VISUAL COMMUNICATIONS, INC. v. ASSUREX HEALTH, INC.

Filing 17

MEMORANDUM AND OPINION. SIGNED BY HONORABLE RONALD L. BUCKWALTER ON 9/18/14. 9/19/14 ENTERED &E-MAILED.(fdc)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

VISUAL COMMUNICATIONS, INC.,
Plaintiff,
v.
ASSUREX HEALTH, INC.
Defendant.

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CIVIL ACTION

NO. 14-3854

MEMORANDUM
BUCKWALTER, S. J.

September 18, 2014

Currently pending before the Court is the Motion by Defendant AssureRx Health, Inc.
(“Defendant”) to Dismiss Plaintiff Visual Communications, Inc. (“Plaintiff”)’s Amended
Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). For the following reasons, the
Motion is granted.
I.

FACTUAL BACKGROUND
Plaintiff is a business corporation with its principal place of business in Aston,

Pennsylvania, and is engaged in the business of designing, producing, shipping, installing, and
dismantling trade show exhibits, trade show graphics, and related components for a wide variety
of industries. (Am. Compl. ¶ 3.) Plaintiff’s designs depict an overall look for exhibits, and
Plaintiff employs exhibit designers and graphic artists who render the designs and artwork that
Plaintiff presents to its customers. (Id. ¶ 8.) Defendant is a business corporation with its
principal place of business in Mason, Ohio, and is a “personalized medicine company dedicated
to helping clinicians determine the right drug for individual patients suffering from behavioral

health conditions,” and also supplies “laboratory-developed demonic tests” which serve as “a
clinical treatment support tool” for the medical industry “in advance of making a medication
decision for [the] patient.” (Id. ¶ 4.)
Defendant’s representatives approached Plaintiff in the fall of 2012 and asked Plaintiff to
show them its custom rental system for use at trade shows because they hoped to save money
and avoid the cost of building a new trade show exhibit. (Id. ¶ 9.) Plaintiff presented
Defendant’s representatives with several ideas, of which Defendant’s representatives liked three
renderings entitled Concepts 1, 2, and 3. (Id. ¶ 9.) Plaintiff asserts that these “Concepts” were
developed over many months and resulted from a substantial commitment of resources, research,
and effort from Plaintiff’s sales and design teams. (Id.) Each of the three concepts included a
proposed layout, a center conference area, custom kiosks with graphics, and a hanging sign. (Id.
¶ 10.) The concepts differ from each other in that the hanging sign was depicted either as a
circular ring, a pinwheel, or a blade. (Id.) In connection with the early presentations, Plaintiff
provided Defendant with a series of renderings regarding the color, shape, size, and layout of the
graphics and of the kiosks depicted in the three concepts. (Id.) Plaintiff considers those three
concepts to be the “Design” referenced throughout the Amended Complaint. (Id.)
Shortly after Plaintiff’s presentations, Defendant rented for a fee Plaintiff’s proprietary
custom rental system, which Plaintiff developed from the Design, and used it at several trade
shows or conferences throughout 2013. (Id. ¶ 11.) Plaintiff also produced a set of graphics,
which Plaintiff considers artwork, for Defendant’s use that was compatible with the rental
system, and which Defendant also used for trade shows and conferences throughout the United
States in May, June, September, October, and November of 2013. (Id.)

2

After the November 2013 event concluded, Defendant’s representatives informed
Plaintiff that they were “going in a different direction,” and asked Plaintiff to ship to them their
exhibit graphics and fabrics. (Id. ¶ 12.) Plaintiff advised Defendant that the graphics and fabrics
were only compatible with Plaintiff’s custom rental system, but Defendant still requested them
and they were subsequently delivered to Defendant. (Id.) According to Plaintiff, that was the
end of the business relationship between it and Defendant. (Id. ¶ 13.) Defendant never
purchased the custom rental system nor the Design of the rental system. (Id. ¶ 12.) Plaintiff
asserts that the Design was never licensed to Defendant, and that Defendant never requested or
purchased a license to copy the Design from Plaintiff. (Id.)
On May 2, 2014, Plaintiff was overseeing the installation of its custom rental system for
another of its customers, Shire Pharmaceuticals (“Shire”), at the American Psychiatric
Association (“APA”)’s annual meeting at the Jacob Javits Convention Center in New York, New
York. (Id. ¶ 13.) There, Plaintiff observed “to its great consternation” that Defendant had
“appropriated the Design for its pecuniary benefit by having had a third party construct a trade
show exhibit which was and is identical to [Plaintiff]’s custom rental system and was produced
entirely and exclusively from the creative work reflected in the Design.” 1 (Id.) Plaintiff “was

1

Plaintiff includes additional facts in its Response to Defendant’s Motion to Dismiss that were
absent from the Amended Complaint. Plaintiff asserts that “[s]tandard procedure for Visual is to
place its copyright notice on all such renderings before they are presented to the customer.”
(Pl.’s Resp. Opp’n Mot. Dismiss 1.) Plaintiff apparently deviated from its standard procedure,
however, as the Design that Defendant is alleged to have infringed was not registered as
copyrighted until after Plaintiff submitted its copyright application in June 2014.
Somewhat in conflict with the facts and sequence of events Plaintiff set forth in the
Amended Complaint, Plaintiff now maintains that Defendant began doing business with Plaintiff
in early 2013 by renting a trade show exhibit to save money by avoiding the cost of having a new
exhibit built. (Pl.’s Resp. Opp’n Mot. Dismiss 1.) Plaintiff states that it presented Defendant
with three designs for the construction of a new exhibit, with minor variations between them, in
early 2013. (Id.) However, Plaintiff also asserts that “the Design itself (with the three options)
was presented to [Defendant] after the initial meeting in the fall of 2012.” (Pl.’s Resp. Opp’n
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further distressed by the fact that [Defendant’s new] trade show exhibit was virtually
indistinguishable from the Visual custom rental system being used by Shire at the said APA
meeting, and was installed in close proximity to the Shire exhibit, thereby detracting from the
uniqueness of the Shire exhibit and jeopardizing the relationship between Visual and Shire.”
(Id.) According to Plaintiff, despite Plaintiff’s repeated demands, Defendant has refused to
discontinue the use of Plaintiff’s Design, compensate Plaintiff for the appropriation of its Design,
or agree to refrain from using its new trade show exhibit in close proximity to the Shire exhibit at
future marketing events. (Id. ¶ 14.)
Plaintiff initiated the present litigation on July 1, 2014, setting forth three causes of
action: (1) copyright infringement pursuant to 17 U.S.C. § 502, et seq.; (2) conversion; and (3)
quantum meruit. (Am. Compl. ¶¶ 16–26.) The essence of these claims is that Plaintiff is entitled
to injunctive relief and damages because of Defendant’s use and infringement of the Design for
its pecuniary benefit for which Plaintiff has not been compensated. Defendant filed a Motion to
Dismiss on July 14, 2014. Plaintiff responded July 25, 2014. Defendant submitted a Reply on
July 30, 2014. Plaintiff submitted its Sur-Reply on September 3, 2014. Defendant submitted its
Response to Plaintiff’s Sur-Reply on September 8, 2014. The Motion to Dismiss is now ripe for
judicial consideration.
II.

STANDARD OF REVIEW
Under Rule 12(b)(6), a defendant bears the burden of demonstrating that the plaintiff has

not stated a claim upon which relief can be granted. Fed. R. Civ. P. 12(b)(6); see also Hedges v.
United States, 404 F.3d 744, 750 (3d Cir. 2005). In Bell Atlantic Corp. v. Twombly, 550 U.S.
Mot. Dismiss 7.) Plaintiff states that Defendant chose not to have a new exhibit built, and in
early 2014, “there was an uneventful parting of the ways by the two parties.” (Id.)
At this Motion to Dismiss stage, the Court will rely only on the facts and dates set forth
in the Amended Complaint.
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544 (2007), the United States Supreme Court recognized that “a plaintiff’s obligation to provide
the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not do.” Id. at 555. Following
these basic dictates, the Supreme Court, in Ashcroft v. Iqbal, 556 U.S. 662 (2009), subsequently
defined a two-pronged approach to a court’s review of a motion to dismiss. “First, the tenet that
a court must accept as true all of the allegations contained in a complaint is inapplicable to legal
conclusions. Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Id. at 678. Thus, although “Rule 8 marks a notable and
generous departure from the hyper-technical, code-pleading regime of a prior era . . . it does not
unlock the doors of discovery for a plaintiff armed with nothing more than conclusions.” Id. at
678–79.
Second, the Supreme Court emphasized that “only a complaint that states a plausible
claim for relief survives a motion to dismiss.” Id. at 679. “Determining whether a complaint
states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific
task that requires the reviewing court to draw on its judicial experience and common sense.” Id.
A complaint does not show an entitlement to relief when the well-pleaded facts do not permit the
court to infer more than the mere possibility of misconduct. Id.; see also Phillips v. Cnty. of
Allegheny, 515 F.3d 224, 232–34 (3d Cir. 2008) (holding that: (1) factual allegations of
complaint must provide notice to defendant; (2) complaint must allege facts suggestive of the
proscribed conduct; and (3) the complaint’s “‘factual allegations must be enough to raise a right
to relief above the speculative level.’” (quoting Twombly, 550 U.S. at 555)).
Notwithstanding these new dictates, the basic tenets of the Rule 12(b)(6) standard of
review have remained static. Spence v. Brownsville Area Sch. Dist., No. Civ.A.08-626, 2008

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WL 2779079, at *2 (W.D. Pa. July 15, 2008). The general rules of pleading still require only a
short and plain statement of the claim showing that the pleader is entitled to relief and need not
contain detailed factual allegations. Phillips, 515 F.3d at 233. Further, the court must “accept all
factual allegations in the complaint as true and view them in the light most favorable to the
plaintiff.” Buck v. Hampton Twp. Sch. Dist., 452 F.3d 256, 260 (3d Cir. 2006). Finally, the
court must “determine whether, under any reasonable reading of the complaint, the plaintiff may
be entitled to relief.” Pinkerton v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002).
III.

DISCUSSION
Defendant moves to dismiss Plaintiff’s Amended Complaint in its entirety due to a lack

of foundation under Rule 12(b)(6), and moves to dismiss Plaintiff’s state law claims on the
grounds of preemption and lack of subject matter jurisdiction. Defendant also asks this Court to
award its attorney’s fees pursuant to 17 U.S.C. § 505. Having considered the Amended
Complaint and the parties’ briefs, the Court finds that Plaintiff has not sufficiently pled copyright
infringement and will grant Defendant’s Motion to Dismiss Plaintiff’s sole federal claim.
Plaintiff’s state law claims of conversion and quantum meruit are preempted by federal copyright
law and, accordingly, the Court will grant Defendant’s Motion to Dismiss with respect to both of
Plaintiff’s state law claims.
A. Copyright Infringement
In the Amended Complaint, Plaintiff alleges that Defendant’s actions pertaining to its use
of the trade show exhibit constructed by a third party infringe its copyrighted Design and violate
17 U.S.C. § 502, et seq. Specifically, Plaintiff alleges that Defendant “has had access to the
Design by virtue of the fact that the Design was the basis for the Visual custom rental system
which was rented by Assurex on several occasions [and that] Visual owns all right, title and

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interest in the Design.” (Am. Compl. ¶ 17.) Plaintiff demands that this Court issue an injunction
(a) prohibiting Defendant from hereafter using its recently constructed trade show exhibit at any
trade show, conference, meeting, or other public event; (b) declaring that any use by Defendant
of its recently constructed trade show exhibit infringes on Plaintiff’s Design; and (c) granting
other equitable relief which this Court deems just and proper. (Id., “Wherefore” Clause.)
“To establish infringement, two elements must be proven: (1) ownership of a valid
copyright, and (2) copying of constituent elements of the work that are original.” Feist Publ’ns,
Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 361 (1991). Plaintiff has established the first
element by providing the Court with a copy of the Copyright Registration Certificate. 2 It is the
second element, “copying,” that Defendant argues is at issue here.
As discussed above, a complaint does not show an entitlement to relief when the facts
alleged do not permit the court to infer more than the mere possibility of misconduct. See Iqbal,
556 U.S. at 679. A complaint is sufficient when (1) its factual allegations provide notice to the
defendant; (2) it alleges facts suggestive of the proscribed conduct; and (3) its factual allegations
are enough “to raise a right to relief above the speculative level.” Phillips, 515 F.3d at 232–34
(quoting Twombly, 550 U.S. at 555)).

2

Defendant originally moved to dismiss Plaintiff’s copyright claim on two grounds: (1) Plaintiff
lacks a copyright registration for “its purported ‘trade show exhibit design,’” which Defendant
argues prevents Plaintiff from making a copyright infringement claim based on both the plain
language of 17 U.S.C. § 411(a) and Third Circuit precedent; and (2) even if Plaintiff had a
registration, it has not pled sufficient facts to demonstrate that Defendant copied original,
protectable elements of any design that may be eligible for copyright protection, which is a
prerequisite to state a claim of copyright infringement. Plaintiff has now received a copyright
registration certificate, effective June 12, 2014, for the two dimensional drawing for which it
sought copyright registration. (See Pl.’s Sur-Reply Ex. A, Certificate of Registration.)
Accordingly the Court will not address Defendant’s argument for dismissal of Plaintiff’s
Amended Complaint on the basis of registration, and will only address Defendant’s insufficient
pleading argument for dismissal of the Amended Complaint.
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Defendant argues that Plaintiff has not pled facts sufficient for Defendant or the Court to
identify precisely either what Plaintiff claims to be covered by copyright, or how Defendant has
“copied” any such protectable elements in an actionable manner—both of which are necessary
elements of a prima facie case of copyright infringement. (Def.’s Mem. Supp. Mot. Dismiss 4,
6.) Plaintiff responds by arguing that its protected work is a two dimensional design from which
a three dimensional trade show exhibit could be manufactured, and not “the three dimensional
trade show exhibit itself, which [Defendant] sets up as a straw man for its irrelevant arguments.”
(Pl.’s Resp. Opp’n Mot. Dismiss 6.) According to Plaintiff, the “new three dimensional exhibit
manufactured for [Defendant] by a third party is, instead, the demonstrable evidence that
[Defendant] copied the Design and sent it to a third party for manufacture, since no one could
have produced the exhibit without relying entirely on the Design.” (Id.) Plaintiff further claims
that because Defendant’s new exhibit “was virtually identical to the Design, the conclusion was
inescapable that the Design presented to [Defendant] was copied by [Defendant] and provided to
a third party in violation of [Plaintiff]’s copyright.” (Pl.’s Resp. Opp’n Mot. Dismiss 2.)
Plaintiff also maintains that “the appearance of the new exhibit itself is the proof [Plaintiff] will
use to establish the elements of its cause of action.” (Id. at 10.) Finally, Plaintiff argues that
“[t]he allegations in the Amended Complaint regarding the appearance of the new Assurex
exhibit establish that, because the appearance of the exhibit is indistinguishable from the Design
in question, Assurex not only had to have possession of the Design but also copied it for the
purpose of forwarding it to its contractor.” (Id. (emphasis in original).)
In the Amended Complaint, Plaintiff alleges the following with regard to the copyright
infringement claim:

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(1) Defendant “appropriated for its pecuniary gain the original
trade show exhibit design created by [Plaintiff].” (Am. Compl.
¶ 1.)
(2) Plaintiff “presented [Defendant’s representatives] with several
ideas, and they liked the designs depicted in three renderings . .
. .” (Id. ¶ 9.)
(3) Plaintiff “provided [Defendant] in connection with those early
presentations a series of renderings with regard to the color,
shape, size and layout of the graphics and the kiosks depicted
in the three concepts.” (Id. ¶ 10.)
(4) Plaintiff observed that Defendant “had appropriated the Design
for its pecuniary benefit by having had a third party construct a
trade show exhibit which was and is identical to [Plaintiff’s]
custom rental system and was produced entirely and
exclusively from the creative work reflected in the Design.”
(Id. ¶ 13.)
(5) Defendant “has had access to the Design by virtue of the fact
that the Design was the basis for the Visual custom rental
system which was rented by [Defendant] on several
occasions.” (Id. ¶ 17.)
These allegations do not indicate whether the presentations were written, such that a copy
of the Design would have been provided to Defendant; whether Plaintiff presented the ideas by
using hard copies of the Design that Defendant may have retained; or whether the “renderings”
Plaintiff provided to Defendant are the same as the Design for which Plaintiff subsequently
sought copyright protection, or if they were ever provided in hard copy. In the Amended
Complaint, Plaintiff does not allege that Defendant ever actually had physical possession of the
Design, copied it in some way, or provided any copies of it to the third party that constructed the
trade show exhibit Plaintiff later observed Defendant using in New York. Paragraph 17 of
Plaintiff’s Amended Complaint, the copyright infringement count, draws conclusions that
Defendant had access to Plaintiff’s Design “by virtue of the fact” that the Design was the basis
for the custom rental system, without actually alleging that Defendant had actual access to or

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possession of the Design, and without alleging that Defendant committed any “copying.” 3
Plaintiff argues that the conclusion is inescapable that Defendant must have copied the Design
because no one could have constructed a similar exhibit without it. But there are numerous ways
the third party could have constructed a similar exhibit for Defendant without infringing
Plaintiff’s copyright—Defendant could have taken photographs of Plaintiff’s custom rental
system on one of the “several occasions” Defendant rented it; Defendant could have described it
to the third party; or Defendant could have given a third party its graphics and fabrics, which
Plaintiff provided to Defendant after their business relationship ended, thereby enabling the third
party to reverse engineer a three-dimensional exhibit which would accommodate those graphics
and fabrics. Plaintiff’s conclusory and speculative allegations in the Amended Complaint are
simply not enough to raise more than the mere possibility of misconduct and do not entitle
Plaintiff to relief. Plaintiff argues that the “existence and appearance” of Defendant’s trade show
exhibit is sufficient to establish that Defendant had access to the Design, copied the Design and
sent it to a third party, and that there is substantial similarity between the original and the copy.
(Pl.’s Resp. Opp’n Mot. Dismiss 10.) Plaintiff’s inferences and conclusions about the
appearance of Defendant’s exhibit, however, do not satisfy the pleading requirements for
adequately stating a claim of copyright infringement. Accordingly, Defendant’s Motion to

3

Plaintiff also relies on Bouchat v. Baltimore Ravens, Inc. for the proposition that “direct
evidence” of copying is not required to establish an infringement. Bouchat, 241 F.3d 350, 354
(4th Cir. 2000). In that case, the court found that circumstantial evidence of access to the work
and substantial similarity between the original work and the copy was enough to establish
infringement. Id. Here, however, Plaintiff has not alleged that Defendant had access to the
Design itself—Plaintiff argues instead that Defendant had access to the Design “by virtue of”
Defendant’s rental of the three dimensional trade show exhibit, which is based on the Design. In
the absence of an allegation that Defendant had access to the two-dimensional Design, rather
than the three-dimensional trade show exhibit, Plaintiff has not provided the type of
circumstantial evidence at issue in Bouchat.
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Dismiss with respect to Plaintiff’s copyright infringement claim is granted and that claim is
dismissed.
Nonetheless, it is well-established that if a complaint is subject to Rule 12(b)(6)
dismissal, a district court must ordinarily permit a curative amendment unless such an
amendment would be inequitable or futile. Alston v. Parker, 363 F.3d 229, 235 (3d Cir. 2004).
Dismissal without leave to amend is justified only on grounds of bad faith, undue delay,
prejudice, and futility. Id. at 236. This opportunity to amend must be offered, even if the
plaintiff does not specifically make such a request. Id. at 235. Plaintiff’s copyright infringement
claim, therefore, is dismissed without prejudice.
B. Plaintiff’s State Law Claims
The Amended Complaint also contains two state law claims for conversion and quantum
meruit. Plaintiff’s conversion claim alleges that as a consequence of Defendant’s actions,
Defendant deliberately and knowingly appropriated the Design that Plaintiff created for its
pecuniary benefit without Plaintiff’s consent and without compensating Plaintiff for use of the
Design. (Am. Compl. ¶ 24.) Plaintiff’s quantum meruit claim alleges that Defendant knowingly
and willingly received a pecuniary benefit from Plaintiff for which Plaintiff has not been
compensated. (Am. Compl. ¶ 26.)
Defendant argues that since Plaintiff’s copyright infringement claim must be dismissed,
the Court lacks subject matter jurisdiction over Plaintiff’s remaining state law claims, neither of
which presents a federal question which would support subject matter jurisdiction under 28
U.S.C. § 1331. Defendant further argues that Plaintiff’s Amended Complaint does not assert
sufficient facts to establish diversity jurisdiction under 28 U.S.C. § 1332(a). Accordingly,
Defendant argues, the Court should dismiss the remainder of Plaintiff’s Amended Complaint for

11

lack of subject matter jurisdiction. If Plaintiff’s federal claim were being dismissed with
prejudice, the Court would normally decline to exercise its supplemental jurisdiction over
Plaintiff’s state law claims and dismiss them as well. However, as Plaintiff’s federal claim is
being dismissed without prejudice and Plaintiff’s Amended Complaint could potentially be
amended and refiled, the Court addresses Defendant’s preemption arguments and finds that
Plaintiff’s conversion and quantum meruit claims are preempted for the reasons discussed below.
Defendant argues that to the extent Plaintiff’s conversion and quantum meruit claims
seek relief based solely on Defendant’s alleged acts of copyright infringement, those claims are
preempted under 17 U.S.C. § 301 and must be dismissed. Plaintiff responds by criticizing
Defendant’s alternative arguments as “inherently contradictory,” and that while the “linchpin of
this case is the copyright infringement . . . of [Plaintiff’s] creative work . . . by adding its
common law claims against [Defendant], [Plaintiff] properly protects itself against the possibility
that the Design will ultimately be found to be non-copyrightable, at which point the [remedies
under the Copyright Act] would be unavailable [and Plaintiff] would then be relegated to
pursuing its state law claims.” (Pl.’s Resp. Opp’n Mot. Dismiss 10–11.) Essentially, Plaintiff
argues that if its Design is not copyrightable, then its state law claims cannot be preempted; on
the other hand, if its Design is copyrightable, then its conversion and quantum meruit claims
contain “extra elements” that do not trigger preemption. (Id. at 11–12.)
Section 301 provides, in pertinent part:
All legal or equitable rights that are equivalent to any of the
exclusive rights within the general scope of copyright as specified
by section 106 in works of authorship that are fixed in a tangible
medium of expression and come within the subject matter of
copyright as specified by sections 102 and 103 . . . are governed
exclusively by this title . . . . No person is entitled to any such
right or equivalent right in any such work under the common law
or statutes of any state.
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17 U.S.C. § 301(a).
“Congress clearly expressed its purpose: ‘the intention of Section 301 is to preempt and
abolish any rights under common law and state statutes that are equivalent to copyright and
extend to works within the Federal Copyright Law.’ H.R. Rep. No. 1476, 94th Cong. 2d Sess.
130, reprinted in 1976 U.S.C.C.A.N. 5659, 5746. However, nothing within the Copyright Act
annuls or limits any rights or remedies under the common law statutes of any state ‘with respect
to activities violating legal or equitable rights that are not equivalent to any of the exclusive
rights within the general scope of copyright as specified by Section 106.’” Tegg Corp. v.
Beckstrom Elec. Co., 650 F. Supp. 2d 413, 420 (W.D. Pa. 2008) (quoting 17 U.S.C. § 301(b)(3)).
Despite the clearly stated purpose of Section 301, “federal courts must still grapple with
whether a particular cause of action is preempted because any direct reference to specific actions
was deleted from the main bill.” Id. (citing Dun & Bradstreet Software Servs., Inc. v. Grace
Consulting, Inc., 307 F.3d 197, 217 (3d Cir. 2002). “In the Third Circuit, ‘if a state cause of
action requires an extra element, beyond mere copying, preparation of derivative works,
performance, distribution or display, then . . . federal law will not preempt the state action.’”
CollegeSource, Inc. v. AcademyOne, Inc., No. Civ.A.10-3542, 2012 WL 5269213, at *9 (E.D.
Pa. Oct. 25, 2012) (quoting Dun and Bradstreet, 307 F.3d at 217). In other words, “a state law
claim that invokes rights ‘that are equivalent to the exclusive rights within the general scope of
copyright’ is subject to preemption.” Brown v. Suburban Life Publ’g, LLC, No. Civ.A.10-245,
2011 WL 1465423 at * 6 (E.D. Pa. Apr. 15, 2011) (quoting Orson, Inc. v. Miramax Film Corp.,
189 F.3d 377, 382 (3d Cir. 1999)).

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1. Conversion
Defendant argues that Plaintiff’s conversion claim must be dismissed as preempted
because it does not contain an “extra element” beyond what would be required to sustain an
infringement claim, and is “merely a repackaging of [Plaintiff’s] copyright claims.” (Def.’s
Mem. Supp. Mot. Dismiss 14.) Plaintiff responds by arguing that its conversion claim does have
an extra element, relying on a Middle District of Pennsylvania case where the “use” of the
converted chattel without authority to do so comprised an extra element. 4 (Pl.’s Resp. Opp’n
Mot. Dismiss 12.) Defendant argues that Plaintiff has not sufficiently pled conversion, because
Plaintiff has not alleged, and according to Defendant cannot allege, “that Defendant wrongfully
possesses a chattel—a physical embodiment of the work, namely, the two-dimensional artwork
in which [Plaintiff] claims copyright ownership [and] the only ‘chattel’ at issue was constructed
by [Defendant], at its own expense.” (Def.’s Reply Supp. Mot. Dismiss 8.) Therefore, according
to Defendant, Plaintiff “has not and cannot allege it has been deprived of its own use of a
physical chattel.” (Id.)
“Conversion is ‘an act of willful interference with the dominion or control over a chattel
done without lawful justification, by which any person entitled to the chattel is deprived of its
use and possession.’” Brown, 2011 WL 146523, at *6 (quoting Baram v. Farugia, 606 F.2d 42,
43 (3d Cir. 1979) (applying Pennsylvania law)). While the Third Circuit has not opined on the
matter, other courts in this District have found that conversion claims are preempted by the
Copyright Act. See, e.g., Harris v. Winfrey, No. Civ.A.10-5655, 2011 WL 1003807, at *3–4
(E.D. Pa. Mar. 18, 2011) (finding that the plaintiff’s claims for conversion and unjust
4

See Scranton Times, L.P. v. Wilkes-Barre Pub. Co., No. Civ.A.08-2135, 2009 WL 3100963, at
*8 (M.D. Pa. Sept. 23, 2011) (finding that a conversion claim was not preempted by the
Copyright Act because the plaintiff claimed that the defendant “used” the chattels in question
without the authority to do so, and therefore the claim had the requisite “extra element” to avoid
preemption).
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enrichment, or quantum meruit, were preempted because they did not contain an extra element);
Brown, 2011 WL 146523, at *6 (finding that the plaintiff’s conversion claim was preempted
because it sought to protect the same rights as the copyright claim and failed the extra element
test); see also Apparel Bus. Sys., LLC v. Tom James Co., No. Civ.A.06-1092, 2008 WL 858754
at *18 n.9 (E.D. Pa. Mar. 28, 2008) (declining to rule on preemption issue where the parties did
not raise it but noting that “[t]he plaintiff’s conversion claim arises from the alleged copying and
misuse of the work, which is equivalent to a copyright claim. The plaintiff's claim does not have
an extra element (such as breach of trust) that takes it beyond the scope of copyright
protection.”).
In this matter, Plaintiff’s claim for conversion alleges that Defendant deliberately and
knowingly appropriated the Design Plaintiff created for its pecuniary benefit without Plaintiff’s
consent and without compensating Plaintiff for use of the Design—this is another way of
claiming copyright infringement. Accordingly, Plaintiff’s conversion claim is preempted by the
Copyright Act and must be dismissed with prejudice.
2. Quantum Meruit
Defendant argues that Plaintiff’s quantum meruit claim is also preempted by the
Copyright Act and must therefore be dismissed. Plaintiff responds by arguing that its quantum
meruit claim has an extra element beyond copyright infringement because “[t]he benefit
conferred on [Defendant] which used the Design to have its new exhibit built goes well beyond
the issue of whether its creative work was copied in violation of the Copyright Act. The Design
involved a service provided with intrinsic value for which [Plaintiff] deserves to be
compensated.” (Pl.’s Resp. Opp’n Mot. Dismiss 12.) According to Plaintiff, “as with any other

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service provider, [Plaintiff’s] act of conferring a benefit on [Defendant] is actionable whether or
not the Design is copyrightable.” (Id.)
Under Pennsylvania law, quantum meruit is treated as a claim for unjust enrichment, as
the two types of claims “are different labels for a quasi-contractual theory of recovery.” See Fyk
v. Roth, No. Civ.A.94-3826, 1995 WL 290444, at * 2 n.4 (E.D. Pa. May 9, 1995) (internal
citations omitted). Among courts within the Third Circuit, “[i]t is clearly established that an
action for unjust enrichment is preempted by copyright law because unjust enrichment seeks to
compensate the plaintiff for the alleged use and imitation of her protected artwork, which rights
are protected by copyright law.” (Id. at *2) (internal citations omitted); see also Harris, 2011
WL 1003807, at * 3–4 (finding that unjust enrichment claim was preempted by Copyright Act);
College Source Inc., 2012 WL 5269213 at *12 (noting that “[t]he Third Circuit has not yet ruled
on whether an additional element exists in unjust enrichment claims” but that “[t]he circuits to
consider the issue have held that there is no ‘additional element’ in unjust enrichment claims
stemming from acts that would in and of themselves have violated the Copyright Act.”) (internal
citations omitted).
Here, Plaintiff alleges that Defendant “knowingly and willingly received a pecuniary
benefit from [Plaintiff], for which [Plaintiff] has not been compensated.” (Am. Compl. ¶ 26.)
Without more, even on the basis of the other facts contained within the Amended Complaint, it is
not clear to the Court what benefit—other than not having to independently create the ideas
represented in the Design—Defendant is alleged to have taken from Plaintiff. Plaintiff’s
quantum meruit claim, as set forth in the Amended Complaint, does not contain an “extra
element” beyond a traditional copyright infringement claim, because the quantum meruit claim
seemingly seeks compensation for Defendant having profited from the use of Plaintiff’s drawing

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and thus seeks to protect the same rights as those protected by the Copyright Act. Plaintiff
asserts that “[t]he Design involved a service provided with intrinsic value” but without any
further elaboration it is unclear to the Court what “service” Plaintiff refers to. As Plaintiff’s
quantum meruit claim does not contain an extra element beyond copyright infringement, that
claim is preempted and must be dismissed.
C. Defendant’s Request for Attorney’s Fees Pursuant to 17 U.S.C. § 505
Defendant requests attorney’s fees pursuant to 17 U.S.C. § 505, which provides that “[i]n
any civil action under this title, the court in its discretion may allow the recovery of full costs by
or against any party other than the United States or an officer thereof. Except as otherwise
provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party
as part of the costs.” 17 U.S.C. § 505. “In Fogerty v. Fantasy, 510 U.S. 517, 536 (1994), the
Supreme Court directed courts to look to the following list of ‘nonexclusive factors that courts
should consider in making awards of attorney’s fees’ which the Third Circuit enunciated in Lieb
v. Topstone Industries, Inc., 788 F.2d 151, 156 (3d Cir. 1986): ‘frivolousness, motivation,
objective unreasonableness (both in the factual and in the legal components of the case) and the
need in particular circumstances to advance considerations of compensation and deterrence.’”
Warren Pub. Co. v. Spurlock, No. Civ.A.08-3399, 2010 WL 760311 at *2 (E.D. Pa. Mar. 3,
2010) (quoting Fogerty, 510 U.S. at 535 n.19) Based on the circumstances in this case, the Court
declines to grant Defendant’s request for attorney’s fees.
IV.

CONCLUSION
In light of the foregoing, Defendant’s Motion to Dismiss is granted and Plaintiff’s

Amended Complaint is dismissed in its entirety. As Plaintiff’s copyright claim has not set forth
factual allegations sufficient “to raise a right to relief above the speculative level,” Twombly,

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550 U.S. at 555, that claim is dismissed without prejudice. Plaintiff’s state law claims are both
preempted by the Copyright Act, and therefore are dismissed with prejudice.
An appropriate Order follows.

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