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August 9, 2004.


The opinion of the court was delivered by: CHARLES HAIGHT, District Judge


This case involves a dispute over ownership and use of two computer programs. Plaintiff Logicom Inclusive, Inc. ("Logicom") along with individual plaintiffs Stephen Boriotti and Richard Rosen allege that defendants W.P. Stewart & Co., Inc. ("WPS"), William P. Stewart, John C. Russell, Edward Butler, and Rocco Macri infringed their exclusive rights under the Copyright Act of 1976, 17 U.S.C. § 101, et seq. (the "Copyright Act" or the "Act") to create derivative works of the programs. Plaintiffs also bring state and common law actions for conversion, unjust enrichment, and malicious interference with contract rights.

Defendants move to dismiss plaintiffs' complaint pursuant to Fed.R.Civ.P. 12(b)(6), for failure to state a cognizable claim. Defendants also move pursuant to Fed.R.Civ.P. 12(b)(5) to dismiss plaintiffs' complaint against individual defendants Stewart, Russell, and Macri for insufficiency of service of process. Plaintiffs oppose these motions and cross-move to amend the Summons and Complaint to add W.P. Stewart & Co., Ltd. and Stefan Stefanowski as defendants. and to extend the time to effect service of process. This Opinion resolves all motions.


  Logicom is a software development and services company incorporated and with its principal place of business in the State of New York. Boriotti is a resident of New York and Logicom's president. Rosen is also a New York resident and serves as Logicom's treasurer.

  WPS is a publicly traded financial services firm, incorporated and with its principal place of business in the State of New York. William P. Stewart is WPS's president, John C. Russell its chief executive officer, Edward Butler its chief information officer, and Rocco Macri its chief financial officer. All are New York residents.

  Subject matter jurisdiction over the case is conferred by 28 U.S.C. § 1338(a), which gives federal courts original jurisdiction over civil actions arising under the Copyright Act, and 28 U.S.C. § 1367(a), granting district courts supplemental jurisdiction over state and common law claims that form part of the same case or controversy as the underlying federal action. Venue lies in the Southern District of New York under 28 U.S.C. § 1391(b), as all defendants reside therein.


  For purposes of this motion, Plaintiff's well-pleaded allegations of fact will be taken as true, in accordance with the standard of review for a motion to dismiss. See Papasan v. Allain, 478 U.S. 265, 283 (1986). In addition, in accordance with the standards set forth in Part III, infra, I also take judicial notice of the public documents identified at the end of this section.

  From 1985 to March 2003, WPS hired Logicom as an independent contractor, to develop and service the software infrastructure upon which WPS managed its business. During the course of this 18 year history, plaintiffs created and developed approximately a dozen software programs, tailored to WPS's specific needs.

  Though Logicom had been conducting business since 1985, it was first incorporated, as "Logicom, Inc.," in October 1990. On March 23, 1994, Logicom was dissolved by State proclamation for failure to pay state franchise taxes. According to Rosen, neither he nor Boriotti were aware of their company's dissolution until early 2003. In the meantime, the individual plaintiffs continued in good faith, to conduct business, file corporate tax returns, and pay franchise taxes. Plaintiffs also received official state correspondence addressed to Logicom after the corporation had been dissolved.

  In 1995, plaintiffs created the two software programs at issue in this case. Entitled "Order Entry System" and "VisualTrader" (the "computer programs" or "programs"), both were tailored for WPS's business. These programs were not registered with the United States Copyright Office until 2002.

  During the course of their business relationship, plaintiffs made "regular, even daily" modifications to their programs. These modifications were necessary for the programs to be of value to defendants' changing needs. Some of these modifications were made by Boriotti and Rosen themselves. At other times, Logicom hired independent contractors to make these software adjustments and perform other services on site at WPS. One such independent contractor plaintiffs hired was Stefan Stefanowski.

  The relationship between the parties remained amicable until 2001, when WPS's auditors, aware that there was no formal contract between the companies, urged defendants to enter into such a contract. By November 2002 various WPS officers, including Butler and Macri, entered into negotiations with plaintiffs for a licensing arrangement that would allow WPS to access Logicom's source code and modify its software, and a possible WPS buyout of Logicom's contracts with its subcontractors, including Stefanowski. As these negotiations were taking place, plaintiffs obtained Certificates of Registration from the United States Copyright Office for the computer programs, Order Entry System and Visual Trader, both dated December 20, 2002. Meanwhile, defendants also attempted to replace Logicom's software with alternative software developed by other companies, but were unsuccessful in those efforts.

  Negotiations continued through January and February 2003, between Boriotti, Rosen, and Logicom's counsel for the plaintiffs, and Butler and Macri and WPS's counsel for the defendants. By February 2003, the parties reached a tentative agreement.

  Shortly thereafter, Russell, who evidently did not take part in the negotiations, informed the plaintiffs that he had rejected this agreement. Likewise, Stewart notified the plaintiffs that the terms of agreement negotiated by Butler and Macri were a "mistake," and that another arrangement would need to be worked out, under which WPS could acquire greater rights to Logicom's software. Finally, on March 9, 2003, WPS terminated its relationship with Logicom, and Macri, under orders given by Russell, directed Logciom personnel to leave the WPS premises.

  Between April 1999 and March 2003, WPS had paid Logicom approximately $70,000 a month for its services.

  For several weeks after they had been terminated, Boriotti and Rosen received pager alerts triggered by Logicom's software running on WPS computers. The software had been programmed to send pager alerts to plaintiffs when encountering conditions which required modification. Due to these pager alerts, plaintiffs became aware of the fact that defendants continued to modify plaintiffs' software even after terminating their relationship with plaintiffs. Plaintiffs further suspected that defendants had hired Stefanowski to service the programs and had obtained proprietary knowledge and passwords from him to get access to the source code.

  Sometime in early 2003, plaintiffs finally became aware that their company had been dissolved, when a lender to whom they applied for a line of credit brought it to their attention.*fn1 When plaintiffs initiated action to reinstate their corporate charter, they discovered that the name Logicom, Inc. was already in use by another company. Consequently, they changed their name to "Logicom Inclusive, Inc." On May 5, 2003, the State of New York reinstated plaintiffs' corporate charter under this new name.

  In their original complaint, plaintiffs allege four causes of action against defendants, as follows: Count I states a claim against defendants for willful infringement of plaintiffs' copyrights in the software programs "Order Entry System" and "Visual Trader" in violation of the Copyright Act. Count II is a claim for conversion based on defendants' wrongful possession of programs and conversion of the programs to their own use. Count III is a claim for unjust enrichment, and alleges that a constructive contract existed between Logicom and WPS which defendants breached by appropriating Logicom's software for its own use. Count IV states a claim for malicious interference with Logicom's consulting contract with Stefanowski. Plaintiffs' proposed amended complaint seeks to add a fifth cause of action against Stefanowski for breach of contract, thereby adding him as a party defendant.*fn2 Finally, defendants request the Court to take judicial notice under Federal Rule of Evidence 201 of the following public documents, on file with the State of New York:
Certificate of Incorporation of Logicom, Inc., dated October 17, 1990;
Dissolution by proclamation, dated March 23, 1994, and Annulment of Dissolution, dated May 8, 2003; and
Certificate of Amendment, dated May 8, 2003, changing corporation's name from Logicom Inc. to Logicom Inclusive, Inc.
  On a motion to dismiss a complaint under Rule 12(b)(6) for failure to state a claim upon which relief can be granted, the trial court's function "is merely to assess the legal feasibility of the complaint, not to assay the weight of the evidence which might be offered in support thereof." Geisler v. Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980); see Ricciuti v. N.Y.C. Transit Authority, 941 F.2d 119, 124 (2d Cir. 1991). "[T]he issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims." Scheuer v. Rhodes, 416 U.S. 232, 236 (1974). The district court should grant a Rule 12(b)(6) motion "only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73 (1984) (citing Conley v. Gibson, 355 U.S. 41, 45-46 (1957)).

  Except in certain circumstances, consideration of a motion to dismiss the complaint must focus on the allegations contained on the face of the complaint. See Cortec Industries, Inc. v. Sum Holdings, L.P., 949 F.2d 42, 47 (2d Cir. 1991), cert. denied, 112 S.Ct. 1561 (1992); Kramer v. Time Warner, Inc., 937 F.2d 767, 773 (2d Cir. 1991). On a motion to dismiss, a district court must accept plaintiff's well-pleaded factual allegations as true, Papasan, 478 U.S. at 283, and the allegations must be "construed favorably to the plaintiff." LaBounty v. Adler, 933 F.2d 121, 123 (2d Cir. 1991). "[A] Rule 12(b)(6) motion to dismiss need not be granted nor denied in toto but may be granted as to part of a complaint and denied as to the remainder." Decker v. Massey-Ferguson, Ltd., 681 F.2d 111, 115 (2d Cir. 1982).

  In considering a motion to dismiss pursuant to 12(b)(5) for insufficiency of service of process, "a Court must look to matters outside the complaint to determine whether it has jurisdiction." Darden v. DaimlerChrysler N. Am. Holding Corp., 191 F. Supp.2d 382, 387 (S.D.N.Y. 2002). "Conclusory statements that a defendant was properly served are insufficient to overcome a defendant's sworn affidavit that he was never served with process." Howard v. Klynveld Peat Marwick Goerdeler, 977 F. Supp. 654, 658 (S.D.N.Y. 1997), aff'd, 173 F.3d 844 (2d Cir. 1999). When a defendant raises a 12(b)(5) challenge to the sufficiency of service of process, "the plaintiff bears the burden of proving its adequacy." Preston v. New York, 223 F. Supp.2d 452, 466 (S.D.N.Y. 2002).

  Finally, Fed.R.Evid. 201(b) allows the Court to take judicial notice of facts "not subject to reasonable dispute" that are either "(1) generally known within the territorial jurisdiction of the trial court or (2) capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned." Courts may take notice of "the contents of relevant public disclosure documents . . . required by law to be filed" and "are relevant not to prove the truth of their contents but only to determine what the documents stated." Kramer v. Time Warner, Inc., 937 F.2d 767, 774 (2d Cir. 1991).


  I will first address plaintiffs' federal claim for copyright infringement, followed by plaintiffs' state law claims. Third I will consider the sufficiency of service of process, and lastly, plaintiffs' request to amend the complaint.

  A. Federal Copyright Claim

  1) Are plaintiffs' copyrights valid?

  To bring a claim for copyright infringement, a plaintiff must establish, first, the existence of a valid copyright, and second, that the defendant has infringed the copyright. Whimsicality, Inc. v. Rubie's Costume Co., 891 F.2d 452, 455 (2d Cir. 1989). Defendants' first allegation is that plaintiffs do not hold valid copyrights in the two computer programs at issue in this case.

  a. Seven-year hiatus

  Plaintiffs have certificates of registration for the two computer programs at issue in this case. Copies of the certificates have been attached to plaintiffs' complaint. Both certificates identify 1995 as the "year in which the creation of this work was completed," and identify the author as "Logicom, Inc." The sections in which the author is to list the "Date and Nation of First Publication" have been left blank. Finally, both certificates are dated December 20, 2002.

  At first blush, plaintiffs' certificates of registration of the two computer programs would appear to establish the validity of plaintiffs' copyrights. However, 17 U.S.C. § 410(c) states:
In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate. The evidentiary weight to be accorded the certificate of a registration made thereafter shall be within the discretion of the court.
  Defendants argue that since the programs were not registered until 2002, seven years after the programs were completed, the certificates have been stripped of their presumptive validity. They further argue that this shifts the burden to plaintiffs to establish the validity of their copyright ownership, a burden which, defendants contend, they have failed to meet. In response, plaintiffs assert that the seven year gap between the "completion" of plaintiffs programs and the date of registration is misleading. In fact, plaintiffs argue, both programs received "major overhauls" as recently as 2002 and 2001.*fn3 Following plaintiffs' logic, the actual "completion date" for each program as they currently exist falls within the statutorily assigned five-year period, and therefore the certificates of registration deserve to be considered prima facie evidence of the validity of the two copyrights.

  Plaintiffs' response to defendants' allegation may have taken them out of the frying pan and into the fire. For it leads one to ask: precisely which versions of the programs are the certificates of registration protecting? Both certificates state that the respective programs were completed in 1995. Defendants assert therefore that post-1995 versions of the programs have not yet been registered with the U.S. Copyright Office. If this is so, then plaintiffs may not be entitled to proceed with their action until proper registration has been completed.*fn4

  Plaintiffs criticize defendants' suggestion as unworkable, noting that there are no standards for determining at what point a software program has been modified enough to call for a new copyright registration. ("However extensively the programs were modified from time to time, they remain the same programs, with the same names or titles, and serving the same purposes as their original versions." Plaintiff's Reply Memorandum in Support of Cross Motion, at 1.) While plaintiffs may be correct in that assertion, these same principles lead to the conclusion that the "major overhauls" to the computer programs made between 1999 and 2002 do not narrow the seven-year gap between the date of completion and date of registration. Plaintiffs cannot have it both ways. Just as there are no standards for determining when a party must re-register copyrightable material after a new version has been made, there are no standards for determining when a new or revised version resets the five-year clock for purposes of § 410(c) copyright validity.

  b. Publication

  There is a second and perhaps more fundamental problem concerning the § 410(c) presumption of copyright validity. The statute requires that a court begin its countdown five years after first publication of a copyrightable work. Therefore, an underlying question must be whether plaintiffs' computer programs have been "published" at all. For reasons stated below, I find that they have not.

  "Publication" is defined in the 1976 Copyright Act as
[T]he distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending. The offering to distribute copies of phonorecords to a group of persons for purposes of further distribution, public performance, or public display, constitutes a publication. A public performance or display of a work does not of itself constitute publication.
17 U.S.C. § 101.

  This definition codifies the concepts of limited and general publication developed under the 1909 Act.*fn5 A "limited publication" is not considered to have been ...

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