[00:00:04] Speaker 00:
Good morning, Your Honor.

[00:00:05] Speaker 01:
Good morning.

[00:00:08] Speaker 00:
We have an unusual case here.

[00:00:11] Speaker 00:
Two parties make a claim for copyright infringement and for various related claims under a diversity jurisdiction.

[00:00:23] Speaker 00:
One of the plaintiffs

[00:00:25] Speaker 00:
then contacts the court and says, I don't want to sue anymore.

[00:00:29] Speaker 00:
I'm not interested in this case.

[00:00:32] Speaker 00:
Here are my reasons.

[00:00:33] Speaker 00:
I never even authorized this case, which results in dismissal of the case because the court finds that the remaining plaintiff lacks standing.

[00:00:50] Speaker 00:
Why does it lack standing?

[00:00:52] Speaker 00:
Because a series of rather complex licensing agreements and settlement agreements are unclear.

[00:01:02] Speaker 00:
But according to the district court, they leave the remaining plaintiff without a true copyright interest other than the enforcement right, a naked right to sue.

[00:01:20] Speaker 00:
The problem is the plaintiffs that withdrew, withdrew under pretenses that are not only disputed by the remaining plaintiffs on the record and under oath, but that another court, considering the same documents, in a litigation between the two plaintiffs in this case, another federal court,

[00:01:46] Speaker 00:
has concluded that not only is there more than a naked right to sue under the remaining plaintiff's suite of rights under these complicated agreements, but there is, in fact, if anything, there's no copyright in the withdrawing plaintiff.

[00:02:11] Speaker 00:
Nonetheless, the district court here dismissed the case.

[00:02:15] Speaker 00:
Our client, therefore, seeks a remand for purposes of, at the very least, an evidentiary hearing on the circumstances concerning the withdrawal of the other plaintiff, Dr. Marisky, which are, again, contradicted under oath by his former attorney in the matter,

[00:02:43] Speaker 00:
And also for the district court to explain why, although it acknowledged the holding of the federal court in Tacoma with respect to the interpretation of the party's respective rights under their agreements, why the central district nonetheless disregarded

[00:03:09] Speaker 00:
the holding of that case, rather than at least explaining why it did not hold it, why it did not find it persuasive, much less controlling.

[00:03:22] Speaker 01:
Let's assume that we agree that there was error in finding the copyright was transferred.

[00:03:32] Speaker 01:
As I understand your argument, the district court somehow misunderstood

[00:03:36] Speaker 01:
your complaint as alleging a traditional copyright claim of going now to the merits of the dismissal that the district court basically should have analyzed it under the DMCA.

[00:03:50] Speaker 01:
Did I understand your position correctly?

[00:03:52] Speaker 00:
I think the use of the term DMCA here is a little bit, it is somewhat confusing.

[00:03:57] Speaker 00:
At the end of the day, this is a copyright claim.

[00:04:01] Speaker 01:
Well, your blue brief, as I understand it, took the position that the complaint actually alleged Charité violated the DMCA's prohibition on the removal or alteration of copyright management.

[00:04:14] Speaker 01:
So you're saying the district court mischaracterized kind of the thrust of your claim, and it should have been analyzed under the DMCA.

[00:04:22] Speaker 00:
Well, certainly on the merits, that would have been the appropriate analysis, yes.

[00:04:27] Speaker 01:
Right so that's why I said let's set aside the whole risky issue and that there is standing the district got it wrong.

[00:04:36] Speaker 01:
Now I'm getting to the merits of your argument that the district court should have addressed BMCA but I don't see that

[00:04:43] Speaker 01:
as being a part of, or at least an integral part of, the complaint and the briefing.

[00:04:48] Speaker 01:
So what would have alerted the district court to the fact that it should have looked at the DMCA and done that analysis?

[00:04:55] Speaker 00:
Well, that, Your Honor, that wasn't the ground on which the dismissal took place.

[00:05:01] Speaker 00:
The court dismissed the case on grounds of standing.

[00:05:07] Speaker 00:
We are seeking a reversal of that ruling.

[00:05:14] Speaker 00:
I meant to say, by the way, that I wanted to reserve three minutes for a bottle.

[00:05:21] Speaker 00:
I think we're ready.

[00:05:23] Speaker 01:
Well, I thought that the parties were splitting time.

[00:05:25] Speaker 00:
Right.

[00:05:26] Speaker 00:
Well, we're not splitting.

[00:05:28] Speaker 00:
I'm splitting time with my colleague.

[00:05:29] Speaker 01:
Oh, I see.

[00:05:30] Speaker 01:
OK.

[00:05:30] Speaker 00:
OK.

[00:05:31] Speaker 00:
So this is counting down my seven minutes.

[00:05:32] Speaker 00:
Right.

[00:05:33] Speaker 01:
Thank you.

[00:05:34] Speaker 01:
It's just that I'm trying to understand your position the way that this was briefed.

[00:05:38] Speaker 01:
Yes, standing is a key part of it, but the district court did make a finding

[00:05:42] Speaker 01:
that there was no allegation of a traditional copyright violation, that you didn't win on that as well.

[00:05:48] Speaker 01:
So I wanted to explore really your position on that.

[00:05:51] Speaker 00:
Well, let me just point out, Your Honor, that

[00:05:55] Speaker 00:
Placing that aside for a moment, another ground to this appeal is that the court also dismissed the diversity claims.

[00:06:03] Speaker 00:
And strangely, the appellee has stated that there is no allegation of diversity jurisdiction, but there is.

[00:06:08] Speaker 00:
It's right in the Second Amendment complaint.

[00:06:10] Speaker 01:
Let me get the answer to my question, which is that the district court made a finding that there was no allegation or failure to sufficiently allege a traditional copyright violation.

[00:06:20] Speaker 01:
You're not challenging that part of it.

[00:06:22] Speaker 00:
Your Honor, I actually think that my colleague is going to be in a better position to answer that question.

[00:06:28] Speaker 00:
All right.

[00:06:28] Speaker 01:
All right.

[00:06:29] Speaker 01:
So getting to diversity jurisdiction, do you agree that ASS currently pled the allegations insufficient?

[00:06:39] Speaker 00:
No.

[00:06:40] Speaker 00:
No.

[00:06:41] Speaker 00:
There's no reason we would agree with that, Your Honor.

[00:06:43] Speaker 00:
The allegations, the district court did not, the district court

[00:06:51] Speaker 00:
framed the dismissal of the non-copyright claims as declining to take, within its discretion, to take on supplemental, to retain supplemental jurisdiction.

[00:07:05] Speaker 00:
But this was a diversity claim, where the jurisdictional minimum was pleaded.

[00:07:11] Speaker 00:
And there are a number of other.

[00:07:12] Speaker 02:
But those are the state claims, I guess.

[00:07:14] Speaker 02:
I think Judge, you were just asking about the copyright claims.

[00:07:18] Speaker 00:
Well, I'm sorry, but I thought the question now was about the diversity claim.

[00:07:22] Speaker 01:
Yeah.

[00:07:23] Speaker 00:
OK.

[00:07:23] Speaker 01:
That's where I was going.

[00:07:24] Speaker 00:
Right.

[00:07:25] Speaker 01:
Because you're criticizing the court for declining to exercise supplemental jurisdiction, right?

[00:07:30] Speaker 01:
know what we're actually criticizing the court for failing to to retain diversity jurisdiction right once the federal claims are dismissed the district court has to basically exercise supplemental jurisdiction over the state claims and you're saying there's diversity jurisdiction alleged over the state claim and the court aired in

[00:07:51] Speaker 01:
really not analyzing and exercising diversity jurisdiction.

[00:07:55] Speaker 01:
But as I see the Second Amendment complaint, I don't think that there's sufficient allegations to establish diversity jurisdiction.

[00:08:07] Speaker 00:
Certainly diversity jurisdiction is alleged in the Second Amendment complaint.

[00:08:13] Speaker 00:
The question of whether the claims themselves are sufficient as a matter of law under 12b6 is not addressed in this decision.

[00:08:23] Speaker 04:
Specify where diversity jurisdiction is alleged.

[00:08:26] Speaker 00:
Yes, that would be in ER 96.

[00:08:30] Speaker 00:
I don't have that in front of me.

[00:08:32] Speaker 04:
Paragraph 11.

[00:08:32] Speaker 04:
So read to me what it says.

[00:08:36] Speaker 00:
Paragraph 11, ER 36.

[00:08:49] Speaker 00:
I'm sorry, it's 96.

[00:09:01] Speaker 00:
Paragraph 11.

[00:09:02] Speaker 00:
Additionally, this court has original jurisdiction over this controversy for misappropriation of trade secrets claims pursuant to 18 USC, 1836 C, and diversity jurisdiction pursuant to 28 US, 1332, as the amount of controversy exceeds $75,000.

[00:09:23] Speaker 04:
What about the citizenship?

[00:09:24] Speaker 00:
And there is a complete diversity of citizenship between the parties.

[00:09:27] Speaker 04:
Specify the citizenship.

[00:09:28] Speaker 04:
Where does the complaint specify the citizenship?

[00:09:33] Speaker 04:
You can't just say it.

[00:09:34] Speaker 04:
You have to specify the decision.

[00:09:36] Speaker 00:
So the appellee is a German corporation.

[00:09:44] Speaker 00:
Again, I don't believe.

[00:09:45] Speaker 01:
Well, it says MMMS alleges that it's a Washington limited liability company, but there's no allegation of member citizenship, which is really required.

[00:09:54] Speaker 00:
OK.

[00:09:55] Speaker 00:
We would submit that if that is the deficiency,

[00:09:59] Speaker 00:
That would have been an appropriate exercise of the court's discretion to permit amendment to cure that relatively insignificant tactical deficiency.

[00:10:13] Speaker 00:
And I've run out of my time.

[00:10:16] Speaker 01:
Thank you.

[00:10:16] Speaker 01:
All right.

[00:10:16] Speaker 01:
You wanted to save a little bit of time, so I'll put a minute back on the clock then.

[00:10:19] Speaker 00:
Thank you very much.

[00:10:33] Speaker 01:
And is Ms.

[00:10:34] Speaker 01:
Ray going to address the substantive copyright claim, or were you planning to address just the rebuttal portion?

[00:10:45] Speaker 01:
I'm sorry, I should have cleared up at the outset how you planned on dividing the time.

[00:10:51] Speaker 03:
It's an honor to answer your question.

[00:10:52] Speaker 03:
The DMCA claim was in the second amendment complaint.

[00:10:56] Speaker 03:
It was not argued extensively because many other issues were argued more strongly, but it was there and argued as part of the copyright infringement claim.

[00:11:11] Speaker 01:
Yeah, I really am very sympathetic to the district court's dilemma, because it was mentioned in the captioned jurisdiction, the jurisdictional statement.

[00:11:21] Speaker 01:
It was never really addressed in the briefing.

[00:11:23] Speaker 01:
So how can the district court really be expected to address it?

[00:11:27] Speaker 03:
We would ask, Your Honor, to remand a law of the district court to do that on remand.

[00:11:32] Speaker 03:
Because it was, the allegations were there.

[00:11:34] Speaker 01:
Then we'd address the forfeiture issue, right?

[00:11:39] Speaker 01:
But I understand your position.

[00:11:41] Speaker 03:
It was not overlooked.

[00:11:43] Speaker 03:
It was just not argued extensively because a lot more argument was put into the standing.

[00:11:47] Speaker 01:
Well, I don't think it was argued at all.

[00:11:49] Speaker 01:
So I can't blame the district court for not addressing it.

[00:11:54] Speaker 03:
Well, maybe ask the court to remand to allow the district court to address it along with the other issues.

[00:12:01] Speaker 01:
All right.

[00:12:01] Speaker 01:
Thank you, counsel.

[00:12:13] Speaker 05:
Thank you, Your Honor, and may it please the Court.

[00:12:15] Speaker 05:
I'd like to start by just picking up where the panel's questions were, which are the DMCA count and then the diversity jurisdiction.

[00:12:22] Speaker 05:
Then I want to center us to where we are in this case.

[00:12:26] Speaker 05:
But with respect to the DMCA count, if you turn to the second amended complaint,

[00:12:32] Speaker 05:
and you go to pages 113 to 115 of the excerpts of the record, which is where the copyright claim is alleged, there is never a factual allegation made that there was a falsification or removal of copyright management information, which is what you need to assert a DMCA claim.

[00:12:49] Speaker 05:
Under notice pleading, the defendant needs to know what the plaintiff is alleging in their complaint, and you can't just list every cause of action that exists under statute and contain no factual allegations

[00:13:01] Speaker 05:
in support of it.

[00:13:03] Speaker 05:
And this was the fifth complaint that was filed.

[00:13:05] Speaker 05:
They had plenty of opportunities to allege that the DMCA was factually violated, and they didn't.

[00:13:10] Speaker 05:
And 113 to 115 of the excerpts of the record demonstrate that.

[00:13:18] Speaker 05:
As to diversity jurisdiction, the plaintiff as the party invoking jurisdiction has the burden of establishing that diversity jurisdiction exists.

[00:13:28] Speaker 05:
Under this court's decision in Johnson,

[00:13:30] Speaker 05:
to plead diversity jurisdiction when there's an LLC, you need to plead the membership of the members, the citizenship of the members.

[00:13:38] Speaker 05:
And they never plead the citizenship of the members.

[00:13:41] Speaker 05:
And the two licenses that give rise to this dispute.

[00:13:44] Speaker 01:
I agree with you that the allegations, as it stands, are deficient.

[00:13:51] Speaker 01:
What about leave to men?

[00:13:53] Speaker 01:
Because you didn't raise the jurisdictional defect either in your motion to dismiss paperwork, right?

[00:13:58] Speaker 05:
We in in our motion to dismiss paperwork we said that the that there was no subject matter jurisdiction over the federal claims and the and the state claims were preempted alternatively the court should decline exercise its jurisdiction over those claims ultimately the court concluded that it would not exercise its sure it's

[00:14:18] Speaker 05:
supplemental jurisdiction over those claims.

[00:14:20] Speaker 05:
They never in the briefing asserted diversity jurisdiction.

[00:14:23] Speaker 02:
If they had... You removed on basis, at least in part, on diversity jurisdiction.

[00:14:28] Speaker 05:
And in earlier version of the complaint, we removed, and the removal statement says, the opposing side had said to us, we think

[00:14:36] Speaker 05:
the amount in controversy is over $75,000.

[00:14:39] Speaker 05:
So there's a statement where we remove on copyright grounds and say, and upon information and belief, we believe that they think this case is worth more than $75,000.

[00:14:47] Speaker 05:
And the district court issued a notice and said, well, you might believe it's worth more than $75,000, but I have an independent obligation

[00:14:55] Speaker 05:
to exercise whether jurisdiction exists, and they never pleaded the location of the citizenship of the members.

[00:15:03] Speaker 05:
And I'm not sure that the amount of controversy is satisfied because these two licenses at issue are $15,000, which is well below $75,000.

[00:15:12] Speaker 05:
The parties can't, by agreement, confer federal court jurisdiction.

[00:15:16] Speaker 05:
And after this whole exchange happens, they file a complaint that doesn't allege diversity jurisdiction at all.

[00:15:24] Speaker 05:
It's federal subject matter only.

[00:15:26] Speaker 05:
And it's only at the Second Amendment phase that they throw in this new allegation of diversity jurisdiction.

[00:15:31] Speaker 02:
I agree with you.

[00:15:31] Speaker 02:
They had the burden to put in the complaint.

[00:15:33] Speaker 02:
But you guys did invoke diversity jurisdiction to remove.

[00:15:37] Speaker 02:
And it should have been clear when you have LLC that you have to look at the members.

[00:15:42] Speaker 05:
And that's precisely what the district court said, which is, you know, we, we tried to remove it and he said, you haven't met the burden of showing that it's removed.

[00:15:50] Speaker 05:
And you then have three iterations of the complaint where they could have amended it to include these allegations that, that the amount of controversy was over $75,000 and plead the citizenship of the members and they never did.

[00:16:01] Speaker 05:
And in the back and forth on the briefing.

[00:16:03] Speaker 05:
they never asserted the diversity jurisdiction exists, so we didn't have the opportunity to appeal to plead that.

[00:16:09] Speaker 04:
But in your removal notice, you relied also on federal question, correct?

[00:16:13] Speaker 04:
We did, because we thought they were trying to assert a copyright claim, but we were proven right, because... So the diversity was really just built in suspenders.

[00:16:21] Speaker 05:
It was a belt in suspenders.

[00:16:23] Speaker 05:
And again, the language said, we think that they think it's worth $75,000.

[00:16:27] Speaker 05:
It wasn't that we were certain or conceding that it was worth $75,000.

[00:16:32] Speaker 05:
And even if we had, that concession is irrelevant because this court has a duty to assess whether subject matter jurisdiction exists.

[00:16:39] Speaker 02:
You may have addressed, I may have just missed it, Judge Winn's question.

[00:16:41] Speaker 02:
Should we remand it back for them to, for another complaint to allege for diversity of jurisdiction or the DMC claim?

[00:16:51] Speaker 05:
No, Your Honor, this is their fifth bite at the apple.

[00:16:54] Speaker 05:
If there has ever been a case that would make one question the sensibility of the American rule, it's this case.

[00:17:01] Speaker 05:
We've just witnessed two attorneys fly from Florida and New York to split 10 minutes of oral argument time to contest the dismissal of the fifth complaint that's been filed against my client.

[00:17:15] Speaker 05:
The fifth bite at the Apple, Your Honor, and we've been threatened by prior counsel that they're going to initiate a six lawsuit after this.

[00:17:22] Speaker 05:
after the district court's dismissal was affirmed.

[00:17:24] Speaker 05:
And if we actually look at the briefing on appeal, and I'm happy to talk about the district court's rulings on subject matter jurisdiction, but the arguments that were raised are not just wrong, they're so wrong that they're frivolous.

[00:17:37] Speaker 05:
I have never seen a party rely on a district court decision to invoke starry decisis to a circuit court before, and I've also never seen a single judicial decision suggesting that unclean hands supplies a basis

[00:17:51] Speaker 05:
to disturb a district court's dismissal of summary judgments.

[00:17:54] Speaker 05:
So let's look at the arguments that they made on appeal.

[00:17:57] Speaker 05:
The diversity jurisdiction argument that they had five bites at the apple to plead, never pleaded, never raised in the opposition of the motion to dismiss briefing.

[00:18:05] Speaker 05:
We have unclean hands, which is factually untrue.

[00:18:08] Speaker 05:
We submitted declarations that say what they said and were not in any way, shape, or form relied on by the district court.

[00:18:14] Speaker 05:
Even if they were, unclean hands is not a doctrine that confers federal subject matter jurisdiction that doesn't exist.

[00:18:21] Speaker 05:
Then we have their reliance on the settlement agreement, which in our view confirms that the owner of the patents is Marinsky.

[00:18:31] Speaker 05:
There's plenty of language in there that is binding that says this is enforceable in any court.

[00:18:36] Speaker 05:
The parties will later enter into a final agreement in the interim.

[00:18:39] Speaker 05:
We want to agree, reach an interim agreement.

[00:18:43] Speaker 05:
All of these terms are binding and enforceable.

[00:18:45] Speaker 05:
And there is an abandonment of any rights in the copyright.

[00:18:51] Speaker 05:
The for them to turn around and argue that that agreement doesn't say there's an owner

[00:18:59] Speaker 05:
is wrong, but then let's take this to their collateral stopple argument.

[00:19:03] Speaker 05:
There is no privity.

[00:19:04] Speaker 05:
That case is still ongoing.

[00:19:06] Speaker 05:
It has been stayed.

[00:19:07] Speaker 05:
The basis for the stay is because this court is looking potentially at that settlement agreement and looking at ownership.

[00:19:14] Speaker 05:
So let's let the Ninth Circuit decide this so that we don't reach an inconsistent decision.

[00:19:20] Speaker 05:
None of the prongs of collateral stopple

[00:19:22] Speaker 05:
exist, in this case, identical issues.

[00:19:26] Speaker 05:
There's a magistrate judge report and recommendation that says that there's no irreparable harm.

[00:19:34] Speaker 05:
That is not the same issue as who owns the patents.

[00:19:38] Speaker 05:
And as much as they like that decision that they invoke on for stare decisis grounds, the

[00:19:45] Speaker 05:
The decision itself also includes language that says Dr. Moritzky had licensed the MMAS-4 and the MMAS-8 to MMAS to create a widget, and he would own all of the derivatives, including the widget.

[00:20:01] Speaker 05:
So that decision confirms that there was this license agreement where Moritzky would own all of the derivatives, including this widget, and they conveniently ignore that and rely on an irreparable harm finding

[00:20:13] Speaker 05:
to say that there's collateral stopple in this case.

[00:20:17] Speaker 05:
The fact of the matter is that MMAS does not care that its arguments in this case are frivolous.

[00:20:25] Speaker 05:
They've moved the ball a dozen times.

[00:20:27] Speaker 05:
Every time they file a new complaint, my client has to spend more money in attorney's fees.

[00:20:33] Speaker 05:
And the real tragedy in that is that my client is one of the leading research

[00:20:37] Speaker 05:
universities in the world, which would otherwise be spending that money on scientific research.

[00:20:42] Speaker 05:
For the reasons set forth in our briefing, the district court's dismissal should be affirmed, and when we move for fees and sanctions at the end of this appeal, those fees and sanctions should be awarded to stop this abusive

[00:20:54] Speaker 05:
conduct from continuing.

[00:20:55] Speaker 05:
Unless there's any further questions, I'll yield the remainder of our time.

[00:20:59] Speaker 05:
But I think our briefs set out the dozens of reasons why this case is wrong and that the arguments they raise are irrelevant because there's dozens of other reasons, like the expiry of the statute of limitations, to dismiss it.

[00:21:12] Speaker 05:
Thank you.

[00:21:19] Speaker 00:
Briefly.

[00:21:23] Speaker 00:
We're not relying on a stare decisis argument.

[00:21:26] Speaker 00:
That was incorrectly framed.

[00:21:29] Speaker 00:
What we are wondering is why the district court gave no deference, made no reference to, other than acknowledging its existence, this contrary ruling, which notwithstanding that it was as part of an irreparable harm ruling on a preliminary injunction,

[00:21:52] Speaker 00:
did reach the merits.

[00:21:55] Speaker 00:
I would also like to point out that really reading the allegations of the second medical complaint from Paragraph 50

[00:22:05] Speaker 00:
through 78, that is where the allegations of removal of copyright information can be gleaned.

[00:22:15] Speaker 00:
And it is not the best in terms of pleading that issue, but that's where you find it.

[00:22:22] Speaker 01:
Thank you, counsel.

[00:22:22] Speaker 00:
Thank you, judge.

[00:22:28] Speaker 01:
Is there time remaining?

[00:22:31] Speaker 04:
No.

[00:22:31] Speaker 04:
Game's over.

[00:22:45] Speaker 03:
I'm Patricia Ray.

[00:22:47] Speaker 03:
I spoke before.

[00:22:48] Speaker 03:
Appellant is actually seeking a remand by this court so that many issues in the record can be, many findings of that can be made in terms of failures of the lower court to actually consider the evidence.

[00:23:09] Speaker 03:
For example, the submissions of appellant plaintiff concerning the decision in Washington, which actually was counter to the finding below, there was no findings made.

[00:23:31] Speaker 03:
There was submissions of declarations that would have countered evidence that was provided by

[00:23:39] Speaker 03:
and relied on in the dismissal.

[00:23:42] Speaker 03:
And we're just asking the court to allow for findings that would create a reliable record for the court to make a decision on.

[00:23:55] Speaker 01:
All right, we have your position.

[00:23:57] Speaker 01:
Thank you, Ms.

[00:23:57] Speaker 01:
Ray.

[00:23:58] Speaker 01:
Thank you to all counsel for your arguments this morning.

[00:24:01] Speaker 01:
The matter is submitted.

[00:24:02] Speaker 01:
And our last case on the argument calendar for this morning is Cachet Financial Services versus Berkeley Insurance and Great American Insurance Companies.