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KnowledgePlex, Inc. v. Metonymy

September 5, 2008

KNOWLEDGEPLEX, INC., PLAINTIFF,
v.
METONYMY, INC. D/B/A PLACEBASE, DEFENDANT.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Document No. 8

MEMORANDUM OPINION

GRANTING THE DEFENDANT'S MOTION TO DISMISS

I. INTRODUCTION

The plaintiff brings claims for breach of contract, copyright infringement and trade secret misappropriation. In response, the defendant seeks to dismiss the complaint on the grounds (1) that the court lacks personal jurisdiction over the defendant; (2) that the District of Columbia ("D.C." or "the District") is an improper venue; (3) that the plaintiff fails to join an indispensable party; (4) that the court lacks subject-matter jurisdiction over the copyright claim; and (5) that the plaintiff fails to state a claim. Because the defendant does not have sufficient minimum contacts with the District and because the defendant has not consented to being haled into this court, the court lacks personal jurisdiction over the defendant and grants the defendant's motion to dismiss. As this ruling is dispositive, the court need not reach the defendant's request to dismiss the complaint on other grounds.*fn1

II. BACKGROUND

A. Factual History

The plaintiff corporation was launched in 2000 as an initiative by the Fannie Mae Foundation to support the work of practitioners, grantors, policy makers, scholars, investors, and others involved in the affordable housing and community development fields. Compl. ¶ 5. In 2004, in an effort to create a web-based data system that would provide housing and demographic data to the public, the plaintiff issued a request for proposals, seeking input on developing a new technology platform for this purpose. Id. ¶ 7. The plaintiff eventually accepted a proposal by Vinq, L.L.C. ("Vinq") and its subcontractor, the defendant, to develop the system called "DataPlace." Id. ¶ 13; Pl.'s Opp'n to Mot. to Dismiss ("Pl.'s Opp'n") at 2.

Fannie Mae Foundation on behalf of the plaintiff executed a contract ("the prime contract") with Vinq, and Vinq subsequently executed a subcontract ("the subcontract") with the defendant. Pl.'s Opp'n at 2. Under the terms of the prime contract, Vinq and the defendant agreed that the plaintiff would own all work produced as part of the project, that all rights in the resulting work would be assigned to the plaintiff, and that the defendant had no license to use intellectual property developed as part of the project. Compl. ¶ 16. The subcontract incorporated the prime contract "when available and only to the extent applicable." Pl.'s Opp'n at 6 & Ex. 1 ("Subcontract") ¶ 21.

The prime contract identified the District as the governing law and venue for all disputes or controversies arising out of or in connection with the agreement. Id., Ex. A(1) ("Prime Contract"). The subcontract, which binds the defendant to all "applicable provisions" of the prime contract, includes a conflicting forum selection clause requiring all actions relating to the defendant's work to be brought in Santa Clara County, California. Subcontract ¶ 21. At the time of contract formation, the plaintiff was located in the District of Columbia, but it subsequently relocated to Maryland in August 2007, and then to California in November 2007, where it is currently located. Pl.'s Opp'n at 6.

Between May 1, 2007 and August 13, 2007, the parties attempted to negotiate an agreement to govern the future development of DataPlace, outside of the Vinq contracts, but the attempt was unsuccessful. Compl. ¶ 27. When negotiations failed, the defendant allegedly refused to fulfill its obligations under the subcontract. Id. The defendant allegedly ceased all development work and failed to complete delivery of DataPlace. Id. ¶ 28. The plaintiff claims that the defendant began developing a product for itself called Pushpin and another product for a different client, both similar to DataPlace. Id. ¶ 32.

B. Procedural History

On December 21, 2007, on the basis that it is a third-party beneficiary to the subcontract, the plaintiff filed a complaint against the defendant alleging copyright infringement, breach of contract, common law trade secret misappropriation and trade secret misappropriation in violation of District of Columbia Code §§ 36-401. Compl. ¶¶ 17, 38-56. On February 25, 2008, the defendant moved to dismiss the case, arguing that the court lacks personal jurisdiction and subject-matter jurisdiction, that D.C. is an improper venue, that the plaintiff fails to join ...


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