United States District Court, S.D. New York
Robert D. Owen, Esq., Travis J. Mock, Esq., Sutherland Asbill & Brennan LLP, New York, NY, For Plaintiff.
Leon Medzhibovsky, Esq., Airina L. Rodrigues, Esq., Francis W. Ryan, Esq., Marc E. Miller, Esq., Melissa A. Reinckens, Esq., DLA Piper LLP, New York, NY, For Defendants.
OPINION AND ORDER
SHIRA A. SCHEINDLIN, District Judge.
I. INTRODUCTION AND BACKGROUND
Paysys International ("Paysys") is a software company that, in 1988, licensed one of its products - CardPac - to a company called Sema, predecessor to Sema SA and Atos IT, two of the named defendants here. The license was codified in an agreement ("License Agreement") that, according to Paysys, strictly limited Sema's ability to assign or sublicense its rights. In 2001, Paysys and Sema entered into a settlement ("Settlement Agreement") that effectively amended the License Agreement to, inter alia, designate the Southern District of New York as the proper venue, and New York law as the governing law, for adjudicating future disputes. In 2004, Sema was acquired by a French company, Atos SE ("Atos"), and eventually renamed Atos IT Services ("Atos IT"). In the course of the acquisition, Sema (or Atos IT) assigned some or all of its rights under the License Agreement to Atos ("Assignment Agreement"). Through a series of internal transactions, all of Sema's assets were eventually transferred to the control of Atos. At present, Sema is "defunct, " and it is unknown whether Atos IT continues to operate - but in either case, Atos now possesses and exercises all of the rights originally granted to Sema under the License Agreement.
Paysys has alleged multiple grounds for relief, but each rests on the same essential theory. Namely, Sema was not permitted, under the terms of the License Agreement, to transfer or assign its interests, and that the acquisition of Sema by Atos - and the resulting assignment of intellectual property - amounts to some combination of breach of contract, copyright infringement (under both domestic and foreign law), misappropriation of trade secrets, conversion, and unfair competition.
The four named defendants have moved to dismiss under Rule 12(b)(2) - for want of personal jurisdiction over Atos, Worldline, and Atos IT (the "French defendants") - as well as Rule 12(b)(6), for failure to state a claim. The jurisdictional argument has two components. First, the French defendants do not operate in the United States - much less New York - which means they are not subject to the general jurisdiction of this Court. Second, although the Settlement Agreement grants this Court specific jurisdiction over disputes between Paysys and Sema, defendants argue that Paysys is estopped from asserting the forum designation clause against the French defendants, because Paysys's contract claim rests on the proposition that Sema had no authority to assign its rights and liabilities in 2004, which, if true, means the French defendants are not parties to the License Agreement (where the forum designation clause is codified). Therefore, according to defendants, Paysys cannot argue that the forum designation clause of the License Agreement - but only that clause - applies to the French defendants. The upshot of Paysys' legal theory is that the License Agreement does not apply to the French defendants at all - Paysys cannot "pick and choose one provision of [a contract while] repudiating all others."
Defendants offer several arguments in support of their motion to dismiss for failure to state a claim. First, defendants maintain that Paysys's contract claims fail as a matter law, because the License Agreement unambiguously permitted Sema to assign its rights and liabilities to Atos. Second, defendants argue that Paysys's claims for conversion and unfair competition are legally defective, duplicative of its breach of contract claims, and time-barred. Third, defendants argue that Paysys's claim for misappropriation of trade secrets is legally defective and time-barred. Fourth, and finally, defendants argue that Paysys's domestic copyright claims fail as a matter of law, and that its foreign copyright claims, though potentially viable, should be adjudicated elsewhere under the doctrine of forum non conveniens.
For the reasons set forth below, defendants' motion is GRANTED in part and DENIED in part, and I reserve judgment on the bulk of the parties' arguments, pending jurisdictional discovery to determine the exact relationship among the defendants.
II. STANDARD OF REVIEW
When resolving a motion to dismiss, the court must "accept all factual allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor." A claim is plausible - and survives dismissal - "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."
III. PERSONAL JURISDICTION
A court has personal jurisdiction over a foreign defendant if (1) the defendant is subject to the court's specific jurisdiction, or (2) the defendant is subject to the court's general jurisdiction. With respect to specific jurisdiction, Paysys's main argument is that defendants are subject to the terms of the License Agreement, which specifies the Southern District of New York as the forum for adjudicating disputes. In response, defendants protest that Paysys wants to "have it both ways." On the one hand, Paysys argues that Sema's 2004 assignment of its rights and liabilities to the French defendants violated the terms of the License Agreement, so the French defendants never became parties to the License Agreement. On the other hand, Paysys argues that the French defendants are bound by the forum designation clause of the License Agreement, because they "purport[ed] to operate under the [License Agreement]." In defendants' view, "[a] party to a contract cannot enforce a forum selection clause against a non-signatory when the enforcing party avers that the relevant contract itself is invalid... pick[ing] and choos[ing] one provision of [a contract while] repudiating all others."
Although defendants' "pick and choose" argument may not always carry the day, it has some appeal in this case. It would be awkward for this Court to exercise personal jurisdiction over the French defendants pursuant to the forum selection clause, but subsequently hold that the forum selection clause is void as applied to the French defendants - because the 2004 assignment was invalid - ...