Tech S.I. appropriated to itself the trademark registration for the Wizardry name and logo, despite AGI's co-ownership of the mark, and that the principals of Sir-Tech S.I. (Frederick Sirotek, Norman Sirotek and Robert Sirotek) reestablished themselves as Sirtech Canada and 1259190 Ontario, through which they continue to market and profit from the Wizardry product while depriving AGI of royalties or an accounting.

In a pre-answer motion, the Canadian defendants moved for dismissal of the second amended complaint pursuant to CPLR 3211 (a) (8). They asserted that the court lacked personal jurisdiction over them because AGI had not satisfied the prerequisites of New York's long-arm statute. As relevant here, CPLR 302 (a) provides that a court may exercise personal jurisdiction over a nondomiciliary who

"1. transacts any business within the state or contracts anywhere to supply goods or services in the state; or . . .

"3. commits a tortious act without the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if he

"(i) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or

"(ii) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce. . . ."

Supreme Court concluded that AGI had satisfied section 302 (a) (1) in that Sirtech Canada had allegedly entered into licensing agreements to market and sell Wizardry and related products in New York. The court noted that AGI produced sworn evidence that Sirtech Canada's games were offered for sale in New York and had submitted an exhibit consisting of packaging which listed the games' copyright as owned by Sirtech Canada. The court further concluded that AGI adequately alleged that Sir-Tech S.I., a New York corporation, assigned or transferred to Sirtech Canada the Wizardry trademark and copyrights along with the information necessary to develop the software for...