Cael Technologies (Pvt.) Ltd. v. Precise Voting, LLC. et al

Filing 76

MEMORANDUM AND ORDER granting 75 Motion for Judgment on the Pleadings. For the reasons stated herein, the Court finds that Defendant VotRite's failure to obtain counsel constitutes a default and directs the Clerk of the Court to strike the A nswer from the docket, solely as it pertains to VotRite, and to enter VotRite's default. The Court further construes Plaintiffs Rule 12(c) motion as a motion for a default judgment and, as such, grants Plaintiff a default judgment against VotRit e on all of the claims contained in the Complaint. In addition, due to VotRite's Answer being stricken, the counterclaims pleaded by VotRite are dismissed. Plaintiff is directed to submit a proposed judgment, consistent with this opinion, within ten (10) days. Plaintiff is further directed to advise the Court, within ten (10) days,whether it intends to continue this action with respect to Defendants Precise New York and Precise Delaware. In the event Plaintiff does not intend to continue this action as to either of the remaining defendants, Plaintiff shall file a stipulation of discontinuance within ten (10) days. (Ordered by Judge Leonard D. Wexler on 9/26/2016.) (Fagan, Linda)

FILED
IN CLERK'S OFFICE
U.S. DISTRICT COURT E.D.N.Y.

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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

-----------------------------------------------------------)(
CAEL TECHNOLOGIES (PVT.) LTD.,

SEP 2 6 2016

*

LONG ISLAND OFFICE

MEMORANDUM AND ORDER

cv 13-1470

Plaintiff,

(Wexler, J.)

-againstPRECISE VOTING, LLC.,
PRECISE VOTING, LLC.,
VOTRITE, LLC.,
Defendants.

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APPEARANCES:
SABHARWAL & FINKEL, LLC
BY: ADAM D. FINKEL, ESQ.
Attorneys for Plaintiff
350 Fifth Avenue, 591h Floor
New York, New York 10118
CITTONE & CHINTA LLP
BY: HENRY JOSEPH CITTONE, ESQ.
PADMAJA CHINTA, ESQ.
Attorneys for Plaintiff
11 Broadway, Suite 615
New York, New York 10004

WETIER, District Judge:
Before the Court is the Plaintiffs motion for a judgment on the pleadings, pursuant to
Federal Rule of Civil Procedure 12(c), against Defendant VotRite LLC ("VotRite"), based on
VotRite's default as a result of its failure to obtain counsel in this action. VotRite has failed to
file any opposition to the within motion. For the following reasons, Plaintiffs motion is granted.
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BACKGROUND
I.

The Facts Alleged in the Complaint
Plaintiff, Cael Technologies ("Cael"), is an Indian corporation that specializes in

providing customized software applications, software product development and other software
products and services. (Compl.

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1.) Defendants Precise Voting, a New York limited liability

company ("Precise New York"), and Precise Voting, a Delaware limited liability company
("Precise Delaware"), are in the business of manufacturing and marketing electronic voting
machines and services in the United States. (Compl.

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3-6.) Defendant VotRite is a wholly

owned subsidiary of Precise Voting and is a provider of electronic voting machines and services,
including rentals, in the United States. (Compl.

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9.)

In early 2005, Plaintiff was approached by an Indian company, SSW Information
Technology Services Private Limited ("WITS India"), to develop an electronic voting machine
system to be marketed worldwide, including in the United States, by the WITS Group Inc.
("WITS Group"). (Compl.

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17-18.) In May 2005, Plaintiff entered into an agreement with

WITS India for the development of a functional voting machine prototype for the United States
market. (Compl.

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19.) The Advanced Electronic Voting System ("AEVS") prototype was to be

made solely for marketing and demonstration purposes and not for sale. (Compl.
referred to the new voting system as "VotRite." (Compl.

~

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20.) Plaintiff

21.)

Around the same time, Plaintiff entered into an agreement with another Indian company,
Analogic Technomatics Private Limited ("Analogic"), who was to provide the hardware box for
the AEVS prototype, exclusively for Plaintiff and based solely on Plaintiffs specifications.
(Compl.

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21.) On or about June 28, 2005, Plaintiff delivered the functional AEVS prototype to
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the WITS Group in New Jersey. (Compl.

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22.) Plaintiff subsequently delivered four more

functional AEVS prototypes to the WITS Group in New Jersey between late 2005 and August
2006, pursuant to purchase orders placed by the WITS Group. (Compl.

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23.)

In 2008, Plaintiff registered its copyright in the software and source code for the AEVS
prototype in India and was issued Certificate ofRegistration No. SW-386112008 entitled "Cael
Voting Systems Software." (Compl.
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28.) Plaintiff is the sole owner of this copyright. (Compl.

30.)
In or about September 2006, Plaintiff entered into another agreement with Analogic for

the manufacture of a close-to-production AEVS prototype, again using software exclusively
developed for Plaintiff and based solely on Plaintiffs specifications. (Compl.

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31.) Plaintiff

incorporated the copyrighted Cael Voting Systems Software into the AEVS prototype provided
by Analogic and gave it to Analogic for completion of the hardware. (Compl.

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32.) Analogic,

however, failed to deliver the close-to-production AEVS prototype to Plaintiff. (Compl. ~ 32.)
In or about early 2007, Plaintiff grew suspicious of Analogic and WITS India and
cautioned WITS India against using or re-engineering its copyrighted Cael Voting Systems
Software through Analogic or anyone else. (Compl.

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34.) In July 2007, Plaintiff commenced

arbitration proceedings against Analogic in India for breach of its 2006 agreement and to prevent
Analogic from exploiting Plaintiffs copyrighted software. (Compl.

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35.) During these

proceedings, an interim injunction was issued against Analogic and material evidence was seized
from Analogic, including hard drives. (Compl.

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35.)

In or about August 2012, Plaintiff received the confidential report of the Andrha Pradesh
Forensic Science Laboratories from the arbitrator. (Compl.
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36.) The report concluded that the

hard drives seized from Analogic contained Plaintiffs copyrighted Cael Voting Systems
Software. (Compl.

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36.)

In late 2012, Plaintiffbegan investigating the United States voting machines market.
(Compl.

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37.) During this investigation, Plaintiff discovered that Defendants were marketing an

electronic voting system very similar to Plaintiffs Voting Systems Software. (Compl.

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37.)

Defendants' voting machines include the same major features as Plaintiffs copyrighted Voting
Systems Software, use the same acronym as that of Plaintiffs proposed prototype- "AEVS"and Defendants formed a susbsidiary using the same name intended to be used by Plaintiff for its
voting system- "VotRite." (Compl.

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39-41.)

Plaintiff alleges that Defendant Precise Voting gained access to Plaintiffs copyrighted
Voting Systems Software through Analogic or the WITS Group. (Compl.

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38.) Plaintiff bases

this belief on a 2007 online article in which Precise Voting states that through an entity known as
Bright Software Development, Inc., it decompiled a source code that was originally developed by
an Indian programmer who "disappeared" mid-project, for use in its electronic voting machines.
(Compl.

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38 and Ex. B, annexed thereto.) According to Plaintiff, Defendants copied,

decompiled and modified Plaintiffs copyrighted Voting Systems Software and registered it with
the United States Copyright Office in 2006 as its own software with the title "Voting Machine
Software." (Compl.

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42; Kapsis Aff.

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6.)

Plaintiff commenced this action on March 20,2013, alleging copyright infringement.
Defendants moved to dismiss the Complaint, pursuant to Federal Rule of Civil Procedure
12(b)(6), on the grounds that Plaintiffs copyright infringement claim is time-barred. The Court
granted Defendants' motion in part, dismissing as time-barred any claims of copyright
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infringement based on acts taken by Defendants prior to March 20, 2010. Defendants thereafter
filed their Answer containing six counterclaims.

II.

The Counterclaims
Defendants allege that they are the owners of the AEVS and VOTRITE trademarks and

have been since 2006.

(Counterclaim~~

6-7.) Defendants further allege that Plaintiffs past use

of its trademarks, as well as any future use in the United States, will impair Defendants' rights in
those trademarks, as well as deceive and mislead the public into thinking a connection exists
between Plaintiff and Defendants. Accordingly, Defendants assert the following six
counterclaims: (1) for a declaratory judgment of copyright non-infringement; (2) trademark
infringement and (3) false designation of origin, pursuant to the Lanham Act, 15 U.S.C. §§
1114(1), 1125(a)(1)(A); and (4) deceptive practices, (5) false advertising, and, (6)
misappropriation of trademarks, pursuant to New York state law. In August 2014, Plaintiff
moved to dismiss all of Defendants' counterclaims except the declaratory judgment of copyright
non-infringement. The Court denied that motion on December 5, 2014.

III.

Procedural History
On November 25, 2014, Defendant Precise New York filed for bankruptcy in the United

States Bankruptcy Court for the Eastern District ofNew York and a suggestion of bankruptcy
was filed with the Court on December 17,2014. 1 Thereafter, on January 12,2015, Defendants'

1

Precise New York's bankruptcy case remains pending and, therefore, the automatic
bankruptcy stay is in effect. Plaintiff does not seek a judgment on the pleadings against
Defendant Precise New York. It appears undisputed that Precise Delaware is a defunct
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attorney moved to withdraw as counsel for Defendants. The Court granted the application on
January 21, 2015 and, after advising James Kapsis, the principal ofVotRite and Precise Voting
that corporations cannot proceed pro se, Defendants were afforded sixty days to retain new
counsel. (Docket Entry 62.) On March 24, 2015, Defendants were granted an additional thirty
days to obtain new counsel. By letter dated April21, 2015, Mr. Kapsis advised the Court that
Defendants are unable to afford counsel and "will have to default." (Docket Entry 66.)
On December 9, 2015, Plaintiff submitted a request for a certificate of default with
respect to Defendant VotRite to the Clerk of Court. (Docket Entry 70.) That request was denied
by the Clerk of the Court on December 14, 2015, based on the fact that an appearance for
VotRite had previously been entered in this action. Plaintiff was directed to instead file a motion
for a judgment on the pleadings, pursuant to Rule 12(c). That motion, which VotRite has failed
to oppose, is now before the Court.

DISCUSSION
"After the pleadings are closed- but early enough not to delay trial- a party may move for
judgment on the pleadings." Fed. R. Civ. P. 12(c). While Plaintiff styled the within motion as a
12(c) motion, what it is really seeking is a default judgment and the Court will construe the
motion as such. As the Court advised Mr. Kapsis, the principal ofVotRite, corporations may not
appear prose. See Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20, 22 (2d Cir. 1983).
"The failure by a corporate defendant to obtain counsel constitutes a failure to defend,"
warranting the entry of a default judgment. Demopoulos v. Sweet Clover Farms. Inc., No. 15 CV

corporation. Plaintiff similarly does not seek any judgment against Precise Delaware.
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6148, 2016 U.S. Dist. LEXIS 119449, at *15-16 (E.D.N.Y. Sept. 1, 2016) (citing Shapiro.
Bernstein & Co. v. Continental Record Co., 386 F.2d 426, 427 (2d Cir. 1967)); see also
Balestriere PLLC v. CMA Trading. Inc., No. 11 Civ. 9459, 2012 U.S. Dist. LEXIS 29620, at *5
(S.D.N.Y. Mar. 5, 2012) ("A default is warranted if a defendant cannot proceed without counsel
and either will not or cannot obtain an attorney. Failure by such a party to obtain counsel after
being warned of the necessity to do so justifies entry of a default or dismissal."). VotRite was
afforded more than ninety days to obtain new counsel after its former counsel was permitted to
withdraw. It failed to do so. Recognizing its inability to appear pro se, Mr. Kapsis, on behalf of
VotRite, advised the Court that VotRite would have to default. The Court finds that by its failure
to obtain counsel, VotRite has indeed defaulted in this action. Accordingly, the Clerk of the
Court is directed to strike the Answer from the docket, solely with respect to VotRite, and to
enter VotRite's default. 2
As stated supra, the Court will construe the within motion as one for a default judgment.
When a party fails to appear or defend an action by an adverse party, a default may be entered
against the non-moving party. See Fed. R. Civ. P. 55. After entry of the default, "a defendant is
deemed to have admitted all of the well-pleaded allegations raised in the complaint pertaining to
liability." Time Warner Cable v. Rivera, No. 99-2339, 1995 WL 362429, at *2 (E.D.N.Y. June
8, 1995); see also Time Warner Cable v. Barbosa, No. 98-3522, 2001 WL 118606, at *5
(S.D.N.Y. Jan. 2, 2001 (quoting Transworld Airlines. Inc. v. Hughes, 449 F.2d 51, 63 (2d Cir.
1971)). Plaintiff is "entitled to all reasonable inferences from the evidence it offers."

2

The Answer shall remain on the docket with respect to the remaining defendants,
Precise New York and Precise Delaware.
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Cablevision Sys. N.Y. City Corp. v. Lokshin, 980 F. Supp. 107, 112 (E.D.N.Y. 1997) (citing Au
Bon Pain Corp. v. Artect. Inc., 653 F.2d 61,65 (2d Cir. 1981)).
Based on VotRite's failure to obtain counsel and defend this action, Plaintiff is entitled to
a default judgment with respect to all of the claims pleaded in the Complaint. Moreover, since
VotRite's Answer is being stricken, the counterclaims pleaded in it are dismissed, solely with
respect to VotRite. Plaintiff is directed to submit a proposed judgment consistent with this
opinion within ten (10) days. In addition, Plaintiff is directed to advise the Court, within ten (10)
days, whether it intends to continue this action against Defendant Precise Delaware, a defunct
corporation, or Precise New York, currently in bankruptcy. In the event that Plaintiff does not
intend to continue this action with respect to either defendant, a stipulation of discontinuance
shall be filed within ten (1 0) days.

CONCLUSION
For the foregoing reasons, the Court finds that Defendant VotRite's failure to obtain
counsel constitutes a default and directs the Clerk of the Court to strike the Answer from the
docket, solely as it pertains to VotRite, and to enter VotRite's default. The Court further
construes Plaintiffs Rule 12(c) motion as a motion for a default judgment and, as such, grants
Plaintiff a default judgment against Yo tRite on all of the claims contained in the Complaint. In
addition, due to VotRite's Answer being stricken, the counterclaims pleaded by VotRite are
dismissed. Plaintiff is directed to submit a proposed judgment, consistent with this opinion,
within ten (1 0) days. Plaintiff is further directed to advise the Court, within ten (1 0) days,
whether it intends to continue this action with respect to Defendants Precise New York and
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Precise Delaware. In the event Plaintiff does not intend to continue this action as to either of the
remaining defendants, Plaintiff shall file a stipulation of discontinuance within ten (1 0) days.

SO ORDERED:
Dated: Central Islip, New York
September 2lP, 2016

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