Richard Goettle Inc v. Burgess & Niple Inc

Richard Goettle, Inc., Plaintiff,

v.Burgess & Niple, Inc., Defendant.

Case No. 1:10-cv-187

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

Filed: December 14, 2010

ORDER DENYING MOTION TO DISMISS

Chief Judge Susan J. Dlott

This matter is before the Court on Defendant Burgess & Niple, Inc.'s Motion to Dismiss Under Rule 12(b)(6) of the Federal Rules of Civil Procedure (doc. 29). For the reasons that follow, the Court will DENY the Motion to Dismiss.

I. BACKGROUND

A. Factual Allegations

Plaintiff Richard Goettle, Inc. ("Goettle") states the following relevant factual allegations against Defendant Burgess & Niple, Inc. ("B&N") in the First Amended Complaint (doc. 13) and the proposed Second Amended Complaint (doc. 37-1): ¹ Goettle is corporation engaged in the business of earth retention, marine construction, deep foundation construction, and related services. In 2008, Goettle submitted a subcontract bid proposal for the development project in Hamilton County, Ohio called The Banks Development Project ("the Project"). Goettle included in the bid proposal a design called Goettle's Alternate Phase 1 Design. Goettle has a copyright — federal registration number VAu001013351 — in the Alternate Phase 1 Design.

B&N is a civil engineering company. B&N was retained to serve as the project engineer for the first phase of the Project. B&N opposed Goettle's Alternate Phase 1 Design, but Goettle was awarded a subcontract to perform earth retention work for the first phase of the Project. Goettle installed a permanent earth retention system for the first phase.

Bid proposals were solicited for the second phase of the Project in 2009. B&N again served as the project engineer for the second phase. B&N submitted a design for the permanent earth retention work for the second phase of the Project ("B&N Phase 2 Design") and stamped its design as prepared by B&N. Goettle alleges that the B&N Phase 2 Design is "virtually a verbatim copy of [Goettle's] copyrighted Alternate Phase 1 Design... down to the smallest design detail." (Doc. 13 at 4; Doc. 37-1 at 4.) Goettle alleges that B&N willfully infringed upon its copyright in the Alternate Phase 1 Design.

B. Procedural Posture

On March 25, 2010, Goettle initiated this suit against multiple defendants, including Defendant B&N. On April 15, 2010, Goettle filed a First Amended Complaint asserting two claims: (1) copyright infringement and (2) violation of use restrictions. Goettle asserts only the copyright infringement claim in the proposed Second Amended Complaint. B&N filed the pending Motion to Dismiss on June 14, 2010. All of the defendants except for B&N were dismissed pursuant to an Agreed Partial Entry of Dismissal (doc. 32) entered on June 29, 2010.

II. STANDARDS GOVERNING MOTION TO DISMISS

Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss a complaint for failure to state a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6). A district court "must read all well-pleaded allegations of the complaint as true." Weiner v. Klais and Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997). However, this tenet is inapplicable to legal conclusions, including legal conclusions couched as factual allegations. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009).

To withstand a dismissal motion, a complaint "does not need detailed factual allegations, " but it must contain "more than labels and conclusions [or] a formulaic recitation of the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "Factual allegations must be enough to raise a right to relief above the speculative level." Id. The Court does not require "heightened fact pleading of specifics, but only enough facts to state a claim for relief that is plausible on its face." Id. at 570. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949. "[O]nce a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 563.

The Supreme Court gave the following additional guidance in Iqbal:

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than [legal] conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

129 S. Ct. at 1950.

III. ANALYSIS

A. Count One: Copyright Infringement

The Copyright Act protects "original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." 17 U.S.C. § 102(a). A plaintiff seeking to establish copyright infringement must prove "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991); see also Stromback v. New Line Cinema, 384 F.3d 283, 293 (6th Cir. 2004); Kohus v. Mariol, 328 F.3d 848, 853 (6th Cir. 2003). Copying can be proven with indirect evidence that the defendant had access to the allegedly-infringed work and there was a substantial similarity between the two works. Kohus, 328 F.3d at 854.

The Sixth Circuit has adopted a two-part test to determine substantial similarity. "[T]he first step is to filter out the unoriginal, unprotectible elements-elements that were not independently created by the inventor, and that possess no minimal degree of creativity... through a variety of analyses." Id. at 855 (internal citation omitted). In cases "that involve a functional object rather than a creative work, it is necessary to eliminate those elements dictated by efficiency." Id. at 856. The second step requires a determination of "whether the allegedly infringing work is substantially similar to the protectible elements of the original" based on the "judgment of the ordinarily reasonable person" in the class of the "intended audience." Id. at 856-57. Courts have dismissed copyright infringement cases at the pleadingstage on Rule 12(b)(6) motions, including for lack of substantial similarity as a matter of law. See, e.g., Peter F. Gaito Arch., LLC v. Simone Dev. Corp., 602 F.3d 57, 63-65 (2d Cir. 2010) (stating that a court can resolve substantial similarity where either the similarity between the works "concerns only the non-copyrightable elements of the plaintiff's work" or because no reasonable jury could find the works to be substantially similar); Taylor v. IBM, 54 F. App'x 794, 794 (5th Cir. 2002) (dismissing where plaintiff failed to allege copying of copyrightable text); Nelson v. PRN Prods., Inc., 873 F.2d 1141, 1143-44 (8th Cir. 1989) (finding no substantial similarity between song lyrics).

B&N moves to dismiss the First Amended Complaint on the grounds that Goettle failed to identify in the First Amended Complaint those aspects of the Alternate Phase 1 Design that were copyrightable. Goettle's Alternate Phase 1 Design is a design for the creation of an earth retention system. B&N contends that an earth retention system is a "useful article, " a term of art defined in the Copyright Act as "an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information." 17 U.S.C. § 101. The design of a useful article is protected under the Copyright Act "only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article." Id. (defining "pictorial, graphic, and sculptural works"). B&N contends that allegations that a defendant infringed upon a design for a useful object do not rise to the level of plausibility under Twombly and Iqbal unless the plaintiff specifically identifies the elements of the design that are protectible under the Copyright Act.

In response, Goettle points out that a registered copyright is entitled to a presumption ofvalidity. Under copyright law, generally no suit can be brought for infringement of a copyright until the copyright has been registered in accordance with law. 17 U.S.C. § 411(a). "In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate." 17 U.S.C. § 410(c). However, it does not necessarily follow from the fact that a valid copyright exists that copying of the copyrighted work is actionable. Copyright infringement exists only in regards to the "copying of constituent elements of the work that are original." Feist Publ'ns, 499 U.S. at 361. The burden is on the defendant to rebut the presumption that a copyright is invalid. Hi-Tech Video Prods., Inc. v. Capital Cities/ABC, Inc., 58 F.3d 1093, 1095 (6th Cir. 1995).

Post-Feist Publications, but pre-Twombly and Iqbal, at least two federal courts held that a plaintiff need not specifically allege which elements of a copyrighted work are original and, therefore, protected. Mid America Title Co. v. Kirk, 991 F.2d 417, 422 (7th Cir. 1993) (stating that Feist Publications does not require a determination of originality at the pleading stage); Kindergartners Count, Inc. v. Demoulin, 171 F. Supp. 2d 1183, 1189-90 (D. Kan. 2001) (stating that originality need not be pleaded to survive Rule 12(b)(6), but rather is only an issue for...