Risktimetry Analytics Llc v. Altaira Llc

• Decision Date: 03 November 2010
• Docket Number: Civil Action No. 10–10969–NMG.
• Citation: 752 F.Supp.2d 141
• Parties: RISKTIMETRY ANALYTICS, LLC, Plaintiff,v.ALTAIRA, LLC, Linedata Services Inc. and Linedata Services S.A., Defendants.
• Court: U.S. District Court — District of Massachusetts

752 F.Supp.2d 141

RISKTIMETRY ANALYTICS, LLC, Plaintiff,

v.ALTAIRA, LLC, Linedata Services Inc. and Linedata Services S.A., Defendants.

Civil Action No. 10–10969–NMG.

United States District Court, D. Massachusetts.

Nov. 3, 2010.

Aaron Y. Silverstein, Saunders & Silverstein LLP, Amesbury, MA, Anna B. Folgers, Paul K. Vickrey, William L. Niro, Niro, Haller & Niro, Chicago, IL, for Plaintiff.Charles A. Cook, Douglas L. Price, Mark R. Segalini, Morrison Mahoney LLP, Kevin Gannon, Cesari & McKenna, LLP, Douglas K. Mansfield, Casner & Edwards, LLP, Boston, MA, James B. Belshe, Seth W. Black, Workman Nydegger, Salt Lake City, UT, Mark C. Howland, Nickou Oskoui, Jones Day, Dallas, TX, for Defendants.

MEMORANDUM & ORDER

GORTON, District Judge.

Plaintiff Risktimetry Analytics, LLC (“Risktimetry”), a Delaware limited liability company with its principal place of business in Utah, has filed a complaint against Altaira, LLC (“Altaira”), Linedata Services, Inc. (“Linedata U.S.A.”) and Linedata Services, S.A. (“Linedata France”) alleging four counts of direct and contributory copyright infringement.

I. Background

Risktimetry is the owner of a copyright on a package of computer software which is utilized by the financial services industry for pre-trade analysis, portfolio assessment, hedge assessments and risk oversight (“the Copyrighted System”). That software program was originally created by Theoretics, Inc. (“Theoretics”), formerly a Utah corporation which ceased doing business in 2005 and subsequently filed for Chapter 7 relief in March, 2008. After Theoretics filed for bankruptcy, the rights to the Copyrighted System were assigned to Risktimetry in December, 2009. Long before the assignment, however, in June, 2005, Theoretics formed a new entity called Altaira, LLC. In August, 2007, Altaira released a new portfolio and risk management software (“the Altaira System”). In July, 2008, Linedata U.S.A. partnered with Altaira to incorporate the Altaira System into the Linedata product line and to market it under its own brand name.

Risktimetry filed its complaint in this Court on June 10, 2010. It alleges that, without Risktimetry's permission, Altaira 1) knowingly and willfully copied and/or created a substantially similar derivative work of the Copyrighted System and 2) entered into an exclusive partnership with Linedata U.S.A. to license a copy of the purported infringing software.

Altaira moves to dismiss the claim against it for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). A scheduling conference was held on October 21, 2010, at which time the Court allowed Altaira's motion for leave to file a reply to the plaintiff's opposition and informed the parties that the motion to dismiss would be decided promptly. Since then the plaintiff has filed a sur-reply to the motion which the Court will consider (this time only) despite the fact that it was not accompanied by a motion for leave to file.

II. Motion to Dismiss for Lack of Personal JurisdictionA. Motion to Dismiss Standard

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). In considering the merits of a motion to dismiss, the Court may look only to the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the complaint and matters of which judicial notice can be taken. Nollet v. Justices of the Trial Court of Mass., 83 F.Supp.2d 204, 208 (D.Mass.2000) aff'd, 248 F.3d 1127 (1st Cir.2000). Furthermore, the Court must accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Langadinos v. Am. Airlines, Inc., 199 F.3d 68, 69 (1st Cir.2000). If the facts in the complaint are sufficient to state a cause of action, a motion to dismiss the complaint must be denied. See Nollet, 83 F.Supp.2d at 208.

Although a court must accept as true all of the factual allegations contained in a complaint, that doctrine is not, however, applicable to legal conclusions. Ashcroft v. Iqbal, ––– U.S. ––––, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). Threadbare recitals of the legal elements, supported by mere conclusory statements, do not suffice to state a cause of action. Id. Accordingly, a complaint does not state a claim for relief where the well-pled facts fail to warrant an inference of any more than the mere possibility of misconduct. Id. at 1950.

B. Personal Jurisdiction Standard

On a motion to dismiss for want of personal jurisdiction, the plaintiff bears of the burden of demonstrating that jurisdiction is 1) statutorily authorized and 2) consistent with the Due Process Clause of the United States Constitution. Astro–Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 9 (1st Cir.2009). The most common approach courts take for determining whether the plaintiff has met his or her burden is the “prima facie evidentiary standard”. Adelson v. Hananel, 510 F.3d 43, 48 (1st Cir.2007). Under this standard, a court considers “whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction.” Id. The Court accepts properly supported proffers of evidence by the plaintiff as true and considers facts put forward by the defendant, to the extent they are uncontradicted by the plaintiff. Newman v. European Aeronautic Defence & Space Co. Eads N.V., 700 F.Supp.2d 156, 159 (D.Mass.2010).

Because the Massachusetts long-arm statute reaches to the full extent that the Constitution allows, the Court may proceed directly to the Constitutional analysis. See Sawtelle v. Farrell, 70 F.3d 1381, 1388 (1st Cir.1995); Tatro v. Manor Care, Inc., 416 Mass. 763, 625 N.E.2d 549, 553 (1994). Due Process requires that the defendants have “minimum contacts” with the forum state such that the “maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945).

A court may exercise either general or specific personal jurisdiction over an out-of-state defendant. Angela Adams Licensing, LLC v. Dynamic Rugs, Inc., 463 F.Supp.2d 82, 84 (D.Me.2006). General jurisdiction exists when the defendant has engaged in “continuous and systematic activity,” unrelated to the suit, in the forum state. Pritzker v. Yari, 42 F.3d 53, 60 (1st Cir.1994). Specific jurisdiction exists where the plaintiff's cause of action arises from or relates to the defendant's contacts with the forum state. Id.

C. General Jurisdiction

Altaira is a Utah limited liability company with its principal place of business in Park City, Utah. Altaira claims that it has never engaged in substantial and continuous business activities for profit nor committed any acts of copyright infringement within Massachusetts. Altaira maintains that, in Massachusetts, it has no office or place of business, is not registered to do business, has no officers, employees, salespeople or agents, does not own, rent, lease, or possess any real or personal property, does not maintain a mailing address or telephone listing, and does not regularly contract with Massachusetts residents.

Risktimetry does not contest any of those assertions. Thus, Altaira does not appear to have the kind of substantial and continuous contacts with Massachusetts that would confer general jurisdiction over Altaira to Massachusetts courts. The Court turns, therefore, to a consideration of specific jurisdiction over Altaira.

D. Specific Jurisdiction

The First Circuit employs a tripartite analysis to determine whether specific jurisdiction is appropriate. The Court inquires whether 1) the claims arise out of or are related to the defendants' in-state activities, 2) the defendants have purposefully availed themselves of the laws of the forum state and 3) the exercise of jurisdiction is reasonable under the circumstances. See, e.g., Platten v. HG Bermuda Exempted, Ltd. 437 F.3d 118, 135 (1st Cir.2006); Sawtelle, 70 F.3d at 1389.

1. Relatedness

The “relatedness” test is a “flexible, relaxed” standard that focuses on the nexus between the plaintiff's claim and the defendants' contacts with the forum state. Astro–Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 9 (1st Cir.2009); Ticketmaster–New York v. Alioto, 26 F.3d 201, 206–07 (1st Cir.1994). In contract cases, the court must ask “whether the defendant's contacts with the forum state were instrumental either in the formation of the contract or in its breach.” Phillips Exeter Academy v. Howard Phillips Fund, 196 F.3d 284, 290 (1st Cir.1999).

Altaira's contacts with Massachusetts consist of its alleged formation of an exclusive partnership with Linedata U.S.A., a Massachusetts corporation with its principal place of business in Massachusetts, for the sale of the allegedly infringing software, the Altaira System. Risktimetry maintains that Altaira and Linedata U.S.A. formed an “exclusive strategic partnership” to sell the Altaira System and that Altaira exclusively licensed the Altaira System to Linedata U.S.A.

Altaira responds that the partnership between Altaira and Linedata U.S.A. was a “future goal” that was never realized, the Linedata Risk Analytics solution was never completed and no Altaira software was ever sold or distributed to third parties by Linedata. Altaira submits an affidavit from its managing director, Blaise Labiola, stating that the only agreement entered into between Altaira and Linedata U.S.A. was a revenue sharing agreement which did not involve the transfer of money or software, failed to produce workable software and expired on June 1, 2010. Mr. Labiola further asserts that any communications between Altaira and Linedata U.S.A. involved Linedata employees in London or Paris only.

The Court must accept properly supported, uncontroverted...