Case 4:07-cv-00704-GKF-PJC Document 45 Filed in USDC ND/OK on 07/21/08 Page 1 of 22
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF OKLAHOMA
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`Case No. 07-CV-704-GKF-PJC
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`)))))))))))
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`BRIAN K. ROGERS,
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` Plaintiff,
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`vs.
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`DONALD C. YONCE, and
`SOLARWINDS.NET, INC.,
`an Oklahoma Corporation,
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` Defendants.
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`O P I N I O N A N D O R D E R
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`This matter comes before the court on the Plaintiff’s Motion to Remand [Document No. 23].
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`I. BACKGROUND
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`Plaintiff Brian K. Rogers (“Rogers”) and defendant Yonce met in 1997 when they began
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`working together as computer network engineers for International Network Services (“INS”) in
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`Tulsa. In 2000, Rogers and Yonce left their employment with INS. Rogers began working for
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`Greenwich Technology Partners (“GTP”), and Yonce started SolarWinds, a new business providing
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`computer network software and related maintenance and support services. Yonce was the founder,
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`principal or sole owner of SolarWinds, as well as SolarWinds’s president or chief executive officer.
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`In 2001, Yonce asked Rogers to leave GTP and work for SolarWinds. Even though Rogers’s
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`job at GTP provided a higher salary and better benefits, Rogers agreed to join SolarWinds. Rogers
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`claims he was persuaded to give up his more lucrative job at GTP in light of other valuable
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`economic opportunities. In particular, Yonce promised Rogers that, if he joined SolarWinds and
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`helped it grow, Rogers would share in the proceeds from the projected sale of SolarWinds. Yonce
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`promised Rogers that when SolarWinds sold, “they would ‘all’ become ‘millionaires.’” (Petition,
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`¶ 14). Rogers claims that, based on Yonce’s statements, he accepted employment at SolarWinds.
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`Case 4:07-cv-00704-GKF-PJC Document 45 Filed in USDC ND/OK on 07/21/08 Page 2 of 22
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`Rogers worked at SolarWinds for approximately five years, from the latter part of 2001 until
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`December 2006. Rogers contends that throughout the course of his employment, Younce repeatedly
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`confirmed and renewed his promise that Rogers would receive a substantial portion of the proceeds
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`from the sale of SolarWinds. In or about 2005-2006, Yonce sold the majority of his ownership in
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`SolarWinds for an alleged nine-figure sum of money and other financial remuneration. Rogers
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`claims that, upon the sale of SolarWinds, the defendants broke their promise to distribute proceeds
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`of the sale to Rogers. In addition, Rogers alleges that Yonce did not disclose the fact or terms of the
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`sale to Rogers, but instead intentionally concealed and misrepresented these facts.
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`Rogers also asserts that during his employment he “regularly conceived of, developed,
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`invented, authored, and created” numerous software programs and related computer technology in
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`connection with SolarWinds’s business, and that SolarWinds has realized significant economic
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`profits from the works. (Petition, ¶ 24). Rogers alleges that he and SolarWinds are co-authors and
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`co-owners of the software and technology he created. Rogers claims he is entitled as a co-owner
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`to (i) an accounting for all proceeds and profits that SolarWinds has realized from the use of the
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`intellectual property; (ii) one-half of all profits from SolarWinds’s use of the intellectual property;
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`and (iii) a constructive trust based upon an equitable lien against one-half of the profits SolarWinds
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`has received or will receive from the use of the intellectual property. Rogers also contends that
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`SolarWinds has a fiduciary duty to him to provide an accounting and to hold and pay him half the
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`profits.
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`Rogers’s claims of co-authorship/co-ownership of the intellectual property are based on the
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`terms of an employment agreement entitled “SolarWinds.Net Employee Proprietary Information
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`And Inventions Agreement.” That agreement states in part:
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`Case 4:07-cv-00704-GKF-PJC Document 45 Filed in USDC ND/OK on 07/21/08 Page 3 of 22
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`Ownership of Intellectual Property. Employee hereby agrees that all
`Intellectual Property relating in any manner to work performed by or
`for the Employee as part of the performance of Employee’s duties to
`the Company shall be owned exclusively by the Company. . . .
`Futhermore, and without limiting the foregoing, any such Company
`Intellectual Property created by Employee and related to the actual or
`proposed business of the Company shall be deemed “works made for
`hire” and the Company shall be deemed the co-author thereof.
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`(Agreement, p. 2, ¶ 2, attached to the Petition as Exhibit A).1
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`Based on this agreement and the allegations described above, Rogers filed this lawsuit,
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`asserting the following nine causes of action: (1) Breach of Contract/Quasi-Contract; (2) Violation
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`of Oklahoma Labor Protection Laws (for wrongfully inducing Rogers to change his employment
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`through false representations and by failing to honor the employment-related promises); (3)
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`Promissory and Equitable Estoppel; (4) Breach of Covenant of Good Faith and Fair Dealing; (5)
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`Fraud and Constructive Fraud; (6) Constructive Trust/Equitable Lien (with respect to the sums
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`Rogers claims to be owed form the sale of Yonce’s majority interest in SolarWinds); (7) Unjust
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`Enrichment and Accounting; (8) Breach of Fiduciary Duties and Knowingly Assisting Breach; and
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`(9) Constructive Trust/Equitable Lien (with respect to the profits SolarWinds has received and will
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`receive from the licensing, use or other commercial exploitation of the Rogers/SolarWinds
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`Intellectual Property). Rogers classifies his causes of action as either employment-related claims
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`(Counts 1 through 6), or intellectual property contract-based claims (Counts 7 through 9).
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`Rogers originally filed this action in the District Court for Tulsa County. Yonce removed
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`1 Defendants point out in their response in opposition to the motion to remand that, during the course of
`Rogers’s employment, he actually executed two agreements related to SolarWinds’s intellectual property.
`The first agreement was signed by Rogers on October 2, 2001. The second agreement was signed by Rogers
`on January 19, 2005. However, the second agreement is dated September 1, 2001 and expressly supercedes
`all other oral or written communications or agreements concerning SolarWinds’s intellectual property. Thus,
`for purposes of the motion to remand, the court will focus its attention on the second agreement signed in
`2005, which is attached to the state court Petition and forms the basis for Rogers’s claims.
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`the case to this court, pursuant to 28 U.S.C. § 1446(a), asserting that federal subject matter
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`jurisdiction exists under 28 U.S.C. §§ 1338(a) and 1331 because Rogers’s claims related to
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`SolarWinds’s intellectual property arise under and are preempted by the federal Copyright Act.2
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`SolarWinds joined in the removal and filed a Partial Motion to Dismiss. Yonce then filed a Motion
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`to Dismiss.
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`Rogers moved to remand the action, arguing that this court lacks subject matter jurisdiction
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`because the claims do not arise under and are not preempted by the federal Copyright Act. Rogers
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`contends that he has not asserted any claims for copyright infringement, i.e. Rogers does not allege
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`that the defendants have unlawfully copied, distributed, reproduced, or converted the intellectual
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`property. Indeed, Rogers asserts that SolarWinds’s use of the intellectual property is perfectly
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`lawful and authorized. Rogers’s claims are instead centered on his purported right to share in the
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`proceeds obtained from the use of the intellectual property. Rogers argues that his ownership rights
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`are derived from the written agreement between the parties, and that his claims are based on state
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`law duties to account and share profits among co-owners of property. Rogers argues that the
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`Copyright Act does not provide any rights or remedies between co-authors or co-owners of joint
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`works, nor has he not sought any remedies under the Copyright Act.
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`II. DISCUSSION
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`A. Removal Standards
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`Generally, a defendant may remove a case from state court to federal court only if the federal
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`court would have had original jurisdiction over the action. 28 U.S.C. § 1441. United States district
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`2 Subject matter jurisdiction rests solely on whether this court has federal question jurisdiction, as there is
`no diversity of citizenship. The plaintiff and defendant Yonce are residents of Tulsa County, Oklahoma.
`Defendant SolarWinds is an Oklahoma Corporation.
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`courts “have original jurisdiction of all civil actions arising under the Constitution, laws, or treatises
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`of the United States.” 28 U.S.C. § 1331. In addition, district courts have original and exclusive
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`jurisdiction of “any civil action arising under any Act of Congress relating to patents, plaint variety
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`protection, copyrights and trademarks.” 28 U.S.C. § 1338. A case “arises under” federal law if the
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`complaint “establishes either that federal law creates the cause of action or that the plaintiff’s right
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`to relief necessarily depends on resolution of a substantial question of federal law.” Empire
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`Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677, 690, 126 S.Ct. 2121, 165 L.Ed.2d 131
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`(2006); see also Nicodemus v. Union Pacific Corp., 440 F.3d 1227, 1228 (10th Cir. 2006).
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`Whether a claim arises under federal law is determined by reference to the complaint alone;
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`the existence of a potential defense based on federal law does not confer a right to remove. See
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`Caterpillar, Inc. v. Williams, 482 U.S. 386, 399, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). “The
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`presence or absence of federal-question jurisdiction is governed by the ‘well-pleaded complaint
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`rule,’ which provides that federal jurisdiction exists only when a federal question is presented on
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`the face of the plaintiff’s properly pleaded complaint.” Caterpillar, 482 U.S. at 392 (citing Gully
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`v. First Nat’l Bank, 299 U.S. 109, 112-13, 57 S.Ct. 96, 81 L.Ed. 70 (1936)). Under this rule, the
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`plaintiff is the master of his claim. Caterpillar, 482 U.S. at 392; see also The Fair v. Kohler Die &
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`Specialty Co., 228 U.S. 22, 25, 33 S.Ct. 410, 57 L.Ed. 716 (1913). A plaintiff may avoid federal
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`jurisdiction by exclusive reliance on state law. Caterpillar, 482 U.S. at 392. However, a plaintiff
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`may not defeat removal by omitting to plead necessary federal questions in a complaint. Franchise
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`Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 22, 103 S.Ct. 2841 (1983); Schmeling v.
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`NORDAM, 97 F.3d 1336, 1339 (10th Cir. 1996).
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`B. Whether a Complaint “Arises Under” the Copyright Act
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`“It is well-established that not every complaint that refers to the Copyright Act ‘arises under’
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`that law.” 1mage Software, Inc. v. Reynolds and Reynolds Co., 459 F.3d 1044, 1049 (10th Cir. 2006)
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`(quoting Bassett v. Mashantucket Pequot Tribe, 204 F.3d 343, 347 (2d Cir. 2000)). The Second
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`Circuit, in T.B. Harms Co. v. Eliscu, 339 F.2d 823 (2d Cir. 1964), set forth the “most frequently
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`cited test” for determining whether an action arises under the Copyright Act. 1mage, 459 F.3d at
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`1049 (citing Gener-Villar v. Adcom Group, Inc., 417 F.3d 201, 203 (1st Cir. 2005)). Under the T.B.
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`Harms test, a suit arises under the Copyright Act if: (1) The complaint is for a remedy expressly
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`granted by the Act, e.g., a suit for infringement; or (2) The complaint asserts a claim requiring
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`construction of the Act. 1mage, 459 F.3d 1050 (citing Bassett, 204 F.3d at 349, quotations omitted).
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`The Tenth Circuit has expressly adopted the Second Circuit’s approach to this “difficult
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`jurisdictional issue” and has recognized that the T.B. Harms test “is essentially a reiteration of the
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`‘well-pleaded complaint’ rule.” Id. at 1051 (citing Scholastic Entm’t, Inc. v. Fox Entm’t, 336 F.3d
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`982, 986 (9th Cir. 2003)).
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`In reaching the decision in T.B. Harms, Judge Friendly undertook a detailed analysis of
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`decisions in which the United States Supreme Court has given a narrow meaning to the language
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`“arising under” in statutes defining the jurisdiction of federal district courts. See T.B. Harms, 339
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`F.2d at 825-27. Judge Friendly determined that “cases dealing with statutory jurisdiction over
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`patents and copyrights have taken the same conservative line.” Id. at 826. In New Marshall Engine
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`Co. v. Marshall Engine Co., 223 U.S. 473, 478, 32 S.Ct. 238, 239, 56 L.Ed. 513 (1912), the U.S.
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`Supreme Court stated that “[f]ederal courts have exclusive jurisdiction of all cases arising under the
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`patent laws, but not of all questions in which a patent may be the subject-matter of the controversy.
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`For courts of a state may try questions of title, and may construe and enforce contracts relating to
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`patents. Wade v. Lawder, 165 U.S. 624, 627, 41 L.Ed. 852, 17 Sup.Ct.Rep. 425.” T.B. Harms, 339
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`F.2d at 826.
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`Judge Friendly reasoned that “the federal grant of a copyright has not been thought to infuse
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`with any national interest a dispute as to ownership or contractual enforcement turning on the facts
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`or on ordinary principles of contract law.” Id. An expansive reading of the provisions conferring
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`exclusive federal jurisdiction with respect to patents and copyrights has been disfavored and “would
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`entail depriving the state courts of any jurisdiction over matters having so little federal significance.”
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`Id. While federal copyright law authorizes an assignment of a copyright by written instrument, it
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`does not “specify a cause of action to fix the locus of ownership” of copyrights. Id. at 827.
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`C. Application of the T.B. Harms Test
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`With respect to the first prong of the T.B. Harms test, it is clear that Rogers has not brought
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`a claim for copyright infringement and has not sought a remedy expressly granted by the Copyright
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`Act. As noted, Rogers does not allege that the defendants have unlawfully copied, distributed,
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`reproduced or converted the intellectual property. Rogers even states that SolarWinds’s use of the
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`intellectual property is and always has been authorized. Rogers’s claims are instead focused on his
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`rights as a purported co-owner of the intellectual property to receive an accounting and share in the
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`proceeds derived from the works. “A co-owner of a copyright cannot be liable to another co-owner
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`for infringement of the copyright.” Oddo v. Ries, 743 F.2d 630, 632-33 (9th Cir. 1984) (citations
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`omitted). “Rather, each co-owner has an independent right to use or license the use of the
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`copyright.” Id. at 633 (citations omitted). “A co-owner of a copyright must account to other co-
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`owners for any profits he earns from licensing or use of the copyright.” Id. (citations omitted); see
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`also Goodman v. Lee, 78 F.3d 1007, 1012 (5th Cir. 1996). Notably, federal copyright law, although
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`recognizing jointly owned copyrights and inheritance of rights, is silent as to the law governing joint
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`ownership. Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik, 295 F.3d 59, 64 (1st
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`Cir. 2002) (citing H.R. Rep. No. 94-1476, at 121, reprinted in 1976 U.S.C.C.A.N. 5659, 5736
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`(“There is no need for a specific statutory provision concerning the rights and duties of the co-
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`owners of a work; court-made law on this point is left undisturbed.”)).
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`The real issue then lies within the second prong of the T.B. Harms test – i.e. whether Rogers
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`has asserted a claim requiring construction of the Act. Rogers argues that his claims do not require
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`construction of the Act, because his claim of co-ownership is based on the contract between the
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`parties, not the Copyright Act, and is therefore a matter of state contract law. As discussed above,
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`the contract between the parties provides that all intellectual property created by Rogers relating to
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`SolarWinds’s business “shall be owned exclusively by the Company. . . shall be deemed ‘works
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`made for hire’ and the Company shall be deemed the co-author thereof.” The contract does not
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`define or otherwise explain the meaning of “works made for hire” or “co-author.” In addition, the
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`contract does not incorporate or even reference the Copyright Act, although the term “works made
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`for hire” is a term of art within the Copyright Act. The defendants argue that interpretation of the
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`contract requires construction of the “works for hire” provision of the Act, and as a result, the
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`second prong of the T.B. Harms test is satisfied. For the reasons discussed below, the court
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`disagrees.
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`Cases such as this one, where the plaintiff asserts contractual and other state law claims
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`based on ownership of a copyright, pose “among the knottiest procedural problems in copyright
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`jurisprudence.” Bassett, 204 F.3d at 347 (quoting 3 Melville B. Nimmer & David Nimmer, Nimmer
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`on Copyright § 12.01[A], at 12-4 (1999)). “[F]ederal courts walk a fine line between usurping the
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`power of the state courts and providing redress for copyright infringement.” 1mage, 459 F.3d at
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`1050, n. 7 (quoting Scholastic Entm’t, 336 F.3d at 985-86).
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`In Ausherman v. Stump, 643 F.2d 715, 718 (10th Cir. 1981), the Tenth Circuit Court of
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`Appeals stated that “where an action is brought on a contract either to enforce the contract, or to
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`annul it, the action arises on or out of the contract, and not under the patent laws, even though the
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`contract concerns a patent right.”3 Similarly, in Jasper v. Bovina Music, Inc., 314 F.3d 42, 46 (2d
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`Cir. 2002), the court stated “if the case concerns a dispute as to ownership of a copyright, and the
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`issue of ownership turns on the interpretation of a contract, the case presents only a state law issue.”
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`See also Royal v. Leading Edge Products, Inc., 833 F.2d 1 (1st Cir. 1987) (assertions growing out
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`of purported contract rights “arise under” state law); 13B Charles Alan Wright, et al., Federal
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`Practice & Procedure § 3582 (A suit on a contract does not arise under the copyright laws even
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`though a copyright may have been the subject matter of the contract, although there can be a
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`different result if the case raises an important issue of interpretation of the Copyright Act).
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`The gravamen of Rogers’s copyright-related claims in this case is his assertion that he is a
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`co-owner of the computer software and other technology created during his employment at
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`SolarWinds, and therefore he is entitled to an accounting and half the profits realized from the
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`works. Rogers’s claim of ownership is derived solely from his alleged contractual rights. Rogers
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`does not base his claims on rights drawn from federal copyright laws. As noted above, assertions
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`growing out of contract rights generally arise under state law, even if the contract concerns a
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`3 The Ausherman decision was recognized with approval by the Tenth Circuit Court of Appeals in
`1mage, 459 F.3d 1044, 1051, fn. 9, and found to be consistent with the Second Circuit’s test in T.B.
`Harms.
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`copyright, especially where the issue of ownership turns on the interpretation of a contract. Here,
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`Rogers’s claims ultimately turn on the interpretation of the written employment agreement between
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`the parties – Did the parties agree that they would be co-authors and co-owners of the work?
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`However, even if the case arises directly under the law of contracts, the court must still
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`determine whether “construction” of the Copyright Act is necessary to resolve the dispute or
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`whether the case raises an important issue of interpretation of the Act. The contract, as noted above,
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`states that the intellectual property “shall be deemed ‘works made for hire’ and the Company shall
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`be deemed the co-author thereof.” The court agrees with the defendants that a reading of the “works
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`made for hire” provision in the Copyright Act is helpful, if not necessary, to an understanding of this
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`rather ambiguous contract. For example, the Copyright Act states that copyright ownership vests
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`initially in the author of the works. 17 U.S.C. § 201(a). In the case of “works made for hire,”
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`however, the employer is considered the author of the works, and therefore owns all the rights
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`comprised in the copyright, “unless the parties have expressly agreed otherwise in a written
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`instrument signed by them.” 17 U.S.C. § 201(b). “Works made for hire” are defined as works
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`“prepared by an employee within the scope of his or her employment.” 17 U.S.C. § 101.
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`In short, the Copyright Act provides that an employer is considered the author and owner of
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`“works made for hire” unless the parties otherwise agree in writing. Here, Rogers admits that the
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`software and technology was created during the course of his employment and are therefore
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`considered “works made for hire.” Rogers further admits that ownership would have inured to his
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`employer but for the parties’ written agreement stating otherwise. Rogers contends that the contract
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`establishes that he and SolarWinds are co-authors and co-owners of the intellectual property. Based
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`on these allegations, the court finds that application of the Copyright Act to the contract barely
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`advances, and certainly does not resolve, Rogers’s claims. Applying the Act simply informs the
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`court that SolarWinds and Rogers may agree in writing as to the authorship and ownership of any
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`works created during the scope of Rogers’s employment. In fact, application of the Act reiterates
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`that the core issue in this case is whether the parties agreed to be co-authors and co-owners of the
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`works. This is a matter of contract law.
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`The court further concludes that, under the circumstances of this case, application of the Act
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`does not constitute “construction of the Act” within the meaning of the T.B. Harms test. In reaching
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`the second component of the T.B. Harms test, Judge Friendly stated that “an action ‘arises under’
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`the Copyright Act if and only if the complaint. . . asserts a claim requiring construction of the Act,
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`as in De Sylva.” T.B. Harms, 339 F.2d at 828 (emphasis added). This is not a case like De Sylva.
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`De Sylva v. Ballentine involved a dispute over ownership of copyright renewal terms. 351
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`U.S. 570, 76 S.Ct. 974, 100 L.Ed. 1415 (1956). The court exercised jurisdiction due to the
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`existence of “two major questions of construction of the Copyright Act.” T.B. Harms, 339 F.2d at
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`827. Particularly, resolution of the dispute in De Sylva required the court to determine (i) whether
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`an illegitimate child is within the meaning of “children” in the copyright renewal section (then § 24)
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`of the Copyright Act, and (ii) whether copyright renewal rights belonged exclusively to the widow
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`of the copyright author, or were to be shared by the widow and children under § 24 of the Act. De
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`Sylva, 351 U.S. at 572-73. Unlike the case at hand, De Sylva required the court to construe, not
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`simply reference or apply, the Copyright Act and to resolve important questions of statutory
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`interpretation. The well-pleaded complaint in this case (and even the defenses, though irrelevant)
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`presents no need to resolve any issues of interpretation of the Act.
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`The court in Jasper v. Bovina Music, Inc., 314 F.3d 42 (2d Cir. 2002) considered a similar
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`question of jurisdiction. Although the parties did not dispute that federal jurisdiction existed in that
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`case, the Second Circuit Court of Appeals raised the issue sua sponte. One key issue in the case was
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`whether an agreement between the parties constituted a “writing” within the meaning of section
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`204(a) of the Copyright Act. Specifically, there were questions as to (i) whether the agreement
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`could constitute a “writing” before it was signed by the alleged copyright assignors, and (ii) whether
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`an addendum agreeing to a contract that purported to transfer ownership of a copyright amounted
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`to a “writing” within section 204(a).
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`The court in Jasper held that the questions under the federal Copyright Act were sufficient
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`to invoke federal jurisdiction. In reaching its holding, the court was careful to point out that the case
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`was a “rare contract interpretation case” that presented “a substantial issue as to whether the contract
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`qualifies as a section 204(a) writing.” 314 F.3d at 47. The court stated that “[i]n most cases, there
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`will be no doubt that the contract is a section 204(a) writing, and the only substantial issue will be
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`contract interpretation.” Id. The court warned that “almost every case involving contract
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`interpretation, appropriate for state court determination, could be recharacterized as a case
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`appropriate for a federal court simply by framing the issue to be whether the disputed contract
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`qualified as a writing within the meaning of section 204(a).” Id. However, the need for
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`interpretation of a contract does not necessarily mean that there is a bona fide issue as to whether
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`the contract constitutes a writing. Id. Unlike this case, Jasper was a “rare” contract interpretation
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`case that presented a substantial and bona fide issue under the Act. Id. Applying the well-pleaded
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`complaint rule, the present case does not raise a substantial and bona fide question under the
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`Copyright Act.
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`Finally, the court notes that the parties have referenced numerous decisions concerning
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`disputes over ownership interests in copyrighted work and federal question jurisdiction. This court
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`has carefully reviewed the authorities and finds they are consistent with the court’s conclusion in
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`this case. The initial appearance of conflict among those cases – as some courts determined federal
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`question jurisdiction existed and others did not – is explained by classifying the cases as either (i)
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`those in which the plaintiff’s purported ownership rights in copyrighted work were derived under
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`the Copyright Act itself, or (ii) those in which the plaintiff’s ownership rights were derived from a
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`contract. Generally, those falling within the first category were found to arise under the Copyright
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`Act and confer federal question jurisdiction. Those within the second category were determined to
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`not arise under the Act, but instead were found to arise under state contract law, and do not confer
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`federal question jurisdiction. As demonstrated above in Jasper, however, there is an exception in
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`the second category of cases where an important question of copyright law is present.
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`In Estate Examinations Co., Inc. v. ECG Enterprises, Inc., 2006 WL 3248003 (E.D.N.Y.
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`Nov. 7, 2006), the court determined that it lacked subject matter jurisdiction and remanded the case
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`to state court. The court stated that “though the facts alleged in the complaint state that the source
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`code was created as a ‘work made for hire,’ plaintiff argues it is entitled to the source code under
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`the contract, not as a co-author or co-owner under the ‘work for hire’ doctrine.” 2006 WL 3248003,
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`at *3 (emphasis added). The plaintiff relied exclusively on the contract in an effort to establish
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`ownership. Id.
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`In RBM Technologies, Inc. v. Lash, 2004 WL 1809867 (D. Mass. Aug. 13, 2004), the
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`plaintiff, RBM, brought suit against its former employee, Lash, alleging breach of an employment
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`agreement. One paragraph of the agreement states that any work performed by Lash would be the
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`exclusive property of RBM. Lash claimed the contract was void because RBM failed to fulfill
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`Case 4:07-cv-00704-GKF-PJC Document 45 Filed in USDC ND/OK on 07/21/08 Page 14 of 22
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`certain conditions precedent to its taking effect, and as a result, he is the rightful owner of the
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`copyright to a software program he developed.
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`The court remanded the case to state court, concluding that the case did not assert federal
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`question jurisdiction. 2004 WL 1809867, at *1. The court reasoned that “[a]lthough RBM’s breach
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`of contract claim is related to copyright law insofar as the contract RBM alleges Lash breached
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`purportedly allocated ownership of a copyrighted program, this is not enough to satisfy the ‘arising
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`under’ requirement.” Id., citing Royal v. Leading Edge Prods., 833 F.2d 1, 2 (1st Cir. 1987). The
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`court, applying the Second Circuit’s T.B. Harms test, stated that “the crux of RBM’s claim is
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`whether a valid contract existed between the parties and whether Lash breached that contract.”
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`2004 WL 1809867, at *3. “If, after resolving the essential contract issue, the state court finds it
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`necessary to examine federal copyright law to resolve the dispute, it would certainly be within the
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`court’s purview to do so.” Id. (citations omitted).
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`The RBM court rejected Lash’s arguments that the complaint required construction of the
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`Copyright Act with respect to issues of authorship and/or co-authorship, work-made-for-hire,
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`derivative works and the “federally-granted rights to reproduce copyrighted work and to prepare
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`derivative works therefrom.” Id. at *4. Notably, in rejecting this argument, the court discussed
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`Cuisinarts Corp. v. Appliance Sci. Corp., 1991 WL 329470 (D. Conn. Oct. 30, 1991). In Cuisinarts,
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`the plaintiff alleged that its former employees misappropriated trade secrets related to the design of
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`a coffeemaker. The defendants claimed ownership in the design under the joint-author provisions
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`of the Copyright Act. In Cuisinarts, there was no contract governing ownership; rather, ownership
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`of the design depended on federal copyright principles, and whether the design constituted “works-
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`for-hire.” Contrary to Cuisinarts, the plaintiff in RBM sought (and plaintiff in this case) ownership
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`pursuant to the provisions of a contract.
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`In Merchant v. Levy, 92 F.3d 51 (2d Cir. 1996), the plaintiffs sought a declaration that they
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`were co-owners of the copyright to a song and requested an accounting of royalties. The plaintiffs
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`also alleged copyright infringement, as well as a host of common law and state law claims. The
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`court determined that federal subject matter existed, stating:
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`Unlike a case where a dispute as to copyright ownership arises under
`an agreement between the parties, resolution of which depends on
`state contract law. . . copyright ownership by reason of one’s status
`as a co-author of a joint work arises directly from the terms of the
`Copyright Act itself. Because disposition of this case involves the
`application and interpretation of the copyright ownership provisions.
`. . federal jurisdiction is proper.
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`92 F.3d at 55 (citations and quotations omitted). The plaintiffs in Merchant did not have any
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`contractual rights to ownership; rather, ownership rights were derived solely from the co-author
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`provisions of the Copyright Act. Contrary to Merchant, Rogers’s purported rights as a co-owner
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`are derived solely from the contract, and not from the Copyright Act.
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`In Goodman v. Lee, 78 F.3d 1007, 1011-12 (5th Cir. 1996), the plaintiff claimed she co-
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`authored a song and sued for an accounting and payment of her share of the royalties from the song.
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`The court held that jurisdiction was proper because the plaintiff sought to establish co-authorship
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`under the Copyright Act, which necessitated interpretation of the ownership provisions of the Act.
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`There was no contract in Goodman, and the plaintiff’s rights were asserted purely a matter of
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`statutory law.
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`The defendants in this case rely heavily on Barnhart v. Federated Dept. Stores, Inc., 2005
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`WL 549712 (S.D.N.Y. March 8, 2005) as establishing jurisdiction. In Barnhart, the court denied
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`the plaintiff’s motion to remand because the plaintiff alleged that he was the sole author of
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`Case 4:07-cv-00704-GKF-PJC Document 45 Filed in USDC ND/OK on 07/21/08 Page 16 of 22
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`copyrighted songs and that the songs were not “works for hire.” The complaint required
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`interpretation of the ownership provisions of the Copyright Act. However, the plaintiff alleged no
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`contractual right to c