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No. 02 C 4721 Page 4

as confidential information. These rights are not protected by the Copyright Act. A claim that
defendants breached a contractual duty of confidentiality is qualitatively different than a claim
of copyright infringement. See Lennon v. Seaman, 63 F. Supp. 2d 428, 438 (S.D.N.Y. 1999)
citing Brignoli v. Balch Hardy and Scheinman, Inc., 645 F. Supp. 1201, 1204-06 (S.D.N.Y.
1986).
Choice of Venue Clauses

Both the “Waiver and Release Agreements,” signed by Wahlgren and Jenson, and the
“Employment and Confidentiality Agreement,” signed by Bisotti, contained choice of venue
clauses written by CA. These clauses dictate that federal and state courts in New York shall
have “exclusive jurisdiction” over all claims arising from the agreements. Plaintiff does not
dispute the validity of these clauses, but instead argues that this court is the proper venue for
the contract claims because the copyright infringement and trade secret claims are properly
in front of us, and because Quest, its employees and other potential witnesses, are located in
Hlinois.

Contractual forum-selection clauses are presumptively valid. See Heller Financial, Inc,
y. Midwhey Powder Co., Inc., 883 F.2d 1286, 1290-91 (7 Cir. 1989). In determining the
correct venue for litigation, courts should give such clauses some consideration, but they are

not dispositive. See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 30-31 (1987)

(analyzing forum-selection clause in the context of a motion to transfer venue pursuant to 28
U.S.C. § 1404(a)). This is because parties may only waive one of the § 1404(a) factors (their
own convenience), when signing a forum-selection clause. Heller, 883 F.2d at 1293. Here the

plaintiff has waived any reliance upon its own convenience as a reason for keeping the suit


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No. 02 C 4721 Page3

motion, these documents must be both referred to in the complaint and central to plaintiff's
claims. Leyenstein v. Salafsky, 164 F.3d 345, 347 (7 Cir. 1998). This letter does not satisfy
either prong.

Even considering the letter, however, plaintiff sufficiently alleges the existence of a
contract. Because the June 14, 1999 document was signed by Bisotti, the party being charged
with the contract, it is unnecessary to show that CA signed the contract if it indicated
acceptance through performance. See Newcourt Financial USA, Inc. v. D&G Medical Systems,
PLC, 2000 WL 528476, *5 (N.D. IIL 2000). CA alleges that it reached an agreement with
Bisotti on June 14, 1999, which agreement was honored by both parties. They claim that
Bisotti continued to work for them and continued to receive his regular benefits at least
through June 28, 1999. The letter of June 28, 1999, does not eliminate this possibility. In fact,
the letter indicates that Bisotti turned down an employment offer on June 28, 1999, with no
reference to the earlier agreement. While defendants may be able to produce evidence
showing that there was never a valid employment agreement between CA and Bisotti, CA has
sufficiently alleged the existence of such an agreement so as to survive a motion to dismiss.
Preemption

Defendants next argue that plaintiff’s contract claims are preempted by the federal
Copyright Act, 17 U.S.C. § 301. Preemption generally does not force courts to interfere in
contractual rights bargained for by private parties. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447,
1454-55 (7° Cir. 1996). Such rights are preempted by the Copyright Act only if they are
equivalent to those already protected by federal copyright law. Jd, Plaintiff alleges that the

defendants had an affirmative contractual duty to protect the EDBA source code and treat it


No. 02 C 4721 PageS

here. Courts must still consider the convenience of third parties and the “interests of justice.”
Ta.

Transfer under § 1404(a) is proper if (1) venue is proper in both courts; (2) transfer is
for the convenience of the parties and witnesses; and (3) transfer is in the interest of justice.

Brandon Apparel Group, Inc. v, Quitman Mfg. Co., Inc,, 42 F.Supp. 2d 821, 833 (N.D.IL

1999), While this is a motion to dismiss the case rather than to transfer the venue, we believe
that the analysis in this case should be the same. Other courts have analyzed Rule 12(b)(3)
motions to dismiss, using the framework of § 1404(a). See, e.g., In re Ha-Lo Industries, Inc.,
2003 WL 1824436 (Bankr. N.D. Ill 2003). Looking at the § 1404(a) factors, we find that
dismissing these counts and forcing plaintiff to refile in a New York court simply would not
make sense. Even taking the forum-selection clause into account, there is a strong judicial
interest in hearing these related claims in the same foram. Moreover, the interests of the other
parties and witnesses will best be served by dealing with the claims as part of a single case.
Because the parties cannot waive these other considerations, we choose not to enforce the
forum-selection clause, instead finding that venue in this court is proper.
CONCLUSION

For the foregoing reasons, defendants’ motion to dismiss is denied.

JAMES B. MORAN
ior Judge, U. S. District Court

2 23, 2003.


Minas, Per Form (0697) (9)
United States District Court, Northern District of Illinois
Novar Maghtrae Judge James B. Moran “inen Anigued Sedge
CASE NUMBER 02 C 4721 DATE 7123/2003
CASE Computer Associates etc. Vs. Quest Software, Inc. etc. et al.
TITLE
Motion: Ua he allowing box (a) indo the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
Memorandum Opinion and Order
DOCKET ENTRY:
(1) G Filed motion of [ use listing in “Motion” box above.]
(2) a Brief in support of motion due ___.
(3) Qa Answer briefto motion due___. Reply to answer brief due__—
(4) im) Ruling/Hearingon___—__ssetfor___ at
(5) is} Status hearing[held/continued to] [set for/re-set for]on___—ssetfor at
(() Oo Pretrial conference[held/continued to] [set for/re-set for]on__—ssetfor_— at.
(a) ao Trial[set for/re-set for]on___—sat__—
(8) im (Bench/Jury trial) [Hearing] held/continued to__at.
(9) o This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to)
OFRCP4(m) (Local Rule 41.1 OFRCP41(aX(1) 1 FRCP41(a)(2).
(od) x4 [Other docket entry] Enter Memorandum Opinion and Order. For the foregoing reasons,

defendants’ motion to dismiss is denied.

ald @ [For further detail see order attached to the original minute order.]

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IN THE UNITED STATES DISTRICT COURT DOCKETED
FOR THE NORTHERN DISTRICT OF ILLINOIS JUL 24 2003
EASTERN DIVISION

COMPUTER ASSOCIATES
INTERNATIONAL., INC., a Delaware
corporation,

Plaintiff,
vs. No. 02 C 4721

QUEST SOFTWARE, INC. a
California corporation, et al.,

weer ererwwrwrwrrnrwerwverwrv

Defendants.

MEMORANDUM OPINION AND ORDER

Plaintiff Computer Associates International, Inc. (CA) brought this action against
defendants, Quest Software, Inc. (Quest) and four Quest employees, alleging copyright
infringement and misuse of trade secret information. On May 15, 2003, plaintiff filed an
amended complaint, adding claims for breach of contract and adding Frank L. Bisotti as a
defendant. Defendants filed a motion to dismiss the breach of contract claims, Counts II, IV
and V, pursuant to Fed.R.Civ.P. 12(b)(6) and 12(b)(3), arguing that plaintiff fails to state a
claim and that venue in this court is improper. For the following reasons, defendants’ motion
is denied.

BACKGROUND

CA alleges that defendants unlawfully copied and used the computer source code
created to develop its Enterprise Database Administration project (EDBA). It claims that the
EDBA source code is protected by both the federal Copyright Act, 17 U.S.C. § 107 et seq. and

the Illinois Trade Secrets Act, 765 ILCS 1065/1 ef seq. Plaintiff alleges that defendants used

U


a

No. 02 C 4721 Page2

this source code to create its own database administration software, thereby gaining a
significant commercial advantage at plaintiffs expense. Plaintiff further alleges that
defendants Wahlgren, Jenson and Bisotti breached written agreements with CA or its
predecessor, Platinum technology International, Inc. (Platinum), in which they pledge to
protect confidential information.
DISC ION

In deciding a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) we
must assume the truth of all well-pleaded factual allegations, making all inferences in the non-
movant’s favor. Sidney S. Arst Co. v. Pipefitters Welfare Educ. Fund, 25 F.3d 417, 420 (7*
Cir. 1994). We dismiss a claim only if it appears “beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355
U.S. 41, 45-46 (1957). In deciding a motion to dismiss for improper venue under Rule 12(b)(3),
we take all allegations as true, unless contradicted by defendants’ affidavits and may consider
facts outside the pleadings. Pasulka v. Sykes, 131 F. Supp. 2d 988, 994 (N.D. IL 2001).
Bisotti Contract

Defendants first argue that plaintiff's claim against Bisotti must fail because it does not
allege the existence of a valid contract. First, defendants point out that, while Bisotti signed
adocument titled “Employment and Confidentiality Agreement” on June 14, 1999, CA never
signed this document. Second, defendants produce aletter dated June 28, 1999, indicating that
Bisotti declined an offer of employment from CA.

Likely, we need not consider the June 28, 1999 letter as part of this motion to dismiss.

While we may consider some documents outside the pleadings in deciding a Rule 12(b)(6)