New London Assocs., LLC v. Kinetic Soc. LLC
384 F. Supp. 3d 392
S.D. Ill.2019Background
- Plaintiff New London Associates, LLC (NLA) owns a registered copyright in software called RTR and licensed/hosted code via GitHub and servers colocated at INAP facilities in NY/NJ.
- Twelvefold allegedly continued to use/modify RTR without paying NLA; its assets were later sold to Kinetic, with financing and participation by Costella Kirsch, Multiplier, and the Blue Chip entities (the "Financing Entities").
- NLA alleges the Financing Entities conditioned funding on transferring RTR (including to escrow) and that RTR ultimately migrated from Twelvefold → Kinetic → Spectrum, with Spectrum accessing NLA's GitHub and copying RTR via a cross-connect at INAP's Secaucus facility.
- NLA sued Kinetic, Spectrum, and INAP asserting copyright, CFAA, NJCA, conversion, breach of contract, and tortious interference claims; Financing Entities and others were later added in amended complaints.
- Motions: Blue Chip Defendants, Costella Kirsch, INAP moved to dismiss under Rule 12(b)(6); INAP and Blue Chip also moved to dismiss for lack of personal jurisdiction; Spectrum and Multiplier moved for judgment on the pleadings. Court granted dismissal of Financing Entities and Costella Kirsch; granted INAP’s dismissal on forum-selection grounds; granted Multiplier’s and in part Spectrum’s motions—copyright claims against Spectrum survive for actual damages and injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over INAP and Blue Chip Defendants | NLA: defendants transacted/tortiously acted in NY (contracts, server access, emails, cross-connect) | Defendants: lack of sufficient NY contacts for specific jurisdiction | Court: prima facie showing met; specific jurisdiction exists over both INAP and Blue Chip Defendants |
| Venue for claims against INAP | NLA: disputes (including alleged collusion) do not arise under any INAP contract or forum clause | INAP: MSA/sales order (incorporating MSA) contains mandatory Atlanta forum-selection clause | Court: MSA/sales order enforceable; INAP claims dismissed without prejudice to refiling in Georgia |
| Copyright and secondary liability against Financing Entities | NLA: Financing Entities induced, controlled, participated in transfers and copying of RTR (contributory/vicarious/direct infringement) | Defendants: allegations are conclusory; no facts showing direct acts, knowledge, or control sufficient for secondary liability | Court: direct, contributory, and vicarious copyright claims against Financing Entities dismissed for failure to plead plausible facts |
| State-law (conversion, tortious interference, NJCA) and CFAA claims | NLA: separate tort and computer statutes provide relief for server access, copying, and business loss | Defendants: federal copyright preempts overlapping state claims; CFAA damages not adequately pleaded | Court: conversion, tortious interference, NJCA preempted by Copyright Act; CFAA claim fails for lack of compensable computer loss; only copyright claims against Spectrum survive (actual damages and injunction) |
Key Cases Cited
- SPV Osus Ltd. v. UBS AG, 882 F.3d 333 (2d Cir. 2018) (prima facie standard for personal jurisdiction on pleadings)
- U.S. Bank Nat'l Ass'n v. Bank of Am. N.A., 916 F.3d 143 (2d Cir. 2019) (specific personal jurisdiction and contract-contact analysis)
- Licci by Licci v. Lebanese Canadian Bank, SAL, 834 F.3d 201 (2d Cir. 2016) (New York long-arm framework)
- Starkey v. G. Adventures, Inc., 796 F.3d 193 (2d Cir. 2015) (four-part test for enforcing forum-selection clauses)
- Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007) (mandatory vs. permissive forum clauses; scope analysis)
- Arista Records, LLC v. Doe 3, 604 F.3d 110 (2d Cir. 2010) (contributory infringement standard: knowledge and material contribution)
- Viacom Int'l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) (vicarious infringement: right/ability to supervise plus direct financial interest)
- Harper & Row Publishers, Inc. v. Nation Enters., 723 F.2d 195 (2d Cir. 1983) (conversion not sustained by transient copying of copyrighted material)
- United States v. Bestfoods, 524 U.S. 51 (U.S. 1998) (corporate control alone insufficient to impose subsidiary tort liability)