Jetform Corp. v. Unisys Corp.

• Decision Date: 27 April 1998
• Docket Number: No. CIV. A. 98-228-A.,CIV. A. 98-228-A.
• Parties: JETFORM CORPORATION, Plaintiff, v. UNISYS CORPORATION, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

Page 788

11 F.Supp.2d 788

JETFORM CORPORATION, Plaintiff, v. UNISYS CORPORATION, Defendant.

No. CIV. A. 98-228-A.

United States District Court, E.D. Virginia, Alexandria Division.

April 27, 1998.

Peter J. Carney, White & Case, Washington, DC, for Plaintiff.

Frank Winston, Jr., Wiley, Rein & Fielding, Washington, DC, for Defendant.

MEMORANDUM OPINION

CACHERIS, District Judge.

This case is before the Court on Defendant Unisys' Motion to Dismiss Counts One through Four of the Complaint and Unisys' Motion to Dismiss Complaint for Lack of Subject Matter Jurisdiction.

I.

Plaintiff JetForm Corporation ("JetForm") filed this lawsuit against Unisys Corporation ("Unisys") on February 17, 1998. According to the Complaint, JetForm is a Canadian software manufacturer which licensed certain software products to Unisys, allowing Unisys to provide those products to the United States Coast Guard in furtherance of Unisys' contract with the Coast Guard. JetForm contends that its agreement with Unisys requires Unisys to pay JetForm a royalty for each Coast Guard keyboard which can be used to access to JetForm's software. JetForm argues that Unisys has failed to pay the full amount owed on the contract and is suing for injunctive relief and damages.

JetForm's Complaint contains nine counts. Counts One through Four are based on copyright infringement. Counts Five and Six are for breach of contract. Count Seven is based on promissory estoppel, Count Eight is for conversion, and Count Nine is based on unjust enrichment.

Unisys has filed two motions to dismiss. In its first motion, Unisys argues that Counts One through Four of JetForm's Complaint fail to meet the requirements for pleading copyright infringement claims. In its second motion, Unisys argues that the entire Complaint should be dismissed pursuant to Rule 12(b)(1) because JetForm's allegations can only be addressed by the United States Court of Federal Claims.

II.

In ruling on a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), "the trial court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Williams v. United States, 50 F.3d 299, 304 (4th Cir.1995)(quotation omitted). The burden of proving subject matter jurisdiction is on the party asserting jurisdiction. Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir.1982). If the defendant contends that a complaint fails to allege facts upon which subject matter jurisdiction can be based, all facts alleged in the complaint are assumed to be true. Id. The plaintiff is then afforded the same procedural protection as he would receive under Rule 12(b)(6) consideration. Id.

Rule 12(b)(6) motions test the legal sufficiency of a complaint. Randall v. United States, 30 F.3d 518, 522 (4th Cir.1994). Accordingly, such motions "should be granted only in very limited circumstances." Rogers v. Jefferson-Pilot Life Ins. Co., 883 F.2d 324, 325 (4th Cir.1989). A motion to dismiss under Rule 12(b)(6) should be denied "`unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'" De Sole v. United States, 947 F.2d 1169, 1177 (4th Cir.1991) (quoting Coakley & Williams, Inc. v. Shatterproof Glass Corp., 706 F.2d 456, 457 (4th Cir.1983)).

Generally, a motion to dismiss under Rule 12(b)(6) must be assessed in light of Rule 8's liberal pleading standards. Rule 8 requires "a short and plain statement of the claim showing that the pleader is entitled to relief." The complaint need only state sufficient facts to enable the defendant to draft a responsive pleading. 5A Wright & Miller, Fed. Practice and Procedure, § 1357.

III.

In its Motion to Dismiss Counts One through Four of the Complaint filed pursuant to Rule 12(b)(6), Unisys argues that JetForm failed to plead copyright infringement with the requisite particularity. Specifically, Unisys argues that JetForm failed to: 1) allege that the works at issue have been registered; 2) allege whether the works are of United States origin; 3) allege which specific works are the subject of its claim; 4) allege with specificity how the copyrights were infringed; and 5) allege with specificity when the infringement occurred.

Initially, the Court must determine whether copyright infringement claims are assessed in light of Rule 8's liberal pleading standards or whether such claims must be alleged with greater specificity. In support of its argument that copyright infringement claims must be alleged with specificity, Unisys relies on Paragon Services, Inc. v. Hicks, 843 F.Supp. 1077, 1081 (E.D.Va.1994). In that case, a court in this District dismissed a copyright infringement claim because it did not meet a heightened pleading standard. Id.

However, Wright & Miller's Federal Practice and Procedure recently stated that in light of the Supreme Court's opinion in Leatherman v. Tarrant County Narcotics Intelligence and Coordination Unit, 507 U.S. 163, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993), the requirement stated in Paragon Services, Inc. appears to be in clear violation of Rule 8. 5 Charles A. Wright & Arthur R. Miller, Fed. Practice and Procedure, § 1237 (Supp.1997). In Leatherman, the Supreme Court stated that the only claims which must meet a heightened pleading standard are those enumerated in Rule 9(b), which addresses averments of fraud or mistake. Leatherman, 507 U.S. at 168, 113 S.Ct. 1160.

In Mid America Title Company v. Kirk, 991 F.2d 417, 421-22 (7th Cir.1993), the Seventh Circuit, citing Leatherman, ruled that copyright infringement claims need not be pled with particularity. The court noted that copyright infringement claims which merely allege ownership of the copyright by the plaintiff, registration in compliance with the applicable statute, and infringement by the defendant have been held sufficient. Id. at 421 n. 9 (citing 5 Charles A. Wright & Arthur R. Miller, Fed. Practice and Procedure, § 1237).

The Court finds the Seventh Circuit's application of Leatherman in Mid America Title Company to copyright infringement actions to be persuasive and declines to follow the decision in Paragon Services, Inc.¹ Accordingly, Unisys' Motion to Dismiss must be denied if JetForm's copyright infringement claims state sufficient facts to enable Unisys to draft a responsive pleading.

First, as Unisys concedes, JetForm alleges that it owns the copyrights at issue. Second, while JetForm's complaint does not allege registration with the Copyright Office, it alleges an appropriate exception to that requirement; namely, that the software at issue is Berne Convention work whose country of origin is not the United States. 17 U.S.C. § 411(a).

Unisys argues that the Complaint lacks "key information essential to the determination of whether the programs are works of U.S. origin." Unisys' Reply to JetForm's Opposition, p. 3. 17 U.S.C. Section 101 contains provisions describing when a Berne Convention work's country of origin is or is not the United States. However, as stated, the Complaint need only state sufficient facts to enable Unisys to draft a responsive pleading, and that standard is satisfied by JetForm's statement that the relevant work is Berne Convention work whose country of origin is not the United States.

Pursuant to Rule 12(b)(6), the Rule under which Unisys brought this Motion, the Motion should be denied unless it appears beyond doubt that JetForm can prove no set of facts in support of its claim which would entitle it to relief. De Sole v. United States, 947 F.2d at 1177. Because JetForm may be able to prove facts demonstrating that it is entitled to the Berne Convention exception to the registration requirement, Unisys' Motion must be denied.

In addition to stating it owns the copyrights and qualifies for an exception to registration, JetForm identifies the works at issue and generally states how and when infringement occurred. For these reasons, JetForm's Complaint meets and exceeds Rule 8's pleading requirements. For all of these reasons, Unisys' Motion to Dismiss Counts One through Four of the Complaint is DENIED.

IV.

Before addressing Unisys' second motion, the Court first turns to JetForm's argument that the second motion should not be considered pursuant to Federal Rule of Civil Procedure 12(g). Under Rule 12(g), all Rule 12 arguments must be joined in one motion, although under Rule 12(h)(3), an argument that the Court lacks subject matter jurisdiction may be considered at any time. In its second motion, Unisys contends that the Court lacks subject matter jurisdiction, but JetForm argues that the motion actually raises an affirmative defense and does not concern jurisdiction.

Regardless, Unisys' second motion was made before the Court ruled on the first motion and Unisys could have simply moved to consolidate its arguments. The purpose of Rule 12(g) is to prevent unnecessary delay at the pleading stage. 5A Wright & Miller, Fed. Practice and Procedure, § 1384. However, that concern is not present here, as no delay will occur if the Court considers the first and second motions simultaneously. For these reasons, the Court finds that consideration of Unisys' second motion is appropriate at this time.

V.

In its motion, Unisys argues that 28 U.S.C. Section 1498(b) requires that JetForm's claims be brought against the United States and provides the United States Court of Federal Claims with exclusive jurisdiction over the claims.² The provision at issue states:

[W]henever the copyright in any work protected under the copyright laws of the United States shall be infringed by the United States ... or by a contractor, subcontractor, or any person, firm, or corporation acting for and with the authorization or consent of the government, the exclusive action which may be brought for such infringement shall be an action by the copyright owner against the United States in a Court of Federal Claims for the recovery of his reasonable and entire...