Professional Liability Insurance Services, Inc. v. Hiscox, Inc., 1:18-cv-01072

Plaintiff Professional Liability Insurance Services, Inc. (PLIS) alleges copyright in a custom insurance policy titled the TNR Policy and claims it registered that work with the U.S. Copyright Office.
PLIS contends U.S. Risk and Hiscox copied substantial, original portions of the TNR Policy (including definitions and unique wording) and marketed infringing policies; PLIS points to a Hiscox employee admission and a copy of U.S. Risk’s policy that tracks Hiscox’s version.
PLIS previously sued U.S. Risk in 2006 and 2015, settling those suits; U.S. Risk says that prior settlement bars the current claim, while PLIS says new misappropriation falls outside the release.
U.S. Risk moved to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim and based on the asserted preclusive effect of the prior settlement.
The magistrate judge evaluated whether PLIS plausibly pleaded (1) ownership of a valid copyright and (2) copying of original constituent elements (factual copying and substantial similarity), and whether dismissal was warranted on the face of the pleadings due to the settlement defense.
Recommendation: deny the motion to dismiss—PLIS’s complaint sufficiently pleads both copyright ownership and actionable copying, and the settlement defense is not clearly dispositive on the pleadings.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Ownership of a valid copyright	PLIS asserts a registered copyright in the overall TNR Policy, not merely isolated short phrases	U.S. Risk argues the complaint concerns only short words/phrases that aren't protectable	PLIS sufficiently alleges ownership of a valid copyright in the policy as a whole
Copying (factual copying and substantial similarity)	PLIS alleges access (via Hiscox and a former PLIS employee) and provides side-by-side comparisons showing substantial similarity	Defendants contest that PLIS hasn’t plausibly alleged actionable copying	Court finds PLIS pled enough facts to infer access, factual copying, and substantial similarity at the pleading stage
Applicability of prior settlements/releases	PLIS contends prior settlements do not bar claims for new misappropriations after the release	U.S. Risk contends the prior settlement included a broad release that extinguishes this claim	Settlement defense not sufficiently clear on the face of the complaint to justify dismissal under Rule 12(b)(6)
Rule 12(b)(6) standard	PLIS urges that its factual allegations are plausible and should survive dismissal	U.S. Risk seeks dismissal arguing defects and the affirmative defense (release) are apparent from the complaint	Magistrate recommends denial of the motion to dismiss, finding PLIS’s claims plausible and defenses not conclusively established by the pleadings

Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340 (ownership and originality requirement for copyright infringement)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (pleading standard must raise claim above speculative level)
Ashcroft v. Iqbal, 556 U.S. 662 (courts need not accept legal conclusions as true)
Guzman v. Hacienda Records and Recording Studio, 808 F.3d 1031 (factual copying and substantial similarity elements)
Positive Black Talk Inc. v. Cash Money Records, Inc., 394 F.3d 357 (access plus probative similarity can infer factual copying)
Armor v. Knowles, 512 F.3d 147 (striking similarity can show copying absent proof of access)
Creations Unlimited, Inc. v. McCain, 112 F.3d 814 (substantial similarity judged by lay observer side-by-side comparison)
Clark v. Amoco Prod. Co., 794 F.2d 967 (affirmative defenses rarely justify dismissal under Rule 12(b)(6))
Thomas v. Arn, 474 U.S. 140 (standards and consequences for objections to magistrate judge reports)