Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 1 of 32 Page ID #:1
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`MANDOUR & ASSOCIATES, APC
`JOSEPH A. MANDOUR, III (SBN 188896)
`Email: jmandour@mandourlaw.com
`BEN T. LILA (SBN 246808)
`Email: blila@mandourlaw.com
`8605 Santa Monica Blvd., Suite 1500
`Los Angeles, CA 90069
`Telephone: (858) 487-9300
`Attorneys for plaintiff,
`API Systems, Inc.
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`UNITED STATES DISTRICT COURT
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`CENTRAL DISTRICT OF CALIFORNIA
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`API Systems, Inc., a California
`corporation,
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`Clarvue, Inc., a California
`corporation,
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`Plaintiff,
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`v.
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`Defendant.
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`Civil Case No. 8:21-CV-00507
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`COMPLAINT FOR COPYRIGHT
`INFRINGEMENT AND BREACH
`OF CONTRACT
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`DEMAND FOR JURY TRIAL
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`Plaintiff API Systems, Inc., by and through its counsel, alleges for its
`complaint against defendant Clarvue, Inc. as follows:
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 2 of 32 Page ID #:2
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`NATURE OF THE ACTION
`1.
`This Court has subject matter jurisdiction pursuant to 17 U.S.C. §
`501, et seq. (copyright infringement) and 28 U.S.C. §§ 1331 (federal question
`jurisdiction), 1338(a) and 1338(b) and supplemental jurisdiction for state causes
`of action.
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`THE PARTIES
`2.
`Plaintiff API Systems, Inc. (“API Systems,”) is a corporation
`organized under the laws of the State of California with its principal place of
`business in Tustin, California.
`3.
`Defendant Clarvue, Inc. is a corporation organized under the laws of
`the State of California with, on information and belief, its principal place of
`business at 17320 Red Hill Avenue, Irvine, California.
`JURISDICTION AND VENUE
`4.
`This Court has subject matter jurisdiction over this lawsuit under 28
`U.S.C. § 1338, because, inter alia, the action arises under the copyright laws of
`the United States.
`5.
`This Court has personal jurisdiction over defendant Clarvue, Inc.,
`because it is a California corporation residing in California. Also, defendant has
`transacted business in the Central District of California. Further, defendant
`systematically and continuously direct business activities toward and into the
`Central District of California, including selling the infringing material and
`entering into a contract with plaintiff.
`6.
`Venue is proper and reasonable in this district under 28 U.S.C. §
`1391(b)(2) because a substantial part of the events or omissions giving rise to
`these claims for copyright infringement and breach of contract occurred in this
`district and defendant has significant contacts with the district.
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 3 of 32 Page ID #:3
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`FACTS
`7.
`Plaintiff API Systems is a corporation engaged in the development,
`sale and marketing of software, including software used to generate customizable
`surveys, user forms and databases.
`8.
`API Systems’ software may be hosted on internet-accessible web
`servers for client companies in a variety of industries to use to create database
`management systems.
`9.
`For example, API Systems’ software has been used by companies in
`the facility management industry to allow property management companies to
`provide a platform where workflow can be managed in databases.
`10.
`In 2005, certain software entitled SURVEY Web Code (the “2005
`SURVEY Web Code”) was created and subsequently assigned to API Systems.
`11. API Systems’ work is the subject of U.S. Copyright Registration No.
`TX0008830022. A true and correct copy of said copyright registration is attached
`hereto as Exhibit A.
`12. An exemplary and true and correct copy of a portion of the 2005
`SURVEY Web Code is attached hereto as Exhibit B.
`13.
`In 2019, API Systems licensed and delivered software comprising the
`copyrighted 2005 SURVEY Web Code (the “2019 SURVEY Web Code”) to
`Clarvue.
`14. On March 21, 2020, API Systems and Clarvue formalized the license
`by entering into a Limited Software License Agreement (“Software Agreement”).
`A true and correct copy of the Software Agreement is attached hereto as Exhibit
`D.
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`15. The Software Agreement, among other things, provides Clarvue with
`a license to software entitled “nFormz” comprised of 2019 SURVEY Web Code.
`The 2019 SURVEY web code comprises nearly all the protectable portions of the
`2005 SURVEY Web Code and contains further improvements.
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 4 of 32 Page ID #:4
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`16. API Systems delivered the 2019 SURVEY Web Code in compiled,
`executable object code format to Clarvue.
`17. On information and belief, in or around May 2020, Clarvue, its
`employees and contractors proceed to reverse engineer, replicate, and copy API's
`object code to generate the source code version of the 2019 SURVEY Web Code.
`18. The Software Agreement explicitly provides that Clarvue shall not
`reverse engineer the 2019 SURVEY Web Code. The Software Agreement further
`provides that Clarvue shall not make any derivative works based on API Systems’
`copyrighted material.
`19. An exemplary, true and correct copy of Clarvue’s infringing code is
`attached hereto as Exhibit C. On information and belief, the infringing code will
`generate output that is substantially similar to the output of the copyrighted code
`in Exhibit B.
`20. API Systems uses the copyright symbol, ©, on its copyrighted works,
`including the SURVEY Web Code.
`21. Defendant’s copying, republication and exploitation of plaintiff’s
`copyrighted work(s) was without authorization from plaintiff. Defendant’s
`copying was willful, oppressive, malicious and with wrongful intent to infringe
`the rights of plaintiff.
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`CLAIMS OF RELIEF
`FIRST CLAIM OF RELIEF
` (Copyright Infringement – 17 U.S.C. § 501)
`22. Plaintiff repeats and incorporates by reference the statements and
`allegations in paragraphs 1 to 21 of the complaint as though fully set forth herein.
`23. At all times relevant hereto, plaintiff has been the owner, author
`and/or assignee of all copyright rights or rights to assert copyright claims for its
`works and all derivative works.
`24. Without authorization, defendant used, copied, reproduced, and
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 5 of 32 Page ID #:5
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`republished the copyrighted material. Defendant’s copying, reproduction, and
`republication were commercial in character and purpose. Defendant either
`completely or substantially used plaintiff’s copyrighted content. Because the
`copying was for commercial purposes, it did not constitute fair use under any
`doctrine of copyright law.
`25. Plaintiff did not authorize defendant’s copying, displaying, or
`republishing of the works. Defendant infringed the copyrights of plaintiff’s
`creative works by, inter alia, reproducing, republishing, publicly displaying, and
`creating derivates of the works.
`26. As a result of defendant’s infringement, plaintiff has suffered, and
`will continue to suffer, substantial losses.
`27. Defendant knew the infringed works belonged to plaintiff and that
`they did not have authorization to exploit plaintiff’s works. Defendant’s
`infringements were, therefore, willful.
`28. On information and belief, defendant induced, caused and materially
`contributed to the infringing acts of others by encouraging, inducing, allowing,
`and assisting others to reproduce and republish plaintiff’s works. Further, on
`information and belief, defendant had knowledge of the infringing acts of others
`relating to plaintiff’s copyrighted works.
`29. On information and belief, defendant has the right and ability to
`control the infringing acts of the individuals and entities that directly infringed
`plaintiff’s works. Further, on information and belief, defendant obtained a direct
`financial benefit from the infringing activities of the individuals or entities that
`directly infringed plaintiff’s works.
`30. Defendant’s actions, as set forth above, constitute copyright
`infringement in violation of the Copyright Act, 17 U.S.C. § 501, et seq., all to the
`damage of plaintiff as previously alleged.
`31. By reason of the foregoing unlawful acts recited in the above
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`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 6 of 32 Page ID #:6
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`paragraphs, plaintiff has been irreparably harmed and will continue to suffer
`damage until an appropriate injunction and damages award are imposed by this
`Court against defendant.
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`SECOND CLAIM OF RELIEF
`(Breach of Contract)
`32. Plaintiff repeats and incorporates by reference the statements and
`allegations in paragraphs 1 to 31 of the complaint as though fully set forth herein.
`33. Plaintiff and Defendant entered into the Software Agreement.
`34. Plaintiff did all, or substantially all, of the significant terms that the
`contract required.
`35. Defendant was required by the terms of the Software Agreement to,
`inter alia, not reverse engineer the 2019 SURVEY Web Code and not create
`derivative works based on the SURVEY Web Code.
`36. Defendant breached the Software Agreement by, inter alia, using and
`retaining the 2019 SURVEY Web Code beyond the license term and reverse
`engineering the 2019 SURVEY Web Code.
`37. Plaintiff was harmed by defendant’s breach including defendant’s
`failure to pay license fees. Defendant’s breach of the Software Agreement was a
`substantial factor in causing plaintiff’s harm.
`38. Defendants’ actions, as set forth above, constitute breach of contract,
`all to the damage of plaintiff as previously alleged.
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`PRAYER FOR RELIEF
`WHEREFORE, Plaintiff asks that this Court grant judgment against
`defendants for the following:
`A. Defendant, its officers, agents, servants, employees, and attorneys,
`and all persons in active concert or participation with any of them, be
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 7 of 32 Page ID #:7
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`iii.
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`permanently enjoined from:
`i.
`infringing plaintiff’s copyrighted works;
`ii.
`indirectly, contributorily, or vicariously infringing plaintiff’s
`copyrighted works; and,
`conspiring, encouraging, inducing, allowing, abetting, or assisting
`others in performing any of the activities referred to in
`subparagraphs (i) - (ii) above.
`B. Defendant shall file with the Court and serve on plaintiff, within 30
`days after the entry and service on defendant of an injunction, a report in
`writing and attested to under penalty of perjury setting forth in detail the
`manner and form in which defendants has complied with the provisions of
`subparagraph (A) above.
`C.
`Plaintiff be awarded statutory damages for prosecuting this action.
`D.
`Plaintiff recovers all damages it has sustained as a result of
`defendant’s infringement.
`E.
`Plaintiff be awarded enhanced damages due to defendant’s willful
`infringement.
`F.
`Plaintiff be awarded its reasonable attorneys’ fees for prosecuting this
`action to the full extent allowable by 17 U.S.C. § 505, the Software
`Agreement or other related statute.
`G.
`Plaintiff recovers its costs of this action and pre-judgment and post-
`judgment interest, to the full extent allowed by law.
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 8 of 32 Page ID #:8
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`H.
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`Plaintiff receives all other relief the Court deems appropriate.
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`Date: March 18, 2021
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`Respectfully submitted,
`MANDOUR & ASSOCIATES, APC
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`/s/ Ben T. Lila
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`Ben T. Lila (SBN 246808)
`Email: blila@mandourlaw.com
`Attorneys for plaintiff,
`API Systems, Inc.
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 9 of 32 Page ID #:9
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`DEMAND FOR JURY TRIAL
`Plaintiff hereby demands a trial by the jury on its claims herein and all
`issues and claims so triable in this action.
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`Date: March 18, 2021
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`Respectfully submitted,
`MANDOUR & ASSOCIATES, APC
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`/s/ Ben T. Lila
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`Ben T. Lila (SBN 246808)
`Email: blila@mandourlaw.com
`Attorneys for plaintiff,
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`COMPLAINT FOR COPYRIGHT INFRINGEMENT AND BREACH OF CONTRACT;
`DEMAND FOR JURY TRIAL
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 10 of 32 Page ID #:10
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`EXHIBIT A
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`Civil Case No. 8:21-CV-00507
`EXHIBIT A
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 11 of 32 Page ID #:11
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`Civil Case No. 8:21-CV-00507
`EXHIBIT A
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 12 of 32 Page ID #:12
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`EXHIBIT B
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`EXHIBIT B
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 13 of 32 Page ID #:13
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`Civil Case No. 8:21-CV-00507
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`EXHIBIT B
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 14 of 32 Page ID #:14
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`EXHIBIT C
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`EXHIBIT C
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 15 of 32 Page ID #:15
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 16 of 32 Page ID #:16
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`EXHIBIT D
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`Civil Case No. 8:21-CV-00507
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`EXHIBIT D
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 17 of 32 Page ID #:17
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 18 of 32 Page ID #:18
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 19 of 32 Page ID #:19
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 20 of 32 Page ID #:20
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 21 of 32 Page ID #:21
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 22 of 32 Page ID #:22
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 23 of 32 Page ID #:23
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 24 of 32 Page ID #:24
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 25 of 32 Page ID #:25
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`Case 8:21-cv-00507 Document 1 Filed 03/18/21 Page 26 of 32 Page ID #:26
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