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Soos & Associates, Inc. v. Five Guys Enterprises, LLC

United States District Court, N.D. Illinois, Eastern Division

December 2, 2019

SOOS & ASSOCIATES, INC., Plaintiff,
v.
FIVE GUYS ENTERPRISES, LLC, FIVE GUY OPERATIONS, LLC, DXU ARCHITECTS AND ERIC STYER, Defendants.

          MEMORANDUM OPINION & ORDER

          MARY M. ROWLAND UNITED STATES DISTRICT JUDGE

         Before the Court is Plaintiff Soos & Associates, Inc.'s (“Soos”) motion to dismiss Defendant Five Guys Enterprises, LLC's (“Five Guys”) affirmative defenses and counterclaims. (Dkt. 101) For the reasons stated below, the motion is granted in part and denied in part.

         BACKGROUND

         At the motion to dismiss stage, the Court accepts all well-pleaded factual allegations in the counterclaims as true and draws all inferences in Five Guys' favor. Cole v. Milwaukee Area Tech. Coll. Dist., 634 F.3d 901, 903 (7th Cir. 2011). Starting in 2008, Five Guys hired Soos “for architectural consulting services for multiple burger and fries restaurants in the Chicago/Milwaukee area.” (Dkt. 102 at 5) At some point in 2009, Five Guys and Soos agreed that Soos would “develop, maintain, and help distribute” Five Guys' “Corporate Design Standards.” (Dkt. 103 at 2) The idea, according to Five Guys, “was to have a centralized set of materials reflecting the [Five Guys] brand's trade dress and specifications that architects designing [Five Guys] restaurants could access and implement into their plans. That way, Five Guys could ensure that the stores designed by its various architects looked consistent.” (Id.) (internal citations omitted) To facilitate the distribution of the Corporate Design Standards, Soos agreed to manage a file-sharing platform that architects could use to access and download the standards. (Id.)

         Five Guys claims that “Soos did what it agreed to do.” (Dkt. 103 at 2) Soos selected Buzzsaw as the file-sharing platform and uploaded the Corporate Design Standards materials to Buzzsaw. (Id.) Five Guys paid Soos for this service. (Id.) For several years, Five Guys' architects implemented the Corporate Design Standards into their plans, “just as Five Guys and Soos had intended.” (Id.) Five Guys alleges that Soos knew the Corporate Design Standards materials were distributed to other architects and that other architects were implementing the Corporate Design Standards into their plans (Id. at 3)

         While performing the Corporate Design Standards work, Soos also worked as one of Five Guys' architects that created architectural plans (“Construction Documents”) for specific restaurant locations. (Dkt. 103 at 3) According to Five Guys, the work for site-specific locations was distinct from the Corporate Design Standards work. (Id.). Soos completed Construction Documents for 95 projects, and each location was subject to a separate form agreement (the “Construction Agreements”). (Dkt. 102 at 5) Five Guys further alleges that Soos had access to the Corporate Design Standards materials on Buzzsaw, just like any other Five Guys architect. (Dkt. 95, ¶ 21)

         Five Guys claims that the plans created during Soos' and Five Guys' relationship have similar elements because both Soos' plans and the other architects' plans contain material from the Corporate Design Standards.[1] (Dkt. 103 at 3) Eventually, Five Guys moved its Corporate Design Standards work to a competitor of Soos, DXU. (Dkt. 95, Countercl. ¶ 29) DXU was created by a former Soos employee, Eric Styer. (Id. at ¶ 28) Five guys claims that “Soos decided to use the similarities between its plans and other architects' plans to bring this lawsuit to punish Five Guys for its decision to replace Soos.” (Dkt. 103 at 3)

         Plaintiff brought this action “for the literal or near literal copying of three of Soos' architectural plans.” (Dkt. 102 at 3) Soos alleges that Five Guys essentially copied Soos' copyrighted pictures, diagrams, schedules, charts, notes, texts, illustrations and “pasted” them into architectural plans for other restaurant locations. (Id.) Importantly, Soos alleges that Five Guys directly copied Soos' work from its Construction Documents and not from the Corporate Design Standards. (Id.) Five Guys responded with several affirmative defenses and counterclaims. (Dkt. 95) Soos now seeks to dismiss those affirmative defenses and counterclaims. (Dkt. 101)

         LEGAL STANDARD

         A motion to dismiss tests the sufficiency of a complaint, not the merits of the case. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). “To survive a motion to dismiss under Rule 12(b)(6), the complaint must provide enough factual information to state a claim to relief that is plausible on its face and raise a right to relief above the speculative level.” Haywood v. Massage Envy Franchising, LLC, 887 F.3d 329, 333 (7th Cir. 2018) (quotations and citation omitted); see also Fed. R. Civ. P. 8(a)(2) (requiring a complaint to contain a “short and plain statement of the claim showing that the pleader is entitled to relief.”). A court deciding a Rule 12(b)(6) motion accepts plaintiff's well-pleaded factual allegations as true and draws all permissible inferences in plaintiff's favor. Fortres Grand Corp., 763 F.3d at 700.

         A plaintiff need not plead “detailed factual allegations”, but “still must provide more than mere labels and conclusions or a formulaic recitation of the elements of a cause of action for her complaint to be considered adequate under Federal Rule of Civil Procedure 8.” Bell v. City of Chi., 835 F.3d 736, 738 (7th Cir. 2016) (citation and internal quotation marks omitted). Dismissal for failure to state a claim is proper “when the allegations in a complaint, however true, could not raise a claim of entitlement to relief.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558, 127 S.Ct. 1955, 1966 (2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 679, 129 S.Ct. 1937, 1950 (2009).

         Under Rule 12(f), “[t]he court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). Motions to strike are generally disfavored because they “potentially serve only to delay, ” and so affirmative defenses “will be stricken only when they are insufficient on the face of the pleadings.” Heller Fin., Inc. v. Midwhey Powder Co., Inc., 883 F.2d 1286, 1294 (7th Cir. 1989). To survive a motion to strike, an affirmative defense must be adequately pleaded and withstand a Rule 12(b)(6) challenge. See Maui Jim, Inc. v. SmartBuy Guru Enters., 386 F.Supp.3d 926, 937 (N.D. Ill. 2019) (citations omitted). The Twombly and Iqbal pleading standard applies to affirmative defenses.[2]Id. “As a practical matter, however, affirmative defenses rarely will be as detailed as a complaint (or a counterclaim); nor do they need to be in most cases to provide sufficient notice of the defense asserted. But a problem arises when a party asserts boilerplate defenses as mere placeholders without any apparent factual basis.” Behn v. Kiewit Infrastructure Co., 2018 WL 5776293, at *1 (N.D. Ill. Nov. 2, 2018) (citing Dorsey v. Ghosh, 2015 WL 3524911, at *4 (N.D. Ill. June 3, 2015)).

         DISCUSSION

         Soos moves to strike all affirmative defenses under Federal Rule of Civil Procedure Rule 12(f), and to dismiss all counterclaims under Federal Rule of Civil Procedure 12(b)(6). (Dkt. 101) The affirmative defenses include: 1) an implied, non- exclusive license; 2) estoppel, waiver, acquiescence; 3) statute of limitations; and 4) copyright misuse. (Dkt. 95) The counterclaims include: 1) declaratory judgment of non-infringement based on an implied, non-exclusive license; 2) declaratory judgment of non-infringement based on copyright misuse; and 3) breach of contract. (Dkt. 95) The Court will address each in turn.

         First Affirmative Defense (implied, ...


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