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Graham Hanson Design LLC v. 511 9th LLC and Solly Assa

February 24, 2011

GRAHAM HANSON DESIGN LLC, PLAINTIFF,
v.
511 9TH LLC AND SOLLY ASSA, DEFENDANTS.



The opinion of the court was delivered by: Wood, U.S.D.J.:

Opinion & Order

Plaintiff Graham Hanson Design LLC ("Plaintiff") brings this action against 511 9th LLC ("511") and Solly Assa ("Assa") (collectively, "Defendants"), and makes out the following claims for relief: (1) copyright infringement; (2) breach of contract; (3) account stated; (4) quantum meruit; (5) unjust enrichment; and (6) conversion.

Defendants move to dismiss the claim for copyright infringement pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure ("Rule 12(b)(6)"). Defendants argue that, because they "have an implied[,] non-exclusive license" to use the work product at issue, Plaintiff's claim for copyright infringement fails as a matter of law. (Def. Mem. at 1.) In the event that the copyright infringement claim is dismissed, Defendants move to dismiss the action for lack of subject matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure ("Rule 12(b)(1)"). In the alternative, Assa moves to dismiss the copyright infringement claim against him pursuant to Rule 12(b)(6), arguing that Plaintiff has alleged insufficient facts to pierce the corporate veil.

For the reasons stated below, Defendants' motion is denied in its entirety.

I. Background

The following facts are drawn from Plaintiff's Complaint, and are taken as true for the purposes of Defendants' Rule 12(b)(6) motion. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). The Court examines only those facts relevant to the instant motion.

Plaintiff, a design agency, is "active in all areas of strategic design, including corporate identity, branding, print communications and advertising, web design and development, electronic presentations and other interactive media . . . ." (Compl. ¶ 9.)

Defendant 511 is a limited liability company organized under New York law, with a principal place of business in New York City. (Id. ¶ 5.) Defendant Assa is "a member of 511 . . . ." (Id. ¶ 6.)

In approximately January 2007, 511 retained Plaintiff to design a promotional campaign for a condominium development. (Id. ¶ 10.) The terms of the engagement were memorialized in a contract dated on or about January 7, 2007 ("Contract"). (Id. ¶ 12.) The Contract was executed by both Plaintiff and 511.*fn1 (Id.) Plaintiff registered copyrights with the U.S. Copyright Office for certain properties it developed pursuant to the Contract, including a website, various promotional materials, and a logo ("Work Product"). (Id. ¶ 22.) The Contract provided that Plaintiff "shall own all right, title, interest and proprietary right of every kind to all drawings, artwork, models and other physical embodiments of its work" until "outstanding sums are paid" to Plaintiff. (Id. ¶ 23. See also id. ¶ 3.) The Contract also provided that 511 would pay Plaintiff's service fees, and reimburse Plaintiff for any expenses. (Id. ¶ 11.)

Pursuant to the Contract, Plaintiff developed and designed the Work Product and other materials. (Id. ¶¶ 1, 13.) Plaintiff billed 511 for these services, but 511 "refused to pay at least five [invoices]." (Id. ¶¶ 1, 15-20.) Defendant 511 owes Plaintiff $95,254.11, exclusive of an agreed-upon service charge for overdue payments. (Id. ¶¶ 14, 21.) Despite its failure to pay the invoiced amounts, 511 "has used [Plaintiff's Work Product] continuously since it was developed by [Plaintiff]." (Id. ¶ 25. See also id. ¶ 3.)

Plaintiff filed its Complaint on July 20, 2010. (Dkt. Entry No. 1.) Plaintiff alleges that Defendants are liable for, inter alia, "direct, contributory and vicarious copyright infringement for the unauthorized use of various copyrighted materials, including . . . the [Work Product]." (Compl. ¶ 2.) Plaintiff alleges that both Defendants "have exploited" the Work Product "for commercial gain without securing the rights to use the[se] materials." (Id. ¶ 28.) Plaintiff further alleges that Defendant Assa "aided and assisted [511] in the unauthorized exploitation" of the Work Product "for his own financial gain." (Id. ¶ 29. See also id. ¶ 6 ("Assa . . . was directly involved in the misappropriation of [Plaintiff's] intellectual property . . . .").)

Plaintiff contends that, because it asserts a claim under the Copyright Act, 17 U.S.C. § 101, et seq., subject matter jurisdiction is proper pursuant to 28 U.S.C. §§ 1331 and 1338. Plaintiff alleges that the Court has supplemental jurisdiction over the remaining state law claims pursuant to 28 U.S.C. § 1367.

Defendants filed the instant motion on August 26, 2010. ...


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