Kindergartners Count, Inc. v. Demoulin

• Decision Date: 13 September 2001
• Docket Number: No. 00-4173-SAC.,No. 01-4017-RDR.,00-4173-SAC.,01-4017-RDR.
• Citation: 171 F.Supp.2d 1183
• Parties: KINDERGARTNERS COUNT, INC., Plaintiff/Counterclaim Defendant, v. Donald F. DEMOULIN, Defendant/Counterclaim Plaintiff, and Telephone Pioneers of America, and Pioneer Foundations, Defendants, v. Vernie L. Wheeler, Counterclaim Defendant. Kindergartners Count, Inc., Plaintiff, v. Donald F. Demoulin and Telephone Pioneers of America, Defendants.
• Court: U.S. District Court — District of Kansas

171 F.Supp.2d 1183

KINDERGARTNERS COUNT, INC., Plaintiff/Counterclaim Defendant, v. Donald F. DEMOULIN, Defendant/Counterclaim Plaintiff, and Telephone Pioneers of America, and Pioneer Foundations, Defendants, v. Vernie L. Wheeler, Counterclaim Defendant.

Kindergartners Count, Inc., Plaintiff, v. Donald F. Demoulin and Telephone Pioneers of America, Defendants.

No. 00-4173-SAC.

No. 01-4017-RDR.

United States District Court, D. Kansas.

September 13, 2001.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Terry E. Beck, Topeka, KS, pro se.

Craig C. Blumreich, Gehrt & Roberts, Chartered, Topeka, KS, pro se.

Brian G. Boos, Gehrt & Roberts, Chartered, Topeka, KS, pro se.

Kevin James Grauberger, Thomas E. Wright, Wright, Henson, Somers, Sebelius, Clark & Baker, LLP, Topeka, KS, for Defendant.

Todd E. Hilton, John M. McFarland, throp & Gage, L.C., Kansas City, MO, for Defendant.

Thomas K. McQueen, Molly J. Moran, Jenner & Block, Chicago, IL, for Defendant.

Vernie L. Wheeler, Topeka, KS, pro se.

Harold S. Youngentob, Goodell, Stratton, Edmonds & Palmer, Topeka, KS, for Plaintiff.

MEMORANDUM AND ORDER

CROW, Senior District Judge.

This case comes before the court on the defendant Donald F. DeMoulin's Motion to Dismiss Counts I, III, VI and IX of the Plaintiff's Second Amended Complaint, (Dk.41), and the defendant Telephone Pioneers of America's Motion to Dismiss Counts I, III, and X. (Dk.61).

The plaintiff opposes both motions.

FACTUAL BACKGROUND

The following is taken from the plaintiff's second amended complaint. The plaintiff, Kindergartners Count, Inc. ("KCI"), is the copyright owner of the work, "I LIKE ME!," a personalized children's book. KCI publishes this work with an accompanying program originally geared for children from kindergarten through second grade and recently expanded to include pre-school children. The program is designed for the development of character, self-confidence and reading skills and provides activities that promote sharing, responsibility, counting, learning, listening, helping and good eating habits. The book distributed as part of the program is personalized over 60 times with the name of the child or the names of the child's friends, teacher, principal, school, hometown, and state. The program also includes a teacher's guide with recommended daily lesson plans and activities.

The suit arises from a business relationship between KCI and Telephone Pioneers of America ("TPA") and a consulting contract between KCI and Donald F. DeMoulin ("DeMoulin"). As alleged in the plaintiff's second amended complaint, KCI affiliated in 1998 with TPA to sponsor and coordinate the distribution of the "I LIKE ME" program. In late 1998, TPA representatives discussed the purchase of the program from KCI and made an offer in the spring of 1999 that KCI declined. In the summer of 1999, the partnership dissolved and was replaced with agreements that generally required, inter alia, KCI to use TPA's mechanized ordering system and TPA's logo on published copies of "I LIKE ME." In March of 2000, TPA notified KCI that the agreements would not be renewed as TPA had developed their own personalized reader book, "A Book About Me," ("ABAM"), and that KCI would need to locate its own internet ordering system.

KCI entered into a one-year consulting agreement with DeMoulin in October of 1997 that gave KCI all rights and interests in matters relating to any part of the program developed by DeMoulin. Pursuant to this contract, DeMoulin developed the teacher's guide to the program on which KCI subsequently registered a copyright. As a consultant with KCI, DeMoulin had regular and frequent contact with TPA. A second consulting agreement was signed in April of 1999, with DeMoulin working on another revision to the teacher's guide. After a planning retreat in April of 1999 attended by Jack Sawka of TPA and DeMoulin on behalf of KCI, Sawka sent a letter stating TPA's intent to dissolve the partnership and both Sawka and DeMoulin resigned from the I LIKE ME! advisory board. In June of 1999, DeMoulin advised KCI of his intent to terminate the consulting agreement except for certain compensation provisions, but in July he withdrew his request to terminate. On information and belief, KCI alleges that DeMoulin was involved in the authorship and/or development of TPA's ABAM program with supporting materials.

KCI alleges TPA's personalized reader book and program, ABAM, "duplicates the fundamental essence or structure and is a derivative work of KCI's" own personalized reader book and program, "I LIKE ME!" (Dk.40, ¶ 39). The complaint alleges what are believed to be numerous similarities in content and to be copying of protectable elements of KCI's works. The complaint further alleges that both DeMoulin and TPA, by reason of their relationships and roles, had access and exposure to KCI's confidential information and trade secrets.

The second amended complaint alleges five counts against DeMoulin, and the following four are the subject of his motion to dismiss: Count I: Copyright Infringement; Count III: Unfair Competition; Count VI: Conversion; and Count IX: Intentional Interference with Business Relations. The complaint alleges seven counts against TPA, and the following three are the subject of its motion to dismiss: Count I: Copyright Infringement; Count III: Unfair Competition; and Count X: Misrepresentation.¹

RULE 12(B)(6) STANDARDS

A court may dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). Dismissal should not be granted "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." GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir.1997) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). "The purpose of Rule 12(b)(6) is to allow a defendant to test whether, as a matter of law, the plaintiff is entitled to legal relief even if everything alleged in the complaint is true." Mayer v. Mylod, 988 F.2d 635, 638 (6th Cir.1993); see Hospice of Metro Denver, Inc. v. Group Health Ins. of Oklahoma, Inc., 944 F.2d 752, 753 (10th Cir. 1991) ("Dismissal of a case pursuant to Fed.R.Civ.P. 12(b)(6) requires the legal determination that the plaintiff can prove no set of facts in support of his claim to entitle him to relief.") (citations omitted)). All well-pleaded factual allegations in the complaint must be accepted as true, see Ash Creek Mining Co. v. Lujan, 969 F.2d 868, 870 (10th Cir.1992), and viewed in the light most favorable to the nonmoving party. Thatcher Enterprises v. Cache County Corp., 902 F.2d 1472 (10th Cir.1990) ("Under Rule 12(b)(6), dismissal is inappropriate unless plaintiff can prove no set of facts in support of his claim to entitle him to relief."). These deferential rules, however, do not allow the court to assume that a plaintiff "can prove facts that it has not alleged or that the defendants have violated the ... laws in ways that have not been alleged." Associated General Contractors v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (footnote omitted).

Although plaintiff need not precisely state each element of its claims, it must plead minimal factual allegations on those material elements that must be proved. See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.1991). Put another way, "a complaint must set forth `factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.'" Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir.1997) (quoting Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988)), cert. denied, 523 U.S. 1023 (1997). "`It is true that the Federal Rules of Civil Procedure do not require a plaintiff to set out in detail the facts upon which a claim is based. Nevertheless, a plaintiff must allege sufficient facts to outline a cause of action, proof of which is essential to recovery.'" Stevens v. Umsted, 131 F.3d 697, 700 (7th Cir.1997) (quoting Ellsworth v. City of Racine, 774 F.2d 182, 184 (7th Cir.1985), cert. denied, 475 U.S. 1047, 106 S.Ct. 1265, 89 L.Ed.2d 574 (1986)).

ARGUMENTS AND ANALYSIS

Count One: Copyright Infringement

Both moving defendants contend count one fails as a matter of law, because the complaint does not allege that KCI's "I LIKE ME" book is original to the author and, thus, protectable under copyright laws. The defendants maintain the complaint must allege specifically the constituent elements of the book that are protectable as original to the author and that were copied by the defendants. It is not enough, according to the defendants, for the complaint to allege that the plaintiff owns the copyright in the book and that the defendants infringed the copyright by developing another book.

To prevail on its copyright claim, the plaintiff "must establish both: (1) that it possesses a valid copyright and (2) that Defendants `copied' protectable elements of the copyrighted work." Country Kids 'N City Slicks, Inc. v. Sheen, 77 F.3d 1280, 1284 (10th Cir.1996) (citations and footnote omitted). Copyright protection extends only to original works. See 17 U.S.C. § 102(a); Feist Pubs., Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991) ("To qualify for copyright protection, a work must be original to the author. Original, as the term is used in copyright, means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity." (citation omitted)).

Rule 8(a) of the Federal Rules of Civil Procedure requires "a short and plain statement of the claim showing that the pleader is entitled to relief." The statement must "give the defendant fair notice of what the plaintiff's claim is and the grounds upon...