Opinion
03-CV-6275 CJS(P).
August 13, 2004
DECISION AND ORDER
I. Introduction
This copyright infringement case is before the Court on Connected Energy Corporation's ("CEC") motion for summary judgment (# 23), and Lighthouse Solutions, LLC's ("Lighthouse") cross-motion for dismissal (# 30) of CEC's third counterclaim (entitled "Third Cause of Action Tortious Interference with Business Relations"). For the reasons stated below, the Court grants CEC's motion as to the sole federal cause of action and as to attorney's fees and costs, and it dismisses the case. In doing so, the Court declines to exercise supplemental jurisdiction over the remaining state claims.
II. Factual Background
In April 2001, Lighthouse gave CEC a proposal for the CENTRY LT Project. See Casterline Aff. Ex. C ("Proposal"). In the Proposal, addressed to Clean Dry Air, Inc., CEC's former name, Lighthouse proposed to create software for CEC for use in communicating with an embedded Web Communication Controller, attached to an original equipment manufacturer's industrial device, for setup and configuration, external and remote monitoring, and diagnosis and service. Proposal § 1. The Proposal was signed by Lighthouse's president, but never signed by CEC or Clean Dry Air, Inc. The Proposal states that, "by authorizing this work[,] Clean Dry Air, Inc. accepts the terms and conditions outlined in this proposal and requests that [lighthouse] execute said project. . . ." Proposal § 7. Lighthouse delivered software code ("Code") to CEC pursuant to the Proposal and CEC has paid over $300,000 to Lighthouse for the Code.
A portion of the Proposal outlined the agreement of the parties with respect to the price CEC was to pay for the Code. On that point, the Proposal states, in relevant part:
[Lighthouse] understands the sensitivity [CEC] has with respect to product development costs. [CEC] has expressed and [sic.] interest in pursuing a costing model, with [Lighthouse], that involves sharing development cost by employing a royalty based method. [Lighthouse] is interested in pursuing such an arrangement and proposes for this proposal . . . that the [Lighthouse] project team move forward on a time and material basis utilizing a discounted bill rate until such time that a mutually agreeable royalty based, shared investment agreement can be put in place. [Lighthouse] proposed [sic.] a 25% discounted rate to [CEC] of $75/hr for . . . the CENTRY LT project.
Proposal § 5.1.
On February 25, 2002, approximately ten months after the date of the Proposal, CEC's president, Christopher M. Campbell ("Campbell"), sent a "Letter of Intent — Royalty Based Agreement" to Lighthouse's principle. In the letter, Campbell stated, "[t]his letter will confirm the basic understanding between [CEC] and [Lighthouse], until both companies agree and accept the terms of a Royalty Based Agreement." Though he also made the "contents of this letter" "non-binding" and stated that the letter served only to "communicate a base level of understanding between CEC and [Lighthouse]," he wrote that Lighthouse "has been working with a discounted rate to CEC of $75/hr for the CENTRYwcc project. CEC's intent is to provide [Lighthouse] a reasonable return on [Lighthouse's] investment." Letter from Christopher M. Campbell, President, CEC to Raymond Casterline, Principle, Lighthouse (Feb. 25, 2002) (Attached to Casterline Aff., Ex. D).
The name used in the letter is evidently a reference to the product name, not to the project name. See Casterline Aff. (# 34) ¶ 6.
Other than providing the Code to CEC, Lighthouse has not published it, but did register it with the U.S. Copyright Office on June 6, 2003. See Cert. of Reg. (Jun. 6, 2003) (attached to Kole Aff. as Ex. A). In the registration, Lighthouse described the work as "Remote Monitoring and Control Interface for Industrial Equipment" and checked the box indicating it was a work made for hire. Id.
Since being provided with the Code by Lighthouse, CEC began marketing a CENTURYwcc Device which uses the Code or a derivative of the Code. Lighthouse contends that this use of the Code by CEC is, among other things, a violation of the Copyright Act.
III. Summary Judgment Standard
The standard for granting summary judgment is well established. Summary judgment may not be granted unless "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." FED. R. CIV. P. 56(c). A party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists. See Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). "[T]he movant must make a prima facie showing that the standard for obtaining summary judgment has been satisfied." 11 MOORE'S FEDERAL PRACTICE, § 56.11[1][a] (Matthew Bender 3d ed.). That is, the burden is on the moving party to demonstrate that the evidence creates no genuine issue of material fact. See Amaker v. Foley, 274 F.3d 677 (2d Cir. 2001); Chipollini v. Spencer Gifts, Inc., 814 F.2d 893 (3d Cir. 1987) ( en banc). Where the non-moving party will bear the burden of proof at trial, the party moving for summary judgment may meet its burden by showing the evidentiary materials of record, if reduced to admissible evidence, would be insufficient to carry the non-movant's burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).
Once that burden has been met, the burden then shifts to the non-moving party to demonstrate that, as to a material fact, a genuine issue exists. FED. R. CIV. P. 56(e); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). A fact is "material" only if the fact has some affect on the outcome of the suit. Catanzaro v. Weiden, 140 F.3d 91, 93 (2d Cir. 1998). A dispute regarding a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248. In determining whether a genuine issue exists as to a material fact, the court must view underlying facts contained in affidavits, attached exhibits, and depositions in the light most favorable to the non-moving party. U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). Moreover, the court must draw all reasonable inferences and resolve all ambiguities in favor of the non-moving party. Leon v. Murphy, 988 F.2d 303, 308 (2d Cir. 1993); Anderson, 477 U.S. at 248-49; Doe v. Dep't of Pub. Safety ex rel. Lee, 271 F.3d 38, 47 (2d Cir. 2001), rev'd on other grounds Connecticut Dept. of Public Safety v. Doe, 531 U.S. 1, 123 S.Ct. 1160 (2003); International Raw Materials, Ltd. v. Stauffer Chemical Co., 898 F.2d 946 (3d Cir. 1990). However, a summary judgment motion will not be defeated on the basis of conjecture or surmise or merely upon a "metaphysical doubt" concerning the facts. Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir. 1991) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)); Knight v. United States Fire Ins. Co., 804 F.2d 9 (2d Cir. 1986). Rather, evidentiary proof in admissible form is required. FED. R. CIV.P. 56(e). Furthermore, the party opposing summary judgment "may not create an issue of fact by submitting an affidavit in opposition to a summary judgment motion that, by omission or addition, contradicts the affiant's previous deposition testimony." Hayes v. New York City, Department of Corrections, 84 F.3d 614, 619 (2d Cir. 1996).
Of course, it is well-settled that courts must be "particularly cautious about granting summary judgment to an employer in a discrimination case when the employer's intent is in question. Because direct evidence of an employer's discriminatory intent will rarely be found, affidavits and depositions must be carefully scrutinized for circumstantial proof which, if believed, would show discrimination." Schwapp v. Town of Avon, 118 F.3d 106, 110 (2d Cir. 1997) (citations and internal quotations omitted). However, the general rule holds and a plaintiff may not defeat a motion for summary judgment merely by relying upon "purely conclusory allegations of discrimination, absent any concrete particulars which, if believed, would show discrimination." Schwapp v. Town of Avon, 118 F.3d 106, 110 (2d Cir. 1997) (citations and internal quotations omitted); Meiri v. Dacon, 759 F.2d 989, 998 (2d Cir. 1985).
IV. Discussion
As an initial matter, the Court rejects Lighthouse's claim that CEC's motion papers are legally insufficient, since they do not present any evidentiary proof in admissible form in support of the matters asserted as fact in CEC's memorandum of law. See Pavia Aff. (# 31). Federal Rule of Civil Procedure 56(b) addresses the conditions under which a defending party may bring a motion for summary judgment. It states, in pertinent part,
a party against whom a claim . . . is asserted . . . may, at any time, move with or without supporting affidavits for summary judgment in the party's favor as to all or any part thereof.
FED. R. CIV. P. 56(b) (emphasis added). While the Court agrees with Lighthouse that CEC's moving papers do not include any affidavits from witnesses with personal knowledge, the Rule does not require any. In the "Factual Background," the Court relied on the Complaint and affidavits filed by Lighthouse, as well as the Proposal, which both parties provided to the Court.
The Court will now turn its attention to CEC's application for summary judgment and an award of fees. CEC presents four arguments in support of its motion. They are: (1) CEC, at a bare minimum, has a nonexclusive implied license to use the software for which it paid over $300,000; (2) Lighthouse is ineligible for statutory damages and attorney's fees; (3) Lighthouse's state law unjust enrichment and misappropriation claims are preempted by the Copyright Act; and (4) the Court should decline to exercise supplemental jurisdiction over Lighthouse's remaining state law claims. In addition, CEC seeks costs and attorney's fees pursuant to 17 U.S.C. § 505, alleging that Lighthouse's copyright infringement claims are baseless.
CEC's Ownership Claim
The Proposal stated that Lighthouse's work, created for CEC, "will be the sole property of [CEC] and will be delivered to [CEC]." Proposal § 3. Relying on 17 U.S.C. § 204(a), CEC asserts that when it paid Lighthouse over $300,000 and Lighthouse delivered the Code, the Code became CEC's property. The copyright law cited by CEC in support states,
A transfer of copyright ownership, other than by operation of law, is not valid unless an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent.17 U.S.C. § 204(a). Lighthouse does not dispute having signed the Proposal, or that the Code was to be transferred in its entirety to CEC. However, Lighthouse counters CEC's argument by stating, "CEC never became entitled to assert any ownership in the Code, since it failed to fulfill its obligation to enter into a royalty agreement with Lighthouse." Pl.'s Mem. of Law (# 33) at 7-8. The Court agrees that CEC has not proven its ownership of the Code because there is no written transfer unambiguously assigning the copyright to CEC.
The Copyright Act does not equate transfer of the tangible form of a copyrighted work with transfer of ownership over the copyright, absent an agreement. The statute provides in relevant part as follows:
§ 202. Ownership of copyright as distinct from ownership of material object
Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy or phonorecord in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object.17 U.S.C. § 202. If the language of a written agreement purporting to transfer the copyright is ambiguous, "the contract will be read to transfer only the material object, not ownership of the copyright itself." Shugrue v. Continental Airlines, 977 F. Supp. 280, 285 (S.D.N.Y. 1997). The Proposal specifically stated that Lighthouse would perform its work for the project on "a discounted bill rate until such time that a mutually agreeable royalty based, shared investment agreement can be put in place." Proposal § 5.1 Fees (emphasis added). At best, the emphasized language makes ambiguous whether Lighthouse's transfer of the Code to CEC was merely a transfer of a material object, or ownership of the copyright itself. Thus, CEC has not shown its entitlement to summary judgment on the issue of ownership of the Code.
Implied License
As an alternative argument, CEC proposes that even if Lighthouse retained some interest in the Code, its copyright claim must fail, since CEC acquired, at a minimum, a nonexclusive implied license to use the Code. Lighthouse disputes this argument as well, asserting that because CEC failed to enter into a royalty agreement, no implied license exists. The Court disagrees with Lighthouse's position.
Although Section 204 requires a writing in order to transfer ownership in a copyright, Section 101 excepts nonexclusive licenses from the writing requirement. Effects Assoc., Inc. v. Cohen, 908 F.2d 555, 558 (9th Cir. 1990). Thus, in order to establish that the author of a copyright work has given an implied nonexclusive license, the putative licensee must show: (1) the licensee requested the creation of a work; (2) the author (licensor) made that particular work and delivered it to the licensee who requested it; and (3) the licensor intended that the licensee copy and distribute his work. I.A.E., Inc. v. Shaver, 74 F.3d 768, 776 (7th Cir. 1996); see also Effects, 908 F.2d at 558-59.
Lighthouse attempts to distinguish Shaver, by stating that Design Options v. Bellepointe, Inc., 940 F. Supp. 86, 92 (S.D.N.Y. 1996), supports its argument that a final agreement must have been reached and full payment made in order to support the existence of a nonexclusive implied license. See Pl.'s Mem. of Law at 11-12. Lighthouse argues that the cases on which CEC relies can be distinguished since, in the case at bar, "the question of full payment of compensation is at the heart of the dispute between CEC and Lighthouse." Id. The Court finds that Lighthouse's reliance on the holding in Design Options is misplaced.
In Design Options, the court distinguished Shaver by stating that,
[h]ere, Design Options sold BellePointe finished merchandise — not simply sweater designs — for BellePointe to resell to its customers. Accordingly, an implied license is in no way necessary to effectuate the purpose for which BellePointe purchased the goods, i.e., the resale of those goods. BellePointe received the benefit of the bargain it made with Design Options when it resold the sweaters to its own customers, presumably at a profit.Id. The Proposal at issue here, however, stated that, "[a]ll work created by [Lighthouse] for this effort will be the sole property of [CEC] and will be delivered to [CEC] at the end of the effort. All work will be considered `work made for hire.'" Proposal § 3 Statement of Work. Lighthouse's argument is, therefore, unpersuasive. In its Proposal, Lighthouse did not intend to provide CEC with a product analogous to a finished sweater. Rather, the Proposal set forth that CEC would own the work produced for CEC. See Casterline Aff. ¶ 13 (Proposal phase 2 contemplated ultimate transfer of Code to CEC). Contrary to Lighthouse's contention, Design Options did not require payment in full as a condition precedent to an implied nonexclusive license. That argument was also made by the plaintiff in Effects Assoc., Inc., and the Ninth Circuit rejected it.
"Plaintiff argues that an implied license is an equitable remedy, akin to estoppel, for which Cohen does not qualify because he hasn't paid in full the agreed-to price for the footage. We reject this argument." Effects Assoc., Inc. v. Cohen, 908 F.2d 555, 559 (9th Cir. 1990). Payment is an issue only with regard to whether the nonexclusive implied license is revocable, as addressed below.
Lighthouse also argues that even if CEC had a nonexclusive implied license in the Code, that license did not extend to "CEC's actual use, marketing, or distribution of the Code in the CENTRYwcc device without receipt of future royalties." Pl.'s Mem. Of Law at 12. It is, of course, well settled that "when a license is limited in scope, exploitation of the copyrighted work outside the specified limits constitutes infringement." 3 Nimmer § 10.15[A]. "`Copyright licenses are assumed to prohibit any use not authorized.'" Cf. Cohen, 845 F.2d at 853 (license analyzed to determine what uses it affirmatively permits); 17 U.S.C. § 204(a) (transfer of copyright ownership must be in writing)." S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088 (9th Cir. 1989).
In support of its position, Lighthouse refers to the affidavit of Raymond Casterline, a "member" of Lighthouse, who stated, "[a]s beta software, the Code was subject to further design and programming changes and was, therefore, not intended for immediate commercial use other than in a test environment." Casterline Aff. (# 34) ¶ 8. He further stated that, "Lighthouse completed development of the non-commercial prototype Code for Phase 2 and delivered it to CEC in July, 2002. Lighthouse never provided to CEC a final, commercially viable form of the Code." Casterline Aff. (# 34) ¶ 19.
However, the Proposal is silent as to whether CEC could use the Code provided by Lighthouse for further development by another software engineer. Lighthouse provided it to CEC without any warnings that its further use would constitute a copyright violation. See Casterline Aff. ¶ 19. The only limitation discussed appears to have been the requirement that CEC sign a letter of intent to enter into a royalty agreement, an executory contract. When CEC did so, Lighthouse gave it the Code. Id. ¶¶ 16, 19.
The Court finds the situation here analogous to the one in Shaver. In that case, the plaintiff, an architect who had given the defendant preliminary plans for an airport building, argued that the defendant's use of his drawings to have another firm complete the building was a copyright infringement. The Seventh Circuit affirmed the district court's grant of summary judgment to the defendant, noting that the plaintiff "created a work at [the defendant's] request and handed it over, intending [the defendant] to copy and distribute it for the Airport Project." Shaver, 74 F.3d at 776.
Moreover, Lighthouse's argument contrasts with other evidence submitted in its papers. In an attachment to Casterline's affidavit, Lighthouse submitted an e-mail message from Casterline to Chris Campbell of CEC dated October 23, 2002. In that e-mail message, Casterline wrote:
CEC has proposed sales figures in it's [sic.] business plan of 240 units in 2002 growing to 12430 in 2005. We are currently in the 4th Qtr. of 2002.
How does CEC stand against that plan?
E-mail message from Ray Casterline to Chris Campbell (Oct. 23, 2002 at 1:25 p.m.) (attached to Casterline Aff. as Ex. F). As discussed at oral argument, the clear significance of that message is that Lighthouse knew that CEC was already marketing the CENTRYwcc device, presumably with Lighthouse's "prototype" Code, and wanted to know how many units were sold to calculate potential royalties due under their proposed royalty agreement. Consequently, CEC has shown that it obtained a nonexclusive implied license in the Code delivered to it by Lighthouse with full knowledge that it was to be used by CEC in working products produced and distributed by CEC. The only remaining dispute is over the amount of money CEC agreed to pay for that Code and that issue is one of contract law.
Thus, the Court finds as a matter of law that the scope of the nonexclusive implied license is unlimited and CEC's derivative use of the Code is not a copyright infringement. Revocation of Implied Nonexclusive License
Relying on the holding in Keane Dealer Servs. v. Harts, 968 F. Supp. 944 (S.D.N.Y. 1997), Lighthouse also argues that even if CEC had a nonexclusive implied license in the Code, that license terminated when CEC failed to enter into a royalty agreement, or, at the latest, when Lighthouse filed suit on June 5, 2003. Pl.'s Mem. of Law at 12. Lighthouse argues that Keane supports its contention that "both CEC's failure to provide a royalty agreement and the commencement of this litigation" were sufficient to terminate the implied license. That case, however, held that, "[i]f no consideration was given, the license was revocable, and the institution of this lawsuit would constitute revocation." Id. at 947 (emphasis added). Here, there is no dispute that CEC paid Lighthouse over $300,000 for the Code. Thus, Keane does not support Lighthouse's position.
The law is clear that "a `nonexclusive license may be irrevocable if supported by consideration.'" Carson v. Dynegy, Inc., 344 F.3d 446, 451-452 (5th Cir. 2003) (quoting Lulirama Ltd., Inc. v. Axcess Broadcast Servs., Inc., 128 F.3d 872, 882 (5th Cir. 1997)) ("[A]s consideration was not present, any license ostensibly granted to Dynegy was revocable by Carson."). "[T]his is so because a nonexclusive license supported by consideration is a contract." Id. (citations omitted); see also Avtec Sys., Inc. v. Peiffer, 21 F.3d 568, 574 n. 12 (4th Cir. 1994) (noting in dictum that "an implied license is necessarily nonexclusive and revocable absent consideration" and that, "while an implied license may fail to vest a proprietary interest in the licensee that is enforceable against other licensees, it may provide a defense . . . to the counterclaim"); Keane Dealer Services, Inc. v. Harts, 968 F. Supp. 944, 947 (S.D.N.Y. 1997) ("An implied license is revocable, however, where no consideration has been given for the license."); Melville B. Nimmer David Nimmer, 3 Nimmer on Copyright §§ 10.01[C][5], 10.02[B][5] (1995) ("Nimmer"). Here, CEC paid over $300,000 for the Code. Thus, although the parties dispute the sufficiency of the payment, the fact that a substantial sum was paid by CEC for this work for hire makes the implied nonexclusive license irrevocable. To reiterate, the real dispute here is one of compensation arising under state contract law and not the Copyright Act.
CEC's Claim for Costs and Attorney's Fees
CEC seeks an award of costs and attorney's fees against Lighthouse, arguing that Lighthouse's motivation in bringing the copyright infringement claims was suspect and objectively unreasonable. CEC further asserts that Lighthouse's copyright registration, copyright complaint, and motion for a preliminary injunction in this Court were done solely to create leverage to settle the underlying and real contract dispute. "W hen CEC responded by calling plaintiff's bluff and bluster, plaintiff withdrew its preliminary injunction motion." Def.'s Mem. of Law (# 21) at 10. CEC asks the Court to award costs and attorney's fees under 17 U.S.C. § 505 and Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994), "in order to make clear to litigants that asserting baseless Federal Court claims will only serve as leverage for sanctions, not settlement, in this Court." Def.'s Mem. of Law (# 21) at 11. An award under Section 505 is at the court's discretion.
In Fogerty, the Supreme Court listed "several nonexclusive factors courts should consider when exercising this discretion, namely, `frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence.'" Matthew Bender Co., Inc. v. West Pub. Co., 240 F.3d 116, 121 (2d Cir. 2001) (quoting Fogerty, 510 U.S. at 534 n. 19) (internal quotation marks omitted). The Second Circuit also observed that the Supreme Court "cautioned, however, that such factors may be used only `so long as [they] are faithful to the purposes of the Copyright Act.' Id." Matthew Bender, 240 F.3d at 121.
In analyzing the objective reasonableness standard further, the Second Circuit wrote the following:
This emphasis on objective reasonableness is firmly rooted in Fogerty's admonition that any factor a court considers in deciding whether to award attorneys' fees must be "faithful to the purposes of the Copyright Act." 510 U.S. at 534 n. 19. The "principle purpose of the [Copyright Act] is to encourage the origination of creative works by attaching enforceable property rights to them." Diamond v. Am-Law Publ'g Corp., 745 F.2d 142, 147 (2d Cir. 1984). As such, the imposition of a fee award against a copyright holder with an objectively reasonable litigation position will generally not promote the purposes of the Copyright Act. See Mitek Holdings, Inc. v. Arce Eng'g Co., 198 F.3d 840, 842-43 (11th Cir. 1999) ("The touchstone of attorney's fees under § 505 is whether imposition of attorney's fees will further the interests of the Copyright Act, i.e., by encouraging the raising of objectively reasonable claims and defenses, which may serve not only to deter infringement but also to ensure `that the boundaries of copyright law [are] demarcated as clearly as possible' in order to maximize the public exposure to valuable works." (quoting Fogerty, 510 U.S. at 526-27)); Lotus, 140 F.3d at 75 ("When close infringement cases are litigated, copyright law benefits from the resulting clarification of the doctrine's boundaries. But because novel cases require a plaintiff to sue in the first place, the need to encourage meritorious defenses is a factor that a district court may balance against the potentially chilling effect of imposing a large fee award on a plaintiff, who, in a particular case, may have advanced a reasonable, albeit unsuccessful, claim."). In sum, objective reasonableness is a factor that should be given substantial weight in determining whether an award of attorneys' fees is warranted.Matthew Bender Co., Inc. v. West Pub. Co., 240 F.3d at 122.
The Court finds that Lighthouse's copyright claim was objectively unreasonable. This case is, and always was, a contract dispute. The Proposal unambiguously contemplated that CEC would own the copyright to the Code. When CEC failed to enter into a royalty agreement, Lighthouse then registered the copyright of this work for hire and filed suit here in federal court on the sole jurisdictional basis of the copyright claim. This is a case in which the copyright claim was solely used to leverage a good bargaining position on the real claim under contract law. Consequently, the Court determines that an award of reasonable attorney's fees and costs to CEC is warranted here.
The Court directs CEC to file an affidavit proving the costs and attorney's fees associated with this litigation, including evidence of the nature of the work done, the experience and hourly rates of the attorneys and support staff performing that work, and the amount of time billed. Lighthouse shall have an opportunity to file papers opposing the claim, and the Court will then make an appropriate award.
State Law Claims
Lighthouse has also pleaded state law claims of breach of contract, unjust enrichment, and misappropriation and/or conversion. Since the Court is granting CEC's motion to dismiss the copyright infringement claim, and there is no further basis for federal jurisdiction in this case, the Court declines to exercise jurisdiction over the remaining state law claims. 28 U.S.C. § 1367(c). Though CEC has moved for dismissal of Lighthouse's misappropriation and/or conversion claim, the Court also declines to adjudicate that motion, leaving it for consideration of a state court should the parties determine to continue this action in the New York courts.
Both parties are resident in New York. Thus, there is no diversity jurisdiction.
CONCLUSION
Accordingly, CEC's motion for summary judgment (# 23) is granted with respect to Lighthouse's first cause of action (copyright infringement). There being no further basis for federal jurisdiction, the Court declines to exercise supplemental jurisdiction over the remaining state claims. In light of the Court's decision, Lighthouse's claim for statutory damages and attorney's fees is necessarily denied, and its cross-motion for dismissal (# 30) of CEC's third counterclaim (entitled "Third Cause of Action Tortious Interference with Business Relations"), as well as CEC's motion to dismiss Lighthouse's fourth cause of action for misappropriation and/or conversion, are moot.The case is dismissed. However, CEC shall have until August 30, 2004, to file and serve a claim for costs and attorney's fees. Lighthouse shall have until September 13, 2004, to file papers in opposition to CEC's claim, and the Court will issue a written decision on attorney's fees and costs.
IT IS SO ORDERED.