Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 1 of 15
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`CODE BLOODED, LLC,
`1411 Northfield Park Blvd
`Warrensburg, MO 64093
`
`Plaintiff,
`
`v
`
`Civil Action No. 1:22-cv-01486-APM
`Hon. Amit P. Mehta
`
`CLAUSE LOGIC, INC.;
`1201 Connecticut Avenue NW, Office 655,
`Washington, DC 20036
`
`DEFENDANTS’ ANSWER TO
`PLAINTIFF’S COMPLAINT
`
`JULIE SALTMAN
`1201 Connecticut Ave NW
`Washington DC, USA,
`
`Defendants.
`
`Defendants, Clause Logic, Inc. (“CLI”) and Julie Saltman (“Saltman”) (together
`
`“Defendants”), by and through their attorneys, answer Plaintiff, Code Blooded, LLC’s, Complaint
`
`and Demand For a Jury Trial, as follows:
`
`PARTIES
`
`1.
`
`Plaintiff Code Blooded is a limited liability company registered in Missouri.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 1.
`
`2.
`
`Plaintiff is the owner of certain copyrighted software code at issue in this action
`
`originally created by Plaintiff’s owner, Dr. Paul Hinker (“Hinker”), who created and owned all
`
`copyrights in and to this software code and subsequently assigned all copyrights in and to the
`
`software code to Plaintiff, together with all rights to pursue accrued claims of infringement.
`
`4869-2138-4237.v1
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
`
`CODE BLOODED, LLC,
`1411 Northfield Park Blvd
`Warrensburg, MO 64093
`
`Plaintiff,
`
`v
`
`Civil Action No. 1:22-cv-01486-APM
`Hon. Amit P. Mehta
`
`CLAUSE LOGIC, INC.;
`1201 Connecticut Avenue NW, Office 655,
`Washington, DC 20036
`
`DEFENDANTS’ ANSWER TO
`PLAINTIFF’S COMPLAINT
`
`JULIE SALTMAN
`1201 Connecticut Ave NW
`Washington DC, USA,
`
`Defendants.
`
`Defendants, Clause Logic, Inc. (“CLI”) and Julie Saltman (“Saltman”) (together
`
`“Defendants”), by and through their attorneys, answer Plaintiff, Code Blooded, LLC’s, Complaint
`
`and Demand For a Jury Trial, as follows:
`
`PARTIES
`
`1.
`
`Plaintiff Code Blooded is a limited liability company registered in Missouri.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 1.
`
`2.
`
`Plaintiff is the owner of certain copyrighted software code at issue in this action
`
`originally created by Plaintiff’s owner, Dr. Paul Hinker (“Hinker”), who created and owned all
`
`copyrights in and to this software code and subsequently assigned all copyrights in and to the
`
`software code to Plaintiff, together with all rights to pursue accrued claims of infringement.
`
`4869-2138-4237.v1
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 2 of 15
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`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 2.
`
`3.
`
`Defendant CLI is a corporation registered in Delaware with a principal address
`
`located at 1201 Connecticut Avenue NW, Office 655, Washington, DC 20036.
`
`ANSWER: Denied as to the principal address. Otherwise, admitted.
`
`4.
`
`Defendant Saltman is the owner and chief executive officer of CLI.
`
`ANSWER: Denied that Ms. Saltman is the sole owner, but otherwise admitted.
`
`5.
`
`Upon information and belief, Saltman previously owned and operated a website
`
`located at www.clauselogic.com (the “CLI Website”), which now automatically forwards to a
`
`website located at www.standd.io.
`
`ANSWER: Denied that Ms. Saltman owned or operated the referenced website in her personal
`
`capacity.
`
`6.
`
`Upon information and belief Defendants now do business under the name “Standd.”
`
`ANSWER: Admitted as to CLI but denied as to Ms. Saltman.
`
`7.
`
`Upon information and belief, Saltman is a resident of the DC metropolitan area.
`
`ANSWER: Admitted.
`
`JURISDICTION AND VENUE
`
`8.
`
`This is an action for copyright infringement under Section 501 of the Copyright
`
`Act, 17 U.S.C. § 501, based on Defendants’ unauthorized copying, publication, and distribution
`
`of Plaintiff’s copyrighted works, as well as related claims under applicable state and common law.
`
`ANSWER: Admitted that this paragraph characterizes the claims plaintiff purports to bring.
`
`Denied that plaintiffs have stated a claim or are entitled to any relief.
`
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 3 of 15
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`9.
`
`Jurisdiction for Plaintiff’s claims lies with the United States District Court for the
`
`District of Columbia pursuant to 28 U.S.C. § 1331 (conferring original jurisdiction “of all civil
`
`actions arising under the Constitution, laws, or treaties of the United States”), 28 U.S.C. § 1338(a)
`
`(conferring original jurisdiction over claims arising under any act of Congress relating
`
`to
`
`copyrights and unfair competition), and 28 U.S.C. § 1367(a) (conferring supplemental jurisdiction
`
`for related state law claims which for part of the same case or controversy).
`
`ANSWER: Defendants do not challenge jurisdiction in this Court.
`
`10.
`
`Venue is proper in this Court under 28 U.S.C. §§ 1391(b) since a substantial portion
`
`of the alleged misconduct by Defendants giving rise to the claims asserted herein occurred in this
`
`District and 28 U.S.C. § 1400(a) because Defendants conduct substantial business in and otherwise
`
`may be found in this District.
`
`ANSWER: Defendants do not challenge whether venue is appropriate in this Court.
`
`GENERAL ALLEGATIONS
`
`11.
`
`In or about 2019, Hinker created and developed a software application, consisting
`
`of various original software programs created by Hinker and other software code, to be used in
`
`conjunction with the Microsoft Word document creation/editing program.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 11.
`
`12.
`
`Hinker originally planned to license his software code to and/or distribute the
`
`software commercially with/through Scripta LLC (“Scripta”), a Colorado limited liability
`
`company.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 12.
`
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 4 of 15
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`13.
`
`Hinker was never an employee of Scripta and was not compensated or paid
`
`anything by Scripta in connection with his own work developing his various original software
`
`programs.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 13.
`
`14.
`
`Hinker never entered into any licensing agreement with Scripta with respect to the
`
`software programs and code that he developed.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 14.
`
`15.
`
`Prior to the assignment to Plaintiff Code Blooded, Hinker retained all copyrights,
`
`title, and other interests and rights in all of the software programs and code that he developed.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 15.
`
`16.
`
`The separate software programs that comprise the software code at issue in this
`
`action (collectively, the “Code”) have been registered with the U.S. Copyright Office under
`
`Registration Nos. TXu002267664 and TXu002292792.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 16.
`
`17.
`
`Scripta agreed and understood that it would need to license any of the Code
`
`developed and created by Hinker prior to using it in any software application or products to be
`
`marketed commercially.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 17.
`
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 5 of 15
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`18.
`
`Neither Scripta nor any of its officers ever obtained or received any license, express
`
`or implied, from Hinker related to commercial use or marketing of any products that included any
`
`Code created by Hinker.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 18.
`
`19.
`
`No individual officers of Scripta – including Defendant Saltman – ever had a
`
`license, permission, or authority to copy and use for their own purposes any of the Code created
`
`by Hinker, let alone to publish demonstration videos of products that rely on and use illegal copies
`
`of Hinker’s software Code to commercially market products through a third-party company,
`
`including Defendant CLI.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to
`
`the truth of the allegations contained in paragraph 19.
`
`20.
`
`Defendant Saltman was previously a member of Scripta and, upon information and
`
`belief, entered into and was subject to a confidentiality/non-disclosure agreement with respect to
`
`the software product that Scripta planned to launch, which would include Plaintiff’s copyrighted
`
`Code.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to the
`
`truth of the allegations contained in paragraph 20 as to “which would include Plaintiff’s
`
`copyrighted code.” Otherwise, admitted.
`
`21.
`
`In or about July and August 2020, Scripta and Saltman determined that they did not
`
`intend to continue their collaboration on the Scripta business.
`
`ANSWER: Denied as untrue.
`
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 6 of 15
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`22.
`
`On September 8, 2020, Saltman personally published a video titled “Clause Logic
`
`Explainer” to YouTube (the “YouTube Video”) demonstrating the use of a software application
`
`that included without permission or license the Code developed and owned by Hinker.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to the
`
`truth of the allegations contained in paragraph 20 as to “that included without permission or license
`
`the Code developed and owned by Hinker.” Denied that Ms. Saltman “personally published” the
`
`referenced video. Otherwise, admitted.
`
`23.
`
`Upon information and belief, Saltman also published a video which demonstrated
`
`and incorporated Plaintiff’s Code on the CLI Website.
`
`ANSWER: Denied as untrue.
`
`24.
`
`On September 9, 2020, Saltman registered and incorporated CLI in Delaware.
`
`ANSWER: Admitted.
`
`25.
`
`Upon information and belief, Saltman copied and distributed the Scripta software
`
`application, including Plaintiff’s copyrighted works, to third parties, including LexisNexis, for
`
`purposes of marketing and promoting the software product under the CLI brand name.
`
`ANSWER: Denied as untrue.
`
`26.
`
`Upon information and belief, Saltman presented and demonstrated a product that
`
`incorporated Plaintiff’s software Code, knowingly and falsely representing her ownership and
`
`creation of the Code to potential customers and licensees, including LexisNexis.
`
`ANSWER: Denied as untrue.
`
`27.
`
`Upon information and belief, Saltman knew that Hinker, through his relationship
`
`with Scripta, intended to market and license the software for commercial use to the market
`
`generally, including but not limited to LexisNexis.
`
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 7 of 15
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`ANSWER: Denied as untrue.
`
`28.
`
`Upon information and belief, Saltman knew that Hinker and Scripta had been
`
`engaged in business discussions with third parties, including LexisNexis, with plans to license the
`
`software, and that a core element of those discussions was the ability to offer an exclusive license.
`
`ANSWER: Denied as untrue.
`
`29.
`
`Upon information and belief, in or about September 2020, Defendants were
`
`accepted into the LexisNexis “Legal Tech Accelerator” program for purposes of further
`
`developing and marketing the software product which incorporated and relied upon Plaintiff’s
`
`software Code.
`
`ANSWER: Denied as untrue.
`
`30.
`
`Upon information and belief, Defendants copied, published, and distributed
`
`Plaintiff’s software Code for purposes of applying to the LexisNexis accelerator program without
`
`Plaintiff’s knowledge, authorization or permission.
`
`ANSWER: Denied as untrue.
`
`COUNT I
`DIRECT, VICARIOUS and/or CONTRIBUTORY
`COPYRIGHT INFRINGEMENT
`
`31.
`
`Plaintiff repeats and re-alleges each allegation set forth above as if set forth fully
`
`herein.
`
`ANSWER: Defendants repeat and reallege their prior responses.
`
`32.
`
`The foregoing acts constitute an infringement of Plaintiff’s exclusive copyrights
`
`under 17 U.S.C. §§ 101, et seq.
`
`ANSWER: Denied as untrue.
`
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`33.
`
`Plaintiff is the exclusive owner of all copyrights in the software Code at issue, and
`
`has registered the work with the U.S. Copyright Office.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to the
`
`truth of the allegations contained in paragraph 33.
`
`34.
`
`Hinker was never an employee of Scripta, nor did he ever agree to create any
`
`software or other works for Scripta as works made-for-hire.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to the
`
`truth of the allegations contained in paragraph 34.
`
`35.
`
`As alleged herein, Defendants copied and exploited Plaintiff’s copyrighted works
`
`without a license, permission or authorization to do so.
`
`ANSWER: Denied as untrue.
`
`36.
`
`Upon information and belief, Defendant Saltman personally copied and published
`
`substantial portions of Plaintiff’s copyrighted work to YouTube and the CLI Website in order to
`
`demonstrate the software application product previously intended to be launched by Scripta.
`
`ANSWER: Denied as untrue.
`
`37.
`
`Upon information and belief, Defendants copied and distributed Plaintiff’s works
`
`to third-party businesses for purposes of marketing and promoting the software application product
`
`previously intended to be launched by Scripta and did so under the false pretense that Defendants
`
`created and owned the software for the express purpose of enriching and economically benefiting
`
`themselves, causing economic damage and harm to Plaintiff.
`
`ANSWER: Denied as untrue.
`
`38.
`
`To the extent that Defendants did not directly copy, distribute or display Plaintiff’s
`
`copyrighted works, Defendants are and should be held secondarily liable for such actions.
`
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`ANSWER: Denied as untrue.
`
`39.
`
`Upon
`
`information and belief, Defendants benefitted commercially and
`
`economically from the unauthorized uses of Plaintiff’s works, including through pre-launch
`
`marketing and promotion of the software product Defendants intend to distribute commercially,
`
`which allowed for Defendants’ acceptance into competitive business accelerator programs,
`
`including the LexisNexis Legal Tech Accelerator.
`
`ANSWER: Denied as untrue.
`
`40.
`
`By infringing Plaintiff’s copyrights, Defendants misappropriated Plaintiff’s
`
`intellectual property for their own profit, causing Plaintiff significant injuries, damages, and losses
`
`in amounts to be determined at trial.
`
`ANSWER: Denied as untrue.
`
`41.
`
`Defendants’ unauthorized uses of Plaintiff’s copyrighted works was willful,
`
`intentional, and/or reckless,
`
`including because Defendant Saltman was subject
`
`to a
`
`confidentiality/non-disclosure agreement with Scripta and because Saltman already had decided
`
`to dissociate her relationship with Scripta prior to her copying and distributing Plaintiff’s software
`
`Code.
`
`ANSWER: Denied as untrue.
`
`42.
`
`Plaintiff seeks all damages recoverable under the Copyright Act related
`
`to
`
`Defendants’ unauthorized uses of Plaintiff’s copyrighted works.
`
`ANSWER: Denied that plaintiff is entitled to any relief.
`
`COUNT II
`UNAUTHORIZED DISTRIBUTION OF
`FALSE COPYRIGHT MANAGEMENT INFORMATION
`UNDER 17 U.S.C. § 1202
`
`43.
`
`Plaintiff repeats and re-alleges each allegation set forth above as if set forth fully
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`Case 1:22-cv-01486-APM Document 5 Filed 08/09/22 Page 10 of 15
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`herein.
`
`ANSWER: Defendants repeat and reallege their prior responses.
`
`44.
`
`The conduct by Defendants alleged herein also constitutes a violation of Plaintiff’s
`
`rights under Section 1202 of the Copyright Act, which protects the integrity of copyright
`
`management information (“CMI”) in works of authorship.
`
`ANSWER: Denied as untrue.
`
`45.
`
`Code includes specific underlying text and symbols which indicate the authorship
`
`and source of the Code.
`
`ANSWER: Defendants are without knowledge or information sufficient to form a belief as to the
`
`truth of the allegations contained in paragraph 45.
`
`46.
`
`Upon information and belief, Defendants intentionally published and distributed
`
`the Code with false and/or altered CMI indicating that Defendants were the authors and/or
`
`copyright owners of the Code rather than Hinker or Plaintiff.
`
`ANSWER: Denied as untrue.
`
`47.
`
`Upon information and belief, Defendants distributed the Code with false and/or
`
`altered CMI on YouTube as well as to potential licensees of the software knowing that doing so
`
`would conceal and/or enable the infringement of Plaintiff’s copyrights in and to the Code.
`
`ANSWER: Denied as untrue.
`
`48.
`
`Plaintiff seeks all available damages under Section 1202 and 1203 of the Copyright
`
`Act related to Defendants’ distribution of false CMI in connection with the Code.
`
`ANSWER: Denied that plaintiff is entitled to any relief.
`
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`COUNT III
`REQUEST FOR DECLARATORY JUDGMENT
`
`49.
`
`Plaintiff repeats and re-alleges each allegation set forth above as if set forth fully
`
`herein.
`
`ANSWER: Defendants repeat and reallege their prior responses.
`
`50.
`
`An alleged herein, an actual controversy has arisen involving Defendant Saltman’s
`
`past uses, as well as Defendant CLI’s future intended uses, of Plaintiff’s copyrighted works in
`
`commercial software products.
`
`ANSWER: Denied as untrue.
`
`51.
`
`Plaintiff thus seeks a declaratory judgment that Defendants’ intended use of
`
`Plaintiff’s copyrighted software would constitute an infringement of Plaintiff’s copyrights.
`
`ANSWER: Denied that plaintiff is entitled to any relief.
`
`52.
`
`Plaintiff further seeks a permanent injunction prohibiting Defendants from using or
`
`incorporating any of Plaintiff’s copyrighted software in Defendant’s commercial products.
`
`ANSWER: Denied that plaintiff is entitled to any relief.
`
`COUNT IV
`TORTIOUS INTERFERENCE
`WITH PROSPECTIVE BUSINESS RELATIONS
`
`53.
`
`Plaintiff repeats and re-alleges each allegation set forth above as if set forth fully
`
`herein.
`
`ASNWER: Defendants repeat and reallege their prior responses.
`
`54.
`
`Upon information and belief, Defendant Saltman was fully aware that Plaintiff
`
`expected to license his Code to Scripta for the purpose of entering into a business relationship with
`
`LexisNexis, through which Plaintiff’s copyrighted software would be licensed and/or sold to
`
`LexisNexis.
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`ANSWER: Denied as untrue.
`
`55.
`
`Upon information and belief, Defendants intentionally interfered with Plaintiff’s
`
`business expectancy by personally meeting with LexisNexis representatives and promoting a
`
`product as their own despite Saltman knowing that this application included an unauthorized copy
`
`of Code and programs created by Hinker as her own.
`
`ANSWER: Denied as untrue.
`
`56.
`
`Upon information and belief, Defendants misrepresented fact related to the
`
`ownership and authorship of Plaintiff’s software Code in applying to the LexisNexis Legal Tech
`
`Accelerator.
`
`ANSWER: Denied as untrue.
`
`57.
`
`As a result of Defendants’ actions, Defendants have interfered with and impaired
`
`Plaintiff’s prospective business relationship with LexisNexis, causing Plaintiff damages in an
`
`amount to be determined at trial.
`
`ANSWER: Denied as untrue.
`
`58.
`
`As a result of Defendants’ actions, Plaintiff’s ability to market the software as n
`
`[sic] exclusive product offering has been destroyed or seriously impaired.
`
`ANSWER: Denied as untrue.
`
`COUNT V
`COMMON LAW UNFAIR COMPETITION
`
`59.
`
`Plaintiff repeats and re-alleges each allegation set forth above as if set forth fully
`
`herein.
`
`ANSWER: Defendants repeat and reallege their prior responses.
`
`60.
`
`Defendants’ actions alleged herein constitute unfair competition pursuant to the
`
`common law of the District of Columbia.
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`ANSWER: Denied as untrue.
`
`61.
`
`Upon information and belief, Defendant Saltman knowingly took advantage of her
`
`access to Plaintiff’s copyrighted software as a former officer of Scripta, repackaged the product as
`
`that of Defendant CLI and presented it to prospective customers and business partners.
`
`ANSWER: Denied as untrue.
`
`62.
`
`Upon information and belief, Defendants intentionally misrepresented the
`
`authorship and ownership rights to Plaintiff’s software Code to prospective customers and business
`
`partners, thereby preempting and materially impairing Plaintiff’s ability to subsequently market
`
`and sell the product.
`
`ANSWER: Denied as untrue.
`
`63.
`
`Defendants’ actions have caused Plaintiff damages, including but not limited to lost
`
`licensing opportunities and the value of Plaintiff’s software as a unique and novel product.
`
`ANSWER: Denied as untrue.
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`AFFIRMATIVE DEFENSES
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`1. Plaintiff fails to state a claim against defendants upon which relief can be granted.
`
`2. Plaintiff has unclean hands.
`
`3. Plaintiff’s claims for relief are barred by the fair use doctrine pursuant to Section 107 of
`
`the Copyright Act.
`
`4. Plaintiff has engaged in one or more acts that has misused its copyright and its claims are
`
`therefore barred by the doctrine of copyright misuse.
`
`5. Plaintiff’s claims are barred by the doctrine of de minimis copying.
`
`6. Plaintiff’s claims fail because the subject matter work lacks originality.
`
`7. Plaintiff’s claims fail because the subject matter work lacks authorship.
`
`8. Plaintiff’s claims fail under the scenes a faire doctrine.
`
`9. Plaintiff’s claim is limited by the narrow scope of the copyright registration, if valid.
`
`10. Plaintiff’s claims are barred because critical parts or portions of its alleged protected
`
`copyright is invalid due to consisting of unprotectable ideas or processes.
`
`11. Plaintiff is barred from claiming statutory damages or attorney’s fees under the Copyright
`
`Act to the extent any alleged acts of infringement occurred before registration of plaintiff’s
`
`alleged work.
`
`12. This action is barred by the section 117 limitations on exclusive rights.
`
`13. Plaintiff lacks standing and is not the real party in interest.
`
`14. Plaintiff has failed to mitigate its alleged damages.
`
`15. The allegedly infringing works were independently developed.
`
`16. This litigation has been unreasonably and vexatiously multiplied and pursued in bad faith.
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`17. Defendants reserve the right to assert additional affirmative defenses as they become
`
`apparent through discovery.
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`Respectfully submitted,
`
`BODMAN PLC
`
`By:
`
` /s/ Justin P. Bagdady
`Justin P. Bagdady (Bar ID MI0095)
`201 S. Division, Suite 400
`Ann Arbor, MI 48104
`(734) 761-3780
`jbagdady@bodmanlaw.com
`Attorneys for Clause Logic, Inc. and Julie
`Saltman
`
`Date: August 9, 2022
`
`CERTIFICATE OF SERVICE
`
`I hereby certify that on August 9, 2022, I filed the foregoing paper and this Certificate of Service
`by using the ECF system which will send notification of such filing(s) to all counsel of record.
`
`/s/ Justin P. Bagdady
`
`15
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