108 Degrees v. Merrimack Golf Club

2010 DNH 054

• Court: District Court, D. New Hampshire
• Decided: March 25, 2010
• Docket: CV-09-298-JL
• Status: Published

Opinion

108 Degrees v . Merrimack Golf Club CV-09-298-JL 3/25/10 UNITED STATES DISTRICT COURT DISTRICT OF NEW HAMPSHIRE

108 Degrees, LLC

v. Civil N o . 09-cv-298-JL Opinion N o . 2010 DNH 054 Merrimack Golf Club, Inc., Kevin Kattar, Genesis Management Group, LLC, and Mark Buckley

MEMORANDUM ORDER

This case arises from a golf course marketing deal that

landed in the rough. Plaintiff 108 Degrees, LLC, a marketing

company from New Hampshire, brought suit against the owners and

operators of the Merrimack Valley Golf Club in Methuen,

Massachusetts,1 alleging that they breached a contract and a

promissory note by refusing to pay for a new website that 108

Degrees designed for the golf club. In addition, 108 Degrees

accused the defendants of infringing its copyright by launching a

nearly identical website. See 17 U.S.C. § 501. The defendants

responded with an array of counterclaims, alleging that 108

Degrees fraudulently induced the contract by overstating its

1 Specifically, the defendants include the golf course’s owners, Kevin Kattar and Merrimack Golf Club, Inc., as well as its management company, Genesis Management Group, LLC. A fourth defendant, the golf course’s current web designer Mark Buckley, is voluntarily dismissed from the case without prejudice pursuant to this court’s order dated January 2 2 , 2010, because 108 Degrees did not notify the court by March 2 0 , 2010 that it intended to pursue claims against Buckley. qualifications, breached the contract by delivering an inferior

product, and engaged in unfair business practices. This court

has subject-matter jurisdiction under 28 U.S.C. §§ 1331 (federal

question), 1338(a) (copyright), and 1367(a) (supplemental

jurisdiction).

The defendants have moved to dismiss two of the claims

against them under Fed. R. Civ. P. 12(b)(6). They argue that 108

Degrees cannot recover for copyright infringement because the

website materials were “work made for hire” and thus belong to

the golf course. See 17 U.S.C. § 201(b). They also argue that

108 Degrees cannot recover under the promissory note because it

failed to attach the note to its complaint. After hearing oral

argument, this court denies the motions. Whether the website

materials qualify as “work made for hire” is unclear from the

complaint, so that issue cannot be resolved yet. And while it

would have been helpful for 108 Degrees to attach the promissory

note to its complaint, nothing in the Federal Rules of Civil

Procedure required it to do s o .

I. Applicable legal standard

To survive a motion to dismiss under Rule 12(b)(6), the

plaintiff’s complaint must make factual allegations sufficient to

“state a claim to relief that is plausible on its face.”

2 Ashcroft v . Iqbal, 129 S . C t . 1937, 1949 (2009) (quoting Bell

Atl. Corp. v . Twombly, 550 U.S. 5 4 4 , 570 (2007)). In deciding

such a motion, the court must accept as true all well-pleaded

facts set forth in the complaint and must draw all reasonable

inferences in the plaintiff’s favor. Gargano v . Liberty Int’l

Underwriters, Inc., 572 F.3d 4 5 , 48-49 (1st Cir. 2009). “A claim

has facial plausibility when the plaintiff pleads factual content

that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Iqbal, 129 S .

C t . at 1949 (citing Twombly, 550 U.S. at 5 5 6 ) .

II. Copyright infringement claim

The defendants argue that 108 Degrees’s copyright

infringement claim (Count 1 ) must be dismissed because the

website materials at issue were “work made for hire” and

therefore belong to the golf course, not to 108 Degrees. See 17

U.S.C. § 201(b) (providing that the hiring party owns the

copyright in “work made for hire,” unless otherwise agreed in

writing). As explained below, however, it is unclear from the

complaint whether the website materials fall within the statutory

definition of “work made for hire.” See id. § 101. Moreover,

even if they d o , the complaint alleges that the parties agreed in

writing that 108 Degrees would own the copyright until it

3 received full payment from the golf course, which if true would

amount to a contractual resolution of the issue (in other words,

that the parties “contracted around” the work-for-hire doctrine).

For both reasons, this court cannot dismiss 108 Degrees’s

copyright infringement claim at this early stage.

Under the Copyright Act of 1976, copyright ownership “vests

initially in the author or authors of the work.” 17 U.S.C.

§ 201(a). “As a general rule, the author is the party who

actually creates the work, that i s , the person who translates an

idea into a fixed, tangible expression entitled to copyright

protection. The Act carves out an important exception, however,

for ‘works made for hire.’” Cmty. for Creative Non-Violence v .

Reid, 490 U.S. 7 3 0 , 737 (1989) (quoting 17 U.S.C. § 201(b)). If

a copyrighted work falls within that exception, then “‘the

employer or other person for whom the work was prepared is

considered the author’ and owns the copyright, unless there is a

written agreement to the contrary.” Id.

A copyrighted work “comes within the work for hire doctrine

if it consists of either (i) a work prepared by an employee

within the scope of her employment or (ii) one prepared by an

independent contractor on special order or commission.” Warren

Freedenfeld Assocs., Inc. v . McTigue, 531 F.3d 3 8 , 48 (1st Cir.

2008) (citing 17 U.S.C. § 1 0 1 ) . Here, 108 Degrees created the

4 website materials as an independent contractor, not an employee.

Not every work by an independent contractor qualifies as a work

for hire. The work must be

specially ordered or commissioned for use as a contribution to a collective work, as part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.

17 U.S.C. § 101 (emphasis added). Thus, unless the website

materials fall within one of those nine “enumerated categories”

and were created pursuant to a written work-for-hire agreement,

they will not fall within the statutory exception. Creative Non-

Violence, 490 U.S. at 748; McTigue, 531 F.3d at 48-49.

As with many questions involving copyright law and the

internet, “[c]ourts have not weighed in on whether a website can

fall under one of the nine enumerated” categories in the work-

for-hire statute. Han Sheng Beh, Applying the Doctrine of Work

for Hire and Joint Works to Website Development, 25 Touro L . Rev.

943, 971 (2009). It is possible that website materials might

fall within the “other audiovisual work” category, see, e.g.,

Allen v . Ghoulish Gallery, N o . 06-cv-371, 2007 WL 4207923, *2 n.3

(S.D. Cal. Nov. 2 0 , 2007), at least if they “consist of a series

of related images . . . together with accompanying sounds.” 17

5 U.S.C. § 101. And, of course, if they include the specific

content listed in the statute (e.g., an instructional text, a

test, or an atlas), then they also might qualify. “Because the

creation of websites can differ drastically from case to case,”

however, one commentator has suggested that “each website would

have to be analyzed individually to determine if it could fall

within the enumerated works.” Beh, supra, at 971.

The defendants have not identified which statutory category

they believe the website materials fall i n , and based solely on

the factual information alleged in the complaint, this court

cannot tell whether the materials fall within any specified

category. And in any event, this court need not reach that

issue, because the other statutory prerequisite has not been

satisfied: nothing in the complaint suggests that the parties

had a written work-for-hire agreement. The defendants point to

language in the complaint that refers the website materials as

“work prepared by the Plaintiff for the Merrimack Valley Golf

Club.” But as the statute makes clear, that is not enough. To

satisfy § 1 0 1 , the “writing must precede the creation” of the

copyrighted work, Schiller & Schmidt, Inc. v . Nordisco Corp., 969

F.2d 4 1 0 , 413 (7th Cir. 1992), or at the very least must

“confirm[] a prior agreement, either explicit or implicit, made

before the creation of the work.” Playboy Enters., Inc. v .

6 Dumas, 53 F.3d 549, 559 (2d Cir. 1995); see also Saenger Org.,

Inc. v . Nationwide Ins. Licensing Assocs., Inc., 119 F.3d 5 5 , 60

(1st Cir. 1997) (unwritten agreement is not enough to create or

alter work-for-hire status). Here, 108 Degrees denies any such

agreement. Thus, at least for now, this court cannot deem the

website materials a work for hire.

Moreover, even assuming arguendo that the website materials

qualified as work for hire, that would not necessarily resolve

the issue of copyright ownership, because the Copyright Act

allows parties to contract around the work-for-hire rules. See

17 U.S.C. § 201(b) (hiring entity owns copyright in work for hire

“unless the parties have expressly agreed otherwise in a written

instrument signed by them). Here, 108 Degrees alleges that the

parties signed a promissory note acknowledging that 108 Degrees

would own the copyright in the website materials until it

received full payment from the golf course. Although the

defendants vehemently dispute the validity of the note, the

plaintiff’s allegations must be accepted as true for purposes of

resolving the motion to dismiss. In light of those allegations,

the copyright claim cannot be dismissed on work-for-hire grounds.2

2 As an alternative ground for dismissing this claim, one of the defendants (Genesis Management Group) argues that it cannot

7 III. Promissory note claim

The defendants also argue that 108 Degrees’s claim for

recovery under the promissory note (Count 2 ) must be dismissed

because 108 Degrees failed to attach the promissory note to its

complaint.3 But “there is no requirement [under the Federal

be held liable for copyright infringement because it “is merely the agent” of Merrimack Golf Club, and “no power exists in the agent to copyright anything.” This court already rejected that argument when it denied Genesis Management’s earlier motion to dismiss. See Order dated Jan. 2 2 , 2010. The argument reflects a fundamental misunderstanding of the plaintiff’s claim, which is not that the defendants unlawfully copyrighted something, but rather that they unlawfully infringed the plaintiff’s copyright. The complaint specifically alleges that Genesis Management commissioned and directed the infringing work, which is enough to state a claim for copyright infringement. See, e.g., MGM Studios Inc. v . Grokster, Ltd., 545 U.S. 913, 930 (2005) (noting that “doctrines of secondary liability . . . are well established in the law” of copyright, including vicarious liability and contributory infringement); Restatement (Third) of Agency § 7.01 (unless a statute provides otherwise, an “agent is subject to liability to a third party harmed by the agent’s tortious conduct”). 3 At oral argument, defense counsel withdrew this argument except as to one of the defendants, Merrimack Golf Club, with respect to which she also raised a new argument: that the golf club cannot be held liable under the note because it is not one of the listed signatories. Rather, the note refers to “Merrimack Golf Corporation,” which according to defense counsel does not exist. “This court generally will not consider theories raised for the first time at oral argument, out of fairness to adverse parties and the court.” Prince v . Metro. Life Ins. Co., 2010 DNH 046, 22 n.11 (citing Doe v . Friendfinder Network, Inc., 540 F. Supp. 2d 2 8 8 , 309 n.19 (D.N.H. 2008)). Moreover, even if this argument had been properly raised, the parties appear to dispute whether the note’s reference to Merrimack Golf Corporation was merely a scrivener’s error. This court cannot resolve that disputed factual issue on a motion to dismiss.

8 Rules of Civil Procedure] that the promissory note[] be attached

to the complaint.” In re Nat’l Century Fin. Enters., Inc., Inv.

Litig., 617 F. Supp. 2d 7 0 0 , 720 (S.D. Ohio 2009); see also

Venture Assocs. Corp. v . Zenith Data Sys. Corp., 987 F.2d 429,

431 (7th Cir. 1993) (“A plaintiff is under no obligation to

attach to her complaint documents upon which her action is

based.”) (citing Romani v . Shearson Lehman Hutton, 929 F.2d 875,

879 n.3 (1st Cir. 1991)). And even if there were such a

requirement, 108 Degrees attached the promissory note to its

objection, thereby mooting this issue.

As a practical matter, the defendants are correct; the

better practice would have been for 108 Degrees to attach the

promissory note to its complaint, particularly given the parties’

dispute about the validity of the note and the circumstances of

its signing. But the absence of the note from the complaint

provides no basis for dismissing 108 Degrees’s claim for recovery

under the note.

IV. Conclusion

For the reasons set forth above, the defendants’ motions to

dismiss4 are DENIED. Pursuant to this court’s previous order

4 Documents n o . 35 and 3 9 .

9 dated January 2 2 , 2010, defendant Mark Buckley is voluntarily

DISMISSED from the case without prejudice.

SO ORDERED.

Josep __N . Laplante United States District Judge

Dated: March 2 5 , 2010

cc: Paul M . DeCarolis, Esq. Denise A . Brogna, Esq. Mark B . Johnson, Esq. Robert S . Carey, Esq.