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Hypergraphics Press, Inc. v. Cengage Learning

April 8, 2009

HYPERGRAPHICS PRESS, INC., PLAINTIFF,
v.
CENGAGE LEARNING, INC., DEFENDANT.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiff Hypergraphics Press, Inc. ("Hypergraphics") has filed a first amended complaint against Cengage Learning, Inc. ("Cengage").*fn1 Before the Court is defendant Cengage's motion to dismiss.*fn2

I. Background

For purposes of this motion to dismiss, the Court takes as true the allegations in plaintiff's amended complaint. The Court also considers the settlement agreement (explained below) that plaintiff referred to in its amended complaint and that Cengage attached to its motion to dismiss. Equal Employment Opportunity Comm'n v. Concentra Health Services, Inc., 496 F.3d 773, 778 (7th Cir. 2007) (document attached to motion to dismiss is considered part of the pleadings where the document is referred to in the complaint and is central to the plaintiff's claim).

Defendant Cengage is a publisher and seller of, among other things, college textbooks. In or about 2005, Cengage acquired Thomson Learning, Inc. ("Thomson"). Thomson (and/or its predecessors) had, since about 1980, published a book called Psychology Applied to Work ("PATW"). PATW was authored by Paul Muchinsky. Through the years, Thomson published each successive edition of PATW, including the 8th Edition, which was published in or about 2005. The 8th Edition of PATW sold some 25,000 copies.

Not long after Cengage took over Thomson Learning, Inc., Muchinsky and Cengage disputed the appropriate amount of royalties. Muchinsky sued Cengage, and the two entered a settlement agreement. Among other things, the settlement agreement provided:

2. Termination of Contract * * *

A. Distribution rights

1. Publisher shall have the right to continue to print (as needed) and distribute copies of the Work as it has in the ordinary course of business from the date of this Agreement through June 30, 2008, and shall further have the right to continue to distribute (but not to print) international editions of the Work, in any language, until November 30, 2008 (the "Sell-Off"). . . .

2. Notwithstanding anything contained herein to the contrary, neither Publisher nor any of its subsidiaries shall be entitled to print or distribute any edition of the Work except editions 1 through 8.

3. Assignment of Work, Ancillary Materials and License Agreement

C. Notwithstanding the foregoing assignment, Author shall not distribute, or permit a third party to distribute, the Work, Ancillary Materials, portions thereof or revised and/or modified versions of the same a) domestically, on or before June 30, 2008; and b) internationally, on or before November 30, 2008 (the "Distribution Dates"). Author may create and print a Ninth edition of the work, and make preparations for its distribution, prior to the Distribution Dates.

12. Applicable Law and Dispute Resolution

A. This Agreement and [sic] shall in all respects be interpreted, enforced and governed under the laws of Illinois and Illinois shall be the exclusive venue for ...


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