United States District Court, District of Columbia
[Copyrighted Material Omitted]
ForZILYEN, INC., Plaintiff, Counter Defendant: Rachel L. Tripp Rodriguez, Richard S. Toikka, LEAD ATTORNEYS, FARKAS & TOIKKA LLP, Washington, DC.
For RUBBER MANUFACTURERS ASSOCIATION, Defendant, Counter Claimant: John J. Hathway, LEAD ATTORNEY, WHITEFORD, TAYLOR & PRESTON, LLP, Washington, DC.
REGGIE B. WALTON, United States District Judge.
This case arises from a dispute concerning a contract between the parties for the production of Compact Discs (" CDs" ) by the plaintiff, ZilYen, Inc., for the defendant, the Rubber Manufacturers Association (" the defendant" or " the Association" ). First Amended Complaint (" Am. Compl." ) ¶ 6; Rubber Manufacturers Association's Counterclaim (" Countercl." ) ¶ ¶ 6-7. The plaintiff asserts claims against the defendant for breach of contract and for copyright infringement pursuant to 17 U.S.C. § 501 (2006). Am. Compl. ¶ ¶ 38-55. The defendant responds by asserting counterclaims for common law breach of contract, breach of warranty of merchantability, breach of warranty of fitness for particular purpose, and breach of contract pursuant to the District of Columbia Uniform Commercial Code, D.C. Code § 28-2-601 (2013). Countercl. ¶ ¶ 31-60. The parties' cross-motions to dismiss are now before the Court. See generally Further Motion to Dismiss Statutory Copyright Infringement Claim (" Def.'s Mot." ); Plaintiff ZilYen, Inc.'s Rule 12(b)(6) Motion to Dismiss Rubber Manufacturers Association's Counterclaims I-IV (" Pl.'s Mot." ). After carefully considering the parties' submissions,  the Court concludes that it must grant the defendant's motion to dismiss, dismiss sua sponte the remaining claims over which it has only supplemental jurisdiction, and deny the plaintiff's motion to dismiss as moot.
The following facts are taken from the plaintiff's amended complaint unless otherwise noted, and are accepted as true as required by Rule 12(b)(6) of the Federal Rules of Civil Procedure.  The parties,
two corporations whose principal place of business is in the District of Columbia, Am. Compl. ¶ 1; Countercl. ¶ 1, entered into a contract under which the plaintiff " would design, produce, and deliver" 200,000 CDs to the defendant " for distribution among its members," Am. Compl. ¶ 6. The CDs were to contain content supplied by the defendant. See id. ¶ ¶ 12-13. The contract provided that the defendant would tender a payment of fifty percent of the estimated cost of the CDs upon execution of the contract, with the remaining balance " due upon delivery." Id. ¶ ¶ 9-10; Am. Compl. Exhibit (" Ex." ) A at 2.  The agreement also included the following indemnification provision: " [The Association] recognizes that ZilYen cannot be held responsible for the accuracy of the information supplied to it by the [Association]--or the accuracy of the information included in material prepared by ZilYen and approved by the [Association]." Am. Compl. ¶ 12; Am. Compl. Ex. A at 2. Upon execution of the contract, the defendant paid the plaintiff fifty percent of the estimated cost of the CDs. See Am. Compl. Ex. A at 4 (acknowledging previous receipt of $53,450.00).
The plaintiff repeatedly consulted the defendant about the CDs' content and software during the production stage. Am. Compl. ¶ ¶ 14, 15, 20. On September 20, 2011, the plaintiff provided a final draft CD for the defendant to review before production of the copies. Id. ¶ 20. A representative of the defendant approved the final draft CD by email that same day. Id. ¶ 21. Upon receipt of the defendant's approval of the final draft CD, the plaintiff submitted a master copy of the approved CD to a printer to produce the copies. Id. ¶ 22.
On September 27, 2011, the plaintiff provided the defendant with an amended contract that increased the number of CDs to be produced and included additional packaging for the CDs, both modifications made at the defendant's request. Id. ¶ ¶ 7-8. The amended contract included final costs for the production and packaging of the CDs and indicated that a signature on behalf of the defendant was needed to approve " payment as COD." Id. ¶ 11; Am. Compl. Ex. A at 4. The amended agreement also contained a new provision which had not been included in the original contract, which stated:
Every effort will be made on the part of ZilYen to proofread documents and test functional components prior to printing/production and distribution. Final responsibility for proofreading and approval of drafts, artwork and CD function are entirely the [Association's] responsibility. Prior to document printing and distribution, [the Association] shall sign all proofs/drafts.
Am. Compl. ¶ 13; Am. Compl. Ex. A at 4. On September 28, 2011, a representative of the defendant signed the amended contract. Am. Compl. ¶ 8; see Am. Compl. Ex. A at 5.
On September 28, the defendant received four hundred copies of the CD, with the remainder of the copies shipped to a delivery agent, pursuant to the defendant's request. Am. Compl. ¶ ¶ 26, 28. Upon receipt of the CDs, employees of the defendant " ran the CD software on their computers," which " require[d] a copy to be made on the random access memory . . . of
the user's computer in order to properly run the application." Id. ¶ 54. That same day, the defendant contacted the plaintiff " alleging that the CDs as delivered contained an error in the link to the Adobe Reader X software on the CD." Id. ¶ 31. The CDs functioned properly in all other respects. Id. ¶ 32. The defendant did not pay the remaining balance of the contract amount upon delivery of the CDs, and the balance remains outstanding. Id. ¶ ¶ 29, 30, 37.
The plaintiff brought suit alleging breach of contract and copyright infringement. Id. ¶ ¶ 38-55. The plaintiff invokes this Court's jurisdiction over the copyright infringement claim pursuant to 28 U.S.C. § 1338, and over the breach of contract claim pursuant to 28 U.S.C. § 1367. Id. ¶ 3. The defendant has filed counterclaims for common law breach of contract, breach of warranty of merchantability, breach of warranty of fitness for particular purpose, and breach of contract under the District of Columbia Uniform Commercial Code. Countercl. ¶ ¶ 31-60. The defendant asserts that the Court has jurisdiction over its counterclaims because its claims " arise out of the same transaction and occurrence that is the subject matter of Plaintiff's claims." Id. ¶ 3. After filing suit, the plaintiff registered a copyright for the CD software. Am. Compl. ¶ 36.
The defendant has now filed a motion to dismiss the plaintiff's copyright infringement claim. Def.'s Mot. at 1. The plaintiff thereafter filed a motion to dismiss all of ...