`
`UNITED STATES DISTRICT COURT
`DISTRICT OF NEW HAMPSHIRE
`
`InSync Training, LLC
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`v.
`
`American Society for Training and
`Development, Inc.
`
`Civil No. 21-cv-594-JL
`Opinion No. 2022 DNH 055
`
`MEMORANDUM ORDER
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`This copyright and contract-based action requires a determination of whether the plaintiff
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`has plead sufficient nonconclusory and nonspeculative facts supporting its claims. The plaintiff,
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`InSync Training, LLC, develops and delivers virtual and online training courses and materials
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`focused on effective virtual learning techniques, and the defendant, American Society for
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`Training and Development, Inc., provides professional development training, with a focus (prior
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`to 2020) on in-person offerings. In October 2020, ATD entered into a License Agreement with
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`InSync, under which ATD gained access to some of InSync’s course materials and obtained
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`training on how to deliver InSync’s courses. Under the License Agreement, ATD was permitted
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`to use InSync’s materials to deliver courses directly to customers, but not to generate ATD’s own
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`competitive offerings.
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`ATD terminated the License Agreement effective June 30, 2021, roughly eight months
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`after entering into the agreement, and then began offering competing courses on its website the
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`next day. InSync obtained copyright registration for its course materials on June 30, 2021, and
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`about a week later filed suit against ATD, alleging that ATD copied InSync’s protected course
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`materials when developing its competing offerings, thereby violating the License Agreement and
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 2 of 23
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`the Copyright Act; induced InSync to enter into the License Agreement by fraudulently
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`representing that it had no intention to copy InSync’s course materials; and maintained access to
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`InSync’s course materials under the License Agreement by continuing this misrepresentation.
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`InSync asserts four claims against ATD: copyright infringement (Count 1); unfair competition
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`under the New Hampshire Consumer Protection Act, RSA § 358-A (Count 2); breach of contract
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`(Count 3); and fraud (Count 4).
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`Shortly after InSync filed its complaint, ATD produced its competing course materials to
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`InSync, and InSync then moved to amend its complaint to add details gathered from the
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`documents. Now, ATD objects to the motion to amend as to each of the four claims on futility
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`grounds.
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`The court has subject-matter jurisdiction under 28 U.S.C. §§ 1331(1) (federal question),
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`1338(a) (copyright), and 1367(a) (supplemental jurisdiction). After reviewing the parties’
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`submissions and holding oral argument, the court grants the motion in part and denies it in part.
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`The court grants the motion to amend as to the copyright infringement, unfair competition, and
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`breach of contract claims, after finding that InSync pleads facts to support these claims, but it
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`denies the motion as to the fraudulent misrepresentation claim because InSync’s amended
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`complaint fails to adequately plead scienter.
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`Applicable legal standard
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`I.
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`“Futility means that the complaint, as amended, would fail to state a claim upon which
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`relief could be granted.” Rife v. One W. Bank, F.S.B., 873 F.3d 17, 21 (1st Cir. 2017) (quoting
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`Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996)). “In reviewing for futility,
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`the district court applies the same standard of legal sufficiency as applies to a [Federal] Rule [of
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`Civil Procedure] 12(b)(6) motion.” Glassman, 90 F.3d at 623 (internal quotation omitted). To
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`2
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 3 of 23
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`survive a Rule 12(b)(6) motion, “[a] pleading . . . must contain,” among other things, “a short
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`and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ.
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`P. 8(a)(2). In order to satisfy this requirement, a plaintiff must include “factual content that
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`allows the court to draw the reasonable inference that the defendant is liable for the misconduct
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`alleged.” Martinez v. Petrenko, 792 F.3d 173, 179 (1st Cir. 2015) (internal quotation omitted).
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`Further, applying the Rule 12(b)(6) standard, the court must “take the complaint’s well-
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`pleaded facts as true,” and “draw all reasonable inferences in the plaintiffs’ favor.” Barchock v.
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`CVS Health Corp., 886 F.3d 43, 48 (1st Cir. 2018). “Well-pleaded facts must be ‘non-
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`conclusory’ and ‘nonspeculative.’” Id. (quoting Schatz v. Republican State Leadership Comm.,
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`669 F.3d 50, 55 (1st Cir. 2012)). “If the factual allegations in the complaint are too meager,
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`vague, or conclusory to remove the possibility of relief from the realm of mere conjecture, the
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`complaint is open to dismissal,” or, in this case, the motion to amend should be denied as futile.
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`Id. (internal quotation omitted).
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`II.
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`Background
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`The court gathers the following facts from the complaint and from information contained
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`in the documents on which the complaint relies and which are central to the plaintiff’s claims.
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`See Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007) (in determining the sufficiency of the
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`complaint under Rule 12(b)(6), the court may consider “documents central to plaintiffs’ claim
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`[and] . . . documents sufficiently referred to in the complaint” (internal quotation omitted)).1
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`1 In addition to the complaint and documents attached to it, the court also considered excerpts
`from InSync and ATD’s course materials that ATD attached to its objection to InSync’s motion
`to amend. These excerpts include language that InSync quoted in its complaint as examples of
`copying in support of its copyright infringement claim. The court considered these excerpts for
`two reasons. First, they are “central” to InSync’s claims and “sufficiently referred to in the
`complaint,” as they are portions of the allegedly copied and allegedly infringing course
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`3
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 4 of 23
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`InSync is a New Hampshire LLC that develops and delivers “virtual and online training
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`course materials centered on effective virtual learning techniques.”2 ATD is a Wisconsin non-
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`profit corporation with a place of business in Alexandria, Virginia. ATD provides professional
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`development services, and prior to 2020, ATD was “focus[ed] . . . on in-person professional
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`development offerings and large, in-person conventions.”3
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`On October 19, 2020, ATD entered into a “Training and Intellectual Property License
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`Agreement” with InSync, which InSync included as an attachment to its complaint. Under the
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`License Agreement, ATD agreed to pay a licensing fee in order to have the right to deliver
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`certain of InSync’s programs directly to customers.4 As part of this arrangement, InSync agreed
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`to instruct ATD personnel on the delivery of InSync’s training programs, and InSync developed
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`course materials for ATD--a 2020 Designing Virtual Training ATD Facilitator Guide, a 2020
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`ATD: Facilitating Virtual Training Guide, and “supporting materials for th[e] two guides”
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`(collectively, “Course Materials”).5 The Course Materials were the product of years of
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`“develop[ment] and fine-tun[ing] and are based on extensive industry research and best practices
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`developed by InSync.”6 ATD gained access to the Course Materials in October 2020, upon
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`materials. See Curran, 509 F.3d at 44. Second, InSync confirmed during oral argument that it
`did not object to the court’s consideration of the excerpts, nor did it move to strike the excerpts.
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` Pl.’s Amended Compl. (doc. no 24-1) at 1.
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` Id. at ¶¶ 10-11.
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` 2
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` 3
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` 4
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` See Training and Intellectual Property License Agreement (“License Agreement”) (doc. no. 24-
`3) at § 1.1.
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` Pl.’s Amended Compl. (doc. no 24-1) at ¶¶ 15-16.
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` Id. at ¶ 28.
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`4
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` 5
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` 6
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 5 of 23
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`execution of the License Agreement, and InSync trained ATD personnel from October 2020 until
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`February 2021.
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`The License Agreement provides that ATD can “use [InSync’s] Intellectual Property”--
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`defined as “copyrights, trademarks, patents, trade secrets, know-how and other rights in and to”
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`InSync’s programs--“only in connection [with ATD’s] delivery of the InSync Program Content
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`to consumers via Authorized Trainers.”7 Further, the License Agreement prohibits ATD from
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`“us[ing] or rely[ing] upon the Intellectual Property in order to[,]” at any time, “directly or
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`indirectly develop, deliver, market[,] or offer any service that is similar to or which competes
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`with the InSync Programs.”8
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`On March 29, 2021, ATD told InSync that it planned to terminate the License Agreement
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`effective June 30, 2021. That day, ATD also informed InSync that it “planned to offer its own
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`competitive virtual and online training programs following termination of the License
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`Agreement.”9 InSync alleges that “the primary authors of the materials underpinning ATD’s
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`competitive offerings” are the same ATD personnel who InSync trained under the License
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`Agreement.10
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`InSync acquired copyright registration for its Course Materials, effective June 30, 2021,
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`and ATD began offering its competitive courses on its website the next day, on July 1, 2021.
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`ATD’s competing offerings include “the materials ATD produced for” a Virtual Instructional
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`Design Certificate Program, a Virtual Training and Facilitation Certificate, and “Micro Courses”
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`7 Id. at ¶¶ 18-19 (quoting License Agreement (doc. no. 24-3) at §§ 1.1, 1.4).
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` Id. at ¶ 20 (quoting License Agreement (doc. no. 24-3) at § 1.4).
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` Id. at ¶ 23.
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` 8
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` 9
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`10 Id. at ¶ 34.
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`5
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 6 of 23
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`entitled, for example, Compelling Virtual Presentations, Creating Visuals for Virtual
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`Presentations, Delivering Virtual Presentations, Designing and Developing for the Online
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`Classroom, and more.11
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`ATD “provided assurances” to InSync that its new “virtual and online programs . . . were
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`not based on the Course Materials[,]” but, according to InSync, ATD’s offerings “are not the sort
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`of content that a company could create from scratch in less than a year.”12 InSync further alleges
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`that “portions of ATD’s materials bear probative and substantial similarity to InSync’s Course
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`Materials through the nearly identical expression of prompts and directives to course facilitators
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`and producers.”13 As support, InSync attaches to its complaint a two-page chart with a side-by-
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`side comparison of six excerpts from the InSync and ATD Facilitator Guides, and InSync
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`includes within its complaint a comparison of the course descriptions for InSync’s Virtual
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`Classroom Design Fundamentals course and ATD’s Designing Content for Virtual Training
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`course. These are described in more detail infra Section III.A.
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`III. Analysis
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`A. Copyright infringement (Count 1)
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` “To establish copyright infringement, a plaintiff must prove ‘(1) ownership of a valid
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`copyright, and (2) copying of constituent elements of the work that are original.’” Lotus Dev.
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`Corp. v. Borland Int’l, Inc., 49 F.3d 807, 813 (1st Cir. 1995), aff’d, 516 U.S. 233 (1996) (quoting
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`Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)). ATD’s argument
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`
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`11 Id. at ¶ 30.
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`12 Id. at ¶¶ 24, 29.
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`13 Id. at ¶ 27.
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`6
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 7 of 23
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`centers on the second element of the copyright infringement claim, which consists of two parts:
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`actual copying and substantial similarity.14 More specifically, to satisfy the second element, the
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`plaintiff:
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`must first prove that the alleged infringer copied plaintiff’s copyrighted work as a factual
`matter; to do this, he or she may either present direct evidence of factual copying or, if
`that is unavailable, evidence that the alleged infringer had access to the copyrighted work
`and that the offending and copyrighted works are so similar that the court may infer that
`there was factual copying (i.e., probative similarity). The plaintiff must then prove that
`the copying of copyrighted material was so extensive that it rendered the offending and
`copyrighted works substantially similar.
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`Id. (internal citations omitted). “Substantial similarity is measured by the ordinary observer
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`test”; under this test, “two works will be said to be substantially similar if a reasonable, ordinary
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`observer, upon examination of the two works, would conclude that the defendant unlawfully
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`appropriated the plaintiff’s protectable expression.” Hassett v. Hasselbeck, 757 F. Supp. 2d 73,
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`79-80 (D. Mass. 2010) (internal quotation omitted).
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`Importantly, “the resemblances relied upon as a basis for finding probative” and
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`substantive similarity “must refer to constituent elements of the copyrighted work that are
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`original.” Greenspan v. Random House, Inc., 859 F. Supp. 2d 206, 214 (D. Mass. 2012)
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`(internal quotation omitted), aff’d sub nom. No. 12-1594, 2012 WL 5188792 (1st Cir. 2012);
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`accord Johnson v. Gordon, 409 F.3d 12, 18 (1st Cir. 2005) (noting, in reference to the probative
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`and substantial similarity elements, that “[t]he requirement of originality cuts across both of
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`14 As for the first element, ownership of a valid copyright, InSync alleges in its complaint that it
`obtained copyright registration for its Course Materials effective June 30, 2021, and it provides
`the registration number. See Amended Compl. (doc. no. 24-1) at ¶ 27. InSync also attaches to
`its complaint a printout of an entry from the United States Patent Office’s online catalogue
`indicating that “2020 Designing Virtual Training ATD Facilitator Guide and 5 Other
`Unpublished Works” were registered as of June 30, 2021. See doc. no. 24-5 at 2. Further,
`during oral argument, InSync confirmed that the bulk of its Course Materials, aside from some
`handouts and other items, are covered by the copyright registration. With this, InSync more than
`adequately pleads copyright ownership with respect to the Course Materials.
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`7
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 8 of 23
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`these similarity criteria”). “Thus, in examining whether actual copying has occurred, a court
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`must engage in dissection of the copyrighted work by separating its original, protected
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`expressive elements from those aspects that are not copyrightable because they represent
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`unprotected ideas or unoriginal expressions.” Greenspan, 859 F. Supp. 2d at 214 (quoting
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`Johnson, 409 F.3d at 19).
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`To begin, InSync adequately alleges that ATD had access to the Course Materials under
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`the License Agreement. The court’s analysis, then, turns on the similarity between ATD’s
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`course materials, on one hand, and the original portions of InSync’s Course Materials, on the
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`other. To demonstrate similarity, InSync compares the descriptions of one InSync course and
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`one ATD Micro Course. InSync also attaches to its complaint a chart (“Comparison Chart”)
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`with side-by-side comparisons of six excerpts of the parties’ Facilitator Guides; InSync describes
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`this as an “illustrative comparison of InSync and ATD course excerpts.”15 The court discusses
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`each of InSync’s examples of similarity below and finds that a portion of them support an
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`inference that the Course Materials and ATD’s competing offerings exhibit probative and
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`substantial similarities.
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`Course descriptions. According to InSync, the publicly available course description for
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`ATD’s Micro Course entitled Designing Content for Virtual Training “suggests” that the course
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`contains “actual or derivative copies of InSync’s” course entitled Virtual Classroom Design
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`Fundamentals: One-Day Immersion.16 Both course descriptions explain that a virtual class
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`should be well or solidly designed for better learning. While InSync’s course description names
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`lesson topics, such as “moving from webinar to true learning approaches in the virtual
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`15 Pl.’s Amended Compl. (doc. no 24-1) at ¶ 25; doc. no. 24-4.
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`16 Id. at ¶¶ 32-33.
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`8
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 9 of 23
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`classroom” and “designing for true engagement using directed approaches to interaction and
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`collaboration,” ATD’s description states that participants will “[d]iscover how to apply
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`instructional design techniques and processes specifically to materials for a virtual classroom.”17
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`Based on these descriptions, the court can reasonably infer that the courses cover similar
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`subject matter--the design of virtual classes for optimal engagement. This common focus
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`provides some support, beyond mere speculation, for the inference that ATD’s Micro Course
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`bears similarities to, and copied from, the original content in InSync’s course. This inference is
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`strengthened when the course descriptions are considered alongside InSync’s allegations that (i)
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`ATD was focused on in-person, and not virtual, training prior to 2020, and (ii) ATD developed
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`its course offerings quickly, within months, after obtaining access to InSync’s Course Materials.
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`See 4 Nimmer on Copyright § 13.02 (2021) (“Unusual speed in the creation of defendant’s work
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`may furnish some evidence that defendant had access to and used plaintiff’s work rather than
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`resorting to independent creation.”).
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`ATD argues that InSync’s allegations of copying with respect to the Micro Courses are
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`conclusory because InSync does not allege that it has seen the Micro Courses. For support, ATD
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`cites to Kenney v. Warner Bros. Ent. Inc., 984 F. Supp. 2d 9 (D. Mass. 2013). Kenney does not
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`squarely support ATD’s position, however. In Kenney, the plaintiff failed to demonstrate
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`probative or substantial similarity between his work and the offending work of the defendant
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`because he merely alleged that the themes, lead characters, and titles of the two works were
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`similar. Id. at 13-14. The court concluded that “because [the plaintiff] has not seen [the
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`defendant’s] purportedly infringing screenplay or movie (there is no indication that either yet
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`exists), there are no sustainable allegations of plagiarism.” Id. at 14. The court further reasoned
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`17 Id.
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`9
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 10 of 23
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`that “copyright law . . . does not protect concepts and ideas[,]” nor does it protect “stock scenes
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`and characters” or “plots, subplots[,] or themes.” Id. This conclusion and reasoning do not
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`suggest, as ATD argues, that a plaintiff categorically cannot state a claim for copyright
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`infringement without viewing the offending work in its entirety, or based only on a synopsis or
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`description of the work. The court does not find support for such a proposition in the case law,
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`nor does ATD point to any.
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`Comparison Chart: Rows 1 and 4. Moving on to InSync’s Comparison Chart, Row 1
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`contains lists from the two guides, each of which describes four “level[s]” for evaluation. The
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`two lists are similar in substance. The first three levels are identified using the same exact terms:
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`reaction, learning, and behavior. InSync’s guide states that the fourth level “involves analyzing
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`the final results of your training,” and ATD’s guide states that the fourth level focuses on the
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`“results” or “impact on the organization.” Both guides also define each level similarly, albeit
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`with a different selection of words.
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`The fourth row contains lists of adult students’ qualities; once again, each list
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`incorporates the same concepts. Both lists describe adult students as “goal-oriented.” The
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`remainder of the lists use synonymous, though not identical, terms. InSync’s guide states that
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`students “bring life experiences,” and are “self-directed,” and ATD’s guide states that students
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`“need to share opinions and experiences” and “set their own expectations.” Finally, InSync’s
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`guide notes that students are “relevancy oriented,” “practical,” and “like to be respected.”
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`Similarly, ATD’s guide states that students “[n]eed to be able to apply new knowledge right
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`away,” and “[n]eed to have some control” and “be active agents in their learning.”
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`ATD argues that the material in these rows is not subject to copyright protection because
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`it is not original; instead, it is drawn from other published works--specifically, Donald
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`10
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 11 of 23
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`Kirkpatrick’s four levels of evaluation, and Malcolm Knowles’ adult learning principles.
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`“Original, as the term is used in copyright, means only that the work was independently created
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`by the author (as opposed to copied from other works), and that it possesses at least some
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`minimal degree of creativity.” Situation Mgmt. Sys., Inc. v. ASP. Consulting LLC, 560 F.3d 53,
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`60 (1st Cir. 2009) (quoting Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 345 (1991)).
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`ATD’s critique of the excerpts’ originality is unavailing at this stage because “the determination
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`of whether a work is sufficiently original to be protected is a factual issue that is inappropriate
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`for determination on a motion to dismiss.” Autodesk, Inc. v. ZWCAD Software Co., Ltd., No.
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`5:14-CV-01409-EJD, 2015 WL 2265479, at *4 (N.D. Cal. May 13, 2015) (internal quotation
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`omitted); see also Magic Mktg., Inc. v. Mailing Servs. of Pittsburgh, Inc., 634 F. Supp. 769, 771
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`(W.D. Pa. 1986). (“The issue of copyrightability is typically resolved by a motion for summary
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`judgment” (citing cases)).
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`For example, even if the court were to accept ATD’s contention that Rows 1 and 4 are
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`recapitulations of the work of other scholars and thus not worthy of copyright protection,
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`InSync’s decision to include these works in its guide could be considered original, as could
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`InSync’s presentation or organization of the material on its own or in relation to other theories
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`and constructs presented. See Lyons v. Am. Coll. of Veterinary Sports Med. & Rehab., Inc., 997
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`F. Supp. 2d 92, 113 (D. Mass. 2014) (“the structure or arrangement of unprotected elements
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`sometimes reflects creative choices worthy of copyright protection.”).
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`ATD further asserts that Rows 1 and 4 employ common words and phrases that are not
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`entitled to copyright protection. Again, the court cannot find that the words and phrases included
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`in the excerpts are unworthy of protection, as “[w]hether a short phrase is sufficiently original to
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`merit copyright protection often depends on context”—context that is lacking at this early stage
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`11
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 12 of 23
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`of litigation. Id. at 112. For example, courts have determined that words and phrases lack the
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`originality necessary for copyright protection where they are “fragmentary,” “cliched language
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`typically used to convey” a particular idea, or “forms of expression dictated solely at functional
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`considerations . . . .” CMM Cable Rep, Inc. v. Ocean Coast Properties, Inc., 97 F.3d 1504, 1519-
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`20 (1st Cir. 1996) (internal quotations omitted). ATD’s arguments do not support such a finding
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`with respect to the words in Rows 1 and 4, at this juncture.
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`Rows 2, 3, 5 and 6. These rows each contain prompts for the instructors to follow while
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`delivering a course. The rows are replicated below, along with InSync’s highlighting, signifying
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`the portions that InSync considers similar.
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`Row
`2
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`3
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`InSync Facilitator Guide
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`ATD Facilitator Guide
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`12
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 13 of 23
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`5
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`6
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` At the outset, the court finds that the content in Row 2 does not support an inference of
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`similarity or actionable copying because, as ATD argues, the two excerpts are dissimilar. Row 2
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`presents two questions for instructors to pose to students pertaining to class materials, but the
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`questions seem to reference differing materials and seek different information. The InSync guide
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`asks the students to consider what information to place in the guides to help their future course
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`participants with a particular activity, whereas the ATD guide asks the students what overall
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`course materials they found most helpful for themselves.
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`13
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 14 of 23
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`Next, in Row 3, the common terms between the two guides--chat, whiteboards, and
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`polls--are words and phrases that likely do no merit copyright protection because they are
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`commonly used in relation to the subject matter at hand, online and virtual training or
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`interactions. See Coquico, Inc. v. Rodriguez-Miranda, 562 F.3d 62, 68 (1st Cir. 2009) (noting
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`that “[t]he doctrine of scènes à faire denies copyright protection to elements of a work that are
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`for all practical purposes indispensable, or at least customary, in the treatment of a given subject
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`matter” (internal citation omitted)). The court refrains from deciding whether the words are
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`copyrightable at this stage, however, as such a determination would be premature without
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`additional context, and the determination is not dispositive.
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`The remaining two excerpts, in Rows 5 and 6, provide further evidence from which the
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`court can infer similarities between the two guides. Rows 5 and 6 employ the same structure, as
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`they both begin with an action verb in bold and capitalized lettering, to guide the instructors on
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`what to do or say. The highlighted portions are also similar in substance, and they include some
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`of the same words. Specifically, in Row 5 each guide prompts the instructor to ask the students
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`about their “biggest challenge” when teaching or facilitating, and then to “comment
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`appropriately” on the students’ responses. The excerpts in Row 6 both incorporate a question
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`pertaining to “skills” that are important in the learning environment.
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`ATD argues, again, that these rows present fragmentary words and phrases that are not
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`worthy of copyright protection. The court finds, as explained above, that these arguments, while
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`not wholly without merit, do not warrant a denial of a motion to amend, and should be addressed
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`when more context is available at summary judgment or at trial.
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`In sum, InSync alleges that ATD had access to its Course Materials, which were the
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`product of years of InSync’s own efforts; that ATD developed its own competing offerings from
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`14
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`scratch within eight or nine months of acquiring the Course Materials; and that ATD’s materials
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`“bear probative and substantial similarity to InSync’s Course Materials through the nearly
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`identical expression of prompts and directives to course facilitators and producers.” InSync also
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`presents two similar course descriptions and a Comparison Chart with six excerpts from the
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`parties’ facilitator guides, some of which contain substantive and organizational similarities.
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`When viewed in the light most favorable to InSync, the allegations, course descriptions,
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`and portions of the Comparison Chart adequately plead factual copying and substantial
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`similarity, as required to state a copyright infringement claim. See Cortés-Ramos v. Martin-
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`Morales, 956 F.3d 36, 42 (1st Cir. 2020) (finding that the plaintiff met his “burden of pleading
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`both indirect actual copying and substantial similarity” by alleging facts that gave rise to the
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`“reasonable inference that [the defendant] had access” to the protected material, and by alleging
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`that the protected work and the allegedly infringing work were “almost identical”);
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`FragranceNet.com, Inc. v. FragranceX.com, Inc., 679 F. Supp. 2d 312, 315, 325 (E.D.N.Y. 2010)
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`(finding that the plaintiff “alleged sufficient facts to support its claim for copyright infringement”
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`by alleging that the defendant copied more than 900 of the plaintiff’s copyrighted images from
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`its website, which contained “original elements,” including “arrangement, lighting, [and] use of
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`shadow,” and by attaching to its complaint screenshots of the copyrighted images and the
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`offending images). The court accordingly grants the motion to amend as to this claim, finding
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`that InSync’s amendments are not futile.
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`B. Breach of contract (Count 3)
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`InSync alleges that ATD breached § 1.4 of the License Agreement, which provides that
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`ATD “may not during the Term of this Agreement or anytime thereafter use or rely upon the
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`Intellectual Property in order to directly or indirectly develop, deliver, market or offer any
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 16 of 23
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`service that is similar to or which competes with the InSync Programs or [InSync’s] then-current
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`offerings.” The contract defines Intellectual Property as InSync’s “copyrights, trademarks,
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`patents, trade secrets, know-how and other rights in and to . . . the written, visual, audio, video
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`and other content comprising and/or relating to the InSync Programs . . . .”18 InSync further
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`alleges that this definition of Intellectual Property “necessarily includes” the Course Materials.
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`ATD argues that the amendments to the breach of contract claim are futile for the same
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`reasons that the amendments to the copyright claim are--InSync’s complaint contains only
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`speculative and conclusory allegations that ATD copied or used InSync’s Course Materials to
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`“directly or indirectly develop, deliver, market or offer” competing programs. The court
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`disagrees.
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`“Breach of contract occurs when a party fails to perform any promise that ‘forms the
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`whole or part of a contract’ without legal excuse.” Steele v. Deutsche Bank Nat’l Trust Co., No.
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`14-cv-350-JD, 2014 U.S. Dist. LEXIS 175800, at *5-6 (D.N.H. Dec. 17, 2014) (DiClerico, J.)
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`(quoting Axenics, Inc. v. Turner Constr. Co., 164 N.H. 659, 668 (2013)). As an initial matter, to
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`the extent that ATD is arguing that the elements of a copyright infringement claim must be
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`imputed to InSync’s breach of contract claim--and the two claims must be analyzed in the same
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`manner--ATD is mistaken. InSync’s contract claim should be analyzed independently from the
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`copyright infringement claim because § 1.4 of the License Agreement can “plausibly be read” to
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`prohibit a broader set of activity than copyright infringement. Young v. Wells Fargo Bank,
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`N.A., 717 F.3d 224, 235-36 (1st Cir. 2013) (noting that, at the motion to dismiss stage, a court
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`should resolve any contractual ambiguities in the plaintiff’s favor). Specifically, § 1.4 prohibits
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`not just copying, but the “use or reli[ance] upon” InSync’s Intellectual Property, and it defines
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`18 License Agreement (doc. no. 24-3) at § 1.1.
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`Case 1:21-cv-00594-JL Document 37 Filed 04/13/22 Page 17 of 23
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`Intellectual Property as more than just “copyrights,” but also “trademarks, patents, trade secrets,
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`know-how and other rights in and to” InSync’s content.
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`During oral argument, ATD stated that, even if § 1.4 prohibits a broader set of activities
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`than just copyright infringement, InSync does not specifically allege that the Course Materials
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`fall under another category of Intellectual Property, aside from “copyrights.” Thus, according to
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`ATD, InSync does not allege that ATD engaged in any other conduct barred under § 1.4, aside
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`from copyright infringement. The court’s reading of the complaint differs from ATD’s reading.
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`InSync alleges that its definition of Intellectual Property “necessarily includes” the Course
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`Materials. With this statement, InSync adequately alleges that the Course Materials constitute
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`other forms of Intellectual Property, such as “know-how.” InSync thereby asserts a breach of
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`contract claim that is not necessarily duplicative of, and may fail or succeed independently from,
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`its copyright infringement claim.
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`Turning to InSync’s allegations in support of the breach of contract claim, InSync claims
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`that prior to 2020, ATD focused on in-person professional development offerings. ATD gained
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`access to the Course Materials beginning in October 2020, upon execution of the License
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`Agreement. Some months later, on March 29, 2021, ATD notified InSync of its intention to
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`terminate the License Agreement effective June 30, 2021, and informed InSync that it planned to
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`offer its own “competitive virtual and online training programs” after the Agreement’s
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`termination. Finally, according to InSync, ATD’s new programs “are not