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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
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`MICHAEL MASSINGILL,
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`Plaintiff,
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`CIVIL ACTION NO. 3:08-cv-0091-M
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`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`§
`
`
`v.
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`STREAM, LTD., ROB SNYDER, CHRIS
`DOMHOFF, PIERRE KOSHAKJI, ALEX
`RODRIGUEZ, and DARRIN
`PFANNENSTIEL,
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`Defendants.
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`MEMORANDUM OPINION AND ORDER
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`Before the Court are (1) Defendants’ Motion to Dismiss, or in the alternative, for
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`Judgment on the Pleadings [Docket Entry #34] and (2) Defendants’ Motion for Summary
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`Judgment [Docket Entry #35]. For the reasons explained below, Defendants’ Motion to Dismiss
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`is GRANTED. Defendants’ Motion for Summary Judgment is DENIED.
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`BACKGROUND AND PROCEDURAL HISTORY
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`Plaintiff Michael Massingill is a citizen of Texas and a former Director of Information
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`Technology for Defendant Stream Gas & Electric, Ltd. (incorrectly named as “Stream Energy,
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`Ltd.”). Stream first hired Massingill as an independent contractor in July 2004, and subsequently
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`hired him as its Director of Information Technology in February 2005. Stream is a retail
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`electrical provider that provides electricity and electricity services to consumers throughout
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`Texas. Software programs are central to Stream’s provision of its core services.
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`Massingill took part in developing a software program known as the Arsenal Customer
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`Information System (“Arsenal”), which facilitates Stream’s operations by tracking customer
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`1
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`Case 3:08-cv-00091-M Document 53 Filed 10/01/09 Page 2 of 10 PageID 565
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`accounts and usage, enabling customer billing, and providing customer support capabilities.
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`Massingill alleges that he developed this program before his association with Stream. Stream
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`argues that Arsenal was developed in the scope and course of Massingill’s employment with
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`Stream, or alternatively, as “work for hire” while he was an independent contractor for Stream.
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`Massingill resigned his position with Stream in the spring of 2006. There was at that time no
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`discussion between Massingill and Stream about Massingill’s claiming an ownership interest in
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`Arsenal.
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`In October 2007, Stream received notice that Massingill disputed Stream’s ownership of
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`Arsenal. On December 21, 2007, Stream filed suit in state court seeking a declaratory judgment
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`as to its rights in Arsenal. Massingill filed suit in federal court on January 22, 2008, claiming
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`copyright infringement by Stream, and removed Stream’s lawsuit to federal court, where the two
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`cases were consolidated with Massingill as the plaintiff.
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`Stream filed a First Amended Answer and Counterclaims requesting declarations that it
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`owned the copyright in Arsenal and that it did not infringe any copyright of Massingill’s, and
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`asserting various state law claims that are not before the Court on the subject motions. On July
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`2, 2009, Stream moved to dismiss Massingill’s copyright claim for lack of subject matter
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`jurisdiction, or for judgment on the pleadings, and also moved for partial summary judgment on
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`Massingill’s copyright infringement claim and on its declaratory judgment counterclaims.
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`I.
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`Rule 12(b)(1) Motion to Dismiss
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`ANALYSIS
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`Stream moves to dismiss Massingill’s copyright infringement claim under Federal Rule
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`of Civil Procedure 12(b)(1) for lack of subject matter jurisdiction, or alternatively, for judgment
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`on the pleadings under Rule 12(c), or for partial summary judgment under Rule 56. The Court
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`2
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`Case 3:08-cv-00091-M Document 53 Filed 10/01/09 Page 3 of 10 PageID 566
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`finds that it does not have subject matter jurisdiction over Massingill’s copyright claim, and
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`Stream’s Rule 12(b)(1) motion is therefore GRANTED. Stream’s alternative motions relating to
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`Massingill’s claim are therefore DENIED as moot.
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`Lack of subject matter jurisdiction can be raised by a party, or sua sponte by the court, at
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`any stage in the litigation.1 If the court determines that it lacks subject matter jurisdiction, it
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`must dismiss the action.2 The burden of establishing subject matter jurisdiction rests on
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`Massingill, as the party invoking federal jurisdiction.3 In considering a Rule 12(b)(1) motion to
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`dismiss for lack of subject matter jurisdiction, a court may evaluate: “(1) the complaint alone, (2)
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`the complaint supplemented by undisputed facts evidenced in the record, or (3) the complaint
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`supplemented by undisputed facts plus the court’s resolution of disputed facts.”4 All factual
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`allegations in the complaint must be accepted as true.5
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`Massingill’s Complaint alleges, as the sole cause of action against Stream, a claim for
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`copyright infringement related to Arsenal. However, Massingill’s pleadings do not sufficiently
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`allege that he has registered a copyright for Arsenal with the United States Copyright Office.
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`The Copyright Act of 1976 states that “no civil action for infringement of the copyright
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`in any United States work shall be instituted until preregistration or registration of the copyright
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`claim has been made in accordance with this title.”6 Thus, “registration with the copyright office
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`is a jurisdictional prerequisite to filing a copyright infringement suit.”7 A copyright registration
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`1 See Arbaugh v. Y&H Corp., 546 U.S. 500, 506 (2006); see also Sefton v. Webbworld, Inc., 2001 U.S. Dist. LEXIS
`19286, at *7-8 (N.D. Tex. Nov. 26, 2001) (Boyle, J.) (re-examining a plaintiff’s standing to bring a copyright
`infringement suit because of an inconsistent date on the face of plaintiff’s certificate of copyright registration,
`discovered by the court during its review of a motion for summary judgment).
`2 Fed. R. Civ. P. 12(h)(3).
`3 See St. Paul Reinsurance Co. v. Greenberg, 134 F.3d 1250, 1253 (5th Cir. 1998) (citation omitted).
`4 Den Norske Stats Oljeselskap As v. HeereMac v.o.f., 241 F.3d 420, 424 (5th Cir. 2001) (citation omitted).
`5 Id. at 424.
`6 17 U.S.C. § 411(a) (2006).
`7 Creations Unlimited v. McCain, 112 F.3d 814, 816 (5th Cir. 1997) (emphasis original); accord Positive Black Talk
`Inc. v. Cash Money Records, Inc., 394 F.3d 357, 365 (5th Cir. 2004).
`3
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`is effective “the day on which an application, deposit and fee . . . have all been received in the
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`Copyright Office.”8 Failure to establish this prerequisite renders a plaintiff’s copyright
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`infringement claim open to dismissal for lack of subject matter jurisdiction.9
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`Although some circuits require that a plaintiff actually present a certificate obtained from
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`the Copyright Office before bringing suit, the Fifth Circuit requires only that the Copyright
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`Office actually receive the application, deposit, and fee before a plaintiff files an infringement
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`action.10 Proof of actual receipt is critical to the Court’s subject matter jurisdiction, because the
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`plaintiff may retroactively cure the jurisdictional defect by amending his complaint to plead
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`receipt by the Copyright Office.11 Massingill’s citations to 17 U.S.C. § 411(a) and to case law
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`do not support his argument that the jurisdictional requirements of 17 U.S.C. § 411(a) are met
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`upon mailing the application, deposit and fee to the Copyright Office.12
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`Massingill has failed to meet his burden of establishing subject matter jurisdiction by
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`showing that the Copyright Office actually received his application, deposit of the work and fee.
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`In assessing the sufficiency of proof of actual receipt where a certificate of registration is not
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`available, district courts have required proof of either a receipt from the Copyright Office itself
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`8 17 U.S.C. § 410(d) (2006).
`9 See McCain, 112 F.3d at 816; Sefton, 2001 U.S. Dist. LEXIS at *8.
`10 Positive Black Talk, 394 F.3d at 365; Geoscan, Inc. of Tex. v. Geotrace Techs., Inc., 226 F.3d 387, 393 (5th Cir.
`2000) (“We have previously held that a plaintiff has complied with all statutory formalities for copyright registration
`when the Copyright Office receives the plaintiff’s application for registration, fee, and deposit.” (citing Lakedreams
`v. Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991)); Apple Barrel Prods, Inc. v. R. D. Beard, 730 F.2d 384, 386-87 (5th
`Cir. 1984) (“In order to bring suit for copyright infringement, it is not necessary to prove possession of a registration
`application. One need only prove payment of the required fee, deposit of the work in question, and receipt by the
`Copyright Office of a registration application.” (citing 2 Nimmer on Copyright § 7.16[B][1])); Busch v. Williams,
`2007 U.S. Dist. LEXIS 53328, at *5-6 (N.D. Tex. Feb. 7, 2007) (Fitzwater, J.) (“The Fifth Circuit requires that the
`Copyright Office actually receive the application, deposit, and fee before a plaintiff files an infringement action.”
`(citation and internal quotation marks omitted)).
`11 See Positive Black Talk, 394 F.3d at 365-66 (citations omitted).
`12 See Massingill’s Response to Stream’s Motion to Dismiss at 2; Positive Black Talk, 394 F.3d at 367 (“[17 U.S.C.]
`§ 411 has a substantive component and a timing component . . . . [t]he substantive requirement here was satisfied
`(because [plaintiff] filed a registration application, deposit, and fee), but the timing element was not (because the
`Copyright Office received the materials after [the plaintiff] filed suit).”).
`4
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`or a delivery receipt from a postal carrier.13 A mere recitation that the plaintiff mailed the
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`application, fee and work to the Copyright Office is insufficient without proof of the Copyright
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`Office’s actual receipt of these materials.14
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`Massingill has produced no file-stamped copy of his application, no certified mail receipt,
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`no copy of transmittal correspondence, no copy of a post-marked envelope in which the
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`application materials were sent, nor any other evidence that would prove that the Copyright
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`Office received his application. The only evidence offered by Massingill is the declaration of his
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`attorney, who states that he deposited the registration materials and a check for the filing fee in
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`the U.S. mail, addressed to the Copyright Office, and that, according to the bank, the check was
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`cashed by some unidentified person.15 However, this is insufficient to constitute evidence that
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`the Copyright Office received the application, fee and work.
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`Having failed to establish that the Copyright Office received the application, fee, and
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`work that he purportedly mailed, Massingill has not met the statutory prerequisite to filing a
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`copyright infringement claim. The Court therefore lacks subject matter jurisdiction over his
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`claim, and it is hereby DISMISSED. The time to amend lapsed more than six months ago. It is
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`doubtful that Massingill can convince the Court to modify that date, given the trial setting in
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`November, but he may seek leave if he wishes.
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`II.
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`Sanctions
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`In its Reply to Massingill’s Response to its Motion to Dismiss, Stream asks the Court to
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`13 See, e.g., Yash Raj Films (USA) Inc. v. Sur Sangeet Video Elecs. Inc., 2008 U.S. Dist. LEXIS 14951, at *3 (D.N.J.
`Feb. 28, 2008) (providing copies of application, transmittal correspondence to the Copyright Office, Federal Express
`airbills and delivery receipts to the Copyright Office, and copies of cancelled checks); Prunte v. Universal Music
`Group, 484 F. Supp. 2d 32, 39 (D.D.C. 2007) (e-mail response from the Copyright Office noting the receipt of
`plaintiff’s application and fees); Wilson v. Mr. Tee’s, 855 F. Supp. 679, 682-83 (D.N.J. 1994) (receipt from
`Copyright Office indicating it had received application, deposit and fee).
`14 See Busch, 2007 U.S. Dist. LEXIS at *6 (finding insufficient to establish jurisdiction a complaint suggesting only
`that the plaintiff filed a registration application with the Copyright Office).
`15 See Massingill’s Response to Stream’s Motion to Dismiss at Ex. B.
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`Case 3:08-cv-00091-M Document 53 Filed 10/01/09 Page 6 of 10 PageID 569
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`impose Rule 11 sanctions on Massingill for Massingill’s failure to disclose the registration as
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`required by Rule 26(a). A motion for sanctions for such failures must be made under Rule 37,
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`but Stream does not do so.16 Stream’s request is therefore DENIED without prejudice.
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`III. Motion for Summary Judgment
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`Stream counterclaims for a declaratory judgment of ownership of the Arsenal copyright,
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`or in the alternative, for a declaratory judgment of non-infringement upon Massingill’s alleged
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`copyright. Stream bases its counterclaim on the argument that Massingill was an employee of
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`Stream, which therefore owns the rights to Arsenal under the “work for hire” doctrine of the
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`Copyright Act.17
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`Summary judgment is warranted “if the pleadings, the discovery and disclosure materials
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`on file, and any affidavits show that there is no genuine issue as to any material fact and that the
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`movant is entitled to judgment as a matter of law.”18 The moving party bears the initial burden
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`of identifying those portions of the record that demonstrate the absence of a genuine issue of
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`material fact.19 Once the movant carries its initial burden, the burden shifts to the nonmovant to
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`show that summary judgment is inappropriate, by designating specific facts beyond the pleadings
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`that prove the existence of a genuine issue of material fact.20 In determining whether genuine
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`issues of material fact exist, factual controversies are construed in the light most favorable to the
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`nonmovant, but only if both parties have introduced evidence showing that a controversy
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`exists.21
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`16 See Fed. R. Civ. P. 11(d) (“This rule does not apply to disclosures and discovery requests, responses, objections,
`and motions under Rules 26 through 37.”); Fed. R. Civ. P. 37(c).
`17 See 17 U.S.C. § 201(b) (2006).
`18 Fed. R. Civ. P. 56(c); Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 883-84 (1990).
`19 See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Lynch Props., Inc. v. Potomac Ins. Co., 140 F.3d 622, 625
`(5th Cir. 1998) (citing Celotex, 477 U.S. at 325).
`20 See Fed. R. Civ. P. 56(e)(2); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Fields
`v. City of S. Houston, 922 F.2d 1183, 1187 (5th Cir. 1991).
`21 Lynch Props., 140 F.3d at 625 (citation omitted).
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`6
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`Case 3:08-cv-00091-M Document 53 Filed 10/01/09 Page 7 of 10 PageID 570
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`The Copyright Act of 197622 provides that copyright ownership of a work protected
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`thereunder “vests initially in the author or authors of the work.”23 However, in the case of a
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`work made for hire, “the employer or other person for whom the work was prepared is
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`considered the author . . . , and, unless the parties have expressly agreed otherwise in a written
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`instrument signed by them, owns all of the rights comprised in the copyright.”24
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`Section 101 of the Copyright Act provides that a work is “made for hire” when it is
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`either:
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`“(1) a work prepared by an employee within the scope of his or her employment;
`or (2) a work specially ordered or commissioned for use as a contribution to a
`collective work, as a part of a motion picture or other audiovisual work, as a
`translation, as a supplementary work, as an instructional text, as a test, as answer
`material for a test, or as an atlas, if the parties expressly agree in a written
`instrument signed by them that the work shall be considered a work made for
`hire.”25
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`Stream does not claim that Arsenal satisfies the terms of § 101(2). Quite clearly, it does
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`not. This software program does not fit within any of the nine categories of “specially ordered or
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`commissioned” works enumerated in that subsection. Even if Arsenal did fit into one of these
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`nine categories, the parties must “expressly agree in a written instrument signed by them that the
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`work shall be considered a work made for hire.”26 In support of its position that Massingill’s
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`work on Arsenal before becoming an employee was work made for hire, Stream attaches an
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`“Offer of Employment” to its Motion for Summary Judgment that specifically states that
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`Massingill developed Arsenal for Stream on a “for hire” basis.27 But taking the uncontroverted
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`statements in Massingill’s filings to be true, that Offer of Employment was never signed by
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`22 17 U.S.C. § 101 et seq.
`23 17 U.S.C. § 201(a) (2006).
`24 17 U.S.C. § 201(b); see Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 737 (1989).
`25 17 U.S.C. § 101 (2006).
`26 Id.
`27 See Stream’s Motion for Summary Judgment, App. at 73.
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`Case 3:08-cv-00091-M Document 53 Filed 10/01/09 Page 8 of 10 PageID 571
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`either party.28 Arsenal thus does not fulfill either of the two necessary prongs of § 101(2).
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`The dispositive inquiry in this case therefore is whether Arsenal is “a work prepared by
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`an employee within the scope of his or her employment” under § 101(1). The issue of whether
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`an individual was an employee or an independent contractor for purposes of the work for hire
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`doctrine is a question of law.29 In the absence of statutory definitions for the words “employee”
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`or “scope of employment,” the Supreme Court has held that the term “employee” and “scope of
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`employment” carry their common agency law meanings.30
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`Stream lists and discusses thirteen factors identified by the Supreme Court as relevant
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`under common law agency principles in deciding whether the hired party is an employee or an
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`independent contractor.31 Based on the evidence it submitted on these factors, Stream argues
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`that Massingill was an employee of Stream as a matter of law, starting in February 2005.
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`Massingill fails to refute any of the evidence presented by Stream in support of its position that
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`Massingill was an employee. Rather, Massingill makes contradictory arguments (presumably in
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`the alternative) that Stream failed to perform its obligations under the alleged employment
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`contract,32 that Massingill was hired as an IT Director to perform tasks unrelated to the Arsenal
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`software project,33 and that neither Stream nor Massingill ever signed Massingill’s Offer of
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`Employment.34 These arguments are insufficient to controvert Stream’s evidence and arguments
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`that Massingill was an employee of Stream, and the Court finds that Massingill was an employee
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`of Stream starting in February 2005.
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`However, there remains an issue of material fact as to when Arsenal was developed. If
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`28 See Massingill’s Response to Stream’s Motion for Summary Judgment at 9.
`29 See Penn v. Howe-Baker Eng’rs, Inc., 898 F.2d 1096, 1102 at n.5 (5th Cir. 1990).
`30 See Reid, 490 U.S. at 739-40 (citing, inter alia, Easter Seal Soc’y for Crippled Children & Adults of La., Inc. v.
`Playboy Enterprises, 815 F.2d 323 (5th Cir. 1987)).
`31 See Stream’s Motion for Summary Judgment at 8; Reid, 490 U.S. at 751-52 (citations omitted).
`32 See Massingill’s Response to Stream’s Motion for Summary Judgment at 6.
`33 See id. at 8.
`34 See id. at 9.
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`8
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`Case 3:08-cv-00091-M Document 53 Filed 10/01/09 Page 9 of 10 PageID 572
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`Arsenal was created and completed in the period between Massingill’s initial hiring as an
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`independent contractor in July 2004 and his subsequent hiring as an employee in February 2005,
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`Arsenal does not fit into either of the statutory definitions of a “work made for hire,” and Stream
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`cannot claim ownership of the copyright based on that doctrine. Massingill claims that he was
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`hired first as an independent contractor in relation to the development of Arsenal, and was later
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`hired as an IT Director to perform tasks unrelated to Arsenal.35 Stream claims that Massingill’s
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`role as IT Director included the development of Arsenal.36 Viewing the facts in the light most
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`favorable to nonmovant Massingill, the Court finds that there is a genuine issue of material fact
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`as to whether Arsenal had been essentially completed while Massingill was an independent
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`contractor, or whether it continued to be developed during his employment with Stream such that
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`it would constitute a “work for hire” under the Copyright Act. Stream’s counterclaim for a
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`declaratory judgment of ownership of the Arsenal copyright is therefore DENIED.
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`Stream requests, in the alternative, a declaratory judgment of non-infringement of
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`Massingill’s alleged copyright. In his Response, Massingill refers to an Executive Employment
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`Agreement and a Software License that are not in evidence.37 He states: “It is undisputed that
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`the software at issue is intangible property licensed via the Software License.”38 He goes on to
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`claim that the Software License “governs the ownership of the software at issue.”39 Massingill
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`also refers to an Executive Employment Agreement that purportedly states that “the intangible
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`property licensed via the Software License by Employee to Employer” does not belong to
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`Stream.
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`35 See Massingill’s Response to Stream’s Motion for Summary Judgment at 8.
`36 See Stream’s Motion for Summary Judgment at 3.
`37 Massingill refers to “EXHIBIT A” and “EXHIBIT B” when citing the Executive Employment Agreement and the
`Software License, but Exhibits A and B of his Response are his copyright application and his attorney’s declaration,
`respectively, and the Agreement and License are not attached under different exhibit names.
`38 Massingill’s Response to Stream’s Motion for Summary Judgment at 8.
`39 Id.
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`Massingill introduces the language of the Software License and the Executive
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`Employment Agreement in the context of his argument that he was not a contractual employee.
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`This placement suggests that Massingill intended to use these documents to show that he was not
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`an employee of Stream. However, factual assertions in pleadings are considered to be judicial
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`admissions conclusively binding on the party who made them.40 Massingill has therefore made
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`a judicial admission that a software license agreement exists governing the licensing of Arsenal
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`by Stream. However, because the Software License is not in evidence, the Court cannot view the
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`provisions referenced in Massingill’s argument in context, and therefore cannot determine
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`whether Stream’s request for a declaratory judgment of non-infringement should be granted in
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`the form in which it is requested in Stream’s Motion for Summary Judgment. Stream’s motion is
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`therefore DENIED.
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`CONCLUSION
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`For the reasons stated above, Defendants’ Motion to Dismiss is GRANTED.
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`Defendants’ Motion for Summary Judgment is DENIED as to its declaratory judgment
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`counterclaims, and DENIED as moot as to the Plaintiff’s claim.
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`SO ORDERED.
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`October 1, 2009.
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`40 See White v. ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir. 1983) (citations omitted).
`10