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General Motors LLC v. Dorman Products Inc.

United States District Court, E.D. Michigan, Southern Division

March 1, 2017

GENERAL MOTORS LLC., ET AL., Plaintiffs,
v.
DORMAN PRODUCTS, INC., ET AL., Defendants.

          ORDER DENYING DEFENDANTS' PARTIAL MOTION TO DISMISS PLAINTIFFS' SECOND AMENDED COMPLAINT [DOC. 20]

          HONORABLE VICTORIA A. ROBERTS UNITED STATES DISTRICT JUDGE.

         I. INTRODUCTION

         In August 2015, Plaintiffs General Motors LLC and GM Global Technology Operations LLC (“Plaintiffs” or “GM”) filed suit against Defendants Dorman Products Inc. (“Dorman”) and Electronics Remanufacturing Company LLC (“ERC”; collectively “Defendants”), alleging copyright infringement under the Copyright Act, 17 U.S.C. 101 et seq., and unlawful circumvention under the Digital Millennium Copyright Act, 17 U.S.C. 1201 et seq.

         In September 2016, this Court granted in part Defendants' Motion to Dismiss Plaintiffs' Amended Complaint because the complaint did not meet Rule 12(b)(6)'s plausibility standards. The Court also granted Plaintiffs an opportunity to cure the deficiencies. Plaintiffs submitted a Second Amended Complaint in October, adding two more counts (trade secret misappropriation and unlawful trafficking under the Digital Millennium Copyright Act).

         Defendants filed another Motion to Dismiss, currently before this Court, seeking to dismiss Count I (copyright infringement) with respect to four out of Plaintiffs' five copyrighted works, and Count II (illegal circumvention of security measures) in its entirety.

         Defendants' Partial Motion to Dismiss Plaintiffs' Second Amended Complaint (ECF No. 20) is DENIED.

         II. FACTUAL BACKGROUND

         For the purposes of a Rule 12(b)(6) motion, “the complaint is viewed in the light most favorable to the plaintiff, the allegations in the complaint are accepted as true, and all reasonable inferences are drawn in favor of the plaintiff.” See Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). Plaintiffs, automobile manufacturers, have registered valid copyrights in the software and computer files which run on the control modules installed in their vehicles, and allege that Defendants are illegally stealing and reselling this software. (Plaintiffs include copies of five of their copyright registrations as an exhibit with their complaint; it may be considered as part of the pleading for purposes of a motion to dismiss. See Commercial Money Ctr., Inc. v. Illinois Union Ins. Co., 508 F.3d 327, 335 (6th Cir. 2007) (“documents attached to the pleadings become part of the pleadings and may be considered on a motion to dismiss.”))

         GM alleges that Defendants Dorman and ERC worked together to violate copyright law by: (1) illegally stealing GM's copyrighted software; and (2) installing it into blank control modules, and then reselling the modules to the general public, allowing users to avoid paying GM for the software. GM believes that Dorman purchases blank control modules from an authorized GM distributor and then sends these modules to ERC. Individuals associated with ERC created accounts on websites owned by GM, which allow paid subscribers to access GM software. ERC copies this software from GM's websites in violation of user agreements. GM says ERC then programs Dorman's modules with unauthorized and infringing copies of GM's copyrighted software and sends the programmed modules back to Dorman, which resells them to the general public, advertising them as “pre-programmed.”

          Dorman also manufactures, advertises, and sells a product called a “Software Transfer Tool.” GM alleges this tool allows users to access, copy, and transfer GM's copyrighted software to other modules, circumventing GM's technological protection measure in violation of law.

         GM acquired both a pre-programmed module and a Software Transfer Tool from Dorman. By inspecting and testing the module, GM confirmed that it contained an unauthorized copy of GM software, covered by copyright registration number TXu-1-917-502. By testing the Software Transfer Tool, GM confirmed that it allows users to bypass security measures to illegally transfer copyrighted software.

         III. Legal Standard

         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Defendants seek to dismiss the majority of Count I and the entirety of Count II under Fed.R.Civ.P. 12(b)(6). To survive a 12(b)(6) motion to dismiss, “a complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face.” R.S. Scott Associates, Inc. v. Timm Const. Co. LLC, 2014 WL 7184448 at *3 (E.D. Mich. 2014). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 570). While the court is required to take all factual allegations as true and view the complaint in the light most favorable to the plaintiff, the court does not have to accept legal conclusions as true. Id. Legal conclusions must be backed by plausible factual assertions.

         To establish a plausible claim of copyright infringement, a plaintiff must allege: 1) ownership of a valid copyright, and 2) copying of constituent elements of the copyrighted work that are original. Ford Motor Company v. Autel U.S. Inc., 2015 WL 5729067 at *3; see also Ross, Brovins & Oehmke, P.C. v. Lexis Nexis Group,463 F.3d 478, 482, 2006 WL 2639749 (6th Cir.2006). While other courts in this district have held that copyright infringement claims require a heightened pleading standard under National Business Development Services, Inc. v. American Credit Education & Consulting, Inc., 299 F. App'x 509 (6th Cir. 2008), this Court has interpreted National Business as consistent with the plausibility standard set forth in Twombly ...


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