Color Switch LLC v. Fortafy Games DMCC

377 F. Supp. 3d 1075
CourtDistrict Court, E.D. California
DecidedMarch 29, 2019
DocketNo. 1:18-cv-00419-DAD-JLT
StatusPublished
Cited by15 cases

This text of 377 F. Supp. 3d 1075 (Color Switch LLC v. Fortafy Games DMCC) is published on Counsel Stack Legal Research, covering District Court, E.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Color Switch LLC v. Fortafy Games DMCC, 377 F. Supp. 3d 1075 (E.D. Cal. 2019).

Opinion

Dale A. Drozd, UNITED STATES DISTRICT JUDGE

*1080This matter is before the court on a motion to dismiss plaintiffs Color Switch Productions, Inc. and Color Switch LLC's (collectively, "plaintiff" or "Color Switch") complaint based on the enforcement of a forum selection clause filed on behalf of defendant Fortafy Games DMCC ("Fortafy"). (Doc. No. 9.) A hearing on the motion was held on July 17, 2018. Attorneys Dylan Mefford and Michael Collins appeared telephonically on behalf of Color Switch, and attorney Mehrnaz Boroumand Smith appeared on behalf of Fortafy. The court has considered the parties' briefs and oral arguments, and for the reasons set forth below, will grant defendant's motion to dismiss without leave to amend.

BACKGROUND

Color Switch is a technology company based in Bakersfield, California. (Doc. No. 1 at ¶¶ 7-8, 13.) In November of 2015, David Reichelt, the founder of Color Switch, developed the Color Switch game (the "game"), a mobile application-that has now been downloaded more than two hundred million times-"in which the player taps the device screen to make a ball jump through a series of obstacles, timing each jump just right so that the color of the ball matches the color of the moving obstacle it seeks to overcome. After clearing various obstacles, the ball changes color, adding further challenge to the gameplay." (Doc. No. 1 at ¶¶ 1, 19, 20.) Color Switch alleges that "Reichelt knew the Game was a winner[ ] [b]ut he also knew that he needed a publishing and marketing push for the Game to become successful." (Id. at ¶ 21.) Thus, on November 21, 2015, Reichelt entered into a publishing agreement (the "original agreement") with EyeBoxGames FZE ("EyeBoxGames"). (Id. at ¶ 23; see also Doc. No. 9-3.) EyeBoxGames is a publishing company incorporated in the United Arab Emirates ("UAE") and founded by Marc Lejeune, who is also the founder of defendant Fortafy.1 (Doc. No. 9-1 at 2-4.)

The original agreement states that EyeBoxGames is the publisher and Reichelt and his business partner, Aditya Oza, are the developers. (Id. at 4.) The original agreement includes a forum selection clause, stating that "[the] Agreement and any non-contractual obligations arising out of or in connection with th[e] Agreement shall be governed by[ ] and construed in accordance with UNITED ARAB EMIRATES law. Any dispute arising in connection with th[e] Agreement shall be submitted to the exclusive jurisdiction of the Court of Dubai." (Id. ; see also Doc. No. 9-3 *1081at 10.) Under the original agreement, the parties agreed to an equal share of the revenue once the game became publishable. (Id. at 7.)

On January 12, 2016, purportedly to reflect that EyeBoxGames would be solely responsible for updates to the game, the parties renegotiated the original agreement, changing the terms of the equal profit share to an eighty percent profit share in favor of EyeBoxGames (the "amended agreement"). (Doc. No. 9-1 at 5; see also Doc. No. 9-4.) In addition, the amended agreement provides that "David Reichelt and Aditya Oza do not get any right on the work of updating conducted by EyeBoxGames." (Doc. No. 9-4 at 2.) Finally, the amended agreement notes that provisions from the original agreement that were not modified by the amended agreement remain in effect, and no amendment was made to the forum selection clause or choice of law provision set forth in the original agreement. (Id. )

In April of 2016, Fortafy incorporated in the UAE. (Doc. No. 9-1 at 2-3, 5.) On June 16, 2016, the amended agreement between Reichelt, Oza, and EyeBoxGames was terminated when Color Switch and Fortafy entered into a new publishing agreement (the "publishing agreement"). (Id. at 5; see also Doc. No. 9-5.) That publishing agreement established that Color Switch would retain its intellectual property rights and had the option to terminate the agreement after a period of eighteen months. (Doc. No. 1 at ¶ 24; see also Doc. No. 9-5.) Color Switch alleges that, under the publishing agreement, Fortafy was to perform "work for hire" on behalf of Color Switch, and thus any work Fortafy performed under the operative agreement or benefits accrued pursuant to such work belong to Color Switch. (Doc. No. 1 at ¶ 25.) However, similar to the amended agreement before it, the publishing agreement states that the "Developer [Color Switch] does not get any right on the work of updating conducted by the Publisher [Fortafy]." (Doc. No. 9-5 at 3.) The publishing agreement also maintains the eighty percent profit share in favor of the publisher, Fortafy. (Id. at 6.) Finally, the publishing agreement contains a forum selection clause and choice of law requirement that are identical to the ones contained in the original and amended agreements. (Id. at 9.)

On May 26, 2017, Color Switch sent Fortafy a letter of termination, terminating the publishing agreement effective as of December 15, 2017. (Id. at ¶ 27.) Color Switch also sought the return of its intellectual property and other rights, which it alleges it licensed to Fortafy under the publishing agreement. (Id. ) Fortafy acknowledged receipt of the termination notice. (Id. )

After the termination of the publishing agreement, Color Switch requested that Fortafy de-publish the game, provide the most recent version of the game to Color Switch, and transfer the game from Fortafy's developer account to Color Switch's developer account. (Id. at ¶ 30.) Fortafy de-published the game but has refused to provide the current version of the game to Color Switch or to transfer the game to Color Switch's developer account. (Id. at ¶ 31.)

Color Switch contends that Fortafy's actions have prevented it from being able to publish the game. Accordingly, Color Switch asserts four causes of action against Fortafy: (1) a copyright claim pursuant to 17 U.S.C. § 101 et seq. ; (2) a request for a declaratory judgment pursuant to 28 U.S.C. § 2201 ; (3) a breach of contract claim; and (4) a conversion claim. (Id. at 12-16.) Color Switch seeks declaratory relief, injunctive relief, compensatory damages, consequential damages, treble *1082damages, attorneys' fees, and other fees. (Id. at 16-17.)

On June 12, 2018, Fortafy filed a motion to dismiss this action based on the enforcement of the publishing agreement's forum selection clause. (Doc. No. 9.) On July 3, 2018, Color Switch filed an opposition and, on July 10, 2018, Fortafy filed a reply. (Doc. Nos. 11, 13.) At the July 17, 2018 hearing on the pending motion, the court permitted Color Switch to file a sur-reply and Fortafy to submit a letter in response. (Doc. No. 17.) On July 31, 2018, Color Switch filed its sur-reply, and on August 6, 2018, Fortafy submitted its letter in response. (Doc. Nos. 22, 23.)

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Bluebook (online)
377 F. Supp. 3d 1075, Counsel Stack Legal Research, https://law.counselstack.com/opinion/color-switch-llc-v-fortafy-games-dmcc-caed-2019.