Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_15-cv-01766/USCOURTS-casd-3_15-cv-01766-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:0101 Copyright Infringement (definitions)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

The Regents of the University of

California,

Plaintiff,

CASE NO. 15-cv-1766-BEN (BLM)

ORDER DENYING

vs. MOTION TO REMAND

Paul S. Aisen, et al.,

Defendants.

Plaintiff moves to remand this case to the Superior Court of the State of

California, County of San Diego. The motion asks whether this, or any federal

court, may exercise jurisdiction over this case which was filed in state court and

asserts only state law claims for relief. For the reasons stated below, this Court

denies the motion.

Federal courts are courts of limited jurisdiction. Within limits, a federal court

is authorized to exercise original jurisdiction in a civil action “arising under” the

laws of the United States. 28 U.S.C. § 1331. One such law of the United States is

the Copyright Act. 17 U.S.C. §§ 101, et seq. Congress specifically granted to

federal district courts original jurisdiction over “any civil action arising under any

Act of Congress relating to . . . copyrights . . . .” 28 U.S.C. § 1338(a) (emphasis

added). And for actions arising under the Copyright Act, federal courts have

exclusive jurisdiction. Id. (“No State court shall have jurisdiction over any claim

for relief arising under any Act of Congress relating to . . . copyrights.”) (emphasis

added). The facts are complicated and known to the parties so they are not repeated

here.

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Plaintiff asserts that its Complaint contains only state law claims. Plaintiff

argues that it is the master of its Complaint and that the well-pleaded complaint rule

dictates that federal jurisdiction must be determined by looking no farther than the

four corners of the Complaint. Plaintiff is correct that the well-pleaded complaint

rule is the general rule and that its Complaint asserts only state law claims for relief.

“However, the well-pleaded complaint rule has a necessary corollary — the artful

pleading doctrine. Under the artful pleading rule a plaintiff may not defeat removal

by omitting to plead necessary federal questions in a complaint.” JustMed v. Byce,

600 F.3d 1118, 1124 (9th Cir. 2010) (internal quotations and citations omitted). 

“Even where a claim finds its origins in state rather than federal law,” the Supreme

Court has, “identified a ‘special and small category’ of cases in which arising under

jurisdiction still lies.” Gunn v. Minton, 133 S. Ct. 1059, 1064 (2013) (citation

omitted). 

This case is within that special and small category of cases, because some of

the state law claims for relief “arise under” the federal Copyright Act and the Act’s

work-for-hire doctrine. “Although a complaint may not state a Copyright Act claim

on its face, federal jurisdiction may be appropriate if resolution requires application

of the work-for-hire doctrine of the Copyright Act . . . .” JustMed, 600 F.3d at

1124; Olguin v. Inspiration Consol. Copper Co., 740 F.2d 1468, 1473 (9th Cir.

1984) (a court may look beyond facts pleaded in a complaint to ascertain facts that

would have appeared in a “well pleaded” complaint), overruled on other grounds by

Allis-Chalmers Corp. v. Lueck, 471 U.S. 202 (1985). 

The Supreme Court uses a four-part test to identify the controversies that fit

within that “special and small category” of exceptional cases. “[F]ederal

jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised,

(2) actually disputed, (3) substantial, and (4) capable of resolution in federal court

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without disrupting the federal-state balance approved by Congress.” Gunn, 133 S.

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Ct. at 1065. This case meets all four requirements. 

First, a federal law issue of ownership and control under the Copyright Act’s

work-for-hire doctrine is necessarily raised by several of the asserted claims for

relief. Second, the issue of ownership and control is actually disputed. Third, the

issue is substantial in the federal sense. Fourth, the issue is capable of resolution in

federal court without disrupting the federal-state balance as evidenced by

§ 1338(a)’s ascribing exclusive jurisdiction over copyright issues to the federal

courts. 

The parties do not argue over the fourth element of the Gunn test. And they

do not argue much over the second. At the hearing, Plaintiff suggested that

ownership is not really the contested issue, but the Complaint and Plaintiff’s briefs

suggest ownership is a disputed issue. Certainly, if not outright ownership is

disputed, the right to possess (or more accurately for digital data, the right to

control) is actually disputed. As to the third element, it is true that not every state

law case that requires the application of federal law supports “arising under”

jurisdiction. The federal law issue must be substantial. It must be substantial not

only for the parties, but for the federal system as a whole. For example, a

“backward-looking” hypothetical question of patent law arising in a legal

malpractice action based on state law is not a federal issue with enough substance. 

Gunn, 133 S. Ct. at 1066-67. But this case does not turn on answering a backwardlooking, hypothetical copyright question that will affect no one beyond the parties

in the case. The questions to be answered may affect a large number of medical

researchers at both the Plaintiff’s thirteen university campuses and at the

Defendants’ university campus, as well as employees at other colleges engaged in

“Where all four of these requirements are met, we held, jurisdiction is proper 1

because there is a ‘serious federal interest in claiming the advantages thought to be

inherent in a federal forum,’ which can be vindicated without disrupting Congress’s

intended division of labor between state and federal courts.” Gunn, 133 S. Ct. at 1065.

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academic research. And while the Court is not expressing its opinion on the

answers to these questions at this point, the answers could have an impact on the

future conduct of university medical research. 

The real argument here is over the first element of the Gunn test. That is, is

the federal Copyright Act issue necessarily raised by the Complaint? On the first

element, this case is like the JustMed case. In JustMed, a company bringing a state

law employment claim for relief against an ex-employee presented a case of 

“arising under” jurisdiction. In JustMed, the resolution of the employment law

claim turned on deciding the ex-employee’s rights in computer software he created

for the company during his employment. Those rights were determined by looking

to the federal Copyright Act’s work-for-hire doctrine. JustMed, 600 F.3d at 1124

(“[T]he complaint asserts JustMed’s ownership of the source code, while at the

same time acknowledging that ownership is disputed. These allegations directly

implicate the Copyright Act.”). Like the case here, the state law claims for relief in

JustMed did not mention the federal Copyright Act. 

The JustMed claims for relief are also similar to the state law claims asserted

by the Plaintiff in this case. For example, in JustMed, the plaintiff asserted claims

for: (a) breach of fiduciary duty; (b) interference with a prospective economic

advantage; (c) conversion; (d) misappropriation of a trade secret; and (e) injunctive

relief. JustMed v. Byce, Case No. 1:05cv333-S-EJL (D. Idaho filed Aug. 22, 2005)

Notice of Removal, Ex. A). In the case at hand, among the seven claims for relief

asserted are three of the same types of claims: (a) breach of fiduciary duty (Count 2

Plaintiff has filed an amended complaint adding two claims for relief based on 2

California’s Political Reform Act of 1974. Plaintiff also narrows its claims to try to

avoid the copyright issue. For example, in the amended complaint’s breach of

fiduciary duty claim Plaintiff adds this narrowing language: “[t]his claim is not

predicated on . . . the infringement of copyright in software source code that was

developed and is owned by The Regents.” First Amended Complaint, at ¶ 87. 

However, it is hornbook law that removal jurisdiction is based upon the

operative complaint at the time of removal rather than later amended complaints. See 

Schwarzer, Tashima & Wagstaffe, Rutter Group Practice Guide: Federal Civil

Procedure Before Trial § 2:2503 (Nat’l ed. 2015) (citing Libhart v. Santa Monica

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1), and its corollary, breach of duty of loyalty by employee (Count 2); (b)

interference with prospective economic advantage (Count 4), and its corollary,

interference with contract (Count 3); and (c) conversion (Count 5). Both also seek

injunctive relief. JustMed is controlling law and dictates the answer to the

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jurisdictional question in this case. 

Nevertheless, Plaintiff argues that the well-pleaded complaint rule requires

remand. (Reply in Support of Mot. Remand, at 2.) But Plaintiff ignores the

corollary – the artful pleading doctrine, pointed out by the Ninth Circuit in JustMed.

600 F.3d at 1124. Plaintiff remonstrates that this case is different because in

JustMed and other cases, the complaints alleged a question under the Copyright Act. 

(Reply in Support of Mot. Remand, at 2-3.) But that is inaccurate, at least as far as

the JustMed complaint is concerned. The JustMed complaint did not mention

copyrights, the federal Copyright Act, or any federal law. JustMed, No. 1:05cv333-

S-EJL, Notice of Removal. 

Plaintiff next casts doubt on a recent case upon which Defendants’ rest:

Calicraft Distributors, LLC v. Castro, No. CV 15-1041 BRO (AJW), 2015 WL

1789014 (C.D. Cal. Apr. 17, 2015). Plaintiff underscores that in Calicraft, the court

found the copyright work-for-hire doctrine was not implicated and remanded the

dispute to state court. (Reply in Support of Mot. Remand, at 3.) But in Calicraft,

the court found it important that the “Plaintiffs expressly disclaim that the software

was a work-for-hire,” and instead assert a perpetual license in software. 2015 WL

1789014, at *6. Plaintiff here did not disclaim software ownership based on a

Dairy Co., 592 F.2d 1062, 1065 (9th Cir. 1979)); see also Rockwell Int'l Corp. v.

United States, 549 U.S. 457, 474 n.6 (2007)(“[A]n amendment eliminating the original

basis for federal jurisdiction generally does not defeat jurisdiction.”); Williams v.

Costco Wholesale Corp., 471 F.3d 975, 976 (9th Cir. 2006) (“We have long held that

post-removal amendments to the pleadings cannot affect whether a case is removable

. . . .”).

In both cases, a temporary restraining order had been obtained prior to removal. 

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work-for-hire. On the contrary, it is the assertion of work-for-hire ownership set

forth in Plaintiff’s state court arguments that led to the removal to this Court. 

Moreover, the complaint asserts ownership of intellectual property and aggregated

research data. (See, e.g., Notice of Removal (Docket No. 1) Ex. 1, Complaint ¶ 33

(“[A]ll joint intellectual property created as a result of the clinical studies will

belong jointly to Toyama . . . and The Regents.”); ¶ 68 (“The Regents owned all

data related to the ADCS project, as well as the data and contents of Amazon

Account No. 675713428646, and the data contained on the UCSD laptop computers

issued to the Individual Defendants (‘the ADCS Data’).”).) 

The thrust of Plaintiff’s contention now is that it does not claim a copyright in

the electronic data capture software and it does not claim a copyright in the data

aggregation. Dismissing it as a minor detail and coincidence, Plaintiff now says,

“The happenstance that the data is collected on a computer software program . . . is

an incidental detail unnecessary to any of Plaintiff’s claims, and not alleged in the

Complaint.” (Reply in Support of Mot. Remand, at 4 (emphasis in original).)

Urging their camel toward a needle’s eye, Plaintiff disclaims ownership of the data

and explains that its conversion claim does not require proof of ownership. “[T]he

Complaint only alleges conversion of the data.” (Id. (emphasis in original).) “And

even if the complaint did allege conversion of the EDC system, California law does

not require a plaintiff to prove copyright ownership, or indeed any ownership at

all.” (Id. at 6.) Actually, the Complaint does assert ownership over the collected

data: “Such contracts specify that all data created or captured by UCSD related to

the ADCS program will be jointly owned by The Regents and the sponsors.” 

(Complaint ¶ 29 (emphasis added) and ¶ 69 (“The Defendants . . . have wrongfully

exercised dominion and control over ADCS Data, and . . . interfered with The

Regents’ ownership of the ADCS Data.”) (emphasis added).)

In other briefing, Plaintiff uses more expansive terms describing ownership of

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the electronic data capture computer “system” and ownership of the collected data. 

(See Opp’n. to Defs.’ Mot. to Clarify or Modify Prelim. Inj. at 2 (“They simply

commandeered the ADCS data and computer systems . . . and started treating

UCSD’s property and research studies as USC’s own.”); at 5 (“At most, the

contracts provide sponsors co-ownership of data generated in their study, but they

confer no ownership interest in UCSD’s computer systems, accounts, and other

property wrongfully taken by Defendants.”) (emphasis in original); at 7 (“. . .the

computer software system that UCSD had developed for the ADCS, the Electronic

Data Capture (EDC) system.”); at 9 (“Without the ADCS data and computer

systems that Defendants wrongfully commandeered from UCSD . . . .”); at 10

(“Lilly has no claim to UCSD’s pre-existing computer system, the Electronic Data

Capture (EDC) system, which UCSD developed more than five years ago.”); at 11

(“The USC Defendants . . . unilaterally seizing control of ADCS data and UCSD

computer systems . . . .”); at 21 (“UCSD’s contracts provide sponsors co-ownership

of data generated in their studies, but confer no ownership interest in UCSD’s

computer systems or in the AWS, Google, Github, and Bitbucket accounts

wrongfully commandeered by Defendants.”) (emphasis in original).) 

These broad ownership terms are similar to the language Plaintiff used in the

state court. For example, on the first page of a brief seeking the preliminary

injunction, Plaintiff asserted ownership based on the federal Copyright Act, federal

regulations, university guidelines, and the terms of the grant contracts. Plaintiff

contended, 

the EDC system (and the underlying software programs)

and the ADCS Data is owned by The Regents and by the

Sponsors, as clearly set out in the Copyright Act,

applicable federal regulations, University of California

Guidelines, and by the clear terms of the grant contracts. 

(Notice of Removal (Docket No. 1) Ex. 3, Supp. Brief in Support of Prelim. Inj. &

Appt. of Spec. Master at 1 (emphasis added).) And again, 

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There can be no dispute that the EDC system and

the underlying source code is the property of UCSD. This

is because the system was designed and the software was

written by UCSD employees . . . . Not only does Cal.

Labor Code § 2860 make clear that the system belongs to

UCSD, so too does the Federal Copyright Act, which

provides: “in the case of a work made for hire, the

employer . . . owns all of the rights comprised in the

copyright.” 17 U.S.C. § 201(b).

Moreover, the federal regulations that cover this

government-funded project, 45 C.F. R. §§ 74.34 and 74.36

also make clear that the EDC software system is

exclusively UCSD’s property . . . . 

(Id. at 4 (emphasis added).) Plaintiff also referred to its own employment

regulations and guidelines regarding copyrights: “One pertinent policy statement . . .

provides that ‘Ownership of copyrights to sponsored works shall be with the

University unless the sponsored agreement states otherwise.’” (Id. at 5 (emphasis in

original).)

In other words, Plaintiff’s claims for relief and its formal arguments allege its

own ownership of data and software. The accuracy of the claims necessitate resort

to federal copyright law and perhaps federal regulation of National Institute of

Health research contracts. Even The Regents’ own research policies address

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copyrights in faculty research productions. See, e.g., Works Created at UC,

http://copyright.universityofcalifornia.edu/ownership/works-created-at-uc.html (last

visited Oct. 29, 2015) (“In higher education, copyright ownership is typically

addressed through institutional policy on written agreements. It is widespread

academic tradition that faculty own the copyright to scholarly works that they

produce. The University of California’s policies on Copyright ownership . . . clarify

who owns the copyright to original works created at UC and how the rights of

“Data should be made as widely and freely available as possible while 4

safeguarding the privacy of participants, and protecting confidential and proprietary

data.” NIH Data Sharing Policy Brochure, Pub. No. 03-5399, Nat. Inst. Health Off. 

E x t r a m u r a l R e s e a r c h ( M a y 2 0 , 2 0 0 3 ) , a v a i l a b l e a t

http://grants.nih.gov/grants/policy/data_sharing/data_sharing_guidance.htm.

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ownership are allocated between the authors and the University. According to UC’s

policy, ownership of copyrights to scholarly and aesthetic works generally reside

with the faculty creator, with certain exceptions. If, for example, the work is

sponsored or contracted, or is part of a project that has special provisions on

copyright ownership, then copyright ownership is generally retained by the

university.”). 

Narrowing the claims to nothing more than the medical study data, as

Plaintiff now seeks to do, does not eliminate the copyright question. Collections of

data may be copyrightable. Section 103(a) of the Copyright Act, specifies that

“[t]he subject matter of copyright . . . includes compilations,” which are defined by

section 101 as “a work formed by the collection and assembling of preexisting

materials or of data that are selected, coordinated, or arranged in such a way that the

resulting work as a whole constitutes an original work of authorship.” 17 U.S.C. §§

101, 103. Three elements are required by the Copyright Act in order to qualify as a

copyrightable compilation of data: “(1) the collection and assembly of preexisting

material, facts, or data; (2) the selection, coordination, or arrangement of those

materials; and (3) the creation, by virtue of the particular selection, coordination, or

arrangement of an original work of authorship.” See Fiest Publ’ns, Inc. v. Rural

Tel. Serv. Co., 499 U.S. 340, 357 (1991). Of course, even a copyright in a

collection of data will not “keep others from using the facts or data he or she

collected.” Id. at 359. The point is, if Defendant(s) hold a copyright in the

collection of study data, that may be sufficient to defeat a conversion claim or

California Penal Code § 502(c) claim. And if Plaintiff holds a copyright, it may be

insufficient to support a conversion claim or a section 502(c) claim against

Defendants who may have a right to use the data, notwithstanding the copyright. 

While not deciding the answers at this time, the questions here implicate the federal

Copyright Act and the work-for-hire doctrine (§§ 101, 103, 201), and perhaps

federal regulations on nationally funded medical research. JustMed compels the

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conclusion that federal jurisdiction exists here.

Plaintiff makes one final argument: the removal came too late. It is a

judgment call. But this Court finds that Defendants removed within the 30 day

window triggered by the Plaintiff’s filing of a motion or “other paper.” Motions or

“other papers” are specifically identified in the general removal statute as triggers. 

28 U.S.C. § 1446(b)(3) (“[A] notice of removal may be filed within 30 days after

receipt . . . of a . . . motion, order, or other paper from which it may first be

ascertained . . . .”). And specifically for copyright issues, section 1454 authorizes

extension of the time limit in section 1446(b), for cause shown. 28 U.S.C. 5

§ 1454(b)(2) (“[T]he time limits contained in section 1446(b) may be extended at

any time for cause shown.”). This Court finds that good cause has been shown for

extending the section 1446(b) time limit and the removal is timely. 

Therefore, the Motion to Remand is denied.

DATED: October 29, 2015

Hon. Roger T. Benitez

United States District Judge

“The [America Invents Act] also added § 1454, a new removal provision . . . 

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intended to provide federal courts . . . with a broader range of jurisdiction.” Vermont

v. MPHJ Tech. Investments, LLC, __ F.3d __, 2015 WL 5667526, at *6 (Fed. Cir. Sept.

28, 2015).

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