United States District Court, D. Massachusetts
ICONICS, INC. Plaintiff,
SIMONE MASSARO, VINCENT R. VOLPE, CHRISTOPHER VOLPE, VENTO INDUSTRIES, INC., BAXENERGY GmbH And BAXENERGY ITALIA S.r.L., Defendants.
MEMORANDUM AND ORDER
DOUGLAS P. WOODLOCK UNITED STATES DISTRICT JUDGE
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 infringement allegations (Count I), certain trade secret allegations (Count II), 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 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 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 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. It added new causes of action and new facts with each amendment. The First Amended Complaint added as a defendant BaxEnergy GmbH; the other defendants, including Volpe, were added in the Second Amended Complaint.
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. 17 U.S.C. § 507(b). “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 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 ...