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Healix Infusion Therapy, Inc v. Hhi Infusion Services

January 27, 2011

HEALIX INFUSION THERAPY, INC., PLAINTIFF,
v.
HHI INFUSION SERVICES, INC., METRO INFECTIOUS DISEASE CONSULTANTS, EYE CREATE, INC., AND WILLIAM D. FERGUSON DEFENDANTS.



The opinion of the court was delivered by: Judge James B. Zagel

MEMORANDUM OPINION AND ORDER

I. OVERVIEW

Plaintiff Healix Infusion Therapy, Inc. ("Healix") filed a five-count Third Amended Complaint against Defendants alleging copyright infringement, contributory copyright infringement, trademark infringement, contributory trademark infringement, and tortious interference with an existing contract. Defendants now move to dismiss Plaintiff's Third Amended Complaint on all counts. For the following reasons, Defendants' motion to dismiss is granted in part and denied in part.

II. STANDARD OF REVIEW

A motion to dismiss under Rule 12(b)(6) requires that I analyze the legal sufficiency of the complaint, and not the factual merits of the case. Autry v. Northwest Premium Servs., Inc., 144 F.3d 1037, 1039 (7th Cir.1998). I must take all facts alleged in Plaintiff's complaint as true and draw all reasonable inferences from those facts in favor of Plaintiff. Caldwell v. City of Elwood, 959 F.2d 670, 671 (7th Cir.1992). Plaintiff, for its part, must do more than solely recite the elements for a violation; it must plead with sufficient particularity so that its right to relief is more than a mere conjecture. Bell Atl., Corp. v. Twombly, 550 U.S. 544, 555 (2007). Plaintiff must plead its facts so that, when accepted as true, they show the plausibility of its claim for relief. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). Plaintiff must do more than plead facts that are "consistent with Defendant's liability" because that only shows the possibility, not the plausibility, of their entitlement to relief. Id. (internal quotations omitted).

III. STATEMENT OF FACTS

On June 3, 2010, the Southern District of Texas granted Defendants HHI's and Metro Infection Disease Consultants' ("Metro") motion to dismiss for lack of personal jurisdiction. The case was subsequently transferred to this court by agreement of the parties. On July 13, 2010, Plaintiff filed its Third Amended Complaint adding three new parties, Innovative Ventures, Eye Create and William D. Ferguson ("Ferguson").

Healix has conducted business in the healthcare industry since 1989 and provides infusion therapy services, durable medical equipment, and pharmacy services to physicians. Typically, Healix establishes business relationships with specialty physician groups who utilize infusion therapy treatment, and staffs the customer site with a pharmacist and/or registered nurse, sells the practice drugs for the site, handles practice management matters, and coordinates investigational drug studies. Defendants HHI, Metro, and Innovative Ventures, LLC ("Innovative") (collectively "HHI Defendants") provide infusion services and are direct competitors of Healix. Defendant Ferguson is the owner of Defendant Eye Create, Inc. ("Eye Create").

Healix has expended effort to gain goodwill through its website at www.healix.net as well as through other promotional efforts. Healix also owns United States Copyright Registration Number TX 6-962-837 as well as numerous trademarks and service marks on file with the United States Patent and Trademark Office. In late 2009, Healix learned that the protected work on its own website had been copied and placed on www.hhiinfusionservices.com. Plaintiff further alleges that the HHI Defendants' marketing materials incorporated both Healix's federally registered trademarks and incorporated Healix's clients' names suggesting that they did business with them. Defendants admit that vendor Eye Create "improperly copied certain portions of Healix's website." Healix contends that the HHI Defendants had the right and ability to prevent the acts of infringement by supervising Defendant Eye Create.

In addition to infringing upon its intellectual property, Healix alleges that the HHI Defendants caused it economic harm by tortiously interfering with one or more of its physician contracts. Specifically, Healix alleges that 3 Tree Infectious Disease Consultants ("3 Tree") in Burien, Washington terminated its business relationship with Healix citing building space issues and other concerns. Healix, however, has learned that the HHI Defendants were in contact with 3 Tree and allege that the HHI Defendants hindered 3 Tree's performance on the contract.

IV. DISCUSSION

Defendants move for dismissal on both procedural and substantive grounds. First, Defendants argue that Plaintiff has not affected proper service on the three new parties who were added into the third amended complaint on July 13, 2010. Plaintiffs have since personally served Defendants and cured any allegedly deficient service. Accordingly, Defendants' motion to dismiss for lack of service is denied.

A. Plaintiff's Statutory Damages and Fees Claims In Counts I and II Are Dismissed.

Defendants argue that Plaintiff's claims for statutory damages and fees in counts I and II are precluded under 17 U.S.C. § 412(2). Counts I and II of the complaint charge Defendants with direct and contributory copyright infringement and seeks statutory damages pursuant to 17 U.S.C. § 504 and attorneys' fees and costs under 17 U.S.C. § 505. Section 412(2) of the Copyright Act, however, provides that no award of statutory damages shall be made for "any infringement of copyright commenced after first publication of the work and before the effective date of its registration, unless such registration is made within three months after the first publication of the work." Here, Plaintiff's copyright registration shows that the claimed copyrighted material was published on February 17, 2004, and that the effective date of the copyright registration was not until over five years later, on August 23, 2009. In paragraph 15 of the ...


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