United States District Court, S.D. Mississippi.
Carlton W. Reeves, District Judge .
ORDER ON MOTION TO AMEND
CARLTON W. REEVES, UNITED STATES DISTRICT JUDGE
October 31, 2018, the Court entered an Order denying without
prejudice Dr. Seshadri Raju's motion to amend. Docket No.
139. Now before the Court is Raju's renewed motion.
Docket No. 140. The proposed amendment adds a party,
Medtronic Vascular, Inc. (“Medtronic”), and six
substantive claims: (1) copyright infringement (2) federal
misappropriation of trade secrets, (3) state misappropriation
of trade secrets, (4) tortious interference with contract,
(5) civil conspiracy, and (6) unauthorized access to a
computer network. Dr. Erin Murphy argues that each of the
proposed claims are futile and as such, the amendment should
12(b)(6) of the Federal Rules of Civil Procedure authorizes
dismissal of actions that fail “to state a claim upon
which relief can be granted.” Fed.R.Civ.P. 12(b)(6).
“A district court may deny leave to amend a complaint
if the amendment would be futile.” Myers v.
CitiMortgage, Inc., 557 Fed. App'x 296, 297 (5th
considering a motion to dismiss under Rule 12(b)(6), the
Court accepts the plaintiff's factual allegations as true
and makes reasonable inferences in the plaintiff's favor.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The
plaintiff's claims must be plausible on their face, which
means there is “factual content that allows the court
to draw the reasonable inference that the defendant is liable
for the misconduct alleged.” Id. (citation
omitted). Since Iqbal, the Fifth Circuit has
clarified that the Supreme Court's “emphasis on the
plausibility of complaint's allegations does not give
district courts license to look behind those allegations and
independently assess the likelihood that the plaintiff will
be able to prove them at trial.” Harold H. Huggins
Realty, Inc. v. FNC, Inc., 634 F.3d 787, 803 n. 44 (5th
Court now turns to the claims.
argues that the copyright infringement claim is deficient
because (1) the Copyright Act does not protect Raju's
surgical procedures, (2) there is no allegation of the
ownership of a valid copyright, (3) there is no allegation of
actionable copying, and (4) there are no alleged damages.
prove copyright infringement, a plaintiff must establish (1)
ownership of a valid copyright; (2) factual copying; and (3)
substantial similarity.” Nola Spice Designs, L.L.C.
v. Haydel Enters., Inc., 783 F.3d 527, 549 (5th Cir.
2015) (citation omitted). The Copyright Act does not extend
protection “to any idea, procedure, process, system,
method of operation, concept, principle, or discovery,
regardless of the form in which it is described, explained,
illustrated, or embodied in such work.” 17 U.S.C.
first argument is unpersuasive. Raju is alleging a copyright
violation over the use of his surgical videos, not
his surgical procedures. See Docket No.
140-1 at ¶ 67. Copyright protection extends to
Raju's surgical videos. See Concentro Labs., L.L.C.
v. Practice Wealth, Ltd., 623 Fed. App'x 251, 252
(5th Cir. 2015) (“a copyright in a form or a video
outlining a particular procedure does not extend to the
the second argument, Raju submitted to the Court a copy of
his application for copyright registration of his surgical
videos and receipts for fees paid. He is awaiting the
issuance of registration certificates. Murphy claims that
this is insufficient to allege ownership of a valid
copyright, but the Fifth Circuit disagrees. “A
plaintiff has complied with the statutory formalities when
the Copyright Office receives the plaintiff's application
for registration, fee and deposit.” Lakedreams v.
Taylor, 932 F.2d 1103, 1108 (5th Cir. 1991).
“[T]he Fifth Circuit has held that ‘defects
resulting from lack of registration are cured when the
registration is filed, even if after suit is
filed.'” Hervey v. Keltman Pharm., Inc.,
No. 3:12-CV-625-CWR-FKB, 2015 WL 4673773, at *3 (S.D.Miss.
Aug. 6, 2015) (citing One Treasure Ltd., Inc. v.
Richardson, 202 Fed.Appx. 658, 661 (5th Cir. 2006)).
Raju, therefore, has alleged ownership of a valid copyright.
Murphy claims that because Raju has alleged only that Murphy
took a surgical video without permission, rather than
actually using it in Murphy's or Medtronic's own
work, or any substantial similarity, Raju has failed to
allege actionable copying. Actionable copying consists of the
last two elements of a copyright infringement claim: (1)
factual copying, i.e., “whether the alleged infringer .
. . actually used the copyrighted material in his own work,
and (2) substantial similarity between the two works.”
See Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d
586, 598 n. 62 (5th Cir. 2015) (quotation marks and citations
omitted). Factual copying can be shown through direct or
circumstantial evidence. See Armour v. Knowles, 512
F.3d 147, 152 (5th Cir. 2007). In Raju's proposed
complaint, he alleges that the stolen video was used to
develop Medtronic's venous stent program. See
Docket No. 140-1 at ¶¶ 17, 29, 69. This is
sufficient to allege actionable copying.
may amend his complaint to include a copyright infringement
of Trade Secrets-Defend Trade Secrets Act
proposed complaint also alleges a misappropriation of trade
secrets claim under federal law. Murphy argues that Raju
fails to state a viable claim because (1) Raju's vein
stents and stenting procedures are not trade secrets as
defined by the Code, (2) there is no allegation that
Raju's purported trade secrets were misappropriated, and
(3) there are no alleged damages.
discussing the merits of Murphy's arguments, we must
first return to whether good cause exists under Rule 16(b).
In Raju's first motion to amend, he claimed that part of
the reason he failed to timely seek amendment was because
“the actions of Dr. Murphy and Medtronic could not have
been known prior to filing the Complaint or the deadline to .
. . amend.” Docket No. 111. Raju alleged that
subpoenaed documents contain emails from Murphy to Medtronic
wherein Murphy discloses Raju's trade
further review of the original complaint, however, the facts
that give rise to this trade secret claim against Murphy were
in fact known to Raju before the amendment deadline. In the
original complaint, Raju alleges that Murphy disclosed
confidential information, including trade secrets, which were
exclusive to Raju, . . . without the express written
authorization of Raju. See Docket No. 1-1 at
¶¶ 11, 15.
documents subpoenaed from Medtronic allegedly reveal
more disclosures of trade secrets and a conspiracy
between Murphy and Medtronic to steal those trade secrets.
Still, Raju was certainly aware that Murphy had disclosed
trade secrets before the amendment deadline.
cause under Rule 16(b) is shown by considering: “(1)
the explanation for the failure to timely move to amend; (2)
the importance of the amendment; (3) potential prejudice in
allowing the amendment; and (4) the availability of a
continuance to cure such prejudice.” Alford v.
Kuhlman Corp., No. 3:07-CV-756-HTW-LRA, 2010 WL 1257844,
at *1 (S.D.Miss. Mar. 26, 2010) (citing S&W Enter. v.
Southtrust Bank, 315 F.3d. 533 (5th Cir. 2003))
(brackets omitted). The Court “does not mechanically
count the number of factors that favor each side.”
EEOC v. Serv. Temps, Inc., No. 3:08-CV-1552-D, 2009
WL 3294863, at *3 (N.D. Tex. Oct. 13, 2009).
failure to include a misappropriation of trade secrets claim
at the outset of this case suggests a lack of diligence, but
the last three factors weigh in favor of granting leave to
amend for the reasons stated in the Court's previous
Order. See Docket No. 139. Considering the four
factors as a whole, the Court finds that Raju has met the
good cause standard despite his knowledge of facts sufficient
to have alleged a misappropriation of trade secrets claim
before the deadline.
private right of action is allowed for misappropriation of
trade secret claims where a plaintiff sufficiently alleges:
(1) the existence of a trade secret; (2) misappropriation of
the trade secret; and (3) the trade secret's relation to
a product or service used in, or intended for use in,
interstate or ...