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Zaccari v. Discover Technologies LLC

United States District Court, E.D. Virginia, Richmond Division

December 28, 2018

NEIL ZACCARI, Plaintiff,



         This case involves a business-process consultant suing a government contractor for the alleged infringement of copyrighted software. According to Plaintiff Neil Zaccari ("Plaintiff), Defendant Discover Technologies, LLC's ("Defendant") infringement occurred in collaboration with the United States government. (Compl. ¶ 23, ECF No. 1.) Plaintiff alleges that Defendant engaged in copyright infringement, statutory business conspiracy under Virginia law, and misappropriation of a trade secret. (Id. ¶¶ 39-59.)

         This matter is presently before the Court on Defendant's Motion to Dismiss (ECF No. 9). Both parties have filed memoranda supporting their respective positions, and the Court heard argument on November 26, 2018. Upon due consideration of the parties' arguments, and for the reasons that follow, the Court will dismiss Count I for lack of subject-matter jurisdiction and grant in part Defendant's Motion to Dismiss with respect to Count II. Count III survives Defendant's challenge.

         I. BACKGROUND

         According to the Complaint, Plaintiff contracted his consulting services with the United States government through his former employer, Apprio. (Id. ¶ 13.) Plaintiff was tasked with improving the Defense Contract Management Agency's ("DCMA") business processes. (Id.) DCMA is an arm of the Department of Defense ("DoD") that works with defense contractors and suppliers to manage compliance with contractual and federal requirements for services and supplies delivered to DoD. (Id. ¶ 11.)

         While Plaintiff was contracted to work on certain DCMA business processes, a separate effort was underway by a DCMA project team called "BPR 1" to address inefficiencies in DCMA's contract review processes. (Id. ¶ 14.) Plaintiff was not assigned to that project team. (Id.) Nevertheless, independent of his contracted responsibilities, Plaintiff alleges that he developed computer software (the "Software") that automated government defense contract reviews that were performed manually by DCMA at the time. (Id. ¶ 16.) The Software was designed to streamline review of Federal Acquisitions Requirements, potentially saving the government millions of dollars. (Id. ¶¶ 16, 24.)

         On May 31, 2016, Plaintiff alleges that he demonstrated the Software to Apprio Vice President, Michelle Coelho, and another Apprio employee. (Id. ¶ 17.) Coelho then allegedly directed Plaintiff to do a similar demonstration of the Software for the BPR 1 team. (Id.) Plaintiff did so and sent a copy of the Software to the team for evaluation. After doing so, he requested that the team "not make any further modifications to the software code or his [Software] without his express, prior permission." (Id. ¶¶ 17-18.)

         Upon demonstrating the capabilities of the Software to Apprio and DCMA employees, Plaintiff alleges that a program lead within DCMA, Antoine McNeil, informed an Apprio executive that the Software was beyond the scope of Plaintiff s contracted services for DCMA. (Id. ¶¶ 19-20.) McNeil then demanded a copy of the Software. (Id. ¶ 20.) In response, the Complaint alleges that Apprio directed Plaintiff to provide copies of the Software and its source code to DCMA. (Id.)

         Thereafter, the Complaint alleges that the BPR 1 team "removed [Plaintiffs] name as author on the [] Software and renamed the application ConCISE." (Id. ¶ 22.) Further, Plaintiff alleges that McNeil "subsequently collaborated with [Defendant] to copy [the Software] and prepare a derivative work that uses some or all of the source code in [the Software] to automate the contract receipt and review process ...." (Id. ¶ 23.) ConCISE was later allegedly deployed to thousands of government employees, as well as shared with other DoD agencies. (Id. ¶¶ 25-26, 36.)

         On April 23, 2018, Plaintiff filed an application for Copyright Registration of his software with the U.S. Copyright Office, which was subsequently accepted. (Id. ¶ 10.)

         Plaintiff raises three claims against Defendant. Count I alleges copyright infringement under 17 U.S.C. §§ 504-05, seeking treble damages and attorney's fees for direct and indirect infringement of Plaintiff s copyright. (Id. ¶¶ 39-47.) Count II alleges statutory business conspiracy in violation of Va. Code § 18.2-499(A). (Id. ¶¶ 48-52.) Count III alleges misappropriation of trade secret under 18 U.S.C. § 1836(b)(1). (Id. ¶¶ 53-59.) Plaintiff seeks $63, 000, 000 in actual damages, statutory treble damages and attorney's fees, and injunctive relief. (Id. at 12-13.) Defendant's Motion to Dismiss seeks dismissal of Counts II and III in their entirety, as well as Plaintiffs request for statutory damages under Count I.


         "A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (citation omitted). The Federal Rules of Civil Procedure "require[] only 'a short and plain statement of the claim showing that the pleader is entitled to relief,' in order to 'give the defendant fair notice of what the ... claim is and the grounds upon which it rests.'" Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not assert "detailed factual allegations," but must contain "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action." Twombly, 550 U.S. at 555 (citations omitted). Thus, the "[f]actual allegations must be enough to raise a right to relief above the speculative level," id. (citation omitted), to one that is "plausible on its face," id. at 570, rather than merely "conceivable." Id. In considering such a motion, a plaintiffs well-pleaded allegations are taken as true and the complaint is viewed in the light most favorable to the plaintiff. T.G. Slater, 385 F.3d at 841 (citation omitted). Legal conclusions enjoy no such deference. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

         Generally, the district court does not consider extrinsic materials when evaluating a complaint under Rule 12(b)(6). The court may, however, consider "documents incorporated into the complaint by reference." Tellabs, Inc. v. Makor Issues & Rights,Ltd.,551 U.S. 308, 322 (2007); see ...

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