Iconics, Inc. v. Massaro, et al.

Filing 389

Judge Douglas P. Woodlock: MEMORANDUM AND ORDER entered granting in part and denying in part #327 Motion for Summary Judgment; specifically, I deny the motion in so far as it seeks summary judgment on the statute of limitations grounds for claims against Simone Massaro. I grant summary judgment based on the statute of limitations grounds for the trade secrets, intentional interference with contractual relations and DMCA claims against Christopher Volpe, as well as the copyright infringement claims related to Volpe Industries, but deny summary judgment as to him for the civil RICO claims and the copyright infringement claims related to BaxEnergy. (Woodlock, Douglas) Modified on 1/25/2016 (Abaid, Kimberly).

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

ICONICS, INC.
Plaintiff,
v.
SIMONE MASSARO, VINCENT R. VOLPE,
CHRISTOPHER VOLPE, VENTO
INDUSTRIES, INC., BAXENERGY GmbH
And BAXENERGY ITALIA S.r.L.,
Defendants.

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CIVIL ACTION NO.
11-11526-DPW

MEMORANDUM AND ORDER
January 15, 2016
This litigation began as a dispute between Iconics, a
software company, and its former employee, defendant Simone
Massaro, over copyright infringement. During the travel of the
case, it has metastasized to include ten causes of action and
multiple defendants, although copyright is still at its heart.
Motions for summary judgment based on the statute of limitations
are now before regarding five causes of action against two
defendants: Simone Massaro and Chris Volpe.

Specifically, the

motions are directed at the following: certain copyright

1

infringement allegations (Count I)1, certain trade secret

1

The operative complaint contains the following allegations:
“1. Massaro copied Plaintiff’s source code files from
unspecified versions of Plaintiff’s software, including without
limitation, Plaintiff’s GENESIS64 product, onto the Project
Foxtrot repository no later than September 25, 2008.
2. Massaro used Plaintiff’s software and source code from
unspecified versions of Plaintiff’s software, including without
limitation, Plaintiff’s GENESIS64 product, in the development of
Project Foxtrot, reproducing and/or altering significant
portions of the code.
3. Massaro copied, without authorization, Plaintiff’s software
code when he resigned from the company on January 6, 2009.
4. Massaro copied and/or used Plaintiff’s unregistered
copyrighted works, including unregistered versions of GENESIS64
(including, without limitation, versions released in November
2007 and January 2009), GENESIS32 (including, without
limitation, version released in November 2007 and January 2009)
and BizViz (including,
without limitation, versions from November 2007 and January
2009) in developing the original products offered for sale by
BaxEnergy, further reproducing and/or altering significant
portions of the code for that purpose without authorization.
5. Massaro, without license or authorization, copied and/or used
the Project Foxtrot source code (including Plaintiff’s
underlying preexisting software code), which was assigned to
Plaintiff no later than December 12, 2012 and recorded no
earlier than September 5, 2013.
6. Chris Volpe hired Massaro in September 2007 to develop
Project Foxtrot software for Volpe Industries using, without
authorization, Plaintiff’s software as a starting point.
7. Chris Volpe reproduced portions of Plaintiff’s software code
on the Volpe Industries server without authorization no later
than September 25, 2008.
8. Chris Volpe and Vento Industries offered BaxEnergy’s
infringing products for sale in the United States with full
knowledge that the products in question violated Plaintiff’s
copyright.”
2

allegations (Count II)2, the claim of intentional interference
with contractual relations (Count IV), the claim concerning
removal and alteration of copyright management information
(Count V) and the civil RICO claim (Count IX).

Defendants do

not currently assert a statute of limitations defense with
respect to the other counts.

They also do not assert a statute

of limitations defense for claims against defendants BaxEnergy
GmbH, BaxEnergy Italia S.r.L, or Vento Industries, Inc.
I. STANDARD OF REVIEW
On a motion for summary judgment, including a motion for
summary judgment based upon the statute of limitations, “the
district court must view all facts and reasonable inferences
that may be drawn therefrom in the light most favorable to the
non-movant.” Santiago Hodge v. Parke Davis & Co., 909 F.2d 628,
633-34 (1st Cir. 1990).

Summary judgment should be granted

“when there is no genuine issue as to a material fact, and the

2

The complaint contains the following allegations in this
regard:
“1. Chris Volpe hired Massaro while Massaro was employed by
Plaintiff to develop Project Foxtrot for Volpe Industries using
Plaintiff’s trade secret information as a starting point.
2. Massaro used Plaintiff’s trade secrets to develop Project
Foxtrot.
3. Chris Volpe maintained large portions of Iconics’s trade
secrets on the Volpe Industries servers without authorization.
4. Massaro misappropriated Iconics’s trade secrets when he left
Iconics’s employ.”
3

moving party is entitled to a judgment as a matter of law.”

Id.

at 633-34.
II. FACTS AND PROCEDURAL BACKGROUND
The relevant facts in this case regarding the statute of
limitations are largely undisputed.

When read in the light most

favorable to plaintiff, the party opposing summary judgment,
they appear as follows.
The core of this case – as concerns the instant motion – is
Massaro’s unauthorized taking of Iconics software source code to
Volpe Industries.

From 2001 until 2009, Massaro was employed by

Iconics, where he worked as a software developer. In 2007, while
still employed by Iconics, Massaro began to work for Volpe
Industries, a company founded by Chris Volpe, on “Project
Foxtrot,” a project developing software for video surveillance
systems. Volpe hired Massaro, at least in part, to develop
Project Foxtrot based on Iconics software.

When Massaro

ultimately resigned from Iconics, he copied Iconics source code
and took it with him.

Later, when Iconics examined Volpe

Industries’ servers, it found that Iconics’ source code had been
copied and inserted into Project Foxtrot, with the Iconics name
and identifying information removed.
The outline of these events, although not the details, was
first made known to Iconics in an anonymous email received on
August 30, 2008.

That email informed Iconics of Massaro’s work
4

for Volpe Industries and his use of Iconics source code.
Iconics responded quickly; its counsel wrote to Volpe
Industries, and specifically to Chris Volpe, on September 15,
2008, stating that Iconics had claims against Volpe Industries
including tortious interference, misappropriation, theft of
trade secrets, unjust enrichment, unfair competition, and unfair
trade practices.
These events led to litigation in both state and federal
court.

On January 27, 2009, Iconics filed a complaint in state

court against Volpe Industries, largely reflecting the causes of
action threatened in its 2008 letter, as well as seeking a
declaration that Iconics owned the source code for Project
Foxtrot.

On December 14, 2009, the Suffolk Superior Court

granted partial summary judgment to Iconics, issuing a
declaratory judgment that Iconics owned all of Massaro’s
interests in Project Foxtrot, by operation of employment
contracts between Massaro and Iconics. In 2010, Volpe Industries
filed for bankruptcy in the District of Massachusetts.
During the litigation, defendants have engaged in multiple
efforts to conceal their activities.

It is undisputed that in

the bankruptcy proceedings, Vince Volpe, the brother of Chris,
set up a shell company to purchase and then wipe Volpe
Industries’ servers.

The Bankruptcy Court expressed concern

that it had been defrauded by this purchase and when Iconics
5

ultimately acquired those servers, found that 80,000 files had
been deleted.

It is also undisputed that Chris Volpe testified

in the state court proceedings that he never knew that Massaro
was using Iconics software in his Project Foxtrot work but also
stated in his deposition for this proceeding that he was in fact
aware.

Iconics alleges, but defendants dispute, that in the

state court litigation, Massaro and Volpe Industries
intentionally withheld part of the source code to hide the fact
that he had copied it from Iconics.
The original complaint in this action was filed on August
30, 2011.

It alleged only one count, copyright infringement,

against only Massaro.

At the time, Iconics’s allegations

focused on infringement claims based on the Project Foxtrot
copyrights, which Iconics owned as a result of its contract with
Massaro and the state court litigation, rather than on the
copyrights for the underlying Iconics source code (part of the
GENESIS32, GENESIS64, and BizViz products) which had been
stolen.

Iconics has since amended its complaint twice, first on

May 20, 2013, and second on April 10, 2014.3

It added new causes

of action and new facts with each amendment.

The First Amended

Complaint added as a defendant BaxEnergy GmbH; the other

3

Iconics also filed yet another motion to amend its complaint on
February 27, 2015. That motion was denied on August 18, 2015.
6

defendants, including Volpe, were added in the Second Amended
Complaint.
III. ANALYSIS
A.

Copyright Claims
At the center of this case, and of defendants’ statute of

limitations arguments, is the claim of copyright infringement.
The limitations period for copyright claims is three years.
U.S.C. § 507(b).

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“Under the [Copyright] Act, the cause of

action accrues when a plaintiff ‘knows or has reason to know of
the act which is the basis of the claim.’”

Cambridge Literary

Properties, Ltd. v. W. Goebel Porzellanfabrik G.m.b.H. & Co.
KG., 510 F.3d 77, 81 (1st Cir. 2007).

A plaintiff can have

reason to know of the act based on inquiry notice “once he
possesses information fairly suggesting some reason to
investigate whether he may have suffered an injury at the hands
of a putative infringer.”

Warren Freedenfeld Associates, Inc.

v. McTigue, 531 F.3d 38, 44 (1st Cir. 2008).
Applying this standard, the three year period can be said
to have begun on August 30, 2008, when Iconics received an
anonymous email informing it that Massaro was using its software
and proprietary source code in his work for Volpe Industries.
At that point, Iconics had reason to investigate a potential
injury.

At the latest, the claim accrued on September 15, 2008,

when Iconics’ counsel stated in a letter to Volpe Industries
7

that Iconics was aware of these improper activities, asserting
actual knowledge of the basis of the claim.

Using either of

those dates, the original complaint, filed on August 30, 2011,
falls within the three year statute of limitations.

And using

either of those dates, the amended complaints, filed on May 20,
2013 and April 10, 2014, fall outside the statute of
limitations.

Thus, the copyright infringement claims are timely

only if they relate back to the original complaint.

It is

uncontested that any claims which relate back to the date of the
original complaint are not barred by the statute of limitations.
1.

Relation Back

Before proceeding to a standard analysis of relation back,
it is first necessary to address whether relation back to the
original complaint is possible at all in this case.

Defendants

argue that because of the statutory requirement that a plaintiff
have registered its copyright prior to initiating suit for
copyright infringement, the original complaint was a “legal
nullity” and so plaintiff cannot relate its claims back to the
original filing date.

Defendants urge, essentially, adoption of

the approach used in Morgan v. Hanna Holdings, Inc., 635 F.
Supp. 2d 404, 410-11 (W.D. Pa. 2009) amended, No. CIV.A. 07-803,
2010 WL 1286946 (W.D. Pa. Mar. 31, 2010).

In Morgan, the

plaintiff had failed to register its copyright before filing its
original complaint, as required by the Copyright Act, 17 U.S.C.
8

§ 411, and had filed its amended complaint after the expiration
of the statute of limitations.

The court held that § 411 was a

jurisdictional prerequisite and reasoned that as a result, the
court lacked jurisdiction over the original, pre-registration
complaint altogether.

It therefore held that relation back to

the original complaint was not permitted because no complaint
had been before the court properly on the original filing date.
This approach, if ever it was sound, cannot survive the
Supreme Court’s ruling in Reed Elsevier Inc. v. Muchnick, 559
U.S. 154 (2010).

In Reed Elsevier, the Supreme Court held that

the registration requirement of § 411 is not jurisdictional but
merely a claim processing rule.

Thus, in a scenario such as the

one now before me, an original complaint, filed before a
copyright is registered, is within the court’s jurisdiction,
although a plaintiff relying on such a complaint would still
fail to state a claim for copyright infringement.

This was

recognized in Charles F. Vatterott Const. Co. v. Esteem Custom
Homes, LLP, 713 F. Supp. 2d 844, 846-47 (E.D. Mo. 2010), where
the court, in the wake of Reed Elsevier, withdrew a decision
taking an approach similar to Morgan.

The Vatterott

Construction court recognized that since it had jurisdiction
over the original — albeit faulty — complaint, it could allow
plaintiffs to amend their complaint after registering their
copyrights and further that the amended complaint would relate
9

back to the original date of filing.

Similarly, the original

complaint in this case was not, as defendants would have it, a
nullity.4

Thus, an ordinary analysis of whether the claims in

4

Iconics provides alternative reasons why § 411 does not render
the original complaint a nullity. First, it asserts that the
original complaint satisfied § 411, because it concerned the
Project Foxtrot copyrights, which had been registered by Volpe
Industries and transferred to Iconics by operation of contract.
While the First Circuit has suggested that registration, and the
ability to sue for infringement, transfers with copyright
ownership in this way, it has not directly addressed the
question. Latin Am. Music Co. Inc. v. Media Power Grp., Inc.,
705 F.3d 34, 44 (1st Cir. 2013) (evidence of previous owner’s
registration not deemed admissible). However, at least one
court has thoughtfully interpreted the copyright statutes as
requiring that the particular party seeking to sue have
registered its copyright and not permitting suit under the
wrongful registration of a copyright in another party’s name.
Compound Stock Earnings Seminars, Inc. v. Dannenberg, No. 3:10CV-2201-D, 2012 WL 28121, at *3-*5 (N.D. Tex. Jan. 4, 2012).
Second, Iconics argues that registration of a copyright
after the filing of an infringement action can cure the § 411
defect retroactively. Generally, a copyright registration filed
after the infringement suit, but before the statute of
limitations has expired, will cure the § 411 defect. See, e.g.,
Positive Black Talk Inc. v. Cash Money Records, Inc., 394 F.3d
357, 367 (5th Cir. 2004) (citing “considerations of finality,
efficiency, and economy”); Computer Associates Int'l, Inc. v.
Altai, Inc., 775 F. Supp. 544, 557 (E.D.N.Y. 1991) aff'd in
part, vacated in part, 982 F.2d 693 (2d Cir. 1992) (supplemental
registration, within the statute of limitations, cures defect
and avoids “formalistic dismissal”); Foraste v. Brown Univ., 248
F. Supp. 2d 71, 78 (D.R.I. 2003) (listing cases). In contrast,
where final judgment is sought before the copyright is
registered, courts have dismissed the action. See, e.g., Kernel
Records Oy v. Mosley, 694 F.3d 1294, 1302 (11th Cir. 2012).
Whether copyrights registered after suit was filed and the
statute of limitations had expired but before final judgment was
sought can cure a § 411 violation is a difficult question, made
more so by Reed Elsevier’s unsettling of precedent on the issue.
In this situation, the considerations of judicial economy to
which courts have turned provide no unambiguous answer.
10

the Second Amended Complaint relate back to the original filing
date can be undertaken.
An amended complaint relates back to the date of the
original pleading when it “asserts a claim or defense that arose
out of the conduct, transaction, or occurrence set out--or
attempted to be set out--in the original pleading.”
Civ. P. 15(c)(1)(B).

Fed. R.

The First Circuit generally allows

relation back for “technical errors” but will not allow relation
back for claims “not even suggested in the original complaint.”
O'Loughlin v. Nat'l R.R. Passenger Corp., 928 F.2d 24, 26-27
(1st Cir. 1991) citing 6A WRIGHT, MILLER & KANE, FEDERAL PRACTICE
PROCEDURE, § 1497 (2d ed. 1990).

AND

Between those two poles, courts

look to see whether “the alteration of the original statement is
so substantial that it cannot be said that defendant was given
adequate notice of the conduct, transaction, or occurrence that
forms the basis of the claim.”

Id.

This analysis “is directed

to conduct rather than causes of action,” Zee-Bar, Inc. v.
Kaplan, 162 F.R.D. 422, 426 (D.N.H. 1993), and new legal

Because I find that § 411 does not render the original
complaint a nullity, I do not reach these work arounds for a
§ 411 defect. That said, I note that the willingness of courts
to find that later registrations cure § 411 defects – even at a
time when those defects were perceived to be jurisdictional –
supports the conclusion that claims from the amended complaints
may relate back to the original complaint: courts have generally
been forgiving of § 411 violations and in this related area have
not treated faulty original complaints as legal nullities.
11

theories may relate back to the original filing where — as here
— there is a shared basis in factual circumstances.
2.

Simone Massaro

With respect to defendant Massaro, the relation back
analysis is straightforward.

The original complaint alleged

copyright infringement by Massaro.

It alleged that Massaro used

Iconics’ copyrighted source code to work on Volpe’s Project
Foxtrot beginning in 2007.

While the amended complaints provide

substantially more detail than the original complaint, much of
which was learned during the course of the litigation, the basic
sequence of events laid out in each is the same.

The copyright

infringement claims against Massaro clearly relate back to the
original filing.

This is so even if the specific copyrights in

question changed from one version of the complaint to the next,
as a result of Iconics’s subsequent investigation of the source
code itself.

But see Illinois Tool Works, Inc. v. Foster Grant

Co., Inc., 395 F. Supp. 234, 250-251 (N.D. Ill. 1974), judgment
aff'd on the merits, 547 F.2d 1300 (7th Cir. 1976) (infringement
of one patent is not the “same conduct, transaction or
occurrence” as the infringement of another patent).

The same

infringing events provide the basis for both claims; what
changed was only that Iconics discovered that the infringement
was more substantial than it originally realized and came to
believe that its GENESIS32, GENESIS64 and BizViz copyrights had
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been infringed upon directly.

Uncovering that the extent of its

injury was greater than expected does not render a plaintiff’s
claim untimely.

The original and amended complaints concern the

same conduct, as regards copyright infringement, and thus the
claims against Massaro relate back.
3.

Chris Volpe

Unlike Massaro, Chris Volpe was not named as a defendant in
the original complaint.

For the new claims against him to

relate back to the original filing, additional conditions must
be met.

First, the conditions of Rule 15(c)(1)(B) must be

satisfied.

For the same reasons as with Massaro, they are.

The

original complaint identified Massaro’s alleged copyright
infringement as being undertaken for work solicited by Volpe and
used in Volpe’s Project Foxtrot.

The same basic occurrence

forms the basis for both complaints, although later-discovered
facts changed Iconics’s legal theory about that occurrence.
In addition, for the claims against Chris Volpe to relate
back, he must, within the period for service of process after
the filing of the original complaint, have “(i) received such
notice of the action that [he] will not be prejudiced in
defending on the merits; and (ii) kn[own] or should have known
that the action would have been brought against it, but for a
mistake concerning the proper party’s identity.”

13

Fed. R. Civ.

P. 15(c)(1)(C).5

To show notice, it is not necessary that the

prospective defendant have received formal service of process.
Morel v. DaimlerChrysler AG, 565 F.3d 20, 26 (1st Cir. 2009).
Nevertheless, “notice requires knowledge of the filing of suit,
not simply knowledge of the incident giving rise to the cause of
action.” Id., citing Singletary v. Pa. Dep't of Corr., 266 F.3d
186, 195 (3d Cir. 2001).

Actual knowledge is not required;

certain forms of constructive knowledge, such as knowledge
through an attorney shared by the named defendant and added
defendant, can suffice.

Singletary, 266 F.3d at 195.

burden of establishing relation back falls on Iconics.

The
Coons v.

Industrial Knife Co., Inc., 620 F.3d 38, 44.
Here, Iconics fails to carry that burden.

It offers only

the barest evidence of notice, which is insufficient to show a
lack of prejudice.

First, Iconics points to an email from

Massaro to Volpe in which he states that he received a package
“with a copy of a federal law suit against me.”
p. 1-2].

[Dkt. No. 365

This e-mail does not describe the content of the

5

Because the original defendant, Massaro, was at the time an
individual in a foreign country, the time for service is not the
standard 120 days under the then-current version of Rule 4(m),
but rather left open-ended; thus, the period for notice is
similarly ill-defined. See Erie Indem. Co. v. Keurig, Inc., No.
1:10-CV-02899, 2011 WL 2893013, at *4 (N.D. Ohio July 15, 2011)
(analyzing the incorporation of Rule 4(m) in relation back under
Rule 15(c)). Neither party now before me asserts, however, that
the proffered examples of notice came outside the appropriate
period.
14

lawsuit at all.

Second, Iconics cites a 2015 deposition of

Volpe in which he testified that Massaro told him of the federal
lawsuit before he became involved in it.

[Dkt. No. 365 p. 1-2].

Again, there is no detail as to what Massaro told him about the
lawsuit and in this case, no detail as to when Massaro told him.
While mere knowledge of the filing of a suit might constitute
sufficient notice for relation back where, for example, one
corporate entity was incorrectly sued rather than another
affiliated entity, Morel, 565 F.3d at 26, it is not enough here.
More information about the nature of the suit would be necessary
for Volpe to infer that he could be added as a defendant and
behave accordingly.
Iconics also points to various mentions of the federal
litigation during the bankruptcy proceedings of Volpe
Industries.

The most substantial description of the litigation

– still only a paragraph long – came in a written declaration by
Iconics’ counsel filed with the Bankruptcy Court.

This

statement does provide some description of the content of the
complaint against Massaro – enough, on summary judgment, to
support an inference of notice.

However, this statement, like

others referenced in the bankruptcy court filings, was not made
to Chris Volpe himself.

Finding notice therefore requires an

additional inference: that Volpe was further informed about the

15

litigation against Massaro by his lawyers, perhaps, or that he
read the filings himself.
Imputed notice is sufficient for relation back in at least
two identified scenarios: the “shared attorney method” and “the
identity of interest method.”

Singletary, 266 F.3d at 196.

But

the distance notice would have to travel in this case stretches
beyond what is contemplated either of those methods.
The “shared attorney” method “is based on the notion that,
when an originally named party and the party who is sought to be
added are represented by the same attorney, the attorney is
likely to have communicated to the latter party that he may very
well be joined in the action.”

Id.

It requires that the

original defendant and the defendant to be added be concurrently
represented by the same attorney, such that an explanation of
the new defendant’s potential liability could be expected at
that time.

See Chao v. Ballista, 630 F.Supp.2d 170, 181 (D.

Mass. 2009).
The identity of interest method finds notice when the
original defendant and the new defendant are so related that the
new party “was in effect involved in [the proceedings]
unofficially from an early stage.” Young v. Lepone, 305 F.3d 1,
15 (1st Cir. 2002), quoting Leachman v. Beech Aircraft Corp.,
694 F.2d 1301, 1309 (D.C. Cir. 1982).

Under each of these

methods, notice is imputed where one defendant has actually been
16

served and would be expected to share and explain the full
filings against it with the new defendant.
In this case, however, Volpe’s connection to the actual
complaint, and therefore to an understanding of the likelihood
that he could be brought into the suit, is more distant. Iconics
has not shown or argued that Massaro shared an attorney or an
identity of interest with Volpe.

And Volpe Industries, which

arguably did share an identity of interest with Chris Volpe
himself, was not the original defendant.

Indeed, Iconics has

not even alleged that Volpe Industries was shown the original
complaint, but merely that Volpe Industries was exposed to a
summary of the contents of the complaint.

The road that notice

of this suit traveled – from Iconics lawyers, to the bankruptcy
court, to the Volpe Industries bankruptcy lawyer, and perhaps to
Volpe himself – is long enough that a thin description of a
lawsuit cannot be said to have reached Volpe in a form that
provided him with sufficient notice to avoid prejudice.
Notably, the lack of adequate notice bars the relation back
of the claims against Volpe for all claims and under any theory
of the case.

Volpe was not named as a defendant in the original

complaint and so, without notice, no claim against him can
relate back to that filing date.6

Likewise, Volpe was not named

6

If notice has been provided, Iconics would likely be able to
show that Volpe either knew or should have known that the action
17

as a defendant in the First Amended Complaint – and again
Iconics has provided no evidence of notice thereafter – so the
claims against him date from their addition in the Second
Amended Complaint, on April 14, 2014.

While the copyright

infringement claims against Massaro are not time-barred, those
against Volpe are.
4.

Fraudulent Concealment

As a backstop, Iconics seeks to invoke the doctrine of
fraudulent concealment to bring defendants within the statute of
limitation.

Two conditions are required for this doctrine to

toll the statute of limitations.

“First, the defendant raising

the limitations defense must have engaged in fraud or deliberate
concealment of material facts related to the wrongdoing. Second,
the Iconics must have failed to discover these facts within the
normal limitations period despite his or her exercise of due
diligence.” Gonzalez v. United States, 284 F.3d 281, 292 (1st
Cir. 2002).

The facts giving rise to a fraudulent concealment

would have been brought against him, but for a mistake
concerning the proper party’s identity. A “mistake” can include
situations in which the plaintiff did not understand the roles
that the two parties played in the underlying conduct giving
rise to the claim. Krupski v. Costa Crociere S. p. A., 560 U.S.
538, 549 (2010). In this case, Iconics did not fully understand
Volpe’s now-alleged role when it filed its original complaint;
since then, for example, Volpe’s testimony on relevant matters
has changed and Iconics has been able to examine the Project
Foxtrot source code and servers. Volpe, knowing his own
involvement, should have known that he would have been sued
along with Massaro, if Iconics had not made that mistake.
18

claim must be pled with particularity, under Fed. R. Civ. P.
9(b), J. Geils Band Employee Ben. Plan v. Smith Barney Shearson,
Inc., 76 F.3d 1245, 1255 (1st Cir. 1996) (applying Rule 9(b)
even on a summary judgment motion), and should therefore include
the time, place and content of the false or fraudulent
representations made by the defendant.

Epstein v. C.R. Bard,

Inc., 460 F.3d 183, 189-90 (1st Cir. 2006).

If the requirements

for fraudulent concealment are met, the statute of limitations
is tolled, but only until there were “sufficient storm warnings
to alert a reasonable person to the possibility that there were
either misleading statements or significant omissions involved.”
J. Geils Band Employee Ben. Plan, 76 F.3d at 1255.
It is unnecessary to decide whether defendants’ actions
would satisfy the standard for fraudulent concealment.

Even if

they did, the tolling provided would not be enough to revive the
claims against Volpe.

According to Iconics’s own briefing on

fraudulent concealment, Iconics determined that “Mr. Massaro
and/or Mr. Volpe” had removed the copyright management
information from the Iconics source code copied onto the Volpe
Industries servers in February 2011.

In other words, at that

point, Iconics had reason to believe that Volpe was acting to
hide evidence of copyright infringement.

At that point, Iconics

should have seen the “storm warnings” of Volpe’s potential
concealment of information.

Indeed, Iconics was likely on
19

notice of fraudulent concealment much earlier.

In its state

court complaint against Volpe Industries, dated January 27,
2009, Iconics alleged that “Volpe [Industries] hid its scheme
from Iconics and took steps to prevent Iconics from discovering
the extent of Massaro’s work on Project Foxtrot.”

Regardless of

whether Volpe fraudulently concealed material facts related to
his alleged copyright infringement, the statute of limitations
can only be tolled until sometime between January 2009 and
February 2011.

The claims against Volpe were first raised in

the Second Amended Complaint, which was filed in April 2014,
more than three years after either of those dates.

A finding of

fraudulent concealment would not bring Iconics’s claims against
Volpe within the statute of limitations.
5.

Distinctions between Infringement Clauses

As a final matter, two allegations of copyright
infringement should be addressed separately.

These deal not

with Project Foxtrot and the events previously described in this
memorandum, but with the involvement of Massaro and Volpe with
defendant BaxEnergy.

Specifically, defendants seek to dismiss,

on statute of limitations grounds, claims that Massaro
improperly used Iconics code to develop products for BaxEnergy
and that Volpe and Vento Industries offered BaxEnergy’s
infringing products for sale in the United States.

These

allegations are distinct from those involving Volpe Industries.
20

They involved different actors and different actions.

For

example, Massaro’s work for BaxEnergy, making software for the
renewable energy sector, is at issue here, as opposed to his
work on surveillance software for Volpe Industries.

While

surely connected to the Project Foxtrot claims, these two
allegations do not, even in the light most favorable to Iconics,
arise out of the same transaction or occurrence as the claims
alleged in the original complaint.

They cannot be said to

relate back to that date.
They do not, however, need to relate back to be timely.
The BaxEnergy conduct was first raised in the First Amended
Complaint, on May 20, 2013, so claims regarding BaxEnergy that
accrued after May 20, 2010 were timely raised.

The earliest

date on which Iconics could have learned of these acts of
infringement was September 27, 2010, when it was informed that
Massaro was working at BaxEnergy.

Defendants do not provide any

alternative earlier date on which the statute of limitations
might have begun running with regard to these BaxEnergy claims.
On defendant’s motion for summary judgment, therefore, it cannot
be said that these BaxEnergy claims were time-barred as to
either Massaro or Volpe.
B.

Other Claims
Iconics’s Second Amended Complaint lists nine counts in

addition to the copyright infringement claim included in the
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original complaint.

But as defendants themselves state at the

outset of their memorandum in support of summary judgment, “This
is a copyright case.

All ten claims-in-suit relate directly to

the core issue of alleged copyright infringement.”

Each of the

causes of action arises, more directly or less, from the conduct
alleged in the original complaint.

Given the admittedly close

connections between the counts, these new counts generally
relate back to the original complaint.

With the partial

exception of the civil RICO claim, these are simply new legal
theories about the same basic events.
1.

Theft of Trade Secrets

Under Massachusetts law, the statute of limitations for
tort actions is three years. Mass. Gen. L. ch. 260 § 2A.

This

includes actions for the misappropriation of trade secrets.
Stark v. Advanced Magnetics, Inc., 736 N.E.2d 434, 441 (Mass.
App. Ct. 2000).

The statute of limitations begins to run when a

plaintiff discovers or should have discovered that it was
harmed.

Bowen v. Eli Lilly & Co., 557 N.E.2d 739, 741 (Mass.

1990).

Iconics was first made aware that Massaro may have used

its source code in his work for Volpe Industries in the
anonymous email of August 30, 2008.

Iconics directly stated

that it had a claim for the theft of trade secrets in its
September 15, 2008 letter to Volpe Industries.

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Thus, claims

that were raised in or relate back to the original complaint are
timely, whereas those raised later are not.
The trade secrets claims against Massaro relate back to the
original complaint.

They arise out of the same conduct,

Massaro’s use of Iconics source code in Project Foxtrot.
Indeed, the original complaint even alleged that there had been
“misuse of [Iconics’] trade secrets.”

Massaro certainly had

notice that this behavior was the subject of the lawsuit, and
even had notice of the potential for this legal theory to be
raised against him.

The claims against Volpe, on the other

hand, do not relate back to the original complaint.

As before,

Volpe was not named as a defendant originally and Iconics has
not shown that he had notice of the lawsuit within the requisite
period after the original complaint was filed.

Accordingly, the

theft of trade secrets count is time-barred against Volpe but
not against Massaro.
2.

Intentional Interference with Contractual Relations

The statute of limitations analysis for Iconics’s
intentional interference with contractual relations claims is
largely identical to that for the theft of trade secrets claim.
Again, the statute of limitations is three years.
ch. 260 § 2A.

Mass. Gen. L.

Again, it begins to run either from the date of

the anonymous e-mail or, at the latest, from the date on which
Iconics’s counsel identified it to Volpe Industries as a
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potential cause of action.

On this count, defendants seek a

statute of limitations defense only as to Volpe (Massaro was not
named in this cause of action).

Thus, as before, the lack of

notice defeats any effort to relate this claim back to the
original filing as against Volpe, and therefore the claim is
time-barred.
3.

Removal and Alteration of Copyright Management
Information

Iconics’s claims under the Digital Millenium Copyright Act
(DMCA), 17 U.S.C. § 1202, were first raised in the Second
Amended Complaint, dated April 10, 2014.

Specifically, Iconics

alleges that defendants removed and altered copyright management
information from the headers of Iconics source code.

Defendants

argue, and Iconics does not contest, that this claim accrued
when Iconics discovered the removal of its copyright management
information in February 2011.
these claims is three years.

The statute of limitations for
17 U.S.C. § 507(b).

As such,

Iconics’s DMCA claims are time-barred unless they relate back to
an earlier complaint.

Once again, however, the claims against

Massaro relate back to the original complaint (or on this count,
at least the 2013 First Amended Complaint).

The allegations in

the Second Amended Complaint arise out of the same conduct as
outlined originally, Massaro’s taking of Iconics source code to
his work with Volpe Industries.

The alleged removal of the

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headers was simply a later-discovered aspect of that taking, one
meant to disguise Massaro’s actions.

The DMCA claims relate

back to the original filing date and are timely as against
Massaro.

Once again, the claims against Volpe do not relate

back to the original or First Amended filing dates, as
there is no evidence that Volpe had notice of this suit at those
times.
4.

Civil RICO

The precise legal contours of the statute of limitations
for a civil RICO claim such as this one have not been fully
defined in binding case law.
civil RICO is four years.

The statute of limitations for

Agency Holding Corp. v. Malley-Duff &

Associates, Inc., 483 U.S. 143, 156 (1987).

In the First

Circuit, a civil RICO claim accrues according to an injury
discovery rule.
Cir. 2000).

Lares Grp., II v. Tobin, 221 F.3d 41, 44 (1st

Under this rule, “discovery of the injury, not

discovery of the other elements of a claim, is what starts the
clock.” Id., citing Rotella v. Wood, 528 U.S. 549, 556-57
(2000).

However, both the Supreme Court and First Circuit have

declined to determine how the statute of limitations should be
treated where the injury is discovered before all the underlying
predicates of a civil RICO cause of action – and in particular
the second predicate act needed for a pattern of racketeering to
occur - have occurred.

Lares Grp. II, 221 F.3d at 45 (“a
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different accrual rule may apply where a plaintiff’s injury does
not complete her cause of action”); Rotella, 528 U.S. at 559 n.4
(“we need not and do not decide whether civil RICO allows for a
cause of action when a second predicate act follows the injury,
or what limitations accrual rule might apply in such a case.”).
Some courts, such as the Sixth Circuit (in an unpublished
opinion) and the Ninth Circuit (in a pre-Rotella opinion that
district courts have continued to apply post-Rotella), have held
that a civil RICO cause of action does not accrue until all
elements of the cause of action are present.

Bygrave v. Van

Reken, 238 F.3d 419, 2000 WL 1769587 at *4 (6th Cir. 2000)(per
curiam); Bulletin Displays, LLC v. Regency Outdoor Advert.,
Inc., 518 F. Supp. 2d 1182, 1186 (C.D. Cal. 2007), citing
Grimmett v. Brown, 75 F.3d 506, 512 (9th Cir. 1996).
This case falls into an unsettled category of RICO claim.
In its Second Amended Complaint, Iconics pled two predicate acts
as underlying its RICO claim: “copyright infringement under 17
U.S.C. §§ 506, and/or fraud in connection with a case under
Title 11 destruction alteration or falsification of records, 18
U.S.C. § 1519.”

The injury stemming from the copyright

infringement, as described above, was discovered in August or
September of 2008.

This injury, moreover, is the one at the

heart of Iconics’s civil RICO claim; the destruction of
documents primarily caused injury to Iconics by concealing the
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details of the copyright infringement injury.

Thus, woodenly

applying the rule outlined in Lares Grp. II, the four-year
statute of limitations would run from that 2008 discovery date
and have expired in 2012, before the filing of the Second
Amended Complaint.

However, the second predicate act, relating

to fraud and the destruction of records in relation to a
bankruptcy proceeding, did not occur until significantly later.
Volpe Industries filed for bankruptcy on October 1, 2010
and Iconics asserts that Volpe deleted files from the bankruptcy
assets in September or October of that year.

The Bankruptcy

Court discovered the fraud upon the court on June 8, 2012 and
Iconics discovered that 80,000 files had been deleted from the
Volpe Industries computers after it acquired them on February
11, 2013.

If the claim did not accrue until the second

predicate act occurred, the statute of limitations did not
expire until September 2014, at the absolute earliest.
Accordingly, under that theory, claims raised in the Second
Amended Complaint, on April 10, 2014, were timely.
I hold that civil RICO claims only accrue when two
predicates for the cause of action have occurred (although they
need not all have been discovered).

The weight of the Supreme

Court’s reasoning would support an accrual date that begins only
once the predicates for a cause of action have taken place.
Rotella, the Court identified the policies behind all
27

In

limitations policies as “repose, elimination of stale claims,
and certainty about a plaintiff's opportunity for recovery and a
defendant's potential liabilities.” Id.

When the predicates do

not yet exist, beginning the statute of limitations clock would
not serve these goals.

The statute of limitations would not

eliminate stale claims; it would eliminate claims not yet even
ripe.

Likewise, forcing parties to litigate over still-unripe

civil RICO claims, in order to avoid being time-barred, would
dramatically add to uncertainty for plaintiffs and defendants
alike, encouraging poorly-formed and speculative RICO litigation
to be rushed into court.

Perhaps most importantly, the Supreme

Court, in reserving the issue, referenced “the cardinal
principle that a limitations period does not begin to run until
the cause of action is complete.”

Id. at 559 n.4, citing

Rawlings v. Ray, 312 U.S. 96, 98 (1941).

The Court thus

recognized that a limitations period that begins before the
second predicate act would clash with the most basic purposes of
a statute of limitations – and strongly suggested that such a
rule would not be received favorably.
The RICO statute itself also provides a strong basis for
finding that the statute of limitations does not begin until the
second predicate act has occurred.

A contrary rule would mean

that certain RICO claims, in which the second predicate act
followed the discovery of the injury from the first by more than
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four years, could never be brought.

This would eviscerate the

Congressional scheme, which allows for patterns of racketeering
activity where two predicate acts are separated by up to ten
years.

18 U.S.C. § 1961(5).

It is nonsensical to base RICO

statute of limitation law on the assumption Congress would have
structured the definition of a pattern of racketeering to
include acts ten years apart if it meant for the statute of
limitations to expire four years after the first predicate act.
I hold that the civil RICO claim here did not accrue until
bankruptcy proceedings were at least underway and therefore is
not time-barred as against either Volpe or Massaro.
IV. CONCLUSION
For the reasons set forth above, I GRANT IN PART and DENY
IN PART Defendants’ motion for summary judgment.

I deny the

motion in so far as it seeks summary judgment on the statute of
limitations grounds for claims against Simone Massaro.

I grant

summary judgment based on the statute of limitations grounds for
the trade secrets, intentional interference with contractual
relations and DMCA claims against Christopher Volpe, as well as
the copyright infringement claims related to Volpe Industries,

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but deny summary judgment as to him for the civil RICO claims
and the copyright infringement claims related to BaxEnergy.

/s/ Douglas P. Woodlock______
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE

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