Trust Safe Pay, LLC v. Dynamic Diet, LLC et al. (17-cv-10166).

Trust Safe alleges that the defendants misappropriated proprietary information relating to its diet product business and opened a competing company, Dynamic Diet, and that they copied portions of Trust Safe’s website without authorization. Trust Safe’s original complaint was dismissed without prejudice after Magistrate Judge Kelley determined that it failed to meet the Twombly pleading standards, laying out specific deficiencies in the pleadings and allowing Trust Safe the opportunity to amend its complaint. The new complaint again failed to properly plead ownership and pre-registration of a copyright registration as required by Federal copyright law. Instead, Trust Safe again failed to plead that it had submitted a complete application, along with the fees and deposit copy, to the Copyright Office, and failed to plead that it took any action prior to the filing of the lawsuit. While under First Circuit law an application is deemed to meet the preregistration requirement when it is received by the Copyright Office, an incomplete application cannot satisfy the preregistration requirement. Here, not only was the completeness of the deposit pled, the documents attached to the complaint suggested that the deposit was not complete as of the filing of the original complaint. I would note without comment that among the documents submitted there was reference to submitting the copyright applications via Legal Zoom, a dubious proposition where litigation is anticipated. Judge Kelley also found that the complaint failed to allege which elements of the website were actually subject to copyright protection, making it impossible to analyze whether the defendants copied protected material. Given that this was the second failed attempt to properly plead infringement, Judge Kelley dismissed the copyright claim with prejudice. She further dismissed the claims for trade secret misappropriation, fraud, and unfair and deceptive business practices without prejudice, declining to exercise supplemental jurisdiction over the state law claims with the sole federal claim having been dismissed.

Xiao Wei Yang Catering Linkage in Inner Mongolia Co., Ltd. et al. v. Inner Mongolia Xiao Wei Yang USA, Inc. et al. (15-cv-10114).

Judge Kelley continued to hammer at the litigation misconduct of Xiao Wei Yang Catering, this time granting the defendant’s motion that their requests for admissions be deemed admitted.  She noted that the plaintiffs never responded to correspondence received on two separate occasions from the defendants relating to deficiencies in the objections and responses to the admissions, and filed a supplemental response (only after being threatened with motion practice) that contained no amended answers, only legal arguments about why the plaintiff would not agree to any of the admissions.  Judge Kelley characterized these arguments as “baseless,” and specifically criticized the plaintiffs’ refusal to admit several things that were clearly beyond dispute.  For example, the plaintiffs refused to admit that it had entered into a Cooperation Agreement with the defendants despite having repeatedly so alleged in is complaint.  Judge Kelley also faulted the plaintiffs for refusing to answer clearly relevant requests because they were “beyond the scope” of the litigation, and for making several responses that were “nearly incomprehensible.”  In addition to deeming all of the requests admitted, Judge Kelley indicated she will schedule a hearing regarding whether the plaintiffs should be sanctioned.