United States District Court, S.D. Ohio, Western Division, Dayton
H. Rice District Judge.
REPORT AND RECOMMENDATIONS 
L. Ovington United States Magistrate Judge.
Productivity-Quality Systems, Inc. an Defendant CyberMetrics
Corporation are computer software developers. They are
competitors in the battle for clients to use their respective
software products that operate to improve quality control.
The market for clients who use, or might use, their software
products appears to be very large in light of Plaintiff's
assertion that it serves “clients in all 50 states,
Europe, Africa, and Australia.” (Doc. #1, ¶9).
alleges that CyberMetrics conspired with one of
Plaintiff's former employees, Jeff Aughton, to
misappropriate and exploit software that Aughton had
developed while under Plaintiff's employ. Id. at
¶5. Plaintiff claims that through such activities,
CyberMetrics has infringed Plaintiff's copyrights in
violation of federal law, misappropriated its trade secrets
and other proprietary information in violation of Ohio law,
and tortiously interfered with its contract with Aughton.
CyberMetrics seeks dismissal of Plaintiff's Complaint
under Fed.R.Civ.P. 12(b)(6) or, alternatively, dismissal or
transfer of venue under Fed.R.Civ.P. 12(b)(3) and 28 U.S.C.
§ 1406. Plaintiff opposes dismissal under Rule 12(b)(6).
Plaintiff also opposes dismissal or transfer for improper
reviewing Plaintiff's Complaint under Rule 12(b)(6), the
Court accepts the Complaint's well-pleaded factual
allegations as true, construes the Complaint in
Plaintiff's favor, and draws all reasonable inferences in
Plaintiff's favor. Bickerstaff v. Lucarelli, 830
F.3d 388, 396 (6th Cir. 2016). Doing so reveals the
is an Ohio corporation with a principle business address in
Dayton, Ohio. After Plaintiff was incorporated in 1984, it
began to offer “its flagship statistical process
control software, SQCpack….” (Doc. #1, ¶7).
This software assists its users in collecting, analyzing, and
processing data and statistics related to quality control. It
is a “widely distributed product, and is currently
installed on workstations at many Fortune 100 companies and
household names in the automotive, pharmaceutical, and
software development industries, among others.”
Id. at ¶10. Soon after Plaintiff's
incorporation it secured a toll-free telephone number,
800-777-3020, which it still retains today.
1986, Plaintiff expanded its software products to include
“GAGEpack gage management software. GAGEpack allows
… clients to manage various measurement devices,
instruments and gages.” Id. at ¶11. In
1991, Plaintiff applied for and received U.S. Copyright
Registrations for its GAGEpack, SQCpack 3.1, and SQCpack plus
1.2 software. In 1999, Plaintiff supplemented its SQCpack
with “CHARTrunner.” Id. at ¶13.
CHARTrunner helps Plaintiff's clients create charts and
graphs based on statistical data collected by Plaintiff's
software. To demonstrate the types of charts and graphs
CHARTrunner can create, Plaintiff has for years provided its
clients with sample charts and graphs. Id. at
to the eighties, in 1988 Defendant CyberMetrics began selling
GAGEtrack, a product that competes with Plaintiff's
GAGEpack. Id. at ¶36. At that time,
CyberMetrics secured a toll-free telephone number,
800-777-7020. This number has one different digit different
from Plaintiff's toll-free phone number, 800-777-3020.
Aughton began working for Plaintiff in 1989 as a software
developer. He worked on SQCpack, GAGEpack, and he later
helped develop CHARTrunner before and after its release. At
some point during Aughton's first 24 years with
Plaintiff, he became a manager. This position gave him access
to all Plaintiff's “proprietary information,
including its trade secrets, source code for all its
software, and other confidential information regarding
[Plaintiff's] clients and business
plans.” Id. at ¶24.
appears that for many years no litigious problems existed
between Plaintiff and CyberMetrics. Hints that this might be
changing began to emerge in 2013 when one of its former
employees, David Todd, informed Plaintiff that he had been
working with Jeff Aughton to develop software based on
CHARTrunner. At that time, Plaintiff still employed Aughton.
Todd told Plaintiff that his company planned to call its
CHARTrunner-based product “ProSPC.” Id.
at ¶24. Todd also informed Plaintiff that his company
planned to offer ProSPC in competition with Plaintiff's
software products. Id.
investigated and confirmed that Aughton was involved with
ProSPC and planned to work with Todd to sell ProSPC through
Todd's company. Aughton had written ProSPC back in 2007.
He had also written (in 2006 or 2007) a program called
PqChartCore-“charting code that was developed from and
intended to be used in CHARTrunner….”
Id. at ¶29. “Aughton ultimately inserted
code from PqChartCore into both ProSPC and GAGEpack.”
Id. at ¶31. Plaintiff owns both PqChartCore and
ProSPC. Id. at ¶32.
learning of Aughton's involvement with Todd and his
company, Plaintiff demoted Aughton from his managerial
position. He resigned from Plaintiff's employ in May
2015. Several weeks later, he formed his own company called
all this have to do with Defendant CyberMetrics? The
Complaint alleges that before August 2017, CyberMetrics hired
Aughton and his company, Factoria, Ltd, to help create
certain software products. At the time CyberMetrics hired
Aughton, Plaintiff no longer employed him. The names
CyberMetrics chose for its Aughton-related products- InSPC
and InSPC+are mellifluously reminiscent of the
name-ProSPC-of the product Aughton had developed in 2006 or
2007 while working for Plaintiff. This leads to
Plaintiff's central remonstrance:
Under direction by CyberMetrics, Jeff Aughton used his
specialized knowledge of [Plaintiff's] SQCpack,
CHARTrunner, and GAGEpack, software as well as the derivative
works of those software derivatives ProSPC and PqChartCore,
to create copies and/or derivative works of those software
which would ultimately be known as InSPC and InSPC….
Investigation of [these CyberMetrics products] has revealed
glaringly substantial similarities with [Plaintiff's]
Copyright protected software.
* * *
CyberMetrics employed Aughton with the intention of copying
[Plaintiff's] Productivity Quality Software, such as
SQCpack, CHARTrunner, ProSPC, PqChartCore, and GAGEpack, in
order to fast track InSPC and/or InSPC as a product
sufficient to compete with [Plaintiff's] decades of
experience in statistical process control software.
Id. at 9, ¶s 42-43; id. at 10,
¶52. Plaintiff's Complaint continues to tell this
tale with several examples, such as “largely” or
“virtually identical” formatting and naming
conventions within CyberMetrics' software files that
correspond to Plaintiff's software products. Id.
at ¶s 44-45. The Complaint next alleges, “review
of ‘properties' files from [CyberMetrics']
InSPC language database and a similar language from
[Plaintiff's] GAGEpack contain identical information,
including the name “Jeff' which appears in an
author line for both, and the name ‘PQ Systems (Europe)
Ltd.' which appears in the Company line for both.”
Id. at ¶46. And, “Aughton's
involvement in the development of [CyberMetrics'] InSPC
“is confirmed by the multiple instances of
‘developed by Factoria' appearing within the
program.” Id. at ¶47.
Complaint further maintains that CyberMetrics provides sample
charts for its clients through InSPC or InSPC. Those charts
are similar to the charts Plaintiff provides its clients
through CHARTrunner and SQCpack.
August 2017, CyberMetrics began offering InSPC and InSPC to
claims that CyberMetrics has and continues to reproduce, make
derivative works of, distribute, and display Plaintiff's
copyright-protected works including SQCpack, GAGEpack,
CHARTrunner, ProSPC, PqChartCore, and related sample charts
in violation of the Copyright Act of 1976, 17 U.S.C.
§§ 106 and 501. Plaintiff further claims that
CyberMetrics has misappropriated Plaintiff's trade
secrets in violation of Ohio Rev. Code §1333.61, et
seq., and has tortiously interfered with, and caused a
breach of, Plaintiff's valid and existing contract with
Discussion: Plaintiff's Claims
Federal Rule of Civil Procedure 8, “A pleading that
states a claim for relief must contain: ... a short and plain
statement of the claim showing that the pleader is entitled
to relief; and ... a demand for the relief sought....”
This standard “does not require ‘detailed factual
allegations, ' but it demands more than an unadorned, the
Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937
(2009) (citing Bell Atlantic Corp. v. Twombly, 550
U.S. 544, 555, 127 S.Ct. 1955 (2007); Papasan v.
Allain, 478 U.S. 265, 286, 106 S.Ct. 2932 (1986)).
survive a motion to dismiss, a litigant must allege enough
facts to make it plausible that the defendant bears legal
liability. The facts cannot make it merely possible that the
defendant is liable; they must make it plausible. Bare
assertions of legal liability absent some corresponding facts
are insufficient to state a claim.” Agema v. City
of Allegan, 826 F.3d 326, 331 (6th Cir. 2016) (citing
Iqbal, 556 U.S. at 678) (other citations omitted).
complaint does not need “detailed factual allegations,
” Iqbal, 556 U.S. at 678, but it must contain
“ ‘more than labels and conclusions, and a
formulaic recitation of the elements of a cause of
action.' ” Albrecht v. Treon, 617 F.3d
890, 893 (6th Cir. 2017) (citations omitted). “A
plaintiff must ‘plead[ ] factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged.' A plaintiff falls
short if she pleads facts ‘merely consistent with a
defendant's liability' or if the ...