Timmins Software Corporation d/b/a Mitrend v. EMC Corporation d/b/a Dell EMC et al. (D. Mass. 19-cv-12053).

Judge Talwani denied Dell EMC’s motion to dismiss Mitrend’s claims for alteration or removal of copyright management information (CMI), unjust enrichment, unfair competition under the Lanham Act and violation of c. 93A.  Mitrend developed a set of tools for analyzing IT and data management systems that included collection software and analysis software.  Mitrend’s complaint asserts that it developed these tools independently from EMC and that all such software it provided to EMC contained or pointed to copyright protection notices identifying Mitrend as the owner.  Mitrend’s relationship with EMC deteriorated upon EMC’s acquisition by Dell, and Mitrend says that Dell EMC pressured Mitrend into extending the software license through unequal bargaining power and baseless accusations of breach of contract, and then utilized that extended access time to build a competing product known as “Live Optics.”  Mitrend asserts that the Live Optics software includes large portions copied from the Mitrend tools, with Mitrend’s copyright notices removed. 

Judge Tawlani utilized the Twombly standard, under which a complaint must state a claim, including specific factual allegations of the claim, that is “plausible on its face.”  She rejected Dell EMC’s assertion that the unjust enrichment, unfair competition under the Lanham Act and violation of c. 93A claims were preempted by or duplicative of the copyright infringement claim.  She found that the unfair competition claim relied on allegations beyond those of the copyright infringement claim, including statements made by Dell EMC about ownership of the Live Optics software and that Live Optics was not new, but was merely the prior (Mitrend-owned) product in rebranded form. These additional elements meant that the unfair competition claim went beyond the mere unauthorized use of a copyrighted work and were directed specifically to the source of the software, and thus this claim was not preempted.  Similarly, the 93A claim required proof of elements that are not required by the copyright claim, specifically in this case an allegation of unfairly pressuring Mitrend to accept an unreasonable extension of the software license to permit Dell EMC to copy the software into its own product.  This unfair pressure is what forms the basis of the 93A claim, and it therefore survives the preemption challenge.  The unjust enrichment claim, which relies on the same elements as the other two claims, survives for the same reasons.

Judge Talwani also rejected Dell EMC’s contention that the CMI and 93A claims sound in fraud or misrepresentation that mandate the heightened pleading standard of Rule 9(b).  That rule requires a plaintiff to state with particularity the circumstances surrounding an alleged fraud. In a case of first impression, Judge Talwani determined that a CMI claim, while requiring allegations that the removal was intentional, does not include a deceptive intent requirement, taking it out of the gambit of Rule 9(b).  She further noted that, while Rule 9(b) applies to a claim where the core allegations effectively charge fraud, the 93A claim in this case included allegations that did not sound in fraud that could stand alone, without the allegations related to misleading the public as to the ownership of the software, which did sound in fraud.  Because the claim could stand without relying on claims of fraud, it too survived dismissal. 

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