Case: 2:20-cv-02972-MHW-KAJ Doc #: 93 Filed: 03/14/22 Page: 1 of 5 PAGEID #: 2985
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF OHIO
`EASTERN DIVISION
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`Case No.: 2:20-cv-2972
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`Judge Michael H. Watson
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`Magistrate Judge Vascura
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`STRATESPHERE LLC, et al.,
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`Plaintiffs,
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`vs.
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`KOGNETICS INC, et al.,
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`Defendants.
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`PLAINTIFFS’ MOTION FOR JUDGMENT ON THE PLEADINGS AS TO THEIR
`MISAPPROPRIATION OF TRADE SECRETS CLAIM
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`With respect to Plaintiffs’ Supplemental Misappropriation of Trade Secrets claim, asserted
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`in their Supplement to their Second Amended Complaint (Doc. No. 79), Plaintiffs respectfully
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`move for judgment on the pleadings under Rule 12(c) of the Federal Rules of Civil Procedure.
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`The reasons in support of this Motion are set forth in the attached Memorandum in Support.
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`Respectfully submitted,
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`/s/ Jonathan P. Corwin
`James E. Arnold (0037721)
`Jonathan P. Corwin (0075056)
`Tiffany L. Carwile (0082522)
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`ARNOLD & CLIFFORD LLP
`115 W. Main Street, 4th Floor
`Columbus, Ohio 43215
`Tel:
`(614) 460-1600
`Fax:
`(614) 469-1066
`Email: jarnold@arnlaw.com
`jcorwin@arnlaw.com
`tcarwile@arnlaw.com
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`Counsel for Plaintiffs/Counterclaim Defendants
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`1 
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`Case: 2:20-cv-02972-MHW-KAJ Doc #: 93 Filed: 03/14/22 Page: 2 of 5 PAGEID #: 2986
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`I.
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`Introduction
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`MEMORANDUM IN SUPPORT
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`On November 4, 2021, after being granted leave to do so, (see Doc. No. 78), Plaintiffs filed
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`a Supplement to their Second Amended Complaint (Doc. No. 79). That Supplement included a
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`new claim for Misappropriation of Trade Secrets, which is based on Defendants’ revelation that,
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`following the lawsuit, they developed a “new” and supposedly “unique” artificial intelligence
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`software platform and plan to use it to compete with Plaintiffs. Suppl. (Doc. No. 79), ¶ 21. More
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`specifically, Plaintiffs have alleged that “Defendants knowingly and improperly, and without the
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`knowledge or authorization by the Stratesphere Companies, retained a copy of the Software
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`(and/or other Assets) and/or otherwise used the Software (and/or other Assets) to create, in whole
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`or in part, their supposedly new software and/or artificial intelligence platform.” Id., ¶ 72. To
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`date, Defendants have not filed an answer to this Supplement, and therefore, have not denied these
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`and other factual allegations. As such, Plaintiffs are entitled to judgment on the pleadings as to
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`that claim.
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`II.
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`Law and Analysis
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`A.
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`Standard
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`Rule12(c) of the Federal Rules of Civil Procedure permit any party to move for judgment
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`on the pleadings. The standard for judgment on the pleadings is well settled: all well-pleaded
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`allegations are taken as true and the motion should be granted where there are no material issues
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`of fact and the party making the motion is entitled to judgment as a matter of law. See JPMorgan
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`Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007).
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`Case: 2:20-cv-02972-MHW-KAJ Doc #: 93 Filed: 03/14/22 Page: 3 of 5 PAGEID #: 2987
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`B.
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`Plaintiffs are entitled to judgment on the pleadings with respect to their
`Misappropriation of Trade Secrets claim.
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`Pursuant to Rule 8 of the Federal Rules of Civil Procedure, factual allegations contained in
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`a pleading (other than as to damages) are deemed admitted unless denied in a responsive pleading.
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`Fed. R. Civ. P. 8(b)(6). This Court has previously recognized the validity of applying Rule 8(b)(6)
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`when a defendant fails to file a responsive pleading. See Hairston v. Franklin Cty. Sheriff’s Office
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`Center Main Jail 1, 2018 WL 1904670, at *1 (S.D. Ohio Apr. 23, 2018) (granting judgment to the
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`plaintiff as to liability because defendants were deemed to have admitted factual allegations by
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`failing to answer); Henricks v. Pickaway Correctional Institution, 2016 WL 4577800, at *1 (S.D.
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`Ohio Sept. 2, 2016) (deeming factual allegations admitted because the defendant never filed an
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`answer). Moreover, courts have applied this rule in the context of intellectual property cases—
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`even where the defendant was otherwise defending the case. See ICG-Internet Commerce Group,
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`Inc. v. Wolf, 519 F. Supp.2d 1014, 1018 (D. Ariz. 2007) (failure to deny copyright holder’s
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`allegation that defendant prepared unauthorized derivative works deemed an admission); Miller
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`Studio, Inc. v. Pacific Import Co., 39 F.R.D. 62, 65 (S.D. N.Y. 1965) (failure to deny that work
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`was an original work by the plaintiff and was copyrightable deemed an admission).
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`In this case, it has been over four months since Plaintiffs filed their Supplement, and yet
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`Defendants have failed to file any answer or other responsive pleading. As such, the factual
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`allegations contained in that Supplement (other than damages) are deemed admitted. Those factual
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`allegations include the following:
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` Plaintiffs obtained trade secrets and other confidential business information
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`through the APA;
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` Defendants gained access to Plaintiffs’ trade secrets and other confidential business
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`information via their confidential contractual relationships with Plaintiffs; and
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`Case: 2:20-cv-02972-MHW-KAJ Doc #: 93 Filed: 03/14/22 Page: 4 of 5 PAGEID #: 2988
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` Defendants knowingly and improperly, and without authorization, used that trade
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`secret and other confidential business information to create, in whole or in part,
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`their supposedly new software artificial intelligence platform.
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`Suppl. (Doc. No. 79), ¶¶ 69-73. These undenied facts establish the key elements as to liability on
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`Plaintiffs’ Misappropriation claim. See Premier Dealer Service, Inc. v. Allegiance Administrators,
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`LLC, 2018 WL 5801283, *4 (S.D. Ohio Nov. 6, 2018) (setting forth elements of misappropriation
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`claim). Consequently, there is no dispute of fact and Plaintiffs are entitled to judgment as a matter
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`of law.
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`III. Conclusion
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`For each of the foregoing reasons, Plaintiffs respectfully request that the Court grant this
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`Motion and enter judgment in favor of Plaintiffs, as to liability, with respect to their
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`Misappropriation of Trade Secrets claim.
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` Respectfully submitted,
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` /s/ Jonathan P. Corwin
` James E. Arnold (0037721)
`Jonathan P. Corwin (0075056)
`Tiffany L. Carwile (0082522)
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`ARNOLD & CLIFFORD LLP
`115 W. Main Street, 4th Floor
`Columbus, Ohio 43215
`Tel: (614) 460-1600
`Fax: (614) 469-1066
`Email:
`jarnold@arnlaw.com
` jcorwin@arnlaw.com
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` tcarwile@arnlaw.com
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` Counsel for Plaintiffs/Counterclaim Defendants
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`4 
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`Case: 2:20-cv-02972-MHW-KAJ Doc #: 93 Filed: 03/14/22 Page: 5 of 5 PAGEID #: 2989
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`CERTIFICATE OF SERVICE
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`I hereby certify that on March 14, 2022, a true and accurate copy of the foregoing Motion
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`was filed with the Court using the Clerk of Court’s electronic filing system, which will send notice
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`of this filing to all parties that have entered an appearance in this matter and consented to electronic
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`service.
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`s/ Jonathan P. Corwin
`Jonathan P. Corwin
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`5 
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