James B. Royal v. Leading Edge Products, Inc.

833 F.2d 1, 4 U.S.P.Q. 2d (BNA) 1873, 1987 U.S. App. LEXIS 13919, 1987 Copyright L. Dec. (CCH) 26,173
CourtCourt of Appeals for the First Circuit
DecidedOctober 20, 1987
Docket87-1418
StatusPublished
Cited by121 cases

This text of 833 F.2d 1 (James B. Royal v. Leading Edge Products, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
James B. Royal v. Leading Edge Products, Inc., 833 F.2d 1, 4 U.S.P.Q. 2d (BNA) 1873, 1987 U.S. App. LEXIS 13919, 1987 Copyright L. Dec. (CCH) 26,173 (1st Cir. 1987).

Opinion

SELYA, Circuit Judge.

James B. Royal, plaintiff-appellant, felt that he was treated less than royally by his quondam employer, Leading Edge Products, Inc. (Leading Edge), defendant-appel-lee. He sued, unsuccessfully, in federal district court, and now appeals.

Inasmuch as the district court disposed of this case on Leading Edge’s motion to dismiss, Fed.R.Civ.P. 12(b)(1), we accept the factual averments of the complaint as true, and construe those facts in the light most congenial to the appellant’s cause. Guessefeldt v. McGrath, 342 U.S. 308, 310, 72 S.Ct. 338, 340, 96 L.Ed. 342 (1952); Chongris v. Board of Appeals, 811 F.2d 36, 37 (1st Cir.), cert. denied, — U.S. —, 107 S.Ct. 3266, 97 L.Ed.2d 765 (1987). We eschew, however, any reliance upon “bald assertions, unsupportable conclusions, [or] opprobrious epithets.” Id. (citation omitted). Dismissal can be justified only if it clearly appears that no colorable hook exists upon which subject matter jurisdiction can be hung.

I

The defendant is a Massachusetts corporation involved in various facets of the computer industry. According to the complaint, Leading Edge hired Royal in mid-1982 as manager of word processing development. The complaint does not state whether or not there was a written employment contract. In February of 1983, while still in defendant’s employ, Royal and a co-worker, one Phil Florence, entered into a royalty agreement with the company. See Appendix. In essence, the pair agreed to develop a distinctive “software package” in exchange for stipulated royalty payments based on future sales. In the appellant’s words, “[t]he contractual relationship established between the parties by virtue of the royalty agreement was entirely separate and distinct from their employment relationship.” Complaint 117.

*2 Florence and Royal successfully accomplished their goal before the year was out. As completed, the package was an original work comprising copyrightable subject matter under federal law. Yet, notwithstanding what plaintiff (self-interestedly) describes as the “exceptionally high quality” of the product, id. at ¶ 10, Leading Edge terminated his employment on April 29, 1986. It has not been alleged that the firing was in contravention of any express term of either the royalty agreement or the underlying employment agreement.

Appellant has not been paid royalties for any period after April 29, 1986. Under the royalty contract, no further royalties would be due if he was fired for cause; but, if he was discharged “for no cause,” then he would be entitled to royalties for a period of “five (5) years from date of termination.” The complaint alleges that he was terminated “without cause.” Complaint ¶11.

II

The plaintiff’s pleading limned four causes of action, viz:

Count I: A request for issuance of a declaratory judgment that Royal was a co-owner of the copyright in the software package as of April 29, 1986, together with an accounting for profits derived since that date.
Count II: A claim for damages for breach of the royalty agreement (nonpayment of royalties).
Count III: An unfair trade practice claim for treble damages under Mass.Gen.L. c. 93A, § 11.
Count IV: A common law damages claim for breach of an implied covenant of good faith and fair dealing.

There is no diversity of citizenship or other basis for federal jurisdiction apart from the existence vel non of some cognizable federal question. Royal concedes that the last three counts of his complaint are dependent entirely on state law, and present no uniquely federal aspects. He endeavors to forge his jurisdictional hook solely on the anvil of Count I. As the plaintiff envisions the universe, the district court had subject matter jurisdiction over that count by virtue of 28 U.S.C. § 1338(a), 1 thus gaining pendent jurisdiction over the trio of state-law claims. The district court disagreed, and so do we.

Ill

The plaintiff asserts that his claim for a declaratory judgment is rooted in federal copyright law, thus triggering the jurisdictional snare of § 1338(a). But, that is a ketchup bottle of an argument: it looks full at first glance, but it is surpassingly difficult to get anything out of it.

It is settled beyond peradventure that an action does not “arise under” the federal copyright laws merely because it relates to a product that is the subject of a copyright. See Topolos v. Caldewey, 698 F.2d 991, 993 (9th Cir.1983). The question of whether the suit “arises under” the copyright law is considerably more sophisticated. The most frequently cited test is that formulated by the Second Circuit, along the lines that:

an action “arises under” the Copyright Act if and only if the complaint is for a remedy expressly granted by the Act, e.g., a suit for infringement ..., or asserts a claim requiring construction of the Act, ..., or, at the very least and perhaps more doubtfully, presents a case where a distinctive policy of the Act requires that federal principles control the disposition of the claim. The general interest that copyrights, like all other forms of property, should be enjoyed by their true owner is not enough to meet this last test.

T.B. Harms Co. v. Eliscu, 339 F.2d 823, 828 (2d Cir.1964), cert. denied, 381 U.S. 915, 85 S.Ct. 1534, 14 L.Ed.2d 435 (1965). Royal acknowledges that Harms sets forth the applicable standard, but urges that the first count of his complaint “asserts a claim *3 requiring construction of the Act,” id., because it implicates the so-called work-made-for-hire doctrine.

A brief explanation is in order. The Copyright Act defines a “work made for hire” in relevant part as one “prepared by an employee within the scope of his or her employment.” 17 U.S.C. § 101. 2 The Act further provides that:

In the case of a work made for hire, the employer ... is considered the author ..., and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.

17 U.S.C. § 201(b).

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Bluebook (online)
833 F.2d 1, 4 U.S.P.Q. 2d (BNA) 1873, 1987 U.S. App. LEXIS 13919, 1987 Copyright L. Dec. (CCH) 26,173, Counsel Stack Legal Research, https://law.counselstack.com/opinion/james-b-royal-v-leading-edge-products-inc-ca1-1987.