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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF PENNSYLVANIA
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`GREGORY S. MARKANTONE, DPM, PC.,
`And GREGORY S. MARKANTONE,
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`Plaintiffs,
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`vs.
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`PODIATRIC BILLING SPECIALISTS, LLC,
` Defendant.
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`)
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`) Civil Action No. 14-00215
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`) Chief Magistrate Judge Lisa P. Lenihan
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`MEMORANDUM OPINION
`ON MOTION OF DEFENDANT TO DISMISS UNDER FED. R. CIV. P. 12(b)(6)
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`I. Summation
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`The Motion to Dismiss filed by Defendant The Podiatric Billing Specialists, LLC
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`(“Defendant”) will be granted on substantive grounds,1 as Plaintiff corporation Gregory S.
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`Markantone, DPM., PC., and Plaintiff individual Gregory S. Markantone (collectively,
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`“Plaintiffs”) fail to state a cognizable claim for copyright infringement. See Dawes-Lloyd v.
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`Publish America LLLP, 441 Fed. Appx. 956, 957 (3d Cir. 2011) (holding that a prima facie case
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`of copyright infringement requires a registered copyright under 17 U.S.C. § 411(a) (2012)); 17
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`U.S.C. § 501(a) (2012) (stipulating that alleging the violation of one or more of the “exclusive
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`rights” granted to a copyright owner is essential to a cause of action for copyright infringement).
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`1 See Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154, 169 (2010) (“We thus conclude that §
`411(a)'s [copyright] registration requirement is nonjurisdictional, notwithstanding its prior
`jurisdictional treatment.”)
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`1
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 2 of 10
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`“This case is simply a contractual dispute between Pennsylvania parties.”2 Reply Brief in
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`Support of Defendant’s Motion to Dismiss at ¶ 2 (ECF No. 13). Accordingly, because the
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`parties are not diverse, upon dismissal of the federal question presented by the copyright claim
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`and absent extraordinary circumstances, the Court lacks jurisdiction over all pendent state law
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`claims. Dismissal of the Complaint in its entirety will therefore be granted. Furthermore,
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`Plaintiffs’ Notice of Demand for Data Backup (ECF No. 4) and Motion to Compel Impoundment
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`of Subject-Matter (ECF No. 14) are mooted by grant of Defendant’s Motion to Dismiss.
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`II. Factual and Procedural History
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`
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`Plaintiff corporation is a podiatry medical practice located in Latrobe, Pennsylvania.
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`Plaintiffs’ Complaint (“Complaint”) at ¶¶ 1, 6 (ECF No. 1). Plaintiff individual practices at the
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`same location. Id. at ¶ 1. Plaintiffs make a blanket assertion that they have a “copyright
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`ownership interest” in their “office procedures, patient information, operational rules, and related
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`data” (“Medical Data”). Id. at ¶¶ 6, 8. Defendant, a Pennsylvania limited liability company, is a
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`“professional podiatric billing specialist” that developed companion software and/or “podiatry
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`templates” to facilitate the collection and entry of patient data (“the Content”). Id. at ¶¶ 2, 9.
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`On February 22, 2012, Plaintiff corporation and Defendant entered into a “Content
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`License Agreement” (“the Agreement”). Compl. & Ex. 1 (ECF No. 1-1). Pursuant to the
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`Agreement, Plaintiff corporation purchased (1) a license to use Allscripts MyWay software
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`under the terms of the Allscripts MyWay software license agreement3 and (2) a license to use the
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` 2
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` Plaintiffs’ utterly inapposite Picasso hypothetical fails to persuade this Court otherwise. See
`Plaintiffs’ Brief in Opposition to Defendant’s Motion to Dismiss at ¶¶ 1-2 (ECF No. 8).
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`2
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 3 of 10
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`companion Content developed by the Defendant. Id. at ¶ 1. The license between Plaintiff
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`corporation and Defendant remained in effect only as long as the requisite Allscripts MyWay
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`software remained available. Id. at ¶ 5. Allscripts retired its MyWay software, see Compl. at ¶
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`24 & Ex. 5 at ¶ 1 (ECF No. 1-5), which, in turn, triggered the termination of the Agreement. The
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`Agreement fails to fully address either (a) the extraction of a podiatrist’s Medical Data from
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`Defendant’s proprietary Content or (b) any associated costs has created a contract interpretation
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`dispute between the parties.4
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`In December 2013, Plaintiffs demanded from Defendant the “immediate tender” of the
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`Medical Data, including any content “incorporated with it.”5 See Compl. & Ex. 2 at ¶ 3 (ECF
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`No. 1-2). Defendant maintained that there were problems associated with extracting and
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`3 Allscripts, a third party provider that is not party to the instant litigation, supplied the MyWay
`software.
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` The Agreement’s sole related termination provision reads:
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` 4
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`Upon termination of this License for any reason, [Plaintiff] must cease use of the
`Content, delete the Content from all computers on which the Content was loaded and
`destroy all accompanying written materials provided by Licensor and all copies thereof
`(if any) (except that you will continue to have the right to use content that has been
`incorporated into patient care and billing records prior to the date of termination of this
`License so long as such use otherwise complies with the terms of this License).
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`Compl. & Ex. 1 at ¶ 5 (ECF No. 1-1).
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`Plaintiffs’ pre-litigation correspondence with Defendant frames the issue as a contractual dispute,
`not a copyright infringement claim. See e.g. Compl. & Ex. 4 at ¶¶ 1-2 (ECF No. 1-4) (Plaintiffs’
`Dec. 17, 2013 correspondence to Defendant identifying above as “the exact [contractual] clause
`that is actually at issue”).
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` 5
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` See Compl. & Ex. 2 at ¶ 3 (ECF No. 1-2)(“If [Defendant’s] content is included with the data, so
`be it [.]”).
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`Neither Plaintiffs nor Defendant provide a clear definition of “incorporated” and/or “de-
`incorporated” Content or Medical Data.
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`3
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 4 of 10
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`transferring Plaintiffs’ Medical Data while protecting its proprietary Content. See Compl. & Ex.
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`3 at ¶ 2 (ECF No. 1-3). Plaintiffs aver that Defendant proposed Plaintiffs pay $2000.00 in
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`exchange for the transfer of “deactivat[ed]” database(s) and disavowed any responsibility as to
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`the integrity of the deactivated Content. Id. at ¶ 3.6 Plaintiffs declined the offer. See Compl. &
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`Ex. 2 at ¶¶ 4-5.
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`Plaintiffs filed suit against the Defendant on February 13, 2014. See Compl. Plaintiffs’
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`claim for copyright infringement is premised on Defendant’s “using Plaintiffs [sic] Medical Data
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`in a manner against the directive of Plaintiffs . . . in violation of 17 USC [sic].” Id. at ¶ 33. The
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`Complaint sets forth five additional counts including: Declaratory Relief; Permanent and
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`Temporary Specific Performance/Injunction; Breach of Contract; Tortuous Interference with
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`Contractual Relations; and Tortuous Interference with Prospective Business Advantage. Id. at ¶¶
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`17-31.
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`In response, on April 14, 2014, Defendant filed a motion to dismiss the Complaint in its
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`entirety. See Defendant’s Motion to Dismiss (ECF No. 5). Defendant avers that Plaintiffs fail to
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`state a cognizable copyright infringement claim and, because the parties are not diverse, upon
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`proper dismissal of the federal question presented, this Court lacks jurisdiction over the pendent
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`state law claims. Id.
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`III. Applicable Standard of Review
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`Recently, the United States Court of Appeals for the Third Circuit aptly summarized the
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`standard to be applied in deciding motions to dismiss filed pursuant to Fed. R. Civ. P 12(b)(6):
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` 6
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` This Court notes that Defendant’s proposed deactivated transfer may be composed of little
`more than “patient demographics.” See Compl. & Ex. 3 at ¶ 3 (ECF No. 3) (Defendant’s Dec. 4,
`2013 correspondence to Plaintiffs).
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`4
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 5 of 10
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`Under the “notice pleading” standard embodied in Rule 8 of the
`Federal Rules of Civil Procedure, a plaintiff must come forward
`with “a short and plain statement of the claim showing that the
`pleader is entitled to relief.” As explicated in Ashcroft v. Iqbal, 556
`U.S. 662, 678 (2009), a claimant must state a “plausible” claim for
`relief, and “[a] claim has facial plausibility when the pleaded
`factual content allows the court to draw the reasonable inference
`that the defendant is liable for the misconduct alleged.” Although
`“[f]actual allegations must be enough to raise a right to relief
`above the speculative level,” Bell Atlantic Corp. v. Twombly, 550
`U.S. 544, 555 (2007), a plaintiff “need only put forth allegations
`that raise a reasonable expectation that discovery will reveal
`evidence of the necessary element.” Fowler v. Univ. of Pittsburgh
`Med. Ctr. Shadyside, 578 F.3d 203, 213 (3d Cir. 2009); see also
`Covington v. Int'l Ass'n of Approved Basketball Officials, 710
`F.3d 114, 117–18 (3d Cir. 2013).
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`Thompson v. Real Estate Mortg. Network, ___ F.3d ___, 2014 WL 1317137, *2 (3d Cir. Apr. 3,
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`2014).
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`“In deciding a Rule 12(b)(6) motion, a court must consider only the complaint, exhibits
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`attached to the complaint, matters of public record, as well as undisputedly authentic documents
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`if the complainant’s claims are based upon these documents.” Mayer v. Belichick, 605 F.3d 223,
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`230 (3d Cir. 2010).
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`IV. Analysis
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`A. Failure to State a Copyright Infringement Claim Pursuant to 17 U.S.C. § 411
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`As a threshold matter the Court must address Defendant’s 12(b)(6) motion, and assure
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`that Plaintiffs put forth allegations that raise “a reasonable expectation” that discovery will reveal
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`evidence of the necessary elements of a copyright infringement claim. See Fowler, 578 F.3d at
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`5
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`213.
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 6 of 10
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`To establish a claim for copyright infringement, Plaintiffs must prove: “(1) ownership of a
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`valid copyright; and (2) copying of constituent elements of the works that are original.” Impact
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`Applications, Inc. v. CNS Vital Signs, No. 13-580, 2013 WL 5936422, at *5 (W.D. Pa. 2013)
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`(citing Jackson v. Booker, 465 Fed. Appx. 163, 165 (3d Cir. 2012) (quoting Feist Publ’ns, Inc. v.
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`Rural Tel. Serv., Co., 499 U.S. 340, 361 (1991)). Without evidence of registration, absent
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`certain narrow exceptions inapplicable to the case sub judice,7 a copyright claim does not exist.
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`See Dawes-Lloyd, 441 Fed. Appx. at 957 (“An action for infringement of a copyright may not be
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`brought until the copyright is registered.”). In addition, the allegation of the violation of one or
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`more of the “exclusive rights” granted to a copyright owner is essential to a cause of action for
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`copyright infringement. See 17 U.S.C. § 501(a) (2012). Therefore, where either (a) the disputed
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`material was not registered with the United States Copyright Office, and no exceptions applied,
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`or (b) the copyright owner fails to allege that one or more of their “exclusive rights” were
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`violated, a party fails to state a claim for copyright infringement. Here, even if Plaintiffs meet the
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`registration requirement, which this Court expressly finds they do not, their claim would still fail
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`for want of any alleged violation of a protected right.
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`More specifically, Plaintiffs assert that in accordance with the Supreme Court’s decision
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`in Reed Elsevier Inc. v. Muchnick, 559 U.S. 154 (2010), this Court has subject-matter
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`jurisdiction regardless of whether the Medical Data sought was registered with the United States
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`7 See Reed Elsevier Inc., 559 U.S. at 165 (Section 411(a) “expressly allows courts to adjudicate
`infringement claims involving unregistered works in three circumstances: where the work is not
`a U.S. work, where the infringement claim concerns rights of attribution and integrity under §
`106A, or where the holder attempted to register the work and registration was refused [by the
`United States Copyright Office]. Separately, § 411(c) permits courts to adjudicate infringement
`actions over certain kinds of unregistered works [consisting of sounds, images, or both] where
`the author “declare[s] an intention to secure copyright in the work” and “makes registration for
`the work, if required by subsection (a), within three months after [the work's] first transmission.
`17 U.S.C. §§ 411(c)(1)-(2)”).
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`6
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 7 of 10
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`Copyright Office. See Plaintiffs’ Brief in Opposition to Defendant’s Motion to Dismiss at ¶ 3
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`(ECF No. 8). Plaintiffs further contend that the current claim should be exempted from 17 U.S.C.
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`§ 411(a)’s registration requirement because “substantial justice requires that [the] Plaintiff[s] be
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`afforded the opportunity to register the [Medical Data].” Id. at 4. However, Plaintiffs fail to
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`provide any authority that interprets 17 U.S.C. § 411(a)’s registration requirement as an elective
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`element. It is not.
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`Plaintiffs are correct that failure to register or attempt to register a copyright is a non-
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`jurisdictional question; but it is a substantive question for consideration on challenge, and one
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`which they clearly fail to meet. See Reed Elsevier Inc., 559 U.S. at 162-63 (finding that 17
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`U.S.C. § 411(a)’s registration requirement is a “substantive ingredient” of a copyright
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`infringement claim).8
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`Moreover, even if Plaintiffs owned a copyright or fell within an exception under 17
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`U.S.C. § 411, which this Court expressly finds they do not, Plaintiffs fail to allege an
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`infringement of any of the “exclusive rights” of a copyright owner pursuant to 17 U.S.C. § 106
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`(2012).9 Instead, Plaintiffs have stated that the Defendant is using the Medical Data “against the
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`8 The Court further notes that although Plaintiffs assert a “copyright interest” in the Medical Data
`defined as “office procedures, patient information, operational rules, and related data”, see
`Compl. at ¶ 6, in their pre-litigation correspondence with Defendant, Plaintiffs identified the
`“Medical Data” held by Defendant and to be transferred as Plaintiffs’ “patient care and billing
`records” or “data.” See e.g. Compl. & Ex. 2 at ¶¶ 1-3 (Plaintiffs’ Dec. 2, 2013 correspondence
`referring to the Content at issue as “patient care and billing records” and “medical record data”).
`Cf. Plaintiffs’ Brief in Opposition to Defendant’s Motion to Dismiss at ¶ 7 (“Please return my
`data.”). See also Feist Publ’ns, Inc. v. Rural Tel. Serv., Co., 499 U.S. 340, 343 (1991) (“That
`there can be no valid copyright in facts is universally understood.”). This Court need not base its
`holding on this distinction.
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` 9
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` Under 17 U.S.C. § 106 (2012), “ the owner of [a] copyright …has the exclusive rights to do and
`to authorize any of the following: (1) to reproduce the copyrighted work in copies or
`phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute
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`7
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 8 of 10
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`directive of Plaintiffs”, which infringes upon the Plaintiffs’ “copyright interests” in violation of
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`The United States Copyright Act, 17 U.S.C. §§ 101 – 810 (2012). See Compl. at ¶ 33. The
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`Plaintiffs have provided neither a statue nor meaningful precedent that leads the Court to
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`interpret a failure to follow “the directive” of a copyright owner as an infringement of the
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`copyright owner’s “exclusive rights” pursuant to 17 U.S.C. § 106.10 Because registration of the
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`Medical Data is not alleged, no exception under 17 U.S.C. § 411 applies, and Plaintiffs fail to
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`allege the infringement of one or more “exclusive rights” under 17 U.S.C. § 106, Defendant’s
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`12(b)(6) motion will be granted.
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`B. Lack of Subject Matter Jurisdiction Over the Remaining Claims
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`Defendant seeks the dismissal of the Complaint in its entirety because upon dismissal of
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`the Plaintiffs’ federal copyright claim, this Court lacks subject matter jurisdiction over the
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`remaining state law claims. Defendant’s Memorandum in Support of Motion to Dismiss at ¶¶ 16-
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`17 (ECF No. 6).
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`Article III of the United States Constitution authorizes federal court jurisdiction for suits
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`arising under the laws of the United States. See U.S. Const. art. III, § 2, cl. 1. Congress has
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`copies or phonorecords of the copyrighted work to the public by sale or other transfer of
`ownership, or by rental, lease, or lending; (4) in the case of literary, musical, dramatic, and
`choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform
`the copyrighted work publicly; (5) in the case of literary, musical, dramatic, and choreographic
`works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images
`of a motion picture or other audiovisual work, to display the copyrighted work publicly; and (6)
`in the case of sound recordings, to perform the copyrighted work publicly by means of a digital
`audio transmission.”
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`10 Nor can a Plaintiff fabricate a federal copyright action by purporting to bring a claim based on
`Defendant’s copyright. See Plaintiffs’ Brief in Opposition to Defendant’s Motion to Dismiss at ¶
`24. Defendant’s podiatry templates may constitute “original data”, but Plaintiffs’ raw data does
`not.
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`8
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 9 of 10
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`authorized the federal courts to exercise “federal question” jurisdiction in 28 U.S.C. § 1331
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`(2012). “[I]f it appears that all federal claims are subject to dismissal, the court should not
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`exercise jurisdiction over remaining claims unless ‘extraordinary circumstances’ exist.” City of
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`Pittsburgh Comm’n on Human Rels v. Key Bank USA, 163 Fed. Appx. 163, 166 (3d Cir. 2006)
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`(citing Tully v. Mott Supermarkets, Inc., 540 F.2d 187, 195 (3d Cir. 1976)). See also Tully, 540
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`F.2d at 196 (finding that “substantial time devoted to the case” and “expense incurred by the
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`parties” did not constitute “extraordinary circumstances”).
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`Alternatively, the United States Constitution grants federal courts jurisdiction over suits
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`arising between citizens of different states, see U.S. Const. art. III, § 2, cl. 1, which Congress
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`codified in 28 U.S.C. § 1332(a)(1) (2012).
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`Upon dismissal of Plaintiffs’ copyright claim and absent federal diversity jurisdiction
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`pursuant to 28 U.S.C. § 1332(a)(1), all remaining state law claims will be dismissed consistent
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`with the Third Circuit’s ruling in Cindrich v. Fisher, 341 Fed. Appx. 780, 789 (3d. Cir. 2009)
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`(“[I]n most cases, pendent state law claims should be dismissed without prejudice ‘where the
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`claim over which the district court has original jurisdiction is dismissed before trial.’”) (citing
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`Borough of West Mifflin v. Lancaster, 45 F.3d 780, 788 (3d. Cir. 1995)).
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`The Court agrees with Plaintiffs that “a crux of the dispute” is the parties’ diverging views
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`of a contract.11 Plaintiffs’ Brief in Opposition to Defendant’s Motion to Dismiss at ¶ 17. A
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`contractual dispute between non-diverse parties is misplaced in this Court.12
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`11 Indeed, any question of the costs or procedures associated with the Agreement’s termination
`provision is one of contract.
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`12 A breach of contract claim regarding the “patient care and billing records” to which Plaintiffs
`are entitled, inclusive of “incorporated” content, if Plaintiffs are not in possession of them, is
`properly placed in the State court. The arties’ filings and correspondence support this Court’s
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`9
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`Case 2:14-cv-00215-LPL Document 17 Filed 06/09/14 Page 10 of 10
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`V. Conclusion
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`For the reasons set forth above, this Court will enter an Order consistent with this
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`Memorandum Opinion granting Defendant’s Motion to Dismiss (ECF No. 5). Plaintiffs’ Notice
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`of Demand for Data Backup (ECF No. 4) and Motion to Compel Impoundment of Subject-
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`Matter (ECF No. 14) are mooted.
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`_____________________________________
`LISA PUPO LENIHAN
`United States Chief Magistrate Judge
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`Dated: June 9, 2014
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`finding. See e.g. Compl. & Ex. 1; Compl. & Ex. 2 at ¶ 5 (highlighting correspondence between
`Plaintiffs and Defendants regarding frustration of “contract performance”); Plaintiffs’ Brief in
`Opposition to Defendant’s Motion to Dismiss at ¶ 6 (emphasizing Plaintiffs’ belief in a
`“continued breach of performance by Defendant”).
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`10