Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 1 of 13
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT TACOMA
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`TOUCHPOINT COMMUNICATIONS,
`LLC, an Oregon Limited Liability
`Company, d/b/a WEO MEDIA, LLC,
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`
`
`
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`v.
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`Plaintiff,
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`CASE NO. 3:15-cv-05240-JRC
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`ORDER ON PLAINTIFF’S
`MOTION FOR PARTIAL
`JUDGMENT ON THE
`PLEADINGS
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`DENTALFONE, LLC, a Florida Limited
`Liability Company,
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`Defendant.
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`This matter is before the Court on plaintiff’s motion for partial judgment on the
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`pleadings and has been fully briefed (see Dkts. 38, 41, 45, 49, 50, 51).
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`The Court, and defendant, acknowledge that defendant has withdrawn its
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`compulsory counterclaim for copyright infringement in its Answer to plaintiff’s
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`Complaint. However, defendant notes that it has a pending copyright application and
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`therefore, it wishes to retain the ability to assert such counterclaim later and, at oral
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 1
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 2 of 13
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`argument, claimed for the first time that this Court lacks subject matter jurisdiction to
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`decide plaintiff’s declaratory action.
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`This Court concludes that since defendant has filed an application for copyright
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`registration at the Copyright Office and, therefore, has the right to bring a copyright
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`infringement action now, plaintiff should also have the right to bring a coercive action for
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`declaratory relief and claim that defendant’s claimed copyright was not infringed.
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`Therefore, this Court has subject matter jurisdiction to decide the issue.
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`The Court grants plaintiff’s motion for partial judgment on the pleadings with
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`respect to plaintiff’s claim for declaratory judgment of non-infringement under the
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`Copyright Act (Count I), but this ruling is without prejudice, pending the outcome of
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`defendant’s copyright application.
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`BACKGROUND
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`The following background information is taken from the parties’ COMBINED
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`JOINT STATUS REPORT AND DISCOVERY PLAN (see Dkt. 17, p. 2).
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`Plaintiff, TOUCHPOINT COMMUNICATIONS, LLC d/b/a WEO MEDIA, LLC
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`(“WEO”), is an Internet dental marketing company that conducts business in the State of
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`Washington, and is registered as “Touchpoint Communications, LLC” d/b/a WEO
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`Media. Touchpoint Communications, LLC is also registered and operates as WEO
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`Media, LLC in the State of Oregon.
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`Defendant, DENTALFONE, LLC, is an internet dental marketing company that
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`conducts business in the State of Washington, and is organized in the State of Florida.
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 2
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 3 of 13
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`Dentalfone sent WEO a cease and desist letter dated November 25, 2014, alleging,
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`interalia, copyright and trade dress infringement of Dentalfone’s proprietary mobile
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`application design. Dentalfone never received any response from WEO. Dentalfone sent
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`WEO a follow-up letter dated March 4, 2015, a copy of which was also sent to
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`Washington based “Smiles Dental” as an alleged infringer of Dentalfone’s rights. Once
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`more, Dentalfone did not receive any substantive response. Dentalfone states that it filed
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`an application for copyright protection with the Copyright Office, but has not received a
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`response to that application, as yet.
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`Plaintiff WEO initiated the subject case by filing a complaint for declaratory
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`judgment alleging that it has not infringed Dentalfone’s copyrights and further that
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`defendant Dentalfone has no copyrights in Dentalfone’s mobile application design. In
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`addition, WEO alleges that it has not infringed Dentalfone’s trade dress related to its
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`mobile application design and further that Dentalfone has no trade dress rights in
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`Dentalfone’s mobile application design. Plaintiff also alleges that Dentalfone has
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`engaged in unfair trade practices by attempting to unfairly remove competition from the
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`marketplace through Dentalfone’s cease and desist letter to WEO, and follow-up letter to
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`WEO and Smiles Dental. WEO further alleges that when Dentalfone contacted Smiles
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`Dental, it tortuously interfered with the business relationship of WEO and one of WEO’s
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`customers.
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`PROCEDURAL HISTORY
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`Plaintiff filed its complaint on April 15, 2015 (see Dkt. 1) and its Amended
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`Complaint on April 16, 2015 (see Dkt. 5). Defendant filed its Answer to Amended
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 3
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 4 of 13
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`Complaint with Jury Demand, and Counterclaim against plaintiff on July 27, 2015 (see
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`Dkt. 20). On August 14, 2015, plaintiff filed a motion to dismiss in part defendant’s
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`counterclaim for failure to state a claim, regarding Counts II, IV, V and VI (see Dkt. 27).
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`On October 9, 2015, this Court granted plaintiff’s motion, however defendant was given
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`leave to amend the counterclaim within 21 days (Dkt. 35). In part, the Court concluded
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`that “because defendant claims copyright protection for the same design that entails its
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`trade dress, and has not demonstrated the absence of an adequate remedy based on
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`copyright law, this Court ‘declines to expand the scope of the Lanham Act to cover
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`[defendant’s trade dress claim herein] [for] which the Federal Copyright Act [may]
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`provide[] an adequate remedy’” (see id. at 8 (citations omitted)). The Court also
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`concluded “that regarding defendant’s state law claims, ‘the work at issue comes within
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`the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103 . . . ;’ [that]
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`the underlying nature of [defendant’s] state law claim [] is part and parcel of a copyright
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`claim’ for preemption purposes, and the Court finds that the additional allegations of
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`‘deception, misrepresentation and public impact’ do ‘not change the underlying nature of
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`the action’ of the CPA claim” (id. at 9, 11 (citations omitted)). Similarly, the Court
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`concluded that “the gravamen of defendant’s claim[s] for unfair competition [and]
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`[common law misappropriation] [are] that plaintiff copied portions of defendant’s
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`website” (id. at 13 (citations omitted)).
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`On October 30, 2015, defendant filed its answer to the amended complaint, with
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`amended counterclaims against plaintiff (Dkt. 36). This time, defendant did not include a
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`counterclaim for copyright infringement, “in favor of more ripe counts of trade dress
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 4
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 5 of 13
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`infringement, violations of unfair competition law and state misappropriation, as it has
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`not yet received a copyright registration for its design” (Dkt. 41, p. 5). Nevertheless,
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`defendant concedes that it has filed an application for copyright protection with the
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`Copyright Office and is awaiting a response (Dkt. 49, p. 2).
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`On November 13, 2015, plaintiff filed a motion for partial judgment on the
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`pleadings with respect to its count for copyright non-infringement (Dkt. 38). Defendant
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`filed a response on December 7, 2015 (see Dkt. 41), and plaintiff filed its reply on
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`December 11, 2015 (see Dkt. 45).
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`At oral argument, defendant raised for the first time the argument that this Court
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`lacked subject matter jurisdiction to decide plaintiff’s declaratory relief action for
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`noninfringement because such a claim was premature since the Copyright Office has not
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`issued a copyright registration. The Court requested additional briefing on this issue
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`(Dkt. 48), which the parties provided (Dkt. 49-51).
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`STANDARD OF REVIEW
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`Plaintiff has filed a motion for judgment on the pleadings pursuant to Federal Rule
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`of Civil Procedure 12(c). A motion for a judgment on the pleadings “is properly granted
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`when, taking all the allegations in the non-moving party's pleadings as true, the moving
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`party is entitled to judgment as a matter of law.” Fajardo v. County of Los Angeles, 179
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`F.3d 698, 699 (9th Cir. 1999) (citation omitted). For purposes of ruling on this motion,
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`the complaint is construed in favor of the non-moving party. Keniston v. Roberts, 717
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`F.2d 1295, 1300 (9th Cir. 1983) (citations omitted).
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 5
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 6 of 13
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`DISCUSSION
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`1. Subject Matter Jurisdiction.
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`Subject matter jurisdiction can be raised at any time. See Intercontinental Travel
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`Mktg., Inc. v. F.D.I.C., 45 F.3d 1278, 1286 (9th Cir. 1994); Augustine v. United States,
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`704 F.2d 1074, 1077 (9th Cir.1983). While defendant did not choose to raise the issue
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`until oral argument, the matter has now been fully briefed by the parties (Dkt. 49-51).
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`Therefore, it is ripe for resolution.
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`Plaintiff’s declaratory relief claim for non-infringement is brought pursuant to the
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`Declaratory Judgment Act, 28 U.S.C. § 2201. Nevertheless, the subject of the
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`declaratory action involves defendant’s claimed right under the Copyright Act, Title 17
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`of the United States Code. While 17 U.S.C. § 411 states, in part, that registration of
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`copyright is a pre-condition to filing a claim, the Supreme Court in Reed Elsevier, Inc. v.
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`Muchnick, 559 U.S. 154 (2010), held that the registration requirement “does not restrict a
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`federal court’s subject-matter jurisdiction.” Id. at 157. Specifically, the Court was
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`reviewing whether or not settlement of a class action claim could directly affect members
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`of the class who had not registered for copyright protection. The Court ruled that subject
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`matter jurisdiction involved “a Court’s adjudicatory authority,” and that this should be
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`distinguished from “claim-processing rules” such as § 411. Id. at 160-61. The Court held
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`that subject matter jurisdiction existed even though certain class members had not applied
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`for registration under § 411. Id. at 169.
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`Defendant argues that the Court lacks subject matter jurisdiction because
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`defendant has not filed a copyright claim even though defendant concedes that it places
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 6
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 7 of 13
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`“alleged infringers of unregistered copyrights in an awkward position” (Dkt. 49, p. 7).
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`Defendant states that this is not a case of first impression in the Ninth Circuit, and cites
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`the district court opinion of Optivue Corp. v. Carl Zeiss Meditec, Inc., 2007 U.S. Dist.
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`LEXIS 65647 at *2-3 (N.D. Cal. Aug. 20, 2007) (unpublished opinion). That case is
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`unpersuasive for several reasons.
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`First, it was decided before the Supreme Court decided Reed Elsevier Inc. v.
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`Muchnick, 559 U.S. 154 (2010), which clearly held that the court has subject matter
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`jurisdiction over copyright claims despite the lack of copyright registration.
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`Second, after Reed was decided, the Ninth Circuit has clarified that this Circuit
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`will allow copyright cases to proceed so long as the claimed holder of the copyright had
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`applied for copyright protection with the Copyright Office. The claimed holder of a
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`copyright does not have to wait until the copyright is fully registered. See Cosmetic
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`Ideas, Inc. v. IAC/Interactivecorp, 606 F.3d 612, 621 (9th Cir. 2010).
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`Third, in defendant’s cited case, Optivue Corp. v. Carl Zeiss Meditec, Inc., 2007
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`U.S. Dist. LEXIS 65647 at *12, the defendant had not “registere[d] the copyright,
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`[which] prevent[ed] it from bringing any suit for infringement.” Id. This fact supported
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`the court’s conclusion that “any apprehension of infringement litigation is too remote to
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`support a claim under the declaratory judgment act.” Id. Defendant herein not only has
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`filed an application for copyright protection, which under current law allows it to bring a
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`suit for infringement, but also, as will be discussed further below, has sent cease and
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`desist letters to plaintiff which clearly support plaintiff’s “apprehension of infringement
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 7
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 8 of 13
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`litigation.” Id. Plaintiff’s apprehension of infringement litigation here is not so remote as
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`to deprive the Court of jurisdiction. See id.
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`Finally, while Reed and Cosmetic Ideas, Inc. involved cases brought by claimed
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`holders of the copyright, rather than claimed infringers of the copyright, this Court can
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`discern no reason why the same analysis should not apply to coercive actions brought by
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`claimed infringers, as well. As noted by the court in Cosmetic Ideas, Inc., the language
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`of § 411 is unclear. 606 F.3d at 618. When the statute is unclear, the court should work to
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`discern the meaning of the statute in “‘the broader context of the statute as a whole’ and
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`the purpose of the statute.’” Id. (quoting United States v. Olander, 572 F.3d 764, 768 (9th
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`Cir.2009); quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997)). The court noted
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`that allowing a party to file a claim upon filing an application “avoids . . . legal limbo—
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`and avoids prolonging the period of infringement—by allowing a litigant to proceed with
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`an infringement suit as soon as he has taken all of the necessary steps to register the
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`copyright at issue.” Id. at 620. The same can be said for not depriving the alleged
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`copyright infringer the opportunity to resolve the issue in a timely manner by bringing a
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`coercive action under the Declaratory Relief Act. Since defendant would have a right to
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`file a claim at this time, plaintiff should also have such a right so long as an “actual
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`controversy” exists, as required under the Declaratory Relief Act.
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`Defendant also argues that an actual controversy does not exist until and unless
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`defendant’s copyright is registered, but that argument, as well, is unpersuasive, especially
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`in the factual context presented here. “The purpose of the Declaratory Judgment Act is
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`‘to relieve potential defendants from the Damoclean threat of impending litigation which
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 8
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 9 of 13
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`a harassing adversary might brandish while initiating a suit at his leisure – or never.” Hal
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`Roach Studios, Inc. v. Richard Feiner and Co., Inc., 896 F. 2d 1542, 1555 (9th Cir. 1990)
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`(quoting Societe de Conditionnement v. Hunter Engineering Co., 655 F.2d 938, 943 (9th
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`Cir. 1981)). This case is a perfect example of such a Damoclean threat. Plaintiff alleges
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`that it is continuing to suffer losses as a result of defendant’s threat of copyright
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`litigation. Yet, defendant has chosen not file a copyright claim, leaving plaintiff in limbo
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`– a result clearly not countenanced in Hal Roach Studios, Inc.. Nor should it be here.
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`Furthermore, in this case, as opposed to Opotovue Corp.,, supra, 2007 U.S. Dist.
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`LEXIS 65647, defendant made it quite clear that if plaintiff did not cease and desist in its
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`course of action defendant “shall have to resort to all legal recourse available to it” (Dkt.
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`20, Ex. F). When plaintiff failed to respond, defendant sent a second letter to plaintiff,
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`with a copy to one of plaintiff’s customers stating that “In the event we fail to hear from
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`you, we will vigorously pursue appropriate legal remedies” (Dkt. 20, Ex. F). Plaintiff
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`had a reasonable apprehension of suit; therefore, an actual controversy exists in this
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`matter.
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`Plaintiff has subject matter jurisdiction to pursue a declaratory relief claim for
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`non-infringement of defendant’s claimed copyright even though defendant has chosen not
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`pursue its compulsory counterclaim for copyright infringement.
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`2. Dismissal without prejudice.
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`As noted by the Federal Circuit, “Fed. R. Civ. P. 13(a) requires that a party plead a
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`counterclaim that ‘arises out of the transaction or occurrence that is the subject matter of
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 9
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 10 of 13
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`the opposing parties claim,’ lest the subject of the counterclaim be deemed waived or
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`abandoned.” Vivid Techs., Inc. v. Am. Sci. & Eng'g, Inc., 200 F.3d 795, 801 (Fed. Cir.
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`1999). Plaintiff contends that a counterclaim for copyright infringement is a compulsory
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`counterclaim when a party is faced with a complaint containing a count for declaratory
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`non-infringement (Dkt. 45, p. 3 (citing Vivid Techs., supra, 200 F.3d at 801-02 (“every
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`court that has discussed the issue has recognized that an infringement counterclaim is
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`compulsory in an action for declaration of non-infringement” of a patent) (collecting
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`cases)); see also Dkt. 45, p. 3 (“Given the ‘historic kinship between patent law and
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`copyright law,’ there should be the same result whether it is patent infringement or
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`copyright infringement” (citing Silvers v. Sony Pictures Entertainment, Inc., 402 F.3d
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`881, 887 (9th Cir. 2005))).
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`Defendant does not dispute that a counterclaim for copyright infringement is a
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`compulsory counterclaim that is required to defeat a claim for declaratory non-
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`infringement and concedes that it voluntarily has chosen to withdraw its compulsory
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`counterclaim for copyright infringement in its Answer to plaintiff’s Complaint containing
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`a claim for declaratory non-infringement (see Dkt. 41, p. 1 (“[defendant] concedes that it
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`has not alleged the compulsory counterclaim of copyright infringement to [plaintiff]’s
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`Declaratory Judgment Complaint”)). Therefore, defendant does not dispute plaintiff’s
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`right to judgment on the claim for declaratory non-infringement and “concedes to partial
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`judgment on the copyright non-infringement issue” (id. at 4). Therefore, plaintiff’s
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`motion for judgment on the pleadings should be granted.
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 10
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 11 of 13
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`However, defendant notes that it has a pending copyright application and argues
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`that it should be able to retain the ability to assert such counterclaim for copyright
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`infringement later, in part because “at this stage of the litigation [a counterclaim for
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`copyright infringement] is premature because no copyright registration has been issued
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`by the Copyright Office. . . . and [defendant’s] trade dress and state law counts are
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`more ripe for litigation in the pending matter ” (id. at 1-2).
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`Defendant “requests that any judgment or dismissal be without prejudice to
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`[defendant] revisiting the issue should a registration be issued by the U.S. Copyright
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`Office in the future, provided any future count of copyright infringement does not
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`interfere with litigation of the presently pending trade dress and state law counts” (id. at
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`4-5). The Court agrees that it is relevant that a copyright application currently is pending,
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`and notes that if it is granted, defendant may wish to assert a copyright infringement
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`claim as opposed to the other claims in its counterclaim.
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`Defendant has not brought a counterclaim for copyright infringement in favor of
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`other "more ripe" claims (id. at 1-2). This may be due in part to the possibility that
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`defendant may not receive a copyright regarding the website at issue. However, if the
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`Copyright Office grants a copyright in the future, such would entail "changed
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`circumstances" that potentially would justify revisiting this issue, and justify defendant
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`bringing a counterclaim for copyright infringement. Cf. Royal Ins. Co. of Am., Inc. v.
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`KTA-Tator, Inc., 239 Fed. Appx. 722, 724-25, 2007 U.S. App. LEXIS 12489 *5-*6 (3d
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`Cir. 2007) (unpublished opinion) (“by granting [defendant’s] summary judgment motion
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`without prejudice, and expressly inviting [plaintiff and the other defendant] to return in
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 11
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 12 of 13
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`the event of ‘changed circumstances,’ the court did not end the matter”) (citations
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`omitted).
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`The Court notes that this case currently is at a very early stage in the proceedings,
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`and that discovery has just begun. In addition, the Court also notes that defendant does
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`not concede that plaintiff has not infringed its copyrightable material, hence factual issues
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`remain on this claim (see Defendant’s Answer, Affirmative Defenses and Amended
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`Counterclaims to Plaintiff’s Amended Complaint, Dkt. 36, ¶¶ 30-34). There exists a
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`disconnect between the facts in the pleadings and the general standard that a motion for
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`judgment on the pleadings should be granted where the pleadings lead only to one result.
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`See, e.g., Enron Oil Trading & Transp. Co. v. Walbrook Ins. Co., 132 F.3d 526, 528 (9th
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`Cir. 1997) (“A judgment on the pleadings is properly granted when, taking all allegations
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`in the pleadings as true, the moving party is entitled to judgment as a matter of law”)
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`(quoting McGann v. Ernst & Young, 102 F.3d 390, 392 (9th Cir. 1996)). Finally, the
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`Court notes that plaintiff has not identified, and the Court has not found, any case on
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`point where a party has been granted a motion for judgment on the pleadings with
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`prejudice in the circumstances presented herein.
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`Therefore, for these reasons, the Court concludes that the motion for judgment on
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`the pleadings should be granted without prejudice.
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`//
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`//
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`//
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`//
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 12
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`Case 3:15-cv-05240-JRC Document 52 Filed 02/10/16 Page 13 of 13
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`CONCLUSION
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`Based on the stated reasons and the relevant record, the Court ORDERS that
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`plaintiff’s motion for judgment on the pleadings with respect to Count I be granted
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`without prejudice.
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`Dated this 10th day of February, 2016.
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`A
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`J. Richard Creatura
`United States Magistrate Judge
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`ORDER ON PLAINTIFF’S MOTION FOR
`PARTIAL JUDGMENT ON THE PLEADINGS - 13
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