Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_03-cv-00591/USCOURTS-azd-2_03-cv-00591-0/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:501 Copyright Infringement

---

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

CRC INFORMATION SYSTEMS, INC. )

a Michigan corporation, )

)

Plaintiff, ) 2:03-cv-00591-PHX-JWS

)

vs. ) ORDER AND OPINION

)

QUEBECOR WORLD (USA), INC., ) [Re: Motion at Docket 51]

a Delaware corporation, )

)

Defendant. )

)

I. MOTION PRESENTED

At docket 51, plaintiff CRC Information Systems, Inc. (“CRC”) requests an order

lifting the stay entered in this matter on July 21, 2003, and permitting CRC to prosecute

its federal copyright infringement claim and related state law claims against Quebecor

World (USA), Inc. At docket 55, defendant Quebecor World (USA), Inc. (“QWUSA”)

opposes the motion. Plaintiff replies at docket 56. Oral argument was not requested,

and it would not assist the court.

II. BACKGROUND

 CRC is a Michigan corporation which develops graphic arts business

management software ( “CRC Software”). QWUSA is a Canadian corporation which

operates a commercial printing business. QWUSA is a wholly owned subsidiary of the

Quebecor Printing Holding Company (“the Holding Company”). The Holding Company

Case 2:03-cv-00591-JWS Document 57 Filed 11/16/06 Page 1 of 5
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Doc. 22 at 1.

2

Doc. 33.

3

976 F.2d 587, 588-89 (9th Cir. 1992) (citing Colorado River Conservation Dist. v. United

States, 424 U.S. 800, 818 (1976), Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp.,

460 U.S. 1, 24 (1983)).

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is a wholly owned subsidiary of Quebecor World (“QW”). In 1986, CRC entered into a

license agreement with QW’s predecessor, BCE PubliTech, for CRC Software. The

contract, which was executed in Toronto, Ontario, Canada, incorporated a choice-of-law

provision stating that the laws of Ontario governed the agreement’s construction.

 On October 4, 2002, CRC filed a complaint against QW in the Central District of

California (“the California action”), alleging breach of contract, infringement of federal

copyright, trade secret misappropriation, and unfair competition. CRC specifically

alleged that QW’s installation of CRC Software on numerous central processing units

(“CPUs”) violated the license agreement. 

On January 20, 2003, QW filed a complaint in the Superior Court of Justice in

Ontario, Canada (“the Ontario action”), seeking declaratory relief on the issue of

whether QW breached the CRC Software license agreement and owed additional

license fees. The district court in California subsequently concluded that the Ontario

court would be more appropriate for adjudication and dismissed the California action on

forum non conveniens grounds on March 17, 2003. On June 25, 2003, CRC entered a

statement of defense and counterclaim in the Ontario action, seeking injunctive relief

and damages for copyright infringement and misappropriation of trade secrets. 

On March 27, 2003, CRC filed the underlying complaint against QWUSA in

federal district court in Arizona, alleging claims of copyright infringement,

misappropriation of trade secrets, and unfair competition. QWUSA subsequently filed a

motion to dismiss or stay the case on the “alternate grounds of the existence of a

parallel proceeding in Ontario, Canada and forum non conveniens.”1

 By order dated

July 21, 2003,2

 this court denied QWUSA’s motion to dismiss and granted QWUSA’s

motion to stay after applying the six-factor balancing test for federal abstention

articulated in 40235 Wash. St. Corp. v. Lusardi.

3

 

Case 2:03-cv-00591-JWS Document 57 Filed 11/16/06 Page 2 of 5
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The six factors considered by the court were: 1) the first court to assume jurisdiction

over the property; 2) inconvenience of the forum; 3) desire to avoid piecemeal litigation; 4) order

in which the concurrent forums obtained jurisdiction; 5) which forum’s laws control the decision

on the merits; and, 6) whether the alternative forum can adequately protect the parties’ rights. 

Doc. 33 at 10.

5

Doc. 33 at 11.

6

Doc. 33 at 11-12.

7

Doc. 50.

8

Doc. 52.

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In its July 2003 order, the court held that a balancing of the six factors4 “shows

extraordinary circumstances which warrant a stay pending an interpretation of the

license agreement and the merits of CRC’s counterclaim in Ontario.”5

 The court

reasoned that determining QW’s rights under the license agreement is an essential first

step in resolving the parties’ disputes. The court further concluded that if the license is

determined to disallow QWUSA’s software installations, the instant action will proceed

on the merits of CRC’s federal copyright law claims and related state law claims.6

The Ontario action, whose resolution this case has been awaiting, is scheduled

for trial on February 11, 2008. By order dated July 27, 2006, the court ordered the

parties to file a joint status report addressing the court’s concerns about the “apparent

lack of progress in the Canadian litigation.”7 The parties filed a joint status report

indicating that the parties had conferred on alternatives for concluding this case

expeditiously.8 CRC proposed that the parties stipulate to lifting the stay. QWUSA

disagreed and proposed a dismissal without prejudice, including a tolling agreement. 

CRC did not agree to a dismissal, and filed the underlying motion to lift stay. 

III. DISCUSSION

CRC moves the court for an order lifting the stay and permitting CRC to

prosecute its copyright infringement claim and related state law claims against QWUSA. 

CRC argues that “[i]n light of the changed circumstances caused by the Ontario Court’s

scheduling of trial almost five years after this case was commenced, the Ontario Court

is not a convenient forum and cannot adequately protect CRC’s rights under U.S.

Case 2:03-cv-00591-JWS Document 57 Filed 11/16/06 Page 3 of 5
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Doc. 51 at 9.

10Id. 

11Doc. 34 at 2.

12Merskey Declaration at ¶ 12, exh. 3, doc. 55.

13Dekker Declaration at ¶ 29, doc. 56.

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copyright law.”9 CRC further argues that it has suffered prejudice as a result of the

delay because during the stay, “QW has allowed Grafikom to use the CRC software

without CRC’s consent or authorization.”10

QWUSA opposes the motion on the grounds that CRC has not demonstrated

that circumstances have changed since the court entered its stay order, and CRC has

not set forth any new facts that would change the court’s previous analysis of the

federal abstention factors under Lusardi. The court concurs.

 Based on the parties’ representations, it appears that CRC and QW have

proceeded in the Ontario action largely according to an agreed upon time table. The

parties participated in a mandatory mediation in August 2003, and then agreed to

postpone discovery while the parties attempted to find a “business resolution” to their

dispute.11 After settlement negotiations failed, the parties engaged in discovery during

2004 and 2005, with both parties extending discovery deadlines for various reasons. 

The parties also agreed to adjourn four trial scheduling hearings, which were previously

set for December 15, 2004, February 23, 2005, April 20, 2005, and May 17, 2005.12 On

January 4, 2006, CRC served its trial record and set the Ontario action down for trial.13

The parties filed a required certification form with the Ontario court in April 2006, after

which the court set the matter for trial on February 11, 2008. 

In light of the above procedural history, CRC’s argument that the Ontario court is

not a convenient forum because it “caused” the scheduling of trial almost five years after

the case was commenced is without merit. CRC’s argument that it has suffered

prejudice as a result of the stay because “QW has allowed Grafikom to use the CRC

software without CRC’s consent or authorization” is also unavailing. Grafikom’s alleged

Case 2:03-cv-00591-JWS Document 57 Filed 11/16/06 Page 4 of 5
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use of CRC Software involves an agreement between Grafikom and QW, neither of

which are parties in the instant action. Moreover, determining whether Grafikom’s

alleged use of CRC Software is unauthorized involves resolving the dispute at the

center of the Ontario action, namely QW’s rights under the initial license agreement. 

Because CRC has not demonstrated that the court’s reasons for ordering the

stay were unsound or that circumstances have changed which would warrant lifting the

stay, the court will deny CRC’s request to lift the stay. 

IV. CONCLUSION

For the reasons set out above, plaintiff’s motion at docket 51 is DENIED.

DATED at Anchorage, Alaska, this 16th day of November 2006.

 /s/

JOHN W. SEDWICK

UNITED STATES DISTRICT JUDGE

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