BUA, District Judge.
This cause comes before the court on the defendants' motion for judgment on the pleadings, Rule 12(c), Fed.R.Civ.P., or in the alternative for summary judgment. Rule 56, Fed.R.Civ.P.
In that the defendants' motion is founded in part upon the contention that this court lacks jurisdiction over the subject matter of the plaintiff's complaint, said motion will be treated as one for dismissal, pursuant to Rule 12(h)(2), Fed.R.Civ.P. Although in her pleading she fails to make
As the plaintiff has attempted to state a claim for copyright infringement, the first question this court must resolve is whether federal jurisdiction properly lies pursuant to 28 U.S.C. § 1338(a). § 1338(a) vests the federal courts with subject matter jurisdiction to hear claims "arising under any Act of Congress relating to . . . copyrights." If the case at bar involves claims of infringement or requires construction of the copyright at issue, moreover, the right to hear the action rests exclusively with the federal courts. See 17 U.S.C. § 301.
Central to the plaintiff's infringement claims are certain licensing agreements that pertain to the manufacture, sale, and distribution of the copyrighted art works at issue. The plaintiff, Barbara Burns, and defendant Rockwood Distributing Company appear to hold nearly identical licenses applicable to the manufacture and sale of said art works. These licenses, however, relate to different states.
Both parties obtained their licenses from Apsit Brothers of California, the original owner of the alleged copyrights. The plaintiff contends that these licensing agreements granted her the exclusive right to produce and sell the art works in certain states, including Illinois. She alleges that defendants Rockwood and Paluso, Rockwood's president, have violated the licensing agreements by selling the copyrighted art works in Illinois, with full knowledge of plaintiff's exclusive territorial rights. She further alleges that the defendant White Art Studios has infringed upon her copyright privileges by selling and manufacturing the art works in Illinois.
The provisions of the Copyright Act of 1976 require that certain conditions be fulfilled before an infringement action may be brought. One such prerequisite to the filing of a copyright infringement action is copyright registration. § 411(a) of the Act provides that "no action for infringement of the copyright in any work shall be instituted until registration of the copyright claim has been made in accordance with this title." It is, moreover, well settled that copyright registration is a condition precedent to filing suit. E. g., Roth Greeting Cards v. United Card Co., 429 F.2d 1106 (9th Cir. 1970); Frederick Fell Publishers v. Lorayne, 422 F.Supp. 808 (S.D.N.Y.1976); Algonquin Music, Inc. v. Mills Music, Inc., 93 F.Supp. 268 (S.D.N.Y.1950).
The complaint in the present case does not include a copy of the registration certificate, nor has compliance with the registration provisions of the Copyright Act otherwise been indicated.
The concept of copyright divisibility thus bears importantly on the plaintiff's rights. Since any of the exclusive rights that comprise a copyright can be transferred and owned separately under 17 U.S.C. § 201(d)(2), all the remedies accorded to the "copyright owner" are available to the owner of any particular "exclusive right". That being so, careful consideration must be given to the parties' licensing agreements with Apsit.
Reading the complaint most favorably to her, the court assumes for purposes of this motion that the plaintiff's written agreement with Apsit Brothers is the equivalent of an exclusive license under the Act. Since defendant Rockwood appears to have a similar license agreement with Apsit, Rockwood also may be the owner of an exclusive right in Apsit's initial copyrights. The chief distinction in the plaintiff's and defendant's rights, thus, is geographical. Under this analysis, if Rockwood in fact sold the copyrighted art works in Illinois, plaintiff's territory, it would be guilty of copyright infringement. Similarly, defendant White Art Studios would be in violation of the plaintiff's rights if it manufactured or sold the art works in Illinois.
Assuming that the plaintiff can amend her complaint to incorporate the necessary registration requirements, however, there remains a further statutory bar to the maintenance of her infringement action. As the defendants point out, the complaint does not allege recordation of plaintiff's license, as is required by 17 U.S.C. § 205(d). § 205(d) provides that:
The foregoing analysis, of course, is premised upon the exclusive nature of plaintiff's interest in the licensing agreements involving the art works. If, however, the agreements are characterized as non-exclusive licenses, the recordation requirement of § 205(d) would not be applicable, because nonexclusive licenses do not have to be recorded.
Although it is not at all clear from the face of the complaint, the plaintiff may be attempting to invoke the jurisdiction of this court based upon diversity of citizenship. 28 U.S.C. § 1332(a). She alleges in her complaint that she is a citizen of Missouri, and lists the principle places of business of the defendant corporations as Wisconsin and Illinois. These allegations, however, are not sufficient to allow this court to hear the present matter based upon diversity jurisdiction.
Under 28 U.S.C. § 1332, the citizenship of each party must be distinctly and affirmatively averred. McGlynn v. Employers Commercial Union Ins. Co. of America, 386 F.Supp. 774 (D.P.R.1974), citing Robertson v. Cease, 97 U.S. 646, 24 L.Ed. 1057 (1878). Corporate citizenship is evidenced both by the state of incorporation and by the corporation's principle place of business. Dining Car Employees Local No. 385 v. Chicago, M. & St. P. & P. R. Co., 323 F.2d 224 (7th Cir. 1963); Oskierko v. Southwestern Horizons, Inc., 60 F.R.D. 365 (N.D. Ill.1973). For federal jurisdiction to properly lie under § 1332, moreover, the citizenship of each plaintiff also must be shown to be diverse from that of each defendant. See Strawbridge v. Curtiss, 7 U.S. 267, 2
In the present case it cannot be determined from the face of the plaintiff's complaint whether such complete diversity exists. Missing are the defendants' states of incorporation. The complaint merely alleges that Rockwood and White Art Studios are corporations, "organized and existing pursuant to the laws of a state within the United States." In that said state clearly could be Missouri, the state of plaintiff's residence and citizenship, federal jurisdiction well may not lie.
The burden of establishing federal jurisdiction is on the party asserting such jurisdiction, and the jurisdictional basis must be clear from the face of the complaint itself. If diversity of citizenship is shown to exist between the plaintiff and one of several defendants, but the citizenship of the other defendants is not indicated, federal jurisdiction will not lie. Colony Coal & Coke Corp. v. Napier, 28 F.Supp. 76 (D.C.Ky.1939).
Accordingly, for the reasons discussed above, the present complaint is dismissed, without prejudice, for lack of subject matter jurisdiction. The other issues and potential claims raised by the plaintiff, therefore, need not be reached by the court at this time.
The remaining issue before the court is whether the defendants' three counterclaims also must be dismissed. Generally, when a complaint is dismissed for lack of federal jurisdiction, compulsory counterclaims, because they arise out of the same transaction as the original claim, also will be dismissed. T. Square Equipment Corp. v. Gregor J. Schaefer Sons, Inc., 272 F.Supp. 962, 964 (E.D.N.Y.1967); Manufacturers Cas. Ins. Co. v. Arapahoe Drilling Co., 267 F.2d 5, 8 (10th Cir. 1059).
Defendants' first counterclaim is for a declaratory judgment of copyright non-infringement. Although jurisdiction is alleged to lie pursuant to 28 U.S.C. § 1338(a), it is difficult to determine how the facts and issues involved in this counterclaim differ from the facts and issues involved in the complaint.
The second counterclaim consists solely of state law claims for unfair competition and slander. As regards this counterclaim the defendants contend that this court has diversity jurisdiction, and that ancillary jurisdiction also may properly be exercised. Since, however, the plaintiff's complaint was dismissed for lack of federal jurisdiction, the court cannot properly retain the counterclaim pursuant to any ancillary jurisdiction theory. The defendants' allegation of § 1332(a) diversity jurisdiction also must fail. As only the citizenship of the plaintiff and one defendant has been stated, the requisite complete diversity has not been shown. Therefore, in that it does not properly set forth an independent basis for federal jurisdiction, the defendants' second counterclaim also is ordered dismissed without prejudice.
Defendants' third counterclaim alleges a violation of Section 1 of the Sherman Antitrust Act. 15 U.S.C. § 1. Subject matter jurisdiction over this claim is purported to lie pursuant to 15 U.S.C. § 15.
The allegations contained in this counterclaim are merely conclusory, stating that the plaintiff "has been engaged in an unlawful combination and conspiracy to monopolize . . . interstate commerce . . . in the sale of copyrighted art works produced under license from Apsit." The only alleged acts in furtherance of the conspiracy to restrain trade are that the plaintiff "has threatened to sue and has sued Rockwood's customers in the States of Illinois, Iowa, and Nebraska" and that the plaintiff "conspired with Apsit to force Rockwood out of the business . . ."
It has been held that where a counterclaim states a cause of action seeking affirmative relief independent of that stated in the complaint, dismissal of the complaint does not preclude a trial and determination of the counterclaim. E. g., Pioche Mines Consol., Inc. v. Fidelity-Philadelphia Trust Co., 206 F.2d 336 (9th Cir. 1953). Under the circumstances of this case, however, it appears that this counterclaim also should be dismissed. Although, technically speaking, said counterclaim appears to be supported by an independent basis of jurisdiction, the court's dismissal of it without prejudice will not impair the defendants' rights. The defendants may raise the claim again, if the plaintiff amends her complaint. Alternatively, the defendants, if they so elect, can easily bring a separate antitrust action at a later time.
Interpretation of the licensing agreements maintained between the plaintiff, the defendants, and Apsit Brothers, is critical to any determination on the merits of the plaintiff's copyright and breach of contract claims. The construction of these licensing agreements also is central to defendants' potential antitrust action. A well settled policy in the federal courts is to provide for, to the extent possible, the expeditious resolution of an entire controversy in one proceeding. Regarding the present matter, the court's retention of the single counterclaim under discussion clearly would abrogate this policy. This is especially true where, as here, the allegations of the antitrust violation are vague and conclusory and depend on many of the same issues as in the complaint.
In summary, the following is ordered:
(a) The Order of this court dated June 15, 1979 dismissing the present matter for want of prosecution is ordered vacated.
(b) The plaintiff's complaint is dismissed in its entirety for lack of subject matter jurisdiction. Said dismissal, however, is without prejudice, and the plaintiff is given to January 23, 1980 to, if possible, amend her complaint and remedy the deficiencies indicated above.
(c) Each of the defendants' three counterclaims are ordered dismissed for lack of
IT IS SO ORDERED.
It should be noted, also, that the complaint is inartfully drafted. The plaintiff attempts to allege several claims for relief but fails to separate them into distinct counts as is required by Rule 9 of the Federal Rules of Civil Procedure. While this is not a fatal defect, the plaintiff's failure to separate her claims in the manner specified has made her complaint unnecessarily confusing and difficult to comprehend.
The complaint also should have included a description of the allegedly copyrighted art works so that the defendant would have notice of the specific works in question.
"`Copyright owner,' with respect to any one of the exclusive rights comprised in a copyright, refers to the owner of that particular right." § 408(a) provides that "the owner of copyright or of any exclusive right in the work may obtain registration of the copyright claim by delivering to the Copyright Office the deposit specified to by this section, together with the application and fee . . ." (emphasis added). See Comment, Divisible Copyright Under the Copyright Act of 1976: The Effect on Registration, Recordation, Notice, and Standing to Sue, 57 Neb.L.R. 1033 (1978).
"[a]ny person who shall be injured . . . by reason of anything forbidden in the antitrust laws [is authorized to] sue therefor in any district court . . ."