PH2\724771.1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

TOLEDO MACK SALES &

SERVICE, INC.,

Plaintiff,

v.

MACK TRUCKS, INC.,

Defendant.

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Civil Action No. 2:02-CV-04373-RLB

JURY TRIAL DEMANDED

MACK TRUCKS, INC.,

Counterclaim 

Plaintiff,

v.

TOLEDO MACK SALES & SERVICE, 

INC. 

Counterclaim 

Defendant.

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JURY TRIAL DEMANDED

MOTION OF PLAINTIFF TOLEDO MACK 

SALES & SERVICE, INC. TO DISMISS COUNTS I, II, III, AND IV OF 

DEFENDANT MACK TRUCKS, INC.’S COUNTERCLAIMS AGAINST PLAINTIFF 

TOLEDO MACK SALES & SERVICE, INC. PURSUANT TO FED. R. CIV. P. 12(b)(6)

Plaintiff Toledo Mack Sales & Service, Inc. (“Toledo Mack”), by and through its 

undersigned attorneys, Duane Morris LLP, hereby moves to dismiss Counts I, II, III, and VI of 

the First Amended Counterclaims (“Counterclaims”) of Defendant Mack Trucks, Inc. against 

Toledo Mack for the reasons set forth in the accompanying Memorandum of Law in Support of 

Motion to Dismiss, which is incorporated herein by reference.

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WHEREFORE Plaintiff Toledo Mack requests that this Court dismiss Counts I, II, III, 

and VI of the Counterclaims against Toledo Mack.

Respectfully submitted,

Date: April 7, 2003

Wayne A. Mack

J. Manly Parks

Keith J. Verrier

DUANE MORRIS LLP

One Liberty Place

Philadelphia, PA 19103-7396

215-979-1152/1342/1133

215-979-1020 (telefax)

Attorneys for Plaintiff

Toledo Mack Sales & Service, Inc.

Case 2:02-cv-04373-RB Document 37 Filed 04/07/2003 Page 2 of 23
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

TOLEDO MACK SALES &

SERVICE, INC.,

Plaintiff,

v.

MACK TRUCKS, INC.,

Defendant.

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Civil Action No. 2:02-CV-04373-RLB

JURY TRIAL DEMANDED

MACK TRUCKS, INC.,

Counterclaim 

Plaintiff,

v.

TOLEDO MACK SALES & SERVICE, 

INC. and

Counterclaim 

Defendant.

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JURY TRIAL DEMANDED

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF TOLEDO MACK SALES & 

SERVICE INC.’S MOTION TO DISMISS COUNTS I, II, III, AND IV OF DEFENDANT 

MACK TRUCKS, INC.’S COUNTERCLAIMS AGAINST PLAINTIFF TOLEDO MACK 

SALES & SERVICE, INC. PURSUANT TO FED. R. CIV. P. 12(b)(6)

Plaintiff Toledo Mack Sales & Service, Inc. (“Toledo Mack”), by and through its 

undersigned attorneys, Duane Morris LLP, submits this Memorandum of Law in support of its 

motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Counts I, II, III, and VI

of Defendant Mack Trucks, Inc.’s (“Mack”) First Amended Counterclaims (“Counterclaims”) 

fail to state a claim upon which relief can be granted. Accordingly, Toledo Mack requests that 

this Court dismiss Counts I, II, III, and VI against Toledo Mack with prejudice.

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I. INTRODUCTION

The pending counterclaims that Defendant Mack has brought against Plaintiff Toledo 

Mack and Counterclaim Defendant PAI Industries, Inc. (“PAI”) relate to Mack’s assertion that 

Toledo Mack has shared with PAI, and others, Mack’s MACSPEC 2001 software system, Mack 

microfiche and Mack price lists for Mack parts. Although Counts I, II, III, and VI of Mack’s 

counterclaims against Toledo Mack should be dismissed under Federal Rule of Civil Procedure 

12(b)(6) for several reasons, one of which runs through all of Mack’s claims -- these claims rely 

on the existence of valid licenses for the “intellectual property” in question. However, in its 

Complaint, Mack does not allege – because it can not – the existence of a license as it pertains to 

Mack’s microfiche or price lists. In addition, Mack’s alleged license agreement with Toledo 

Mack for MACSPEC 2001 is contradicted by Mack’s own Counterclaims and the documents 

attached thereto. Contrary to Mack’s unsupported allegations, the License Agreement into which 

the parties entered in 1996 was for a product called MACSPEC II – not MACSPEC 2001. The 

MACSPEC II License Agreement terminated in 2001, and is unrelated to any of Mack’s 

counterclaims against Toledo Mack. 

Although Mack attaches the license agreement for MACSPEC II to its counterclaims, it 

alleges in its papers that the license agreement pertains to MACSPEC 2001. This Court should 

reject these allegations on their face as they are belied by the very License Agreement that Mack 

attaches to its counterclaims. As Counts II and III – and to a large degree Counts I and IV – rely 

upon the existence of a valid license to the MACSPEC 2001 product, and as the agreement 

referenced by Mack on its face pertains to MACSPEC II – not MACSPEC 2001 – those counts 

fail to state a claim upon which relief can be granted. Accordingly, Mack’s counterclaims 

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against Toledo Mack for breach of contract, misappropriation of trade secrets and confidential 

business information, copyright infringement, and civil conspiracy should be dismissed.

II. APPLICABLE LEGAL STANDARD

A motion to dismiss for failure to state a claim upon which relief can be granted, pursuant 

to Federal Rule of Civil Procedure 12(b)(6), tests the sufficiency of the pleadings. See Constar, 

Inc. v. Nat’l Dist. Ctrs, Inc., 101 F. Supp. 2d 319, 322 (E.D. Pa. 2000), citing Conley v. Gibson, 

355 U.S. 41, 45-46 (1957). Although the Court must view all factual allegations and all 

reasonable inferences that can be drawn therefrom in the light most favorable to the plaintiff, see

Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1410 (3d Cir. 1991), cert. denied, 501 U.S. 

1222 (1991) (citation omitted), the “Court need not accept ‘bald assertions or legal 

conclusions,’” Unisource Worldwide, Inc. v. Heller, No. 99-266, 1999 U.S. Dist. LEXIS 8530, at 

*8 (E.D. Pa. June 9, 1999), citing Morse v. Lower Merion School Dist., 132 F.2d 902, 906 (3d 

Cir. 1997). Instead, “’legal conclusions, deductions or opinions couched as factual allegations 

are not given a presumption of truthfulness.’” Constar, 101 F. Supp. 2d at 319 (citation omitted) 

(emphasis added).

When a court considers a motion to dismiss, although it must focus on the pleadings, it 

may also consider documents whose contents the complaint alleges, when the parties do not 

question their authenticity; “legal arguments in memorandums or briefs and arguments of 

counsel,” Pryor v. Nat’l Collegiate Athletic Assoc., 288 F.3d 548, 560 (3d Cir. 2002); “matters 

of public record[;] orders[;]exhibits attached to the Complaint[;]and items appearing in the 

record of the case,” Alifano v. Merck & Co., Inc., 175 F.Supp. 2d 792, 794 (E.D. Pa. 2001), 

citing Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.2d 1380, 1384 n.2 (3d Cir. 1994). In 

considering these additional items, courts seek to prevent “a plaintiff with a legally deficient 

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claim [from surviving] a motion to dismiss simply by failing to attach a dispositive document on 

which it relied.” Id. If the Court finds that the facts pled and the reasonable inferences, if true, 

would not support the relief sought, it must dismiss the claim. See Kehr Packages, 926 F.2d at 

1410 (citation omitted).

III. STATEMENT OF FACTS

A. The Execution And Termination Of A License Agreement For MACSPEC II 

Between Toledo Mack And Mack. 

Since 1982, Toledo Mack has been an authorized distributor and dealer of Mack trucks 

and parts. See generally, Defendant’s First Amended Counterclaims (“Def. Am. 

Counterclaims”) at ¶ 7. On February 26, 1996, Toledo Mack entered into a license agreement 

with Mack relating to MACSPEC II (“the MACSPEC II License Agreement”), a software 

package for Mack parts that Mack offered only to authorized distributors to replace microfiche 

copies of its parts catalogues. See Ex. “A” to Def. Am. Counterclaims (MACSPEC II License 

Agreement).

In late 2000, Toledo Mack began using MACKnet, Mack’s extranet system available 

only to authorized distributors, and thereafter had no further need for MACSPEC II. Toledo 

Mack subsequently contacted Mack and canceled its license for MACSPEC II in January 2001. 

Pursuant to the MACSPEC II License Agreement, Toledo Mack “returned the SOFTWARE, 

documentation and any back-up copy [of MACSPEC II software] to Mack upon expiration or 

termination of [the] license,” see Def. Am. Counterclaims, Ex. “A” at 1, Introductory Paragraph, 

and Mack confirmed the cancellation of the license.1 Toledo Mack’s cancellation and return of 

 

1 As detailed in Toledo Mack’s Memorandum of Law in Opposition to Defendant’s Motion 

for a Preliminary Injunction, Bob Yuzuik, Mack’s Manager for Publications and Product 

Information sent a letter to Toledo Mack, dated February 2, 2000, confirming the return 

(Continued...)

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the MACSPEC II system to Mack in early 2001 signaled and affected the termination of the 

1996 License Agreement. See id 

B. Toledo Mack’s Orders For MACSPEC 2001 On Behalf Of Its Customers.

In early 2002, Toledo Mack ordered copies of MACSPEC 2001, the new software system 

Mack had begun offering to distributors and their customers,

2

 for PAI and one other customer. 

Mack alleges that Toledo Mack signed a license agreement for MACSPEC 2001 and provided 

MACSPEC 2001 and an unlock code for that software to PAI, in contravention of that license 

agreement. See Def. Answer & Counterclaims at 23 ¶ 41. 

As discussed below, although there did exist a license agreement between Toledo Mack 

and Mack for MACSPEC II, see Def. Am. Counterclaims, Ex. “A”, this agreement terminated 

before Toledo Mack ordered MACSPEC 2001. Other than its misquotes from the MACSPEC II 

License Agreement, Mack cannot and does not identify any license agreement between Mack 

and Toledo Mack for MACSPEC 2001. See id.

C. Mack’s Misquoting From The MACSPEC II Agreement

Throughout its Counterclaims, Mack repeatedly misrepresents the already terminated 

MACSPEC II License Agreement. See, e.g., Def. Am. Counterclaims at ¶¶ 19-23. While Mack 

 

(Continued...)

of the discs and the cancellation of Toledo Mack’s license for MACSPEC II. A copy of 

this letter and of Toledo Mack’s Inventory of Discs Returned to Mack, dated January 26, 

2001, are attached as Exhibits C and D, respectively, to Plaintiff’s Memorandum in 

Support of its Motion in Opposition to Mack’s Motion for Preliminary Injunction 

(“Plaintiff’s Mem.”). 

2 According to Bob Yuzuik’s letter to Parts Managers, dated January 29, 2002, effective 

January 1, 2002, dealers’ customers could order, and have been ordering MACSPEC 

2001 for their own use. See Exhibit D to Plaintiff’s Mem.

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claims that “Toledo Mack possesses and operates its MACSPEC 2001 system pursuant to a 

license agreement with Mack,” it attaches the MACSPEC II License Agreement. See id. at ¶ 19; 

Ex. “A.”

Mack asserts that the MACSPEC II License Agreement attached to its Counterclaims 

explicitly identified MACSPEC 2001 as “confidential” and explicitly precluded Toledo Mack 

from providing MACSPEC 2001 to any other parties. See Def. Am. Counterclaims at ¶¶ 19-21. 

Mack supports that position by brazenly misquoting from Section 3.1 of the 1996 License 

Agreement and replacing the defined term “SOFTWARE” in Section 3.1 with the bracketed 

words “MACSPEC 2001.” Compare Def. Am. Counterclaims, Ex. “A” at 1-2, § 3.1 (1996 

License Agreement for MACSPEC II) with Def. Am. Counterclaims at ¶¶ 19-21.

Contrary to Mack’s misquoting of the MACSPEC II License Agreement, Section 3.1 

actually reads as follows:

You may use the SOFTWARE only in connection with your parts 

and service business in accordance with your MACK distributor 

agreement. You will treat the SOFTWARE and the information 

contained in the SOFTWARE as confidential and proprietary to 

MACK. You will not permit access to the SOFTWARE to anyone 

other than your authorized employees or MACK’s authorized 

representatives without first obtaining written approval from 

MACK.

See Def. Am. Counterclaims, Ex. “A” at 1-2, § 3.1. As noted above, the term “SOFTWARE” is 

specifically and exclusively defined as “[t]he MACSPEC II parts information system, consisting 

of both the operating software and the parts database on CD-ROM.” Id. at 1, Introductory 

Paragraph.

A simple reading of the MACSPEC II License Agreement establishes that Section 3.1 of 

that agreement, on which Mack relies to assert each of its counterclaims, does not relate to 

MACSPEC 2001 or to any of Mack’s counterclaims. Moreover, Mack offers no explanation 

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whatsoever for misquoting Section 3.1 of the MACSPEC II License Agreement and suggesting 

that the term “SOFTWARE” was defined in that agreement to mean MACSPEC 2001. See Def. 

Am. Counterclaims at ¶ 20.

D. Toledo Mack Did Not And Could Not Provide PAI With The “Unlock Code”

For MACSPEC 2001. 

Mack asserts that Toledo Mack provided PAI with “the necessary unlock code” to access 

MACSPEC 2001. See Def. Am. Counterclaims at ¶ 52. This assertion, however, is inconsistent 

and irreconcilable with how Mack itself represents its design of the “unlock” feature of 

MACSPEC 2001.

According to Mack’s description of the “unlock” feature, 

[a] third party other than Mack (or its contractor) cannot access the 

MACSPEC 2001 system without an unlock code. Each “unlock 

code” is specific to each copy of the MACSPEC 2001 system. 

Moreover, each ‘unlock code’ integrates itself onto the computer 

hard drive on which it is first used, such that it can never be used 

on any other computer.

Def. Am. Counterclaims at ¶ 15. Mack or GSS, Mack’s contractor, can only distribute an unlock 

code during the first use of MACSPEC 2001 on the computer on which it first installed. See id.

at ¶ 16.

3

 Mack makes conflicting factual assertions in its counterclaims. Although Mack clearly 

states that only GSS or Mack can supply unlock codes to the user of the computer on which 

MACSPEC 2001 is to be installed, Mack alleges that Toledo Mack provided the unlock codes to 

 

3

It is significant to note that Mack’s own “MACSPEC 2001 User’s Guide,” which 

describes the unlocking procedure in depth, reveals that a user can obtain the unlock code 

for its copy of MACSPEC 2001 only after the user begins to download MACSPEC 2001 

software onto its own computer and then telephones Mack to obtain the necessary 

“unlock code” directly from Mack or its contractor. See Exhibit G to Plaintiff’s Mem. at 

20.

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PAI. See Def. Am. Counterclaims at ¶ 52. Under Mack’s own description, however, Toledo 

Mack could not have provided the code to PAI.

IV. ARGUMENT

In its Counterclaims against Toledo Mack, Mack fails to state a claim upon which relief

can be granted for each of the counts against Toledo Mack for breach of contract,

misappropriation of trade secrets and confidential business information, copyright infringement, 

and civil conspiracy.

A. Mack Fails To State A Claim Upon Which Relief Can Be Granted Against

Toledo Mack In Count III (Breach Of Contract). 

Under Pennsylvania law, to establish a claim for breach of contract, the claimant must 

show “the existence of a contract to which the plaintiff and defendant(s) were parties, the 

essential terms of that contract, a breach of the duty imposed by the contract and injury or 

damages resulting from the alleged breach.” Carnegie Hill Fin. Inc. v. Krieger, No. 99-CV2592, 1999 U.S. Dist. LEXIS 13683, at *6 (Sept. 9, 1999 E.D. Pa.).

In its counterclaim for breach of contract, Mack asserts that “Mack and Toledo Mack 

entered into a licensing agreement whereby Toledo Mack would receive a copy of the 

MACSPEC 2001 system and an unlock code in exchange for the payment of fees and an 

agreement to restrict access by third parties to the MACSPEC 2001 system and to maintain the 

confidentiality of the MACSPEC 2001 system.” Def. Am. Counterclaims at ¶ 72. Mack further 

asserts that, in the license agreement for MACSPEC 2001, Toledo Mack “promised that it would 

not distribute MACSPEC 2001 to third parties or permit any person . . . to access MACSPEC 

2001 without Mack’s prior written consent.” Id. at ¶ 73. The crux of Mack’s breach of contract 

claim is Mack’s assertion that Toledo Mack distributed MACSPEC 2001 and its unlock code to 

PAI employees, without Mack’s prior written consent, “in further breach of this agreement.” Id.

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at ¶ 74-75 (referencing “the license agreement”). The only license agreement Mack references in 

all of its Counterclaims is the MACSPEC II License Agreement. See generally, Def. Am. 

Counterclaims at ¶ 19. MACSPEC II, however, is irrelevant to Toledo Mack’s handling of 

MACSPEC 2001 – a separate product.

Mack’s claim must fail because Mack simply does not establish the existence of a license 

agreement for MACSPEC 2001. As the text of the agreement itself made explicit, the 

MACSPEC II License Agreement only related to MACSPEC II. For instance, the MACSPEC II 

License Agreement was entitled 

LICENSE AGREEMENT AND LIMITED WARRANTY

MACSPEC II

See Def. Am. Counterclaims, Ex. “A” at 1. The stated effect of that Agreement was that, “The 

MACSPEC II parts informa tion system, consisting of both the operating software and the parts 

database on CD-ROM (‘SOFTWARE’) is licensed to you [i.e., Toledo Mack].” Id. There is no 

provision or language whatsoever in the MACSPEC II License Agreement indicating that the 

terms of that license would be extended to any software programs other than MACSPEC II or to 

any new software programs which Mack might develop in the future. See id. Mack cannot 

assert that the terms of the MACSPEC II License Agreement, which specifically apply only to 

MACSPEC II, impose any contractual duties upon Toledo Mack with regard to MACSPEC 

2001. 

In fact, the very license agreement on which Mack relies so heavily in its Counterclaims

was terminated as of February 2, 2001 when Mack itself confirmed cancellation of the license for 

MACSPEC II. Mack does not allege that Toledo Mack ever violated the confidentiality of the 

MACSPEC II License Agreement with regard to the MACSPEC II software. 

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B. Mack Fails To State A Claim Upon Which Relief Can Be Granted Against 

Toledo Mack On Count I (Misappropriation Of Trade Secrets And

Confidential Business Information). 

With regard to a claim for misappropriation of trade secrets, Pennsylvania follows the 

standard set forth in Restatement of Torts § 757. See William M. Hendrickson, Inc. v. Nat’l R.R. 

Passenger Corp., No. 00-3711, 2002 U.S. Dist. LEXIS 4097, at *47 (E.D. Pa. Mar. 13, 2002), 

citing R.W. Sims v. Mack Truck Corp., 488 F. Supp. 592, 597 (E.D. Pa. 1980); Den-Tal-Ez, Inc. 

v. Siemens Capital Corp., 566 A.2d 1214, 1228-29 (Pa. Super. 1989). Under Pennsylvania law, 

to establish a claim for misappropriation of trade secrets, the claimant must prove four elements: 

“(1) plaintiff owns a trade secret (2) which was communicated to the defendant (3) within a 

confidential relationship, and (4) was used by the plaintiff to defendant’s detriment.” 

Hendrickson, 2002 U.S. Dist. LEXIS 4097, at *45. Section 757 further provides: “One who 

discloses or uses another’s trade secret, without privilege to do so, is liable to the other if: (a) he 

discovered the secret by improper means, or (b) his disclosure or use constitutes a breach of 

confidence reposed in him by the other in disclosing the secret to him.” Den-Tal-Ez, Inc., 566 

A.2d at 1228-29, quoting Restatement of Torts § 757.

1. Mack’s Bald Assertions that it had a “Confidential Relationship” with 

Toledo Mack are Insufficient to Survive a Motion to Dismiss.

Realizing the failings of its misappropriation of trade secrets claim as originally stated, 

Mack attempts to salvage this claim by alleging in its amended claim what it sees as the magic 

language, that it maintains a “relationship of trust and confidence” with its distributors. Def. 

Am. Counterclaim at ¶ 8. However, Mack must do more than put forth bald assertions, the 

allegations of the Counterclaims must demonstrate at least some confidential relationship. The 

purported “confidential relationship” on which Mack relies to support its claim for 

misappropriation of trade secrets is based upon Toledo Mack’s role as a Mack distributor and 

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Mack’s decision to “entrust[] its distributors with confidential and proprietary materials.” Id. 

These two allegations are insufficient to create a “confidential relationship” for the purposes of 

establishing a claim for misappropriation of trade secrets.

In general, parties to an arms length business transaction are not found to have 

“confidential” relationships. See Williams v. Dresser Industries, Inc., 120 F.3d 1163, 1168 (11th

Cir. 1997)(“Generally, business relationships are not confidential relationships.”); see also

Valley Forge Conv. & Visitors Bureau v. Visitor’s Services, Inc., 28 F. Supp. 2d 947, 952-53 

(E.D.Pa. 1998) (discussing “special” relationships in the context of contractual relations). The 

refusal to recognize any heightened relationship has been the rule in cases involving the 

relationship between franchisees and franchisors – a situation analogous to the 

distributor/manufacturer relationship before the Court. See Broussard v. Meineke Discount 

Muffler Shops, Inc., 155 F.3d 331, 348 (4th Cir. 1998)(taking comfort from “the refusal of courts 

in many other jurisdictions to superimpose fiduciary duties on a franchisor-franchisee 

relationship”); see also O’Neal v. Burger Chef Sys., Inc., 860 F.2d 1341, 1349 (6th Cir. 

1988)(“in general, franchise agreements do not give rise to fiduciary or confidential relationships 

between the parties”); Williams, 120 F.3d at 1168 (“our research does not reveal any” cases 

finding a confidential relationship between a franchisor and franchisee). Toledo Mack’s role as a 

Mack distributor is insufficient to support a claim that the parties have a “confidential 

relationship.”

Furthermore, Mack cannot unilaterally turn its relationship with Toledo Mack into a 

“confidential relationship” by disclosing confidential and proprietary materials. The comment to 

the Restatement of Torts § 757 states that “the proprietor of a trade secret may not unilaterally 

create a confidential relationship without the knowledge or consent of the party to whom he 

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discloses the secret.” Smith v. Snap-On Tools Corp., 833 F.2d 578, 579 (5th Cir. 1987)(citing 

Restatement of Torts § 757, comment). “[T]he question is whether the recipient of the 

information knew or should have known that the disclosure was made in confidence.” Id.; see 

also William M. Hendrickson, Inc., 2002 U.S. Dist. LEXIS 4097, at *52 (stating no confidential 

relationship when circumstances do not indicate to an employee that such a confidential 

relationship exists under his contract). Noticeably absent from Mack’s Counterclaim is any 

allegation that they notified or otherwise stated to Toledo Mack that the information they now 

assert is a “trade secret” was confidential or proprietary or intended to be held out as such. 

The only other allegation for establishing a confidential relationship between the parties 

is Mack’s incorrect assertion that there was a license for MACSPEC 2001. In this regard Mack 

alleges only that there is an express agreement between Mack and Toledo Mack that requires 

Toledo Mack to maintain the confidentiality and secrecy of MACSPEC 2001 and to prevent 

third-party access. See Def. Am. Counterclaims at ¶ 50. The problem with Mack’s allegations is 

the simple and indisputable fact that the contract identified by Mack as the basis of the alleged 

confidentiality obligation does not pertain to MACSPEC 2001, but rather to MACSPEC II. 

Rather than directly address the lack of a license agreement between Toledo Mack and

Mack for MACSPEC 2001, Mack actually goes so far as to represent in its counterclaims that the 

MACSPEC II License Agreement is actually a current license agreement for MACSPEC 2001. 

See Def. Am. Counterclaims at ¶ 20. As demonstrated above, however, the MACSPEC II 

License Agreement on its face related only to MACSPEC II, see id., Ex. “A”, and was 

terminated by February 2, 2001 when Toledo Mack returned MACSPEC II to Mack and Mack 

canceled Toledo Mack’s license for MACSPEC II. The misleading allegation that the 

MACSPEC II License Agreement was a license agreement for MACSPEC 2001 and the actual 

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misquoting of the MACSPEC II License Agreement are illustrative of the weakness of Mack’s 

claims. In addition, the Counterclaims contain no allegations that there are contractual provision 

establishing a “confidential relationship” as it pertains to the Mack microfiche and price lists.

As the foregoing makes clear, Mack can not rely on Toledo Mack’s status as a distributor 

to establish a “confidential relationship” nor can it create such a relationship by unilaterally 

disclosing confidential or proprietary information. In addition, there are no valid contractual 

provisions which create such a relationship. As a result, Mack is unable to adequately plead the 

third element of a misappropriation of trade secrets claim and Count I of the Counterclaims 

should be dismissed.

2. Mack Does Not Assert That Toledo Mack Acquired MACSPEC 2001 

Through Improper Means.

As a fall-back position, Mack also asserts that MACSPEC 2001, Mack microfiche and 

price lists constitute “confidential business information.” See Def. Am. Counterclaims at ¶¶ 57-

58. Pennsylvania follows the Restatement of Torts § 759 for claims of misappropriation of 

confidential business information. See Den-Tal-Ez, Inc., 566 A.2d at 1231. Under section 759, 

only a party who “procures by improper means” another’s confidential business information is 

liable for its subsequent use or disclosure of such information. Restatement of Torts § 759. 

Mack has made no argument that Toledo Mack “procured” MACSPEC 2001, Mack 

microfiche or price lists “by improper means.” See generally Def. Am. Counterclaims at ¶ 51. 

Mack argues that PAI acquired MACSPEC 2001, Mack microfiche and price lists by improper 

means. See id. at ¶¶ 52-53. Against Toledo Mack, Mack alleges only that, once Toledo Mack 

ordered and obtained MACSPEC 2001 through Mack’s proper procedures, Toledo Mack then 

sent MACSPEC 2001 to PAI in alleged “violation of Mack’s confidence and its license 

agreement.” Id. Here again, Mack’s claim turns on the existence of a license agreement for 

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MACSPEC 2001.4 As noted above, no such agreement exists. Therefore, there can be no breach 

of any license agreement or confidentiality relating to MACSPEC 2001, and Mack’s claim for 

misappropriation of confidential business information must be dismissed. 

C. Mack Fails To State A Claim Upon Which Relief Can Be Granted Against

Toledo Mack In Count II (Copyright Infringement). 

To establish a claim of copyright infringement, the claimant “must establish: (1) that it 

owns a valid copyright; and (2) that the defendant copied the copyrighted material.” Stenograph, 

LLC v. Sims, No. 99-5354, 2000 U.S. Dist. 9619, at *7 (E.D. Pa. July 12, 2000). 

Mack does allege that it is the “owner of the copyright on the MACSPEC 2001,” “a 

computer program consisting of original source code and a compilation of pre-existing 

information about individual truck parts in an original manner.” Def. Am. Counterclaims ¶¶ 60-

61. In addition, Mack claims that it “is also the owner of the copyright on the microfiche 

databases.” Id. at ¶ 62. Mack bases its counterclaim for copyright infringement against Toledo 

Mack on the allegations that, “without authorization from Mack, Toledo Mack distributed the 

copyrighted MACSPEC 2001 system [and Mack’s leased copyrighted microfiche parts database 

system] to PAI for its own direct or indirect commercial advantage.” Def. Am. Counterclaims at 

¶¶ 64-65. 

Under the copyright laws, although a copyright owner can restrict further transfers of a 

copyrighted item under its exclusive right to public distribution, a licensing agreement must be in 

place to restrict transfers by a person lawfully in possession. See generally Stenograph, LLC v. 

Sims, No. 99-5354, 2000 U.S. Dist. 9619, at *9 (E.D. Pa. July 12, 2000) (holding that 

 

4 Mack’s own website advertises that the MACSPEC 2001 is available to customers 

through authorized Mack dealers, including Toledo Mack. See Exhibit F to Plaintiff’s 

Mem. (Excerpts from Mack’s Guide to Ordering Parts Publications on www.mack.com).

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copyrighted software cannot be transferred when the license agreement expressly prohibits 

transfer), citing Adobe Sys. v. One Stop Micro, Inc., 84 F. Supp.2d 1086, 1090-91 (N.D. Cal. 

2000) (copyright holder’s right to distribute copyrighted material provided in 17 U.S.C. § 106(3) 

precludes defendant who lawfully purchased a copy of material from holder from providing that 

copy to third party if license agreement between copyright holder and defendant restricted such a 

transfer); Adobe Sys., Inc. v. Stargate Software Inc., No. C 99-20284 JW, 2002 U.S. Dist. 

LEXIS 15622, at *9 (N.D. Cal. Aug. 16, 2002) (noting that the establishment of a license would 

give Adobe a claim for copyright infringement); Softman Prod. Co, LLC v. Adobe Sys. Inc., 171 

F. Supp. 2d 1075, 1088 (C.D. Cal. 2001) (finding that, where Adobe sold its software to a 

distributor without a license agreement between Adobe and the distributor, Adobe’s end user 

license agreement did not bind the distributor who never loaded the software and never assented 

to its terms of use). As demonstrated above, Mack does not even allege a licensing agreement 

governed Toledo Mack’s use of the Mack microfiche and can only establish the existence of a 

prior and terminated license agreement for MACSPEC II – not MACSPEC 2001. See Def. Am. 

Counterclaims, Ex. “A.” Absent a signed license agreement for MACSPEC 2001 and/or the 

Mack microfiche between Mack and Toledo Mack limiting Toledo Mack’s ability to give the 

products to another party, there is no basis for a copyright infringement claim against Toledo 

Mack. 

Furthermore, Mack does not and cannot allege that Toledo Mack unlawfully obtained the 

MACSPEC 2001 and/or the Mack microfiche or unlawfully made copies of them and distributed 

any of those copies to PAI.5 Instead, Mack alleges only that Toledo Mack improperly distributed

 

5 As stated above, Mack has repeatedly demonstrated its consent to dealers ordering 

MACSPEC 2001 for their customers. PAI is a customer of Toledo Mack. 

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its copy of MACSPEC 2001 and the Mack microfiche to PAI once Toledo Mack was in lawful 

possession of that software. See generally, Def. Am. Counterclaims at ¶¶ 64-65. With no 

allegation of unlawful procurement, and no proper allegations of a valid license agreement to 

support any agreement to restrict distribution of the lawfully-obtained products, Mack does not

and cannot state a claim for copyright infringement against Toledo Mack.

D. Mack Fails To State A Claim Upon Which Relief Can Be Granted Against

Toledo Mack In Count IV (Civil Conspiracy). 

Under Pennsylvania law, to establish a claim for civil conspiracy, a plaintiff must plead 

the following elements with particularity:

a. two or more persons combined or agreed with intent to do an unlawful act 

or to do an otherwise lawful act by unlawful means, Fresh Made, Inc. v. 

Lifeway Foods, Inc., No. 01-4254, 2002 U.S. Dist. LEXIS 15098, at *36 

(E.D. Pa. Aug. 9, 2002), citing Skipworth v. Lead Indus. Ass’n, 547 Pa. 

224, 235, 690 A.2d 169, 174 (1997); GMH Assocs., Inc. v. Prudential 

Realty Group, 752 A.2d 889, 905 (Pa. Super. 2000), appeal denied, 795 

A.2d 976 (Pa. 2000);

b. an underlying actionable wrong, Fresh Made, 2002 U.S. Dist. LEXIS 

15098, at * 38, citing Boyanowski v. Capital Area Intermediate Unit, 215 

F.3d 395, 405 (3d Cir. 2000);

c. some overt act is done in pursuance of the common purpose or design,

GMH, 752 A.2d at 905;

d. actual legal damage results, Id.; [and]

e. [p]roof of malice, i.e., an intent to injure, Skipworth v. Lead Industries 

Ass’n, Inc., 690 A.2d 169, 174 (Pa. 1997). 

1. There Remains No Underlying Actionable Wrong To Support A

Claim of Civil Conspiracy.

As demonstrated above, Mack does not and cannot state claims upon which relief can be 

granted for breach of contract, misappropriation of trade secrets and confidential business 

information, or copyright infringement. Accordingly, there remains no underlying actionable 

wrong upon which Mack can rest its civil conspiracy counterclaim. Under Pennsylvania law, 

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“[w]hen a court dismisses the causes of action which underlie a civil conspiracy claim, the civil 

conspiracy claim must also be dismissed.” Fresh Made, 2002 U.S. Dist. LEXIS 15098, at * 38 

(dismissing conspiracy claim where the court dismissed the underlying antitrust, unfair 

competition, and restraint of trade claims) (citations omitted). In Pennsylvania, “’when a party 

fails to allege in [other] counts any unlawful act or unlawful means,’ the conspiracy count must 

also fail when it is based on these claims.” GMH, 752 A.2d at 905, citing Raneri v. DePolo, 441 

A.2d 1373, 1376 (Pa. Commw. 1982). Since Mack fails to state a counterclaim against Toledo 

Mack on the underlying claims of breach of contract, misappropriation of trade secrets and 

confidential business information, and copyright infringement, Mack’s counterclaim against 

Toledo Mack for civil conspiracy must also be dismissed.

2. There Was No License Agreement For MACSPEC 2001 That Toledo 

Mack Could Conspire With PAI To Violate.

Mack’s entire theory that Toledo Mack did something unlawful or otherwise lawful by 

unlawful means, rests on the premise that Toledo Mack improperly gave PAI MACSPEC 2001 

and the necessary unlock code in violation of some license agreement. See Def. Am. 

Counterclaims at ¶ 80. As demonstrated above, however, no license agreement exists for 

MACSPEC 2001. As such, Mack fails to state a claim for civil conspiracy.

3. Without A License Agreement For MACSPEC 2001 and/or the Mack 

microfiche , Mack Does Not Establish That Toledo Mack Acted With 

Malice.

Finally, Mack fails to plead facts sufficient to support its allegation that Toledo Mack 

acted with “malice.” Under Pennsylvania law, “[m]erely describing something as malicious is 

not sufficient to give the proper inference of malice . . . [M]alice requires an allegation that the 

sole purpose of the conspiracy was to injure the Plaintiff.” Simon v. UnumProvident Corp., No. 

99-6638, 2002 U.S. Dist. LEXIS 9331, at *28-29 (E.D. Pa. May 29, 2002) (emphasis added). 

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Mack makes the bold assertion that “PAI and Toledo Mack’s actions were malicious, willful and 

outrageous,” Def. Am. Counterclaims ¶ 56, and that “Toledo Mack and PAI entered into this 

agreement with the intent of injuring Mack,” Id. at ¶ 79. Mack never asserts that the sole

purpose of the arrangement between Toledo Mack and PAI was to injure Mack or that Toledo 

Mack lied about or concealed for whom it ordered its copies of MACSPEC 2001. See Simon, 

2002 U.S. Dist. LEXIS 9331, at *28-29.

Instead, Mack simply asserts that “Toledo Mack had secretly conspired with PAI, Mack’s 

competitor, to steal and misappropriate MACSPEC 2001” and that “Toledo Mack fraudulently 

and in violation of its license agreement with Mack, delivered MACSPEC 2001 to Mack’s 

competitor PAI in exchange for illegal payments or other surreptitious business favors.” Def. 

Am. Counterclaims at ¶¶ 23, 31. Mack has now extended these allegations to include Toledo 

Mack’s complicity in PAI’s use of Mack’s microfiche databases and price lists. Id. at ¶¶ 38, 41. 

As demonstrated above, there exists no license agreement between Mack and Toledo Mack for 

MACSPEC 2001, Mack’s microfiche and/or Mack’s price lists. Moreover, the above discussion 

makes clear that there is no “confidential relationship” on which Mack can base its claims of 

confidentiality. Without a license agreement or other confidentiality agreement that Toledo 

Mack and PAI could conspire to violate, Mack cannot demonstrate that Toledo Mack acted with 

the requisite malice to breach any purported confidence of Mack or to injure Mack in any way 

and Mack’s claim for civil conspiracy must fail.

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V. CONCLUSION

For all of the foregoing reasons, Counts I, II, III, and IV of Mack’s First Amended 

Counterclaims against Toledo Mack should be dismissed with prejudice.

Respectfully submitted,

Date: April 7, 2003

Wayne A. Mack

J. Manly Parks

Keith J. Verrier

DUANE MORRIS LLP

One Liberty Place

Philadelphia, PA 19103

215-979-1152/1342/1133

215-979-1020 (telefax)

Attorneys for Plaintiff

 Toledo Mack Sales & Service, Inc.

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CERTIFICATE OF SERVICE

I, Keith J. Verrier, Esquire, hereby certify that on this 7th day of April, 2003, a true and 

correct copy of the foregoing document was served on the following counsel of record by first 

class mail, postage prepaid:

Jon A. Baughman

Jeremy Heep

Barak A. Bassman

Pepper Hamilton LLP

3000 Two Logan Square

18th and Arch Streets

Philadelphia, PA 19103-2799

Keith J. Verrier 

Case 2:02-cv-04373-RB Document 37 Filed 04/07/2003 Page 22 of 23
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

TOLEDO MACK SALES &

SERVICE, INC.,

Plaintiff,

v.

MACK TRUCKS, INC.,

Defendant.

:

:

:

:

:

:

:

:

:

:

Civil Action No. 2:02-CV-04373-RLB

JURY TRIAL DEMANDED

MACK TRUCKS, INC.,

Counterclaim 

Plaintiff,

v.

TOLEDO MACK SALES & SERVICE, 

INC. 

Counterclaim 

Defendant.

:

:

:

:

:

:

:

:

:

:

:

:

JURY TRIAL DEMANDED

ORDER

AND NOW, this _____ day of _____________, 2003, upon consideration of the Motion 

of Plaintiff Toledo Mack Sales & Service Inc. to Dismiss Counts I, II, III, and IV of Defendant 

Mack Truck, Inc.’s Counterclaims Against Plaintiff Toledo Mack Sales & Service, Inc. Pursuant 

to Fed. R. Civ. P. 12(b)(6) and any Response thereto, IT IS HEREBY ORDERED that the 

Motion is GRANTED and Counts I, II, III, and VI of the Defendant Mack Truck, Inc.’s 

Counterclaims are DISMISSED WITH PREJUDICE.

_______________________________

Ronald L. Buckwalter, J. 

Case 2:02-cv-04373-RB Document 37 Filed 04/07/2003 Page 23 of 23