United States District Court, D. Minnesota
Alexander Farrell, Esq., and Russell M. Spence, Jr., Esq.,
Hellmuth & Johnson PLLC, counsel for Plaintiff Neil
H. Little, Esq., and Sarah Pruett, Esq., Lindquist &
Vennum LLP, counsel for Defendants.
MEMORANDUM OPINION AND ORDER
DONOVAN W. FRANK UNITED STATES DISTRICT JUDGE
matter is before the Court on Defendants' Motion to
Dismiss for Lack of Subject Matter Jurisdiction and Failure
to State a Claim (Doc. No. 44); and Plaintiff's Motion to
Consolidate (Doc. No. 51). For the reasons set forth below,
the Court grants in part Defendants' Motion to Dismiss
and grants Plaintiff's Motion to Consolidate.
Neil Haddley filed suit against Defendants alleging various
acts of copyright infringement stemming from their use and
then replacement of a software program called Scanning
Enabler. In 2007, Plaintiff developed Scanning Enabler as a
program to scan documents into Microsoft SharePoint and which
also allowed the user to view and index paper documents
without leaving SharePoint. (Doc. No. 18 (“Am.
Compl.”) ¶ 36.) Haddley first published Scanning
Enabler in Australia while he was living there. At the time,
Haddley was operating as the sole shareholder of Blue Duck
Pty., Ltd, an Australian entity that Haddley formed in 2006.
Blue Duck Pty. had no formal employees. Instead, Haddley used
Blue Duck Pty. as a vehicle to market and sell Scanning
Enabler. (Defs.' MTD Memo. at 4.)
2009, Haddley entered into a resale agreement for Scanning
Enabler with Defendant Next Chapter Technology
(“NCT”). (Am. Compl. ¶ 46.) Haddley also
licensed to NCT two versions of Scanning Enabler, which NCT
then incorporated into its document-management program
ScottWorks. (Id. ¶¶ 47-48.) NCT helped
develop ScottWorks for Scott County, Minnesota. (Id.
¶ 51.) Based on the success of ScottWorks, NCT began
marketing the product as CaseWorks to other county
governments in Minnesota. (Id. ¶¶ 52-53.)
A number of Minnesota counties purchased licenses for
CaseWorks, which used Scanning Enabler as part of its
functionality. These counties are defendants in this action
(generally, the “County
2012, Haddley began working for NCT. While Haddley worked
there, NCT licensed Scanning Enabler to Clay County and
Steele County, Minnesota. (Id. ¶¶ 60, 98.)
To download and access Scanning Enabler, a purchaser was
required to enter a unique license key. (See Id.
¶ 63.) Plaintiff alleges that Defendants Clay and Steele
Counties exceeded the licenses by downloading too many copies
of Scanning Enabler. (Id. ¶¶ 67, 103.)
Additionally, Plaintiff alleges that six of the County
Defendants accessed Steele and Clay counties'
servers to copy Scanning Enabler without paying for
additional licenses. Plaintiff also alleges that NCT was
actively involved in enabling this system of shared licenses.
(See, e.g., id. ¶ 84.)
the end of 2012, Haddley apparently learned that some of the
County Defendants were allegedly using unlicensed versions of
Scanning Enabler. (Id. ¶ 131.) Haddley raised
the issue with NCT. Haddley and NCT attempted to resolve the
issue, but could not reach an agreement to remedy
Haddley's concerns. With the issues unresolved, NCT fired
Haddley without cause. (Id. at ¶ 139.) NCT then
hired Defendant dataBridge to create a replacement product
for Scanning Enabler. The replacement product was distributed
to the County Defendants. (Id. ¶ 166-67.)
August 24, 2015, Haddley filed a pro se complaint
against eight of the County Defendants (the
“Isanti Matter”). In that complaint, Haddley
brought claims related to the Isanti Defendants' use of
Scanning Enabler. On September 16, 2015, NCT moved to
intervene pursuant to its contractual duty to defend the
Isanti Defendants. (Isanti, Doc. No. 26.) Plaintiff, still
pro se, opposed the motion. (Isanti, Doc. No. 36.)
On November 18, 2015, the magistrate judge denied the motion.
(Isanti, Doc. No. 49.) In the Isanti Matter, Haddley has
obtained counsel, discovery has closed, and the parties have
cross-moved for summary judgment.
hiring counsel, Haddley filed a new complaint here, which was
later amended. In the Amended Complaint, Plaintiff brings
three claims: (1) a claim against NCT and its sole
shareholder, Vaughn Mulcrone, for copyright infringement for
providing copies of Scanning Enabler to the Isanti
Defendants; (2) a claim against all defendants for copyright
infringement stemming from the creation and use of the
replacement product for Scanning Enabler; and (3) a claim
against NCT, Mulcrone, and the Isanti Defendants alleging
that they undertook efforts to circumvent Scanning
Enabler's license-key system.
moved to dismiss for lack of subject matter jurisdiction.
(Doc. No. 44.) Plaintiff has moved to consolidate this case
with the Isanti Matter. (Doc. No. 51.) Defendants also moved
to dismiss for failure to state a claim for Count 2 as to the
County Defendants and for Count 3 as to the Isanti
Motion to Dismiss for Lack of Subject ...