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Cassetica Software, Inc. v. Computer Sciences Corp.

June 18, 2009

CASSETICA SOFTWARE, INC., PLAINTIFF,
v.
COMPUTER SCIENCES CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Virginia M. Kendall

MEMORANDUM OPINION AND ORDER

Plaintiff Cassetica Software, Inc. ("Cassetica") filed suit against Defendant Computer Sciences Corporation ("CSC"), claiming copyright infringement, breach of contract, violation of the Computer Fraud and Abuse Act, conversion, trespass to chattels and unjust enrichment. Pursuant to Fed. R. Civ. P. 12(b)(6), CSC has moved to dismiss Cassetica's First Amended Complaint. For the reasons stated, CSC's Motion to Dismiss is granted.

PLAINTIFF'S ALLEGATIONS

Cassetica, a computer software developer, sells licenses that permit computer users to use its programs. (Compl. ¶ 5.)*fn1 To address problems that computer users experienced when the application "Lotus Notes" crashed, Cassetica developed a program named "NotesMedic." (Compl. ¶ 11.) In developing NotesMedic, Cassetica created a source code, which must be converted to object code before a computer can read the program. (Id.) In 2002, CSC entered into an "Enterprise Agreement" with Cassetica that granted CSC employees a non-exclusive, non-transferable license to download and use NotesMedic from 2002-2003. (Compl. ¶¶ 18, 21-23.) To allow CSC to download NotesMedic from a website, Cassetica provided CSC with the required login and password information. (Compl. ¶ 26.) As agreed, the Enterprise Agreement expired in 2003. (Compl. ¶ 23.)

After the Enterprise Agreement expired in 2003, CSC employees continued using their previously issued login information to download copies of NotesMedic and updated versions of the program. (Compl. ¶¶ 27-31.) Since 2003, Cassetica has contacted CSC numerous times to try to stop it from downloading NotesMedic. (Compl. ¶ 32.) Despite these attempts, CSC continued to download the program from Cassetica's website. (Compl. ¶ 34.) On January 22, 2007, Cassetica obtained a Certificate of Registration for the program from the United States Copyright Office. (Compl. ¶ 16; Ex. A.)

On January 2, 2009, Cassetica filed suit against CSC for patent infringement, breach of contract, violation of the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, conversion, trespass to chattels and unjust enrichment.*fn2 CSC has continued to download NotesMedic as recently as February 2009. (Compl. ¶ 34.) After Cassetica amended its Complaint, CSC moved to dismiss all counts against it.

STANDARD OF REVIEW

When considering a motion to dismiss under Rule 12(b)(6), a court must accept as true all facts alleged in the complaint and construe all reasonable inferences in favor of the plaintiff. See Murphy v. Walker, 51 F.3d 714, 717 (7th Cir. 1995). To state a claim upon which relief can be granted, a complaint must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A plaintiff need not allege all facts involved in the claim. See Sanjuan v. Am. Bd. of Psychiatry & Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994). However, in order to survive a motion to dismiss for failure to state a claim, the claim must be supported by facts that, if taken as true, at least plausibly suggest that the plaintiff is entitled to relief. See Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1974 (2007). Such a set of facts must "raise a reasonable expectation that discovery will reveal evidence" of illegality. Id. at 1965.

DISCUSSION

I. Copyright Infringement

Cassetica seeks to recover statutory damages under 17 U.S.C. § 504(c)(1)-(2)*fn3 in addition to attorney's fees and costs under 17 U.S.C. § 505 for copyright infringement. A plaintiff may not recover statutory damages or attorney's fees when the alleged infringement commenced before the effective date of the copyright registration. See 17 U.S.C. § 412; Budget Cinema, Inc. v. Watertower Assocs., 81 F.3d 729, 733 (7th Cir. 1996). Even when the plaintiff attempts to limit its claim of infringement to events that occurred after registration, § 412 prevents the recovery of statutory damages when the infringement commenced before registration of the copyright and continued after registration. See 17 U.S.C. § 412(1) ("no award of statutory damages or of attorney's fees . . . shall be made for any infringement of copyright in an unpublished work commenced before the effective date of its registration.") (emphasis added); see also Fox Controls, Inc. v. Honeywell, Inc., No. 02 C 346, 2005 WL 1705832, at *8 (N.D. Ill. July 14, 2005) (Grady, J.); X-It Prods., L.L.C. v. Walter Kidde Portable Equip., Inc., 227 F.Supp.2d 494, 527-28 (E.D. Va. 2002).

Here, Cassetica registered its copyright in NotesMedic on January 22, 2007 and seeks statutory damages for alleged infringement that occurred from 2007 through 2009. However, its allegations reveal that the alleged infringement began before registration of its copyright. Cassetica alleges that CSC continued to download NotesMedic after the Enterprise Agreement expired in 2003 and that it had contacted CSC about the downloads numerous times in the five years before it filed this suit. (Compl. ¶ 32.) Additionally, Cassetica claims that the download logs attached to its Complaint provide evidence that CSC continued to download the NotesMedic Software after the expiration of the Enterprise Agreement. (Compl. Ex. C.)*fn4 Assuming that allegation is true, the download logs show downloads that occurred from 2004 through 2008. Although Cassetica attempts to limit its recovery of statutory damages and attorney's fees to infringement that occurred from 2007-2009, after it registered its copyright, the allegations in the Complaint reveal that if CSC infringed by downloading NotesMedic, the infringement commenced before Cassetica registered the copyright. Therefore, § 412 prevents Cassetica from recovering the damages it seeks. Accordingly, Count I of Cassetica's Complaint must be dismissed.

II. Breach of Contract

Cassetica claims that CSC breached the Enterprise Agreement by downloading NotesMedic between 2007 and 2009. Under Illinois law, to state a claim for breach of contract, the plaintiff must allege: 1) the existence of a valid and enforceable contract; 2) performance by the plaintiff; 3) breach by the defendant; and 4) damages to the plaintiff. See Zirp-Burnham, LLC v. E. Terrell Assocs., Inc., 826 N.E.2d 430, 439 (Ill. App. Ct. 2005). Here, Cassetica specifically alleges that the Enterprise License and the Enterprise Agreement expired in 2003. (Compl. ΒΆΒΆ 18, 22.) It does not identify any other contract with CSC that would have been in effect between 2007 and 2009. Because ...


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