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`Case 3:20-cv-01050-L Document 38 Filed 03/26/21 Page 1 of 20 PageID 524Case 3:20-cv-01050-L Document 38 Filed 03/26/21 Page 1 of 20 PageID 524
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`IN THE UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
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`WEINFUSE, LLC,
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`Plaintiff,
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`v.
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`INFUSEFLOW, LLC, GUSTAVO “GUS” §
`DE AVILLEZ, AND REIN HEALTH
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`HOLDINGS, LLC,
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`Defendants.
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`Civil Action No. 3:20-CV-1050-L
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`MEMORANDUM OPINION AND ORDER
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`Before the court are Defendants InfuseFlow, LLC and Gustavo “Gus” De Avillez’s Motion
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`to Dismiss Plaintiff WeInfuse, LLC’s First Amended Complaint Pursuant to Federal Rule of Civil
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`Procedure 12(b)(6) (“Motion”) (Doc. 15), filed July 2, 2020; Defendants InfuseFlow, LLC and
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`Gustavo “Gus” De Avillez’s Motion to Dismiss Plaintiff WeInfuse, LLC’s State Court Causes of
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`Action in Its Original Complaint Pursuant to Federal Rule of Civil Procedure 12(b)(1) (Doc. 16),
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`filed July 2, 2020; Rein Health Holdings, LLC’s Motion Dismiss Pursuant to Federal Rule of Civil
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`Procedure 12(b)(6) and Joinder to the Other Defendants’ Motion to Dismiss Pursuant to Federal
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`Rule of Civil Procedure 12(b)(6) (Doc. 32), filed December 4, 2020; and Rein Health Holdings,
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`LLC’s Motion Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(1) and Joinder to the
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`Other Defendants’ Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(1) (Doc.
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`33), filed December 4, 2020. After considering the Motions, briefs, pleadings, and applicable law,
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`the court, for the reasons herein explained, grants in part and denies in part Defendants
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`InfuseFlow, LLC and Gustavo “Gus” De Avillez’s Motions to Dismiss (Doc. 15 and 16); grants
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`Plaintiff’s Motion to Seal (Doc. 11); denies as moot Defendants’ Motion to Strike (Doc. 13);
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`Memorandum Opinion and Order – Page 1
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`denies Rein’s Motions to Dismiss (Docs. 32 and 33); and declines to dismiss Plaintiff’s state law
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`claims, except those as herein determined.
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`I.
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`Factual and Procedural Background
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`On April 28, 2020, WeInfuse, LLC (“Plaintiff” or “WeInfuse”) filed its Original Complaint
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`(Doc. 1) against InfuseFlow, LLC and Gustavo “Gus” De Avillez (collectively, “Defendants
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`InfuseFlow and Mr. De Avillez”). Plaintiff asserted claims pursuant to the Defend Trade Secrets
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`Act of 2016, 18 U.S.C. § 1836 (“DTSA”), including various state law claims. On June 11, 2020,
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`WeInfuse filed a First Amended Complaint (“Amended Complaint”) and Motion to Seal First
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`Amended Complaint (Doc. 11) pursuant to the DTSA, Copyright Act, 17 U.S.C. § 101, and state
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`law claims for tortious interference. In the Amended Complaint, Plaintiff’s asserted eight claims
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`as follows: Count 1—misappropriation of trade secrets (against all Defendants); Count 2—
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`copyright infringement (against all Defendants); Count 3—vicarious copyright infringement
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`(against Defendant Rein Health Holdings, LLC (“Rein”)); Count 4—tortious interference with
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`existing contracts (against Infuseflow and Mr. De Avillez); Count 5—tortious interference with
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`prospective business relations (against InfuseFlow and Mr. De Avillez); Count 6—breach of
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`contract (against Rein); Count 7—breach of contract (against Rein); and Count 8—attorney’s fees
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`(against all Defendants).
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`Plaintiff moved to seal its Amended Complaint to protect its confidential and/or trade secret
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`material described therein as well as information marked confidential by Defendants in a related
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`state-court action. There was significant contention between the parties concerning Plaintiff’s First
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`Amended Complaint. After much to-and-fro, the parties reached a Stipulation (Doc. 30) on
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`November 2, 2020. The parties agree that the First Amended Complaint as redacted (Doc. 31) is
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`to be filed for public disclosure and that all motions to dismiss remain before the court.
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`Memorandum Opinion and Order – Page 2
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`Accordingly, the court orders that the Amended Complaint (Doc. 11) remain filed under seal
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`because it states the entirety of Plaintiff’s claims, allows the court to see all statements made in
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`support of Plaintiff’s claims and, at the same time, shields the confidential information from public
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`disclosure.
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`In Defendants’ Motion to Dismiss for Failure to State a Claim, InfuseFlow and Mr. De
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`Avillez seek dismissal of Plaintiff’s claims for trade secret misappropriation (Count 1); copyright
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`infringement (Count 2); tortious interference with existing contract and prospective business
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`relations (Counts 4 and 5); and attorney’s fees (Count 8). Defendants contend that these claims by
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`Plaintiff should be dismissed because: (1) Plaintiff has no trade secret; (2) Defendants did not
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`misappropriate Plaintiff’s trade secret; (3) Plaintiff does not have a valid copyright; (4) Plaintiff’s
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`common law tortious interference claims are preempted by the Copyright Act; (5) Plaintiff’s
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`common law tortious interference claims are preempted by the Texas Uniform Trade Secrets Act
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`(“TUTSA”); and (5) there was no tortious interference in either existing contracts or prospective
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`business relationships. Defendants further contend that Plaintiff’s claim for attorney’s fees should
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`be denied because they are insufficiently pleaded.
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`Plaintiff responds that its claims satisfy Federal Rule of Civil Procedure 8’s pleading
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`standard. It contends that: (1) its Software is a protectable trade secret; (2) Defendants
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`misappropriated its Software; (3) its copyright is valid and was infringed upon by Defendants; (4)
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`its state law tortious interference claims are not preempted by the Copyright Act; (5) its state law
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`tortious interference claims are not preempted by TUTSA; and (5) Defendants tortiously interfered
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`with existing and prospective contracts. Plaintiff also maintains that it has sufficiently stated a
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`claim for attorney’s fees and, in a footnote, requests that it be granted the opportunity to amend its
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`pleadings should the court find them to be defective.
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`Memorandum Opinion and Order – Page 3
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`Defendants reply that Plaintiff’s request for leave to amend should be denied because of
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`its lack of particularity regarding the grounds on which it seeks to amend. They maintain that
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`Plaintiff has not cured the defects in its trade secret, copyright, and tortious interference claims.
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`They also maintain that Plaintiff’s tortious interference claims are preempted by TUTSA and the
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`Copyright Act.
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`II.
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`Standard for Rule 12(b)(6) - Failure to State a Claim
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`To defeat a motion to dismiss filed pursuant to Rule 12(b)(6) of the Federal Rules of Civil
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`Procedure, a plaintiff must plead “enough facts to state a claim to relief that is plausible on its
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`face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007); Reliable Consultants, Inc. v.
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`Earle, 517 F.3d 738, 742 (5th Cir. 2008); Guidry v. American Pub. Life Ins. Co., 512 F.3d 177,
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`180 (5th Cir. 2007). A claim meets the plausibility test “when the plaintiff pleads factual content
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`that allows the court to draw the reasonable inference that the defendant is liable for the misconduct
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`alleged. The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more
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`than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662,
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`678 (2009) (internal citations omitted). While a complaint need not contain detailed factual
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`allegations, it must set forth “more than labels and conclusions, and a formulaic recitation of the
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`elements of a cause of action will not do.” Twombly, 550 U.S. at 555 (citation omitted). The
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`“[f]actual allegations of [a complaint] must be enough to raise a right to relief above the speculative
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`level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in
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`fact).” Id. (quotation marks, citations, and footnote omitted). When the allegations of the pleading
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`do not allow the court to infer more than the mere possibility of wrongdoing, they fall short of
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`showing that the pleader is entitled to relief. Iqbal, 556 U.S. at 679.
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`Memorandum Opinion and Order – Page 4
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`In reviewing a Rule 12(b)(6) motion, the court must accept all well-pleaded facts in the
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`complaint as true and view them in the light most favorable to the plaintiff. Sonnier v. State Farm
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`Mutual Auto. Ins. Co., 509 F.3d 673, 675 (5th Cir. 2007); Martin K. Eby Constr. Co. v. Dallas
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`Area Rapid Transit, 369 F.3d 464, 467 (5th Cir. 2004); Baker v. Putnal, 75 F.3d 190, 196 (5th Cir.
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`1996). In ruling on such a motion, the court cannot look beyond the pleadings. Id.; Spivey v.
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`Robertson, 197 F.3d 772, 774 (5th Cir. 1999). The pleadings include the complaint and any
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`documents attached to it. Collins v. Morgan Stanley Dean Witter, 224 F.3d 496, 498-99 (5th Cir.
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`2000). Likewise, “‘[d]ocuments that a defendant attaches to a motion to dismiss are considered
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`part of the pleadings if they are referred to in the plaintiff’s complaint and are central to [the
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`plaintiff’s] claims.’” Id. (quoting Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429,
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`431 (7th Cir. 1993)). In this regard, a document that is part of the record but not referred to in a
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`plaintiff’s complaint and not attached to a motion to dismiss may not be considered by the court
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`in ruling on a 12(b)(6) motion. Gines v. D.R. Horton, Inc., 699 F.3d 812, 820 & n.9 (5th Cir. 2012)
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`(citation omitted). Further, it is well-established and ‘“clearly proper in deciding a 12(b)(6) motion
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`[that a court may] take judicial notice of matters of public record.”’ Funk v. Stryker Corp., 631
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`F.3d 777, 783 (5th Cir. 2011) (quoting Norris v. Hearst Trust, 500 F.3d 454, 461 n.9 (5th Cir.
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`2007) (citing Cinel v. Connick, 15 F.3d 1338, 1343 n.6 (5th Cir. 1994)).
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`The ultimate question in a Rule 12(b)(6) motion is whether the complaint states a valid
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`claim when it is viewed in the light most favorable to the plaintiff. Great Plains Trust Co. v.
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`Morgan Stanley Dean Witter, 313 F.3d 305, 312 (5th Cir. 2002). While well-pleaded facts of a
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`complaint are to be accepted as true, legal conclusions are not “entitled to the assumption of truth.”
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`Iqbal, 556 U.S. at 679 (citation omitted). Further, a court is not to strain to find inferences
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`favorable to the plaintiff and is not to accept conclusory allegations, unwarranted deductions, or
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`Memorandum Opinion and Order – Page 5
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`legal conclusions. R2 Invs. LDC v. Phillips, 401 F.3d 638, 642 (5th Cir. 2005) (citations omitted).
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`The court does not evaluate the plaintiff’s likelihood of success; instead, it only determines
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`whether the plaintiff has pleaded a legally cognizable claim. United States ex rel. Riley v. St.
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`Luke’s Episcopal Hosp., 355 F.3d 370, 376 (5th Cir. 2004). Stated another way, when a court
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`deals with a Rule 12(b)(6) motion, its task is to test the sufficiency of the allegations contained in
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`the pleadings to determine whether they are adequate enough to state a claim upon which relief
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`can be granted. Mann v. Adams Realty Co., 556 F.2d 288, 293 (5th Cir. 1977); Doe v. Hillsboro
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`Indep. Sch. Dist., 81 F.3d 1395, 1401 (5th Cir. 1996), rev’d on other grounds, 113 F.3d 1412 (5th
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`Cir. 1997) (en banc). Accordingly, denial of a 12(b)(6) motion has no bearing on whether a
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`plaintiff ultimately establishes the necessary proof to prevail on a claim that withstands a 12(b)(6)
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`challenge. Adams, 556 F.2d at 293.
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`III.
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`Plaintiff’s Federal Claims and Federal Preemption
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`A.
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`Trade Secret Misappropriation
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`1.
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`Applicable Law
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`Plaintiffs’ statutory trade secret misappropriation claim under federal law is governed by
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`DTSA. DTSA defines “[t]rade secret” as:
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`all forms and types of information, including business, scientific, technical,
`economic, or engineering information, and any formula, design, prototype, pattern,
`plan, compilation, program device, program, code, device, method, technique,
`process, procedure, financial data, or list of actual or potential customers or
`suppliers, whether tangible or intangible and whether or how stored, compiled, or
`memorialized physically, electronically, graphically, photographically, or in
`writing if:
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`(A) the owner of the trade secret has taken reasonable measures under the
`circumstances to keep the information secret; and
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`(B) the information derives independent economic value, actual or
`potential, from not being generally known to, and not being readily
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`Memorandum Opinion and Order – Page 6
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`ascertainable through proper means by, another person who can obtain
`economic value from the disclosure or use of the information.
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`18 U.S.C. § 1839(3).
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`The DTSA defines “[m]isappropriation” as:
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`(A) acquisition of a trade secret of another by a person who knows or has reason to
`know that the trade secret was acquired by improper means; or
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`(B) disclosure or use of a trade secret of another without express or implied consent
`by a person who:
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`(i) used improper means to acquire knowledge of the trade secret;
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`(ii) at the time of disclosure or use, knew or had reason to know that the
`person’s knowledge of the trade secret was:
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`(a) derived from or through a person who used improper means to
`acquire the trade secret;
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`(b) acquired under circumstances giving rise to a duty to maintain
`the secrecy of or limit the use of the trade secret; or
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`(c) derived from or through a person who owed a duty to the person
`seeking relief to maintain the secrecy of or limit the use of the trade
`secret; or
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`(iii) before a material change of the position of the person, knew or had
`reason to know that the trade secret was a trade secret and that knowledge
`of the trade secret had been acquired by accident or mistake.
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`Id. § 1839(5).
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`2.
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`Analysis
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`The court agrees with Defendants that Plaintiff’s claims are not sufficiently pleaded for the
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`reasons urged in their Motion and reply brief. In particular, WeInfuse has not sufficiently alleged
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`facts to show that its web-based software application (“Software”) is a trade secret. With the goal
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`of “creat[ing] an end-to-end software application that would save customers time, remove daily
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`Memorandum Opinion and Order – Page 7
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`inefficiencies, and reduce overall costs,” WeInfuse developed a software application “designed to
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`provide an online, paperless tool capable of centralizing and streamlining all aspects of infusion
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`center management.” Pl.’s Am. Compl., Doc. 31 at 4, ¶ 13. WeInfuse requires its customers to sign
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`a licensing agreement to gain access to the Software that is maintained behind a protected login.
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`Id. at 4-5, ¶ 14. It contends that “every aspect” of the “Software architecture” behind the protected
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`login is a trade secret—“its functionalities, user interface and display and design, interworkings of
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`various components and modules, logic flows, databases, and schema.” Id. It also offers a list of
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`the following features contained within the Software, on its user interface: Patient Management;
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`Patient Log; Provider Order and Document Intake; Provider Order Structure; Patient Flow; Pre-
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`Treatment Workflow Tracking Buckets; Verifications; Authorizations; Referrals; Clinical Review;
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`Financial Review; Inventory Distribution; Appointment Eligibility; Appointment Scheduler;
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`Treatment Notes; Inventory Management; Payer Management; Billing; and Reporting. Id. at 5, ¶
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`15. These “features and functionalities,” according to Plaintiff, form the basis of their claim. Id.
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`at 14, ¶ 42 The court determines that these descriptions and offerings are far too broad to qualify
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`as trade secrets. Plaintiff fails to point to specificities that convey the unique capabilities of the
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`Software. See GlobeRanger Corp. v. Software AG U.S., Inc., 836 F.3d 477, 492 (5th Cir. 2016).
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`Without any indication of such special characteristics, the court cannot reasonably infer that the
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`Software’s features and functionalities as described by Plaintiff are not generally known within
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`the industry or readily ascertainable through proper means.
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`Further, Defendants contend that Plaintiff has not set forth sufficient allegations that it has
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`taken reasonable measures to preserve the secrecy of the Software’s architecture. In its Amended
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`Complaint, WeInfuse alleges that it was in the process of pitching the Software to a potential
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`customer when WeInfuse learned, from the potential customer, that InfuseFlow had a competing
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`Memorandum Opinion and Order – Page 8
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`product. Pl.’s Am. Compl., Doc. 31 at 12, ¶ 35. WeInfuse did not indicate taking any protective
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`measures when pitching to the potential customer who, like Defendants, could also have been a
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`potential competitor. Instead, WeInfuse openly demonstrated features that it now alleges are
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`critical to its claim for misappropriation of trade secrets. The ease with which the Software’s
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`features and functionalities could be duplicated after a demonstration would have made
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`confidentiality measures for potential customers reasonable. As a result, Defendants contend that
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`reasonable measures were not taken to preserve the secrecy of the Software’s features and, thus,
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`they are not trade secrets. Def.’s Mot. Dismiss Doc. 15 at 11, ¶ 36. The court agrees.
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`In describing how it protects its confidential and proprietary trade secret software,
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`WeInfuse lays out the following protocols:
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`• Developers of the Software are required to sign non-disclosure agreements
`before they are allowed to access or write any code related to the Software;
`• WeInfuse maintains its encrypted proprietary source code in protected
`repositories;
`• Other WeInfuse employees are required to maintain confidentiality of
`information related to the Software and are provided such information on a
`need-to-know basis;
`• WeInfuse employees are required to sign non-competition and non-solicitation
`agreements;
`• Customers licensing the Software are required to sign a WeInfuse software
`agreement before gaining access to the Software, acknowledging the
`confidential and proprietary nature of the Software and agreeing to protect it;
`• Among the various restrictions, WeInfuse’s software agreement includes
`confidentiality and non-copying provisions and prohibits use, alteration,
`modification, reverse engineering, dissemination, creation of a derivative work
`of WeInfuse, and other attempts to discover the proprietary and confidential
`information in WeInfuse’s Software.
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`Pl.’s Am. Compl., Doc. 31 at 6-7, ¶ 19. WeInfuse also alleges, however, that it pitched the
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`Software at trade shows. Id. at 10, ¶ 29-30. Plaintiff’s lack of confidentiality measures for
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`prospective clients is notable. If the Software was being marketed to outsiders with no
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`confidentiality restrictions in place, reasonable measures were not taken to guard the
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`Memorandum Opinion and Order – Page 9
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`secrecy of the Software against persons and entities who could obtain economic value from
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`use of the information and the Software did not derive economic value from its features
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`not being generally known. Given WeInfuse’s factual allegations, the existence of a trade
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`secret is implausible.
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`As WeInfuse fails to set forth sufficient allegations for the court to reasonably infer
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`that Defendants can be liable for trade secret misappropriation, it has failed to state a claim
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`upon which relief can be granted. Accordingly, the court will dismiss Plaintiff’s claim for
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`trade secret misappropriation.
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`B.
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`Copyright Infringement
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`1.
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`Applicable Law
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`For direct copyright infringement, a plaintiff must set forth allegations to show that “(1)
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`[it] owns a valid copyright and (2) the defendant copied constituent elements of the plaintiff's work
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`that are original.” Baisden v. I'm Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012) (quoting
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`Positive Black Talk Inc. v. Cash Money Records, Inc., 394 F.3d 357, 367 (5th Cir. 2004), abrogated
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`on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010)).
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`The first element, ownership, is satisfied by allegations that the work is original and can be
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`copyrighted and that the plaintiff has complied with all statutory formalities. Engineering
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`Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335, 1340 (5th Cir. 1994). “[A] plaintiff has
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`complied with all statutory formalities for copyright registration [and ownership] when the
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`Copyright office receives the plaintiff's application for registration, fee, and deposit.” See Geoscan,
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`Inc. of Texas v. Geotrace Techs., Inc., 226 F.3d 387, 393 (5th Cir. 2000) (citing Lakedreams v.
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`Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991)). The term “deposit” refers to the material deposited
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`Memorandum Opinion and Order – Page 10
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`for registration or number of copies of the work that are required by statute to be submitted. See
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`Geoscan, Inc., 226 F.3d at 393 (citing 17 U.S.C. § 408(b)).
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`The copying element is met by: “(1) factual copying and (2) substantial similarity.”
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`Baisden, 693 F.3d at 499 (quotation marks omitted). Factual copying may be based on direct or
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`circumstantial evidence. Armour v. Knowles, 512 F.3d 147, 152 (5th Cir. 2007). To be substantially
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`similar, “the copyrighted expressions in the two works [must be] sufficiently alike that the
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`copyright to the original work has been infringed.” Id. In other words, from the prospective of a
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`“layman” or “ordinary observer,” “the copy must bear a substantial similarity to the protected
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`aspects of the original.” Nola Spice Designs, L.L.C. v. Haydel Enters., Inc., 783 F.3d 527, 550 (5th
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`Cir. 2015) (quoting Peel & Co. v. Rug Mkt., 238 F.3d 391, 398 (5th Cir. 2001)).
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`2.
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`Analysis
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`WeInfuse alleges that its Software is an original work of authorship containing
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`copyrightable material for which copyright protection exists under the Copyright Act. Pl.’s Am.
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`Compl., Doc. 11 at 17, ¶ 60. To qualify for copyright protection, a work must be original to the
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`author. Feist Pub., Inc. v. Rural Tel. Servs. Co., 499 U.S. 340, 345 (1991). Further, copyright
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`protection does not extend to items taken from the public domain. General Universal Sys., Inc. v.
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`Lee, 379 F.3d 131, 143 (5th Cir. 2004). WeInfuse alleges that its developers used, not only its
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`customers’ feedback, but feedback from third-party infusion centers’ customers to create the
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`Software. Pl.’s Am. Compl., Doc. 31 at 5-6, ¶ 17. Defendants argue that, as a result of such
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`extensive use of knowledge from the public domain, the Software does not meet the originality
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`requirement and, thus, is not subject to copyright protection. Def.’s Mot. Dismiss, Doc. 15 at 16,
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`¶ 48. The court agrees.
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`Memorandum Opinion and Order – Page 11
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`WeInfuse’s Software was developed using a broadly acquired set of knowledge, from
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`processes and procedures discovered by WeInfuse’s principals while working for other companies
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`in the infusion industry to feedback from remote customers. Pl.’s Am. Compl., Doc. 31 at 4, ¶ 12.
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`WeInfuse alleges that its features could not be replicated without a similar investment of the
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`significant time, effort, and money it expended to develop the Software. Id. at 5-6, ¶ 17. While this
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`may be true, WeInfuse fails to allege that its features were not, ultimately, products of the public
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`domain, or any other allegation for the court to reasonably infer that its features were not products
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`of the public domain. Without meeting the originality requirement, WeInfuse can establish neither
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`ownership nor copying of the Software.
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`As WeInfuse fails to set forth sufficient allegations for the court to reasonably infer that
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`Defendants can be liable for copyright infringement, it has failed to state a claim upon which relief
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`can be granted. Accordingly, the court will dismiss this claim for copyright infringement.
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`C.
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`Copyright Act Preemption of Tortious Interference Claims
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`
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`1.
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`Applicable Law
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`“[S]tate law claims based on ideas fixed in tangible media are preempted by 301(a).” Spear
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`Marketing, Inc. v. BancorpSouth Bank, 791 F.3d 586, 597 (5th Cir. 2015). The Fifth Circuit has
`established a two-part test to determine whether a state law claim is preempted by the Copyright
`Act.
`
`
`First, the claim is examined to determine whether it falls “within the subject matter
`of copyright” as defined by 17 U.S.C. § 102. And second, “the cause of action is
`examined to determine if it protects rights that are ‘equivalent’ to any of the
`exclusive rights of a federal copyright, as provided in 17 U.S.C. § 106.”
`
`
`Id.
`
`
`
`
`
`
`2.
`
`Analysis
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`First, that WeInfuse’s tortious interference claims are based on Software features and
`
`functionalities fixed in the internet automatically triggers their preemption as they fall within the
`
`Memorandum Opinion and Order – Page 12
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`Case 3:20-cv-01050-L Document 38 Filed 03/26/21 Page 13 of 20 PageID 536Case 3:20-cv-01050-L Document 38 Filed 03/26/21 Page 13 of 20 PageID 536
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`subject matter of copyright. The Software is a graphic work of authorship and the internet is a
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`tangible medium of expression. Second, WeInfuse’s tortious interference claims are based on the
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`lost benefits of exclusive rights to that Software. WeInfuse contends that the Software’s licensing
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`agreement prohibited existing customers from “creating a derivative work.” Pl.’s Am. Compl.,
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`Doc. 31 at 19, ¶ 72. WeInfuse further contends that Defendants induced an existing client (Rein)
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`to breach that Agreement so that Defendants could obtain access to the Software, develop a
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`derivative work, and target WeInfuse’s prospective clients . Id. at 19, ¶ 73. In claiming tortious
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`interference, WeInfuse is seeking the exclusive right to prepare derivative works based upon the
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`Software in order to maintain its exclusive place in the market. As a result, the court finds that
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`WeInfuse’s state law claims fall squarely within the exclusive rights provided by 17 U.S.C. § 106
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`and are preempted by the Copyright Act. Alleging that Defendants were provided unauthorized
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`access to the Software and, subsequently, used information derived from that unauthorized access
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`to compete against WeInfuse is equivalent to alleging that Defendants prepared and reproduced
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`derivative work.
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`The court, having decided that all of WeInfuse’s tortious interference claims are preempted
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`by the Copyright Act, need not address whether WeInfuse has sufficiently pleaded its tortious
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`interference claims. As WeInfuse’s state law claims for tortious interference with existing
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`contracts and prospective business relations are preempted by the Copyright Act, it has failed to
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`state claims upon which relief can be granted. Accordingly, the court will dismiss WeInfuse’s state
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`law claims for tortious interference with existing contracts and prospective business relations.
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`Memorandum Opinion and Order – Page 13
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`IV.
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`Plaintiff’s State Claims and State Preemption
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`A. TUTSA Preemption of Tortious Interference Claims
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`1. Applicable Law
`
`TUTSA’s preemption section provides:
`
`
`(a) Except as provided by Subsection (b), this chapter displaces conflicting
`tort, restitutionary, and other law of this state providing civil remedies
`for misappropriation of a trade secret.
`
`(b) This chapter does not affect:
`
`
`
`or
`
`not
`
`based
`
`upon
`
`remedies, whether
`(1) contractual
`misappropriation of a trade secret;
`
`(2) other civil remedies that are not based upon misappropriation of
`a trade secret; or
`(3) criminal remedies, whether or not based upon misappropriation
`of a trade secret.
`
`Tex. Civ. Prac. & Rem. Code § 134A.
`
`
`
`The court could find no case in which the Fifth Circuit Court of Appeals has addressed
`
`whether TUTSA preempts tortious interference claims. Although,
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`the Fifth Circuit Court of Appeals has not addressed the scope of TUTSA's
`preemption provision, district courts in this circuit have found that to the extent a
`plaintiff’s tort claim is premised on the same facts as its claim for misappropriation,
`it is preempted. See, e.g., StoneCoat of Texas, LLC v. ProCal Stone Design, LLC,
`[426 F. Supp. 3d 311, 333 (E.D. Tex. 2019)]; ScaleFactor, Inc. v. Process Pro
`Consulting, LLC, 394 F. Supp. 3d 680, 686 (W.D. Tex. 2019) (breach-of-fiduciary-
`duty claim is preempted only insofar as it relies on allegations that defendants
`misappropriated trade secrets); 360 Mortgage Group, LLC v. Homebridge
`Financial Servs., Inc., No. A-14-CA-847-SS, 2016 WL 900577, at *6-8 (W.D. Tex.
`March 2, 2016). They found that TUTSA was intended to preempt all claims based
`on misappropriation of a trade secret, and to allow multiple theories of relief for the
`same underlying harm would be to read the preemption provision too narrowly.
`Embarcadero Techs., Inc. v. Redgate Software, Inc., No. 1:17-CV-444-RP, 2018
`WL 315753, at *3 (W.D. Tex. Jan. 5, 2018). A claim will not be preempted if the
`plaintiff can show that the claim is based on facts unrelated to the misappropriation
`of the trade secret. 360 Mortg. Grp., 2016 WL 900577, at *6.
`
`
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`Memorandum Opinion and Order – Page 14
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`Computer Scis. Corp. v. Tata Consultancy Servs. Ltd., No. 3:19-CV-970-X(BH), 2020 WL
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`2487057, at *6-7 (N.D. Tex. Feb. 7, 2020), report and recommendation adopted, No. 3:19-CV-
`
`00970-X, 2020 WL 1428941 (N.D. Tex. Mar. 24, 2020).
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`2.
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`Analysis
`
`In WeInfuse’s allegation of its claim for misappropriation of trade secrets under DTSA and
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`TUTSA in the Amended Complaint, it asserts that “as a direct and proximate result of Defendants’
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`conduct, WeInfuse has suffered and continues to suffer the disruption of its business relationships
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`and the loss of clients and potential clients, misappropriation of its trade secrets, and devaluation
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`of its trade secrets and business.” Pl.’s Am. Compl., Doc. 31 at 17, ¶ 55. Subsequently, in its
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`allegations for tortious interference with an existing contract and prospective business relations,
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`WeInfuse incorporates all allegations in the preceding paragraphs as context for the claims of
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`tortious interference that follow. Id. at 19, ¶ 71; 21, ¶ 76. Weinfuse’s tort claims are, therefore,
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`premised on the same facts as its claim for misappropriation of trade secrets. This attempt to use
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`multiple theories of rel