UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

DYNAMIC MEASUREMENT GROUP, INC.,

an Oregon corporation,

Plaintiff,

v.

UNIVERSITY OF OREGON, a special

governmental body as defined by ORS

174.117(1)(I); MIA TUAN, individually and

in her official capacity; EDWARD J.

KAME’ENUI, individually and in his official

capacity; FRANCIS J. FIEN IV, a/k/a Hank

Fein, individually and in his official capacity;

BRAD SHELTON, individually and in his

official capacity; and HOP SKIP

TECHNOLOGIES INC., an Oregon

corporation,

Defendants.

6:14-cv-1295-TC

FINDINGS AND RECOMMENDATION

 

COFFIN, Magistrate Judge:

Plaintiff, Dynamic Measurement Group, Inc. (DMG), brings this action alleging copyright

and trademark infringement primarily against the University of Oregon. Plaintiff's founders, Dr.

Ruth Kaminski and Dr. Roland Good allege that since the early 1990s they have been engaged in

the business of researching, developing, administering, distributing, and publishing materials known

Page 1 - FINDINGS AND RECOMMENDATION
as Dynamic Indicators of Basic Early Literacy Skills (DIBELS), as well as training teachers on the

use of these materials. DIBELS is designed to help teachers assess literary skills and focus remedial

needs for K-6 students. Plaintiff further alleges that Kaminski and Good established DMG as a for

profit company to carry on the work of developing DIBELS and training teachers in its use. 

DIBELS is widely used, assessing about 25 percent of U.S. students.

Plaintiff alleges that Dr. Kaminski first developed an early version of DIBELS assessment

measures from 1988-92 as a doctoral candidate at the University of Oregon. After obtaining her

Ph.D. in 1992, the University employed Kaminski as a part-time research associate in 92-93, and

as an assistant professor in the college of education until 2003.

Dr. Kaminski's doctoral advisor was Dr. Good who worked as an assistant professor at the

University of Oregon at the time. Plaintiff alleges that Good and Kaminski began to make DIBELS

available to elementary schools around the country and offered fee based training. Plaintiff asserts

that as early as 1994, Kaminski and Good made commercial use of the DIBELS mark.

In the Late 1990s, plaintiff alleges that Dr. Good began offering analytical support allowing

schools to track individual and collective progress of their students. By 2000, plaintiff asserts,

Kaminski's and Good's efforts building widespread acceptance and use of DIBELS assessments

resulted in hundreds of schools adopting DIBELS as an integral part of early childhood literacy

programs.

In collaboration with staff of the University's Center on Teaching and Learning, plaintiff

alleges Dr. Good developed an online system allowing schools to enter their data and generate

automated reports and analysis (the DIBELS Data System) housed on the University's servers in

about mid 2000. Plaintiff alleges that the DIBELS data system is an ancillary service to users of

DIBELS materials.

Page 2 - FINDINGS AND RECOMMENDATION
In 2001, Good and Kaminski released the 5th edition of DIBELS made available to schools

upon request as part of a package price that included their teacher training services. The University's

Center on Teaching and Learning posted a copy to its website for free downloads. The 5th edition

bore a copyright notice and trademarks as follows: "© 2001 Good and Kaminski" and "DIBELSTM." 

This edition contained newly created texts by independent contractors paid for by Good and

Kaminski personally with copyrights for the materials (DIBELS Oral Reading Fluency (DORF))

vesting in Good and Kaminski. Also at this time, DIBELS coverage expanded from K-3 to K-6.

Also in 2001, plaintiff alleges Good and Kaminski approached the University hoping to cede

rights to DIBELS (but retain developmental control with royalties reinvested in continuing

development) in exchange for reimbursement for the DORF passages and dealing with a publisher

for funding and distribution. Plaintiff alleges that the University instead suggested that Good and

Kaminski create a private start-up to fund further development of DIBELS assessment materials and

to pursue the wide distribution of DIBELS through commercial publishers. Plaintiff asserts that at

no time during these discussions did anyone at the University suggest that the University of Oregon

had any claim to the DIBELS mark or the DORF passages, but that the University's Office of

Technology Transfer did state that it should own a copyright in some non-DORF DIBELS content

because it had been funded by a grant administered by the University. However, plaintiff alleges,

the University offered to assign its purported copyright to the start-up presumably for some share

of the revenue. 

Plaintiff alleges that the University failed to provide any follow-up paperwork and Good and

Kaminski decided to develop and commercialize DIBELS independently.

In January of 2002, Good and Kaminski incorporated their start-up, plaintiff DMG. Plaintiff

alleges from that point forward, it was the exclusive vehicle for development and commercialization

Page 3 - FINDINGS AND RECOMMENDATION
of DIBELS products. DMG then entered into a publishing agreement with 

Sopris West Educational Services.

On February 13, 2002, DMG applied to the Patent Office to register the DIBELS mark which

issued in 2003. DMG asserts it informed the University of Oregon when it received the registration. 

From then on, DMG products displayed its registered mark: DIBELS®.

DMG and Sopris marketed DIBELS 6th edition (allegedly entirely new, except for carrying

over 20 of the 24 DORF passages, with 151 new passages) with sales exceeding $1,100,000 in the

first eight months of 2003. 

The University provided a link on its website to Sopris' website to enable teachers to

purchase printed copies of the DIBELS materials and below the link advertised its data system

service for DIBELS for $1 per student to analyze DIBELS scores.

DMG and its publishing partners agreed that the University should be allowed to continue

hosting free downloads but, plaintiff alleges, also agreed that DMG would maintain quality control

and the public would be on notice that the DIBELS mark and materials were proprietary to Good,

Kaminski, and DMG. Accordingly, DMG alleges it obtained acceptance from the University Of

Oregon to attach a Educational User Agreement posted to the University's download page requiring

acceptance as a condition of download. The Agreement noted that DIBELSTM1

 was the proprietary

work of Good, Kaminski, and DMG and limited the use of the free download.

At this time, although Kaminski "maintained a courtesy appointment as Assistant Professor

in the College of Education," she began devoting herself full-time to DMG.

Plaintiff alleges that the University undertook an investigation in 2004 regarding ownership

1

Later changed to DIBELS® after registration of the mark.

Page 4 - FINDINGS AND RECOMMENDATION
of the DIBELS copyright and registration of the mark and, in 2005, all apparently agreed that DMG

was the exclusive owner with a non-exclusive license granted to the University. However, the

University never signed the agreement. Nonetheless, plaintiff asserts that the University acted

consistent with the "agreement" for the next seven years.

DMG asserts ownership of numerous registrations related to its DIBELS materials and that

registration is now incontestible. Plaintiff further asserts registration of a Spanish language version

with the mark IDEL created by Good, Kaminski, and DMG via independent contractors with the

copyright vested in DMG. IDEL was also made available through the University's website in the

same manner as DIBELS with paid service for data analysis beginning in 2007.

Plaintiff launched its latest literary assessment product DIBELS Next in 2011 which is

presently only available from DMG and licensees/publishers SOPRIS and Wireless Generation, Inc. 

Plaintiff alleges that until recently, the University acknowledged that DIBELS Next was a registered

trademark. 

Plaintiff alleges that the University failed to properly implement support for DIBELS Next

in its Data System and that it therefore undertook its own data service in 2011 which eventually

became known as DIBELSNet with a registered mark. DIBELSNet supports DIBELS 6th edition

and IDEL as well.

Plaintiff alleges that the University then asserted it had been using the DIBELS mark in

commerce since 1980 and that it owned all DIBELS intellectual property. DMG rejected these

assertions and the University then filed an application with the Patent Office on July 20, 2012,

seeking to register the DIBELS mark for the goods and services allegedly covered by DMG's

existing registrations. The Patent Office rejected the application.

The University sought to register the IDEL mark in June of 2013 for goods and service

Page 5 - FINDINGS AND RECOMMENDATION
essentially identical to DMG's along with a petition to cancel DMG's registration. The University's

applications to register IDEL was rejected, but its petition, as of the time of the filing of the

complaint was still pending.

On November 19, 2013, the University petitioned to cancel DMG's DIBELS registrations

asserting DMG obtained registration by fraud. These proceedings are also still pending. 

Plaintiff DMG now asserts claims for trademark violation based on the University's violation

of the terms of the license DMG asserts controls by, among other things, deleting reference to DMG

and the registrations on its website. Plaintiff alleges that University is attempting to mislead the

public into believing that it is the owner of the mark and ultimate source of DIBELS products and

to undermine DIBELSNet. Similarly, plaintiff alleges infringement of the IDEL mark and the

DIBELS NEXT mark. Plaintiff also alleges state law trademark infringement claims. Plaintiff

further asserts a claim for unfair competition and copyright infringement claims.

The University of Oregon and the individual University defendants have filed counterclaims

against DMG, Good, and Kaminski for misappropriation of the University's federally-funded

intellectual property. Indeed, the University asserts that Good admitted in Congressional testimony

that he used federal research funds to create DMG. The University alleges that Good and Kaminski

filed applications for trademarks DMG did not own and submitted University webpages to the

Trademark Office to prove DMG's use of the marks. The University further alleges that Good and

Kaminski sought copyright registrations for works DMG did not own that co-opted the authorship

and support of the University and federal research grants. The University also argues that the use

of its DIBELS moniker deceives parents and educators into believing that the DMG product is able

to detect a significant percentage of at-risk young readers.

The University alleges that it had successfully implemented the DIBELS assessment and the

Page 6 - FINDINGS AND RECOMMENDATION
DIBELS Data System throughout the United States prior to DMG and long before DMG existed. 

It further asserts that it has successfully implemented the IDEL assessments at least as early as

January 2008 and began using the IDEL mark in commerce as early as July 2003.

The University alleges that it expended government grants and personnel to create, develop,

and implement the DIBELS assessments, the IDEL assessments, and the DIBELS Data System. It

further alleges that University faculty, staff, and graduate students are credited with contributing to

DIBELS 5th edition including defendants Edward Kame'enui and Francis Fein. The DIBELS 5th

edition also credits several government research grants awarded to the University. The 6th edition

similarly credits the University personnel and federal grants awarded to the University.

The University alleges that its regulations, policies and directives, provide that the University

owns and is entitled to own all of the intellectual property developed by its employees, graduate

students, and staff with University resources and/or within the scope of their employment. It further

alleges that its regulations, policies and directives, as well as federal regulations provide that the

work product resulting from research and grant funds awarded to the University is the property of

the University. It asserts that Good and Kaminski were notified and agreed to these ownership rights

and right to ownership of intellectual property developed at the University, using the University

resources, and/or using research grant funds awarded to the University. The University also alleges

Good and Kaminski executed agreements agreeing to assign any intellectual property using

University resources to the University, but violated these regulations, policies, directives, and

agreements by purporting to transfer intellectual property rights arising from University resources

to DMG.

Plaintiff alleges Good worked as an Assistant Professor for the University's College of

Education from June 1988 to August 1994 and then as Associate Professor continuing to the present. 

Page 7 - FINDINGS AND RECOMMENDATION
With respect to this work, the University alleges Good 

executed numerous agreements as a condition of his employment whereby he agreed

that the intellectual property rights arising from the research funded, developed and

implemented by the University, were owned by the University. Dr. Good was one

of the many University professors, graduate students, staff and others who worked

on, developed and implemented the research related to DIBELS and IDEL on behalf

of the University, including research funded by University grants and awards. 

First Amended Answer (#40) at ¶ 42.

The University alleges that 

Kaminski worked as a graduate student at the University, and earned her Ph.D in

1992. Dr. Good supervised her graduate work during this time. After earning her

Ph.D, Dr. Kaminski has worked for the University since June 16, 1992 in various

capacities including as an Assistant Professor, an Adjunct Assistant Professor and

as a Courtesy Assistant Professor. Also during this time, Dr. Kaminski executed

numerous agreements whereby she agreed that the intellectual property rights arising

from research funded, developed and implemented by the University, were owned

by the University. Moreover, Dr. Kaminski was one of the many University

professors, graduate students and staff who worked on, developed and implemented

University research related to DIBELS pursuant to University grants and awards.

Id. at ¶ 43.

The University alleges Good, Kaminski and DMG engaged in fraud related to the DIBELS

registrations by among other things, submitting declarations in support with knowledge that 

(1) DMG was not the owner of the DMG DIBELS Marks; (2) DMG was not using

the DIBELS mark in commerce; (3) DMG was not entitled to use the DIBELS mark

in commerce; (4) the University was previously using and had the prior right to use

DIBELS in commerce; and, (5) the statements in the declarations for the applications

to register the DMG DIBELS Registrations were not true.

[and]

submitt[ing] evidence of the University's use of DIBELS to show DMG's use in

commerce.

[and]

[Knowing] that the University owned and was using the University DIBELS Mark

in commerce when Counter-Defendants filed DMG's trademark maintenance and

Page 8 - FINDINGS AND RECOMMENDATION
renewal forms for the DMG DIBELS Registrations. Counter-Defendants

nevertheless executed these declarations with the knowledge and belief that the

statements in the declaration were false.

E.g., Id. at ¶¶ 58, 63, 77.

The University alleges similarly that the counter-defendants engaged in fraud related to the

IDEL registration.

With respect to DIBELS NEXT and DIBELSNET, the University alleges DMG hired a

university employee to copy portions of the University's DIBELS Data System code as the

underlying code for DIBELSNET. The research for DIBELS NEXT benchmark achievement

standards was not conducted by the University and the University asserts that it is based on flawed

research. The University further asserts that the product creates harm and confuses the public

believing that it is based on the University's DIBELS products.

The University similarly argues that counter-defendants have unlawfully claimed copyright

ownership over the University's DIBELS products which it asserts are property of the University

based on the same regulations, policies, directives, and agreement noted above. Specifically, the

University alleges:

The University Works underlying the DMG Copyrights were authored and are

owned by the University pursuant to Oregon State regulations, University

regulations, University directives, federal government research grant terms, the work

for hire doctrine and/or the terms of executed contracts.

It is indisputable that, throughout their tenure at the University, Drs. Good and

Kaminski knew that the University owned and was entitled to own the intellectual

property arising from University resources and/or government grants pursuant to

Oregon State regulations, University regulations, and University directives. In fact,

Drs. Good and Kaminski executed numerous agreements whereby they agreed to

comply with these Oregon State regulations, University regulations, and University

directives by, among other things, agreeing to assign any intellectual property rights

arising from University resources to the University as a condition of their work at the

University.

Page 9 - FINDINGS AND RECOMMENDATION
Drs. Good and Kaminski did not comply with the law or their contractual

obligations. Instead, Drs. Good and Kaminski unlawfully claimed ownership over

the University Works. Drs. Good and Kaminski unlawfully and without authorization

sold, copied, and distributed the University Works related to DIBELS and IDEL

through DMG under the DMG Copyrights, as alleged in DMG's Complaint for

Trademark and Copyright Infringement. Moreover, Counter-Defendants falsely

stated in the copyright applications for the DMG Copyrights that DMG owned the

underlying University Works in order to induce the Copyright Office to register the

DMG Copyrights in DMG's name.

First Amended Answer (#40) at ¶¶ 109-111.

The University also asserts that Good and Kaminski used their positions at the University

to insert and maintain the Educational Use Agreement crediting DMG with development of DIBELS

in place of the University.

The University alleges claims for trademark infringement (false designation of origin),

cancellation of trademark registrations, declaratory relief of prior common law trademark use,

copyright infringement, declaratory relief of invalidity of DMG's copyrights or non-infringement

by the University, unfair competition, conversion, breach of contract and the covenants of good faith

and fair dealing, breach of fiduciary duty, unjust enrichment, and accounting. Plaintiff DMG seeks

to dismiss the conversion claim, dismiss the breach of contract claim or make it more definite and

certain, dismiss the breach of fiduciary duty claim or make it more definite and certain, dismiss the

unjust enrichment claim, dismiss the accounting claim, and dismiss all claims against Good and

Kaminski due to improper joinder. Moreover, DMG seeks summary judgment as to the remaining

claims.

MOTION TO DISMISS COUNTERCLAIMS 7-11

A. Seventh Counterclaim - Conversion

The University alleges that the counter-defendants "intentionally took possession or control

Page 10 - FINDINGS AND RECOMMENDATION
of the University's intellectual property and resources as well as the ill-gotten gains of funds

belonging to the University and ... kept them for their own use, ... and/or transferred them to other

persons, who were not acting in the interests of the University, for other uses." First Amended

Answer (#40) at ¶ 165. Counter-defendants assert that this claim is preempted by copyright law and

that there is no legal basis for such a claim under trademark law. DMG also asserts that the claim

is untimely.

A plaintiff's state-law cause of action is preempted under 17 U.S.C. § 301(a) if: (1)

the work involved falls within the general subject matter of the Copyright Act as

specified by sections 102 and 103; and (2) the rights that the plaintiff asserts under

state law are equivalent to those protected by the Act in section 106. 17 U.S.C.

301(a); Downing v. Abercrombie & Fitch, 265 F.3d 994, 1003 (9th Cir. 2001).

However, where a state law claim contains an element not shared by the federal law

that "changes the nature of the action so that it is qualitatively different from a

copyright infringement claim" there is no preemption. Summit Machine Tool

Manufacturing Corp. v. Victor CNC Systems, Inc., 7 F.3d 1434, 1439-40 (9th Cir.

1993).

...

[C]onversion claims generally are preempted even though there is an additional

element of intent. See Firoozye v. Earthlink Network, 153 F.Supp.2d 1115, 1130

(N.D.Cal. 2001). The extra element in a conversion claim does not necessarily

change the nature of the underlying rights at issue. Id. A conversion claim arising

from the unauthorized reproduction and distribution of a copyrighted work only

interferes with the plaintiff's intangible property right and is equivalent to a claim for

copyright infringement. Id.

Zito v. Steeplechase Films, Inc., 267 F.Supp.2d 1022, 1027 (N.D.Cal. 2003). 

Counter-defendants argue that the alleged "intellectual property" converted is an intangible

right and thus is equivalent to the copyright infringement claims.

The University asserts that under Oregon law, intangible property is a chattel protected under

Oregon's conversion law qualitatively different from copyright law. However, the case cited by the

University, Lyden v. Nike Inc., 2013 WL 5729727 (D.Or. October 22, 2013), which allowed a

Page 11 - FINDINGS AND RECOMMENDATION
conversion claim in a patent case to survive in the face of a motion to dismiss, did not address this

issue because

Nike argues that the state law claims are preempted because all the claims are based

on allegations regarding Nike's misconduct before the PTO or infringement of the

'883 patent. Def.'s Mem. 6. In support of this argument, Nike provides a string cite

of cases, the majority of which are from other district court jurisdictions. Id. at 6–7.

Nike fails to explain how each state law claim would be preempted. Because of the

lack of analysis for the preemption argument, I decline to address this argument.

Id. at *2. 

Judge Hernandez did later address the issue and found the conversion claim preempted. 

Lyden v. Nike Inc., 2014 WL 2563401 @ *2-3 (D.Or. June 6, 2014). Judge Hernandez further

affirmed such preemption after Lyden sought reconsideration. Lyden v. Nike Inc., 2014 WL

4631206 (D.Or. September 15, 2014). To the extent the University alleges a conversion claim for

its purported intellectual property, such claim impermissibly seeks to redress a right protected under

federal copyright law and is preempted.

Similarly there is no support for a claim of conversion of a trademark as it would seek to

displace federal trademark law. See J. Thomas McCarthy, 4 McCarthy on Trademarks and Unfair

Competition, § 25:9.50 (4th Ed. 2013) (allowing conversion of intangible property such as

trademarks would allow conversion to largely displace IP laws defining what is infringement of

copyright, trademark and patents). See also, Big Time Worldwide Concert & Sport Club at Town

Center, LLC. v. Marriott Int'l, 236 F.Supp.2d 791, 806-07 (E.D. Mich. 2003) (noting no support for

conversion of trademark claim).

Although the University's cite to Lyden does note some support for intangible property as

a chattel protected by a conversion claim, a trademark is not even tied to tangible property such as

would be the case with a copyright or patent. Rather it is a symbol of the good-will of its holder. 

Page 12 - FINDINGS AND RECOMMENDATION
Accordingly, Oregon conversion law is inapplicable. Cf. Joe Hand Promotions, Inc. v. Jacobson,

874 F.Supp.2d 1010, 1019-21 (D.Or. 2012) (noting protection of certain intangible property tied to

tangible property such as an unrecorded mortgage (security interest) which secures land, or a license

or contractual right to receive an electronic signal). 

To the extent the University seeks to assert a claim for conversion of grant funds and tangible

University resources, the Copyright Act does not preempt such a claim because the interest at stake,

the funds and other resources used to develop the intellectual property rather than the intellectual

property itself, is different than what is protected by the copyright laws. However, the proceeds, i.e.,

the intellectual property developed, may not be recovered through an action for conversion as that

is the exclusive province of federal copyright law.

The motion to dismiss the conversion claim should be granted to the extent it seeks to assert

a claim for the DIBELS intellectual property and trademarks, but denied to the extent it seeks to

assert a claim for the underlying grant and other underlying tangible University resources used to

develop such intellectual property.

Counter-defendants also move to make the claim for ill-gotten gains of funds more definite

and certain. The Amended Answer and Counterclaims, however, specifically identifies the grants

at issue at paragraph 18, 20, 22. The counterclaim further identifies University resources allegedly

dedicated to the development of the intellectual property at paragraphs 16-17, 19, 21. However,

because the alleged conversion of these resources sound in fraud, see, e.g., paragraphs 57-88

(alleging false material misrepresentations in obtaining copyrights and trademarks by, among other

things, appropriating taxpayer money and grants), more specificity regarding the underlying

appropriation of resources is required under Fed. R. Civ. P. 9. While the who, what, where and

when is provided regarding the applications for copyright and trademarks, such information is

Page 13 - FINDINGS AND RECOMMENDATION
lacking with respect to the grants beyond merely listing them. It is not clear when counterdefendants misappropriated the resources and how, beyond generally developing the DIBELS

product with such resources and then keeping the intellectual property. Because the conversion

counterclaim needs to be amended to remove the allegations of conversion of intellectual property,

the court should require more specificity with regard to the remaining portions of the claim,

especially in light of the long period of time for which the counter-defendants are alleged to have

engaged in such fraud to accomplish the alleged conversion. The court can then make a

determination regarding whether the claim is timely if necessary.

B. Eighth Counterclaim - Breach of Contract and Covenants of Good Faith and Fair Dealing

The University alleges that Good and Kaminski2 breached their agreements and their implied

covenants of good faith and fair dealing with the University by failing to assign their intellectual

property rights related to DIBELS and IDEL to the University and by assigning their intellectual

property rights to DMG. The University further alleges that Good and Kaminski breached the

implied duty of good faith and fair dealing by inducing University employees, staff, and researchers

to breach their employment agreements with and/or obligations to the University.

The counterclaims reference numerous agreements, regulations, directives, federal

government research grant terms but fail to cite any specific agreements, regulations, directives, and

other terms. In addition, other than a broad time period encompassing all of these restraints on Good

and Kaminski's actions with respect to DIBELS and IDEL, no specific dates are offered as to when

2

Plaintiff's breach of contract claim does not allege that DMG breached any contract or

fiduciary duty owed to the University and thus the motion to dismiss the claim against DMG

should be denied as moot.

Page 14 - FINDINGS AND RECOMMENDATION
they were entered into or became applicable.

To plead a breach of contract claim, the University must allege (1) the existence of a

contract, (2) the relevant terms of the contract, (3) plaintiffs' full performance and lack of breach,

and (4) defendant's breach resulting in damage to plaintiffs. Slover v. Or. State Bd. of Clinical Social

Workers, 144 Or.App. 565, 927 P.2d 1098, 1101–02 (1996). While a motion to dismiss or a request

to make more definite and certain may not be employed as a discovery device, the counterclaim here

is insufficient because it only pleads the existence of terms that prohibit the actions taken by

counter-defendants. The actual relevant terms are not alleged.

The University does cite a regulation that require University employees to "agree to assign

rights" to "any invention or improvement to technology" and "educational and professional

materials," (O.A.R. 580-043-0011(1)) and to internal management directives granting ownership of

educational materials developed with University resources and the court can take judicial notice of

such regulations. However, as noted, the terms of the purported contracts are not supplied in the

counter-claims. Moreover, judicial notice does not take the place of pleading requirements as

counter-defendants cannot guess as to which laws and regulations may apply simply because the

University generally alleged violation of regulations and directive.3

Moreover, it is not clear if the DIBELS assessments and trademarks are educational materials

or inventions within the purview of the regulations and directives cited in the response memo. In

addition, the regulations require an agreement to agree and it is unclear when the University actually

obtains such rights absent further allegations. Nonetheless, it appears, absent more definite and

3

The University asserts the contracts were already provided to DMG in the underlying

Trademark Trial Appeal Board proceedings regarding IDEL. However, just as motions attacking

the pleadings are not an appropriate vehicle for discovery, discovery provided in other

proceedings is not a replacement for proper pleading.

Page 15 - FINDINGS AND RECOMMENDATION
certain allegations, these are issues more appropriate to a motion for summary judgment.4

So while the claim is plausible, and should not be dismissed, assuming that such terms exist,

the claim needs to be made more definite and certain. The University should file an amended breach

of contract claim identifying the precise purported terms, regulations, directives, etc. that were

breached and by whom and when along with the elements of lack of breach on the part of the

University and resulting damage. Morever, to the extent the breach allegations are supported by the

allegations of fraud spread throughout the counterclaims, the claims must be alleged with

particularity as required by Fed. R. Civ. P. 9. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097,

1103 (9th Cir. 2003) (Rule 9(b) applies to state law claims in federal court and apply to averments

of fraud even if fraud is not an essential element of a claim). The issue of whether the breach of

contract claims are subject to the statute of limitations can be addressed once the claim is sufficiently

alleged with terms and their applicable time frames.

The motion to dismiss the breach of contract claim should be denied, but the motion to make

it more definite and certain should be granted. 

C. Ninth Counterclaim - Breach of Fiduciary Duty

The University does not allege a breach of fiduciary duty claim against DMG and its motion

to dismiss the claim against it should be denied as moot. The University does allege that

 Dr. Good and Dr. Kaminski were under certain fiduciary duties to the University,

including, without limitation, duties of loyalty, trust, honesty, and disclosure, which,

4

The same is true as to whether requirements of grant funding provide a bases for breach

given that the specific terms are not alleged. Thus, the court cannot determine if grant terms vest

intellectual property rights in the University or the professors who develop the property even if

appropriate in determining on a motion to dismiss rather than a motion for summary judgment.

Page 16 - FINDINGS AND RECOMMENDATION
among other things, required them not to misappropriate the University's resources

for their own benefit, make full disclosure to the University of all material facts, and

to otherwise act in the utmost good faith and honesty toward the University in all

matters connected with Dr. Good and Dr. Kaminski's work with the University.

The University relied upon Dr. Good and Dr. Kaminski to manage the University

resources, University research, University training and University employees related

to DIBELS and IDEL, and Dr. Good and Dr. Kaminski were bound to act in good

faith and with due regard to the interests of the University.

By their actions or omissions, Dr. Good and Dr. Kaminski acted in disregard of their

fiduciary duty owed to the University by committing the foregoing unlawful and/or

fraudulent actions, by breaching their agreements and the terms of their employment

with the University, by placing their own interests above those of the University in

their position as professors at the University and by misleading the University

through the above-referenced acts and/or omissions.

First Amended Answer (#40) at ¶¶ 175-177.

To recover for breach of fiduciary duty, the University must plead the existence of a

fiduciary relationship. Evergreen West Bus. Ctr., LLC v. Emmert, 254 Or.App. 361, 367 (2012). 

Good and Kaminski argue that the University has failed to adequately allege any fiduciary

relationship beyond the mere fact that they were, at various times, attending graduate school at or

employed by the University.

A fiduciary duty exists under Oregon law only where the parties are in a "special

relationship" in which one party is obliged to pursue the other party's best interests. Conway v.

Pacific University, 324 Or. 231, 237 (1996). In determining whether such a relationship exists:

The focus [of the inquiry] is not on the subject matter of the relationship, such as one

party's financial future; nor is it on whether one party, in fact, relinquished control

to the other. The focus instead is on whether the nature of the parties' relationship

itself allowed one party to exercise control in the first party's best interests. In other

words, the law does not imply a tort duty simply because one party to a business

relationship begins to dominate and to control the other party's financial future.

Rather, the law implies a tort duty only when that relationship is of the type that, by

its nature, allows one party to exercise judgment on the other party's behalf.

Bennett v. Farmers Ins. Co., 332 Or. 138 (2001).

Page 17 - FINDINGS AND RECOMMENDATION
Such relationships include certain professional relationships in which one party has a

professional obligation to protect the interests of the other party, or contractual relationships of a

kind that give rise to a status upon which the general law predicates a duty independent of the terms

of the contract. Conway 324 Or. at 239. 

In Fenn v Yale University, 283 F.Supp.2d 615, 624 (D.Conn. 2003), the court determined

Yale had a policy that "all inventions ... shall be reported promptly in writing to the provost through

the director of the Office of Cooperative Research" and that "[i]f the University decides that it does

not wish and has no legal obligation to participate in the patenting or licensing of an invention, the

University may release to the inventor the University's interest in the invention, and the inventor

shall then be free to dispose of the invention as he or she wishes." The policy had royalty sharing

provisions with the majority of the share going to Yale. The court determined that plaintiff was

bound by the policy. Id. at 629. The court also determined that Yale and Fenn had a special

relationship of trust and confidence that was different from the usual employer-employee

relationship. Yale supported Dr. Fenn's research in the form of facilities, funding, and staff and

entrusted Dr. Fenn with the proper management of its NIH grants in the reasonable expectation that

Dr. Fenn would use his superior knowledge, skill and expertise to act in good faith and with

complete candor and undivided loyalty in connection with the University's research funds and

intellectual property. The court noted that Dr. Fenn knew more about the value and patentability

of inventions he developed than anyone else, and Yale necessarily sought out and reasonably relied

on his expertise in evaluating such inventions. Similarly, Yale was entirely dependent on Dr. Fenn,

the inventor, to provide truthful and forthright information regarding the progress and outcome of

his federally funded research so that Yale could fulfill its reporting obligations to the NIH pursuant

to the Bayh–Dole Act. Id. at 632. Thus, when Fenn failed to promptly disclose his invention and

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actively discouraged Yale from preparing and filing a patent application by the deadline while

preparing and filing his own patent at the same time and then licensing it to a third party, Fenn

breached his fiduciary duty. Id.

Here, the University alleges it provided Good and Kaminski with facilities, funding, and staff

and entrusted them with grant money. In addition, the University alleges that the agreements,

directives, etc. establish that the intellectual property developed with such resources belong to the

University. Counter-defendants assert there is no such reservation of property and at best there is

only an agreement to assign at some future date. Again, these are issues that appear beyond the

scope of a motion to dismiss given the lack of specificity regarding the agreements, etc. Because

the University should amend its breach of contract claim to provide greater detail, the motion to

dismiss the breach of fiduciary duty claim should be denied for now. Even then, it appears that

whether a fiduciary duty exists will be a fact specific inquiry that probably should be addressed in

a motion for summary judgment or at trial.

D. Tenth Counterclaim - Unjust Enrichment

The University alleges that counter-defendants obtained funds, access to funds, and/or illgotten gains of funds, including intellectual property belonging to the University. The university

seeks a return of the "ill-gotten gains that rightfully belong to" it via imposition of a constructive

trust. To the extent this claim seeks the intellectual property itself, the claim is preempted by the

Copyright Act for the reasons stated above. To the extent the claim seek royalties that flow from

those copyrights, it is also preempted. See Zito, 267 F.Supp.2d at 1027 (While a claim for unjust

enrichment may require proof that a benefit was conferred on the defendant, where the unjust

enrichment arises from defendants' unauthorized use of a copyrighted work, such an extra element

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does not qualitatively change the rights at issue, the rights the plaintiff holds in the copyrighted

work, and does not avoid preemption.). 

To the extent the claim seeks a return of specific grant money, the claim fails to clearly

identify the money. See Tupper v. Roan, 349 Or. 211, 222 (2010) (a constructive trust can attach

only to items and money that the evidence clearly identifies as rightfully belonging to the plaintiff,

or to the identifiable products of, or substitutes for, those items and money). The counterclaim fails

to clearly identify the grant money or its substitute. The motion to dismiss the unjust enrichment

claim should be granted with leave to replead the loss of clearly identified non-intellectual property.

E. Eleventh Counterclaim - Accounting

The University alleges that counter-defendants have failed to account for the use and location

of University funds and or ill-gotten gains. This claim depends on the existence of a fiduciary

relationship. Assuming that an amended complaint will provide a sufficient basis for plausible

breach of fiduciary duty claim, then the need to prove an element, breach of a special relationship,

changes the nature of the action so that it is qualitatively different from a copyright infringement

claim and allows the claim to survive. The statute of limitations issue is premature at this time due

to the lack of specificity in the complaint.

F. Improper Joinder

Counter-defendants argue that Good and Kaminski are not parties to this action and that the

counterclaims improperly join them because the University did not file a third-party complaint and

did not file a motion to join. However, although motions are often filed, Fed. R. Civ. P 13(h) does

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not require a motion to name a nonparty as a defendant to a counterclaim. Wright, Miller and Kane,

Federal Practice and Procedure, § 1434. Additionally, joinder is appropriate under Fed. R. Civ. P.

20(a)(2) because Good and Kaminski are alleged to be jointly and severally liable and there are

common questions of law and fact. The motion to dismiss for improper joinder should be denied.

MOTION FOR SUMMARY JUDGMENT

At its heart, this action appears to be more about money rather than the integrity and

ownership of DIBELS products. It appears that the University of Oregon enjoyed a long and

lucrative relationship with DMG through the operation of its Data System to analyze DIBELS

assessments and DMG profited from selling the DIBELS products developed, at least in part, with

University resources. In 2011, when DMG launched DIBELS NEXT, whether because of an intent

to take all of the profits (including payments for analyses through DIBELSNet) or through faulty

integration of DIBELS NEXT with the University's Data System, the relationship apparently was

no longer mutually beneficial. Accordingly, the battle over the ownership of DIBELS intellectual

property heated up with fights at the Trademark Trial and Appeals Board and now in court. 

Accordingly, DIBELS moves for summary judgment as to the University's trademark counterclaims

and the copyright counterclaims, based on the statute of limitations and acquiescence/laches. It is

not clear at this early stage of the proceedings if equity bars any claims, but summary judgment is

appropriate as to the copyright claims based on the statute of limitations.

A. Laches and Acquiescence

The University alleges trademark infringement and false designation of Origin under the

Lanham Act with respect to the DIBELS and IDEL marks. The University also alleges that the

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DMG trademark registrations should be canceled and seeks damages under the Lanham Act. The

University similarly alleges common law claims for declaratory relief that its use of the marks are

senior to DMG's use and unfair competition by DMG's trading on the University's goodwill

associated with the DIBELS marks and IDEL marks.

Counter-defendants assert that the University's claims are too late. The Lanham Act permits

a person to petition to cancel a trademark registration at any time if its registration was obtained

fraudulently. 15 U.S.C. § 1064(3). Nonetheless, "equitable principles of laches, estoppel, and

acquiescence, where applicable may be considered and applied." 15 U.S.C. § 1069.

The Trademark Trial and Appeal Board (TTAB) has determined that laches and acquiescence

are not available where cancellation is based on fraud. See Marshak v. Treadwell, 240 F.3d 184,

193, n. 2. The Circuit Court for the D.C. Circuit, however, disagrees:

The words "[a]t any time" demonstrate only that the act imposes no statute of

limitations for bringing petitions. Those words have nothing to do with what

equitable defenses may be available during cancellation proceedings.

Pro-Football, Inc. v. Harjo, 415 F.3d 44, 48 (D.C.Cir. 2005). However, the equitable defense may

not be available in cases of continuing and inevitable likelihood of confusion where the registrant

engages in fraud and deceit. See Bridgestone/Firestone Research, Inc. v. Automobile Club De

L'Quest De La France, 245 F.3d 1359, 1363 (Fed. Cir. 2001) (Although there are cases where a

continuing and inevitable likelihood of confusion led the court to permit tardy challenge to a

registered mark, the equitable defenses of laches and estoppel are not barred in false suggestion

cases, absent misrepresentation or deceit). The Ninth Circuit has not specifically addressed the

issue, but in In Re Beatty, 306 F.3d 914, 922-26, (9th Cir. 2002) it found that laches may be

available to a non-dischargeability claim under the section 523(a)(3)(B) of the bankruptcy code

where Bankruptcy Rule 4007(b) provides that such complaint by unscheduled creditors may be filed

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"at any time." But the court also noted that the provisions also direct bankruptcy courts 

to be especially solicitous to § 523(a)(3)(B) claimants when laches is invoked, and

to refuse to bar an action without a particularized showing of demonstrable

prejudicial delay. Just as there is a strong presumption that a delay is reasonable for

purposes of laches when a specified statutory limitations period has not yet lapsed,

there should be a similar presumption in § 523(a)(3)(B) cases. A party asserting

laches as a defense to a complaint filed under § 523(a)(3)(B) must make a heightened

showing of extraordinary circumstances and set forth a compelling reason why the

action should be barred. See Jarrow Formulas, 304 F.3d at 835 (“If the plaintiff filed

suit within the analogous limitations period, the strong presumption is that laches is

inapplicable.”); Shouse v. Pierce County, 559 F.2d 1142, 1147 (9th Cir.1977) (“It is

extremely rare for laches to be effectively invoked when a plaintiff has filed his

action before limitations in an analogous action at law has run.”).

Id. at 926.5

Because of the unique treatment of governmental entities under Oregon law for purposes of

the state statute of limitations, which are applicable for the reasons stated infra, the presumption of

unreasonableness does not come into play in this case. Accordingly, the court should decline to

make such a factual determination as to unreasonableness and fraudulent conduct at this very early

stage of the proceedings.

Laches is an equitable time limitation on a party's right to bring suit. Boone v. Mech.

Specialties Co., 609 F.2d 956, 958 (9th Cir. 1979). Laches is a valid defense to Lanham Act claims,

including those for false advertising. E.g., Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813, 820–21

(7th Cir. 1999); GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1209 (9th Cir. 2000)

(considering laches defense to a trademark infringement suit under § 43(a)). A party asserting

5

The University asserts that the Ninth Circuit favorably cited the Marshak case. 

However, the In re Beatty court actually stated that the cases reaching the conclusion that the "at

any time" language in statutes negates a laches defense do "so with virtually no analysis as to

why such language would eliminate the application of the equitable doctrine, instead simply

assuming that the absence of a time limitation also results in the absence of a laches limitation." 

In Re Beatty, 306 F.3d at p. 922-23. 

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laches must show that it suffered prejudice as a result of the plaintiff's unreasonable delay in filing

suit. Couveau v. Am. Airlines, Inc., 218 F.3d 1078, 1083 (9th Cir. 2000).

The equitable defense of acquiescence similarly requires unreasonable delay with the

addition of an active rather than passive consent to the alleged violation. Seller Agency Council,

Inc. v. Kennedy Center for Real Estate Educ., 621 F.3d 981, 989 (9th Cir. 2010).

While laches and the statute of limitations are distinct defenses, a laches determination is

made with reference to the limitations period for the analogous action at law. If the plaintiff filed

suit within the analogous limitations period, the strong presumption is that laches is inapplicable.

E.g., Shouse v. Pierce County, 559 F.2d 1142, 1147 (9th Cir. 1977). However, if the claim is filed

after the analogous limitations period has expired, the presumption is that laches is a bar to suit.

Jarrow Forumulas, 304 F.3d at 837. Since the Lanham Act does not provide its own limitations

period, the applicable state statute of limitation applies. Although the counter-defendants assert that

only the limitation period itself is applicable, given the equitable nature of the defense, the court

should also borrow any other statute applicable to determining when an action is timely commenced

including the statute's exemption of certain parties from the limitation. Accordingly, while the

applicable limitations period is found at O.R.S. 12.110(1) for actions sounding in fraud, which is two

years, the Oregon legislature has determined that such limit shall not apply to actions brought in the

name of the state or other public corporation therein or for the state's benefit. O.R.S. § 12.250. This

is not just a gap filling provision because the issue for the court is to determine what amount of delay

is reasonable, not merely the applicable limitations period. This is especially true where the federal

courts are in disagreement as to the applicability of laches at all to cancellation claims under the

Lanham Act. Accordingly, merely because the general statute of limitation for actions sounding in

fraud has run, the court should decline to presume that laches bars the claims. The University of

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Oregon is now a university with its own governing board, but a university with a governing board

is a governmental entity performing governmental functions and exercising governmental powers. 

O.R.S. § 352.033. So even though the University "is not considered a unit of local or municipal

government or a state agency, board, commission or institution for purposes of state statutes or

constitutional provision," id., it may still be an instrumentality of the state and thus any action it

brings is for the benefit of the state. Cf. Clarke v. Oregon Health Sciences University, 343 Or. 581,

600 (finding OHSU an instrumentality of the state even though state statute stated that it shall not

be considered a unit of local or municipal government or a state agency for purposes of state statutes

or constitutional provisions). However, the Clark case noted that OHSU was specifically designated

as a public corporation which is a provision lacking in the University of Oregon's case. Nonetheless,

Prior to July 1, 2014, the University was part of the Oregon University System and expressly an

instrumentality of the State. See O.R.S. § 351.011. Accordingly, during the applicable time period

for determining the reasonableness of the University seeking to assert its claims for cancellation, the

University was clearly within the provisions of O.R.S. § 12.250 because it instituted the TTAB

proceedings prior to July 1, 2014. Accordingly, the applicable statute of limitation does not

establish a presumption of laches because during the time period at issue, the University of Oregon

was exempted from such limitation.6

6

This is not to say that the University may forever sit on its hands while its alleged

trademark rights are violated. Laches still applies, just without the presumption that the running

of the limitations period precludes asserting those rights. At this stage of the proceedings, the

court cannot determine whether the University is estopped from asserting it has a valid

trademark or that DMG has an invalid trademark in the DIBELS products. By the same token,

the University cannot claim that because it is exempt from the limitations period, there is a

presumption that laches is inapplicable. The court should only find that the exemption for state

entities eliminates the presumptions associated with the running of the generally applicable

limitations period.

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A determination of whether a party exercised unreasonable delay in filing suit consists of two

steps. First, the court assesses the length of delay, which is measured from the time the University

knew or should have known about its potential cause of action. See Portland Audubon Soc'y v.

Lujan, 884 F.2d 1233, 1241 (9th Cir. 1989). Second, the court decides whether the University's

delay was reasonable. See Danjaq v. Sony Corp., 263 F.3d 942, 954–55 (9th Cir. 2001). As noted,

the reasonableness of the University's delay is considered in light of the time allotted by the

analogous limitations period, but resort to Oregon's limitations period provides no presumption

either way. The court also considers whether the University has proffered a legitimate excuse for

its delay. See Danjaq, 263 F.3d at 954–55 (outlining several legitimate excuses for delay in filing

suit). Importantly, the Danjaq court noted that delay is reasonable when its purpose is to determine

whether the scope of proposed infringement will justify the cost of litigation. Id. at 954. But the

delay is not permissible when its purpose is to capitalize on the value of the alleged infringer's labor,

by determining whether the infringing conduct will be profitable. Id.

Here, as noted, the complicated relationship between DMG, Good and Kaminski on the one

hand throughout the years, especially when both Good and Kaminski worked at the University, and

the University on the other hand was mutually beneficial until about 2011. The University states

that to the extent it was aware of infringement prior to 2011, it felt that harm was too small to justify

the costs of litigation. While, there is some evidence to show that the goodwill of the University

was being exploited at least in certain advertising by DMG, the record is not clear at this stage as

to whether the University or DMG actually sought to capitalize on the alleged infringing conduct

until the product was profitable--it was profitable for both up until 2011.

While there is significant evidence of the University's awareness of the allegedly infringing

conduct, see, e.g., Declaration of Roland Good (#52) at Ex. 11 (Schenkel memo dated January 31,

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2005 asserting University's rights have been infringed and failure to follow through on 2001

investigation may amount to acquiescence ); Ex. 16 (drafted but unexecuted intellectual property

agreement with DMG in December of 2005).7

 Because there are issues of fact as to the

reasonableness of the delay, the court need not reach the issue of prejudice. Accordingly, the court

should deny summary judgment as to the cancellation claims based on laches or acquiescence.8

Similarly, to the extent laches and acquiescence apply to the common law trademark claims, the

issue is not ripe for summary judgment.9

In addition, counter-defendants' assertion that the University's request for damages pursuant

to its cancellation claim is time-barred is not ripe for summary judgment because, as note above, the

applicable statute of limitations during the time period at issue did not apply to the University. 

Contrary to counter-defendants' argument, the court should borrow all applicable provisions from

7

DMG also asserts that the University acted as if DMG had valid trademarks and

copyrights by inserting the User Agreement on the downloads page of its website, but the record

is not amenable to a finding as a matter of law at this stage as to whether this was an act

attributable to the University or attributable to DMG improperly engaging a University employee

to breach his agreement with the University to place the notice.

8

The court also need not reach the issue of the applicability of the Morehouse Doctrine to

the DIBELS Next registration and DIBELSNet registration.

9

For purposes of trademark infringement courts generally consider the following factors

as to whether laches will bar relief: 1. strength and value of trademark rights asserted; 

2. plaintiff's diligence in enforcing the mark; 3. harm to the senior user if is relief denied; 4. good

faith ignorance by the junior user; 5. competition between the senior and junior users; and 6.

extent of harm suffered by the junior user because of the senior user's delay. E-Systems, Inc. v.

Monitek, Inc., 720 F.2d 604, 607 (9th Cir. 1983). At this stage of the proceedings, the court

simply cannot determine as a matter of law the consumer's identification of the marks with either

party, or the reasonable diligence in enforcing the mark given how both parties benefitted from

the way the products were presented in the market as perhaps being developed by both parties

and offered by both. Thus, the court cannot determine the harm to the senior user, the good faith

by the junior user, the competition between the two and the extent of harm absent further

development of the record.

Page 27 - FINDINGS AND RECOMMENDATION
Oregon's limitations statute including the exemption of a state entity to the limitation period for

fraud type actions.

B. Statute of Limitations and the Copyright Claims

The University alleges two copyright claims: (1) infringement related to the DIBELS,

DIBELS 6th Edition, DIBELS Next, and DIBELSNET copyrights, and (2) declaratory relief of noninfringement of DMG's alleged copyrights. A copyright action must be commenced within three

years from the date the claim accrued. 17 U.S.C. § 507(b). The counter-defendants assert it has

been openly exercising ownership of the disputed materials for a far longer period and that the

claims are therefore time-barred.

Copyright claims accrue, with respect to claims of infringement centered on ownership rather

than copying, when plain and express repudiation is communicated to the claimant. Seven Arts

Filmed Entertainment Ltd. v. Content Media Corp. PLC, 733 F.3d 1251, 1254 (9th Cir. 2013). The

counter-defendants assert several acts of repudiation via communication to the University's Office

of Technology and Transfer (dated 2001)(ECF #s 62-2 and 62-3), open nationwide sales of DIBELS

products without payment of royalties to the University, an intellectual property disclosure dated

July 29, 2005 (ECF #52-13 at p. 1), a term sheet drafted by University counsel in 2005 (ECF #52-

14) draft intellectual property agreement created by the Office of Technology and Transfer in 2005

(ECF #52-15), another draft intellectual property agreement from 2005 (ECF #52-16), a conflicts

of interest disclosure dated January 13, 2006 (ECF #52-18), a conflict of interest disclosure dated

September 19, 2007 (ECF# 52-19), and the educational use agreement posted with the download of

the DIBELS product on the University's website for about eight years. (ECF #52-20). While there

is an issue of fact regarding imputing knowledge of the user agreement to the University, there is

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no dispute of the University's knowledge of the remaining items. Moreover, the University

participated in a hearing before Congress in 2007 in which Good discussed ownership of DIBELS

6th edition.

The counter-defendants assert sole ownership of the disputed works. The repudiations in the

documents go beyond mere blanket statements of ownership to outright hostility to the University's

claimed ownership of the DIBELS products. DMG expressly notes primary DIBELS 5th edition

ownership and ownership of prior editions including TORF passages and DORF passages,

ownership of DIBELS 6th edition and DORF passages (specifically noting solo development by

DMG). Indeed, in conflict disclosures, Good expressly claimed DMG ownership of the copyright

to DIBELS 6th, IDEL 7th and for training and consultation materials, DIBELS 2008 edition,

DIBELS DEEP, and DIBELS Survey. These statements to the University along with the open

selling of the product without paying royalties establish that no finder of fact could not conclude that

DMG plainly and expressly repudiated University ownership and communicated such to the

University. Indeed, the Schenkel memo establishes that the University was aware in 2005 of alleged

copyright infringement and discussed whether to seek royalty sharing, register the copyright in the

name of the State of Oregon, or negotiate a license agreement with DMG for use of DIBELS. 

Although there is an issue of fact as to whether the University received some attribution for its work

on the DIBELS products in advertising, there is no dispute that DMG did not pay royalties.10 The

motion for summary judgment should be granted as to the copyright infringement claim. With

respect to the claim for a declaration of non-infringement, to the extent it is based on the University's

own assertion of ownership of the intellectual property, the motion should be granted and otherwise

10The fact that DMG did not register its copyrights until 2009 does not negate a finding

that it repudiated the University's claim to own the products prior to that time.

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denied.

CONCLUSION

For the reasons stated above, counter-defendants' motion to dismiss (#47) should be granted

in part and denied in part as follows:

(1) The motion to dismiss the conversion claim should be granted to the extent it seeks

to assert a claim for the DIBELS intellectual property and trademarks, but denied to the extent it

seeks to assert a claim for the underlying grants and other tangible University resources used to

develop such intellectual property. The court should require more specificity with regard to the

remaining portions of the claim, especially in light of the long period of time for which the

counter-defendants are alleged to have engaged in such fraud to accomplish the alleged conversion.

(2) The motion to dismiss the breach of contract and covenants of good faith and fair

dealing claim should be denied, but the motion to make it more definite and certain should be

granted. The University should file an amended breach of contract claim identifying the precise

purported terms, regulations, directives, etc. that were breached and by whom and when along with

the elements of lack of breach on the part of the University and resulting damage. Morever, to the

extent the breach allegations are supported by the allegations of fraud spread throughout the

counterclaims, the claims must be alleged with particularity.

(3) Because the University should amend its breach of contract claim to provide greater

detail, the motion to dismiss the breach of fiduciary duty claim should be denied for now but with

greater specificity provided in accordance with the amended breach of contract claim.

(4) The motion to dismiss the unjust enrichment claim should be granted with leave to

replead the loss of clearly identified non-intellectual property.

(5) Assuming that an amended complaint will provide a sufficient basis for plausible

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breach of fiduciary duty claim, the motion to dismiss the accounting claim should be denied for now.

(6) The motion to dismiss for improper joinder should be denied.

In addition, counter-defendants' motion for partial summary judgment (#48) should be

granted in part and denied in part as follows: 

(1) The motion for summary judgment as to the trademark claims based on laches, 

acquiescence, or the statute of limitations should be denied.

(2) The motion for summary judgment should be granted as to the copyright infringement

claim. With respect to the claim for a declaration of non-infringement, to the extent it is based on

the University's assertion of ownership of the intellectual property, the motion should be granted and

otherwise denied. 

This recommendation is not an order that is immediately appealable to the Ninth Circuit

Court of appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate

Procedure, should not be filed until entry of the district court's judgment or appealable order. The

parties shall have fourteen (14) days from the date of service of a copy of this recommendation

within which to file specific written objections with the court. Thereafter, the parties shall have

fourteen (14) days within which to file a response to the objections. Failure to timely file objections

to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right

to de novo consideration of the factual issues and will constitute a waiver of a party's right to

appellate review of the findings of fact in an order or judgment entered pursuant to this

recommendation.

DATED this 27th day of April 2015.

s/Thomas M. Coffin 

THOMAS M. COFFIN

United States Magistrate Judge

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