This suit arises from a failed business relationship between Real Estate Innovations and Johnnie Norsworthy. Real Estate Innovations filed a barrage of claims against the defendants, ranging from claims of copyright infringement to RICO Act violations. Through a series of motions to dismiss, the district court dismissed all claims against the defendants. Real Estate Innovations appealed. We AFFIRM.
STATEMENT OF FACTS
Real Estate Innovations (REI) is a software marketing corporation in Houston, Texas, owned by Pamela Connery-Hazel-wood. Johnnie Norsworthy is a software engineer who created software for a Disk Operating System copyrighted as “RE/minder loader vl.01.” The program
In October 1992, Norsworthy executed an agreement that gave REI exclusive marketing and sales rights to the “VS/REMS-Re/Minder” software. We mention now, and will discuss the relevance of the point later, that the software identified in the agreement is not the same one named in the copyright registration. Over the next 13 years, REI continued marketing the software, and Norsworthy provided support to REI by maintaining the software’s compatibility with the frequent changes in the Multiple Listing Service system. Norsworthy released to REI for distribution the new VS/REMS-Re/Minder for Windows in April 2003. REI marketed and sold VS/REMS-Re/Minder for Windows until Norsworthy terminated their contract in October 2005.
REI alleges that in 2002, Defendants Norsworthy, First American MLS Solutions, National Association of Realtors, Houston Association of Realtors, Houston Realtors Information Service, Inc., Steve Smith, and Real Data, Inc. released REI’s licensed VS/REMS-Re/Minder software over the internet without REI’s knowledge or permission. These defendants allegedly released various web-based software products, called “copy products” by REI, that performed the same functions as REI’s software. They were either free to Houston Association of Realtors’ members or cost significantly less than REI’s product.
In 2003, REI’s clients began cancelling their subscriptions to REI’s software in favor of competing products. REI contends that the defendants launched a web-based version of listing-management software that infringed REI’s software. This allegedly infringing web-based version eliminated the need for the software governed by the agreement between REI and Norsworthy. REI asserts that Norsworthy acted in violation of REI’s exclusive marketing and sales rights by secretly developing and selling similar, but directly-competing software. Many of the defendants are former clients of REI that terminated their subscriptions to use the competing online software. REI also alleges numerous defendants created partially or wholly owned entities to be resellers of VS/REMS-Re/Minder software without REI’s permission.
Pamela Connery-Hazelwood, as owner of REI, filed a pro se complaint against four defendants alleging 11 claims for relief, including breach of contract, copyright infringement, tortious interference with a contract and a prospective business, fraudulent conversion and concealment, civil conspiracy, and violations of the Sherman Antitrust Act. Connery-Hazelwood, pro se, filed three amended complaints on behalf of REI. The result of the amendments was to add 34 defendants and 21 claims for relief. Counsel was retained by REI at some point after the third amended complaint was filed. The defendants moved to dismiss. The district court partially granted these motions, holding that REI did not have standing to bring a copyright infringement claim. The court permitted REI to re-plead its fraud and RICO claims.
REI then filed its fourth amended complaint. Twenty-four defendants moved to dismiss the complaint under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). The defendants argued that at least seven of the claims were preempted by the Copyright Act, that REI’s fraud allegations failed the particularity requirements
A final judgment was entered on November 16, 2009, dismissing all claims against every defendant except Norsworthy.
DISCUSSION
As an initial matter, there were seven claims raised in the district court but not discussed by REI on appeal. The defendants noted in their response brief the absence of these claims, yet REI did not file a reply to explain the omission. We consider the claims waived for failure to brief. See Brinkmann v. Dallas Cnty. Deputy Sheriff Abner,
I. Copyright Infringement
REI brought a copyright infringement claim, alleging that certain defendants infringed REI’s copyright when they permitted the VS/REMS-Re/ Minder software to be accessed, downloaded, and updated by other entities for commercial advantage or private financial gain. The district court dismissed REI’s copyright infringement claim for lack of standing with no further explanation. REI then filed a motion seeking clarification of the court’s ruling. The court reasoned that REI lacked standing to bring a claim for copyright infringement because the evidence demonstrated that Norsworthy had owned the copyright to the software since 1992, not REI. Further, the court explained that although Norsworthy granted REI exclusive sales and marketing rights to the software in 1992, that agreement did not establish REI owned the copyright at issue.
We review questions of jurisdiction, and specifically standing, de novo. Arguello v. Conoco, Inc.,
“The ownership of a copyright may be transferred in whole or in part by any means of conveyance or by operation of law....” 17 U.S.C. § 201(d)(1). “The owner of any particular exclusive right is entitled ... to all of the protection and remedies accorded to the copyright owner by this title.” Id. § 201(d)(2). Section 106
This court, however, may affirm the dismissal of REI’s copyright infringement claim for any reason supported by the record regardless of whether the district court relied upon it. See Forsyth v. Barr,
The Supreme Court recently decided that lack of a copyright registration for the intellectual property that is the subject of a claim is not fatal to a court’s jurisdiction but instead is a claims-processing requirement. Reed Elsevier, Inc. v. Muchnick, -U.S.-,
The defendants assert that the proof of registration provided by REI dated April 20, 1993, is limited to a program called RE/minder loader vl.01. REI’s copyright infringement claims are based on VS/REMS-Re/Minder for Windows. REI has made no effort to explain the discrepancy in software names, nor has REI produced proof of registration for VS/REMS/RE/Minder for Windows. It was not until oral argument that REI’s counsel first asserted that VS/REMS/RE/Minder for Windows is a derivative work of the underlying registered software. REI did not provide case-law to the court on its derivative work argument until well over a month after oral argument in a Rule 28(j) letter. We do not address the merit of REI’s derivative work argument because the argument was not presented to the district court for its consideration. See Louque v. Allstate Ins. Co.,
Because the registration requirements of 17 U.S.C. § 411(a) were not met as to the software at issue in this case, REI failed to state a claim for copyright infringement. Dismissal of REI’s copyright infringement claims was proper.
II. Copyright Act Preemption
REI contends that the district court erred in dismissing its state law claims for breach of contract and fraudulent conversion based on the preemption doctrine. “We review the district court’s preemption analysis de novo.” Wright v. Allstate Ins. Co.,
Though perhaps counter-intuitive, it is settled that the absence of a copyright
State laws are subject to federal preemption under the Copyright Act if they create “legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106.... ” 17 U.S.C. § 301(a). Application of this provision is by a two-part test. Carson v. Dynegy, Inc.,
We first address the issue of preemption as applied to REI’s breach of contract claim. REI’s fourth amended complaint alleged that the defendants “breached Plaintiff[’]s contract and caused economic injury to Plaintiffs business from the illegal distribution (file-sharing) of Plaintiff[’]s licensed VS/REMS/RE/Minder software to non-licensed real estate offices, agents and entities, in breach of Plaintiff[’]s contract and in violation of Plaintiff[’]s exclusive distribution rights.”
The parties do not dispute that REI’s software is within the subject matter of copyright. We must then decide whether the cause of action protects rights equivalent to exclusive rights under the Act. Carson,
Although the district court erred in holding that REI’s breach of contract claim is preempted by the Copyright Act, we may affirm the dismissal of a claim for any reason supported by the record. See Forsyth,
The Federal Rules of Civil Procedure require “a short and plain statement of the claim showing that the pleader is entitled to relief[.]” Fed.R.Civ.P. 8(a)(2). While the complaint does not need detailed factual allegations to survive a motion to dismiss, factual allegations must support that a right to relief is neither speculative nor merely a legal conclusion. Ashcroft v. Iqbal, - U.S. -,
Under Texas law, a breach of contract action requires “(1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach.” Smith Int’l,
REI does not attach, identify, or describe the terms of any contract between REI and the defendants. The only contract mentioned and attached to its complaint is the exclusive distribution right agreement between REI and Norsworthy. No defendant other than Norsworthy was a party to that contract, and Norsworthy is not a party to this appeal. REI does not contend that the defendants in some other way owed obligations under the contract to REI, perhaps as a third-party beneficiary or for some other reason.
REI’s breach of contract claim fails to state a claim because REI has not pled the existence of a contract between it and the defendants or the factual basis for a breach of any such contract.
We now consider whether preemption applies to REI’s fraudulent conversion claim. “The tort of conversion relates to interference with tangible rather than intangible property and, hence, should be held immune from pre-emption.” 1-1 Nimmer on Copyright § 1.01[B][l][i]. In Texas, conversion claims are limited to the wrongful exercise of dominion and control over tangible, physical objects. See Carson,
REI represents in its brief that it “alleged Defendants committed the acts of fraudulent conversion by not returning the software after Defendants improperly copied and used REI’s software.” A review of the pleadings does not support this assertion. REI’s complaint instead demonstrated that its theory of conversion is based on intangible property — the alleged infringing distribution of “an Internet hosted version of [REIj’s licensed VS/REMS/RE/Minder software.”
Because the allegations underlying REI’s fraudulent conversion claim involved the defendants’ wrongful distribution of REI’s software, the district court properly held it was preempted.
III. Racketeering Influenced and Corrupt Organizations Act (RICO)
REI’s third amended complaint alleged that the defendants violated RICO under 18 U.S.C. §§ 1961-68 and described nine predicate offenses. The district court granted REI leave to amend its RICO claims, noting deficiencies in the pleadings. Despite a fourth amendment, the district court dismissed REI’s RICO claims for failure to state a claim. REI contends its allegations sufficiently stated a claim and should not have been dismissed.
Regardless of subsection, RICO claims have three common elements: “1) a person who engages in 2) a pattern of racketeering activity, 3) connected to the acquisition, establishment, conduct, or control of an enterprise.” Crowe v. Henry,
An enterprise under RICO can include legal entities such as partnerships and corporations, but it also can include “any un
The district court held that REI failed to plead specific facts to established the existence of an enterprise. We agree. REI’s conclusory allegations did not provide sufficient facts to establish the existence of an enterprise. REI’s fourth amended complaint provided a mere recitation of the elements necessary to demonstrate an enterprise without providing relevant facts. Accordingly, the district court properly dismissed REI’s RICO claims for failure to state a claim.
IV. Denial of Leave to Amend
First American Real Estate Solutions filed a motion to dismiss REI’s fourth amended complaint, arguing that REI had abandoned its claims against it. Although First American was a named defendant in REI’s third amended complaint, it was omitted in the fourth amended complaint. REI claimed the omission was a typographical error and sought leave to amend its complaint a fifth time to include First American as a defendant. First American responded that despite being a named defendant in the third amended complaint, it was never served with process and had sought dismissal on that basis. In fact, the district court previously had granted dismissal to First American on the third amended complaint without prejudice, allowing REI leave to perfect service.
The district court held that REI already had four opportunities to amend its complaint to cure any deficiencies. The district court denied REI’s request for leave to amend its complaint for a fifth time and granted First American’s motion to dismiss.
REI contends the district court erred by denying its request to amend. We review “a district court’s denial of leave to amend a complaint for abuse of discretion.” Ashe v. Corley,
REI was afforded the opportunity to perfect service on First American after filing its third amended complaint, but did not. REI then filed a fourth amended complaint omitting First American and again failing to perfect service. The district court did not abuse its discretion in denying leave to amend.
V. Sua Sponte Dismissal of Claims
REI challenges the sua sponte dismissal of its remaining claims. By ruling on a series of motions to dismiss, the district court dismissed claims against a number of defendants. The district court then sua sponte dismissed those same claims against other defendants. The court explained that REI had alleged the same 15
A district court’s sua sponte dismissal is reviewed de novo. White v. Johnson,
REI contends that the district court erred by failing to give REI notice of the court’s intention to dismiss the claims or an opportunity to amend its complaint. Despite several amendments, REI insists it only had one opportunity to amend once employing counsel. The defendants argue that despite the lack of notice, REI had the opportunity to allege its best case.
The district court permitted REI to amend its complaint four times to correct deficiencies noted by the court before its sua sponte dismissal. REI’s explanation for wanting to amend again did not offer reasons that would change the outcome of the case. REI had the opportunity to allege its best case. We find no error in the dismissal of REI’s remaining claims.
AFFIRMED.
Pursuant to 5th Cir. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5th Cir. R. 47.5.4.
. Norsworthy filed for bankruptcy on or about April 17, 2008, and the district court signed an order administratively closing the case against him on June 6, 2008.
. The claims we are not discussing because of inadequate briefing are identified in REI's brief as Issues 5. 6. 8. 9. and 10.
. We discuss Issue 1 from REI's brief in this section. Because we determine REI has standing, we need not address Issue 13, REI’s doctrine of accrued claim argument.
. We have combined the discussion of Issues 2, 3, and 4 from REI's brief in this section.
. We discuss Issue 7 from REI's brief in this section.
. We discuss Issue 11 from REI’s brief in this section.
. We discuss Issue 12 from REI’s brief in this section.
