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IN THE UNITED STATES DISTRICT

COURT FOR THE SOUTHERN
DISTRICT OF INDIANA
EVANSVILLE DIVISION

MADDENCO INC., )
)
Plaintiff, )
v. ) Case No. 3:22-CV-173-RLY-MPB
)
JAMES REED, DRU DARBY, and )
HG AUTOTECH LLC )
)
Defendants. )

PLAINTIFF’S RESPONSE IN OPPOSITION TO DEFENDANT JAMES REED’S RULE

12(b)(6) MOTION TO PARTIALLY DISMISS, RULE 12(b)(2) MOTION TO DISMISS
FOR LACK OF PERSONAL JURISDICTION, AND RULE 12(b)(3) MOTION TO
DISMISS FOR LACK OF PROPER VENUE AND, ALTERNATIVELY, MOTION TO
TRANSFER VENUE
James Reed’s motion lacks merit and should be denied. First, MaddenCo, Inc.

(“MaddenCo”) has sufficiently pled a claim for statutory damages and attorney’s fees under the

Copyright Act, and Reed’s attempt to inject matters outside the pleadings on that issue is wholly

improper. Second, the law clearly provides that MaddenCo’s breach of contract, declaratory

judgment and breach of fiduciary duty claims are not preempted by the Copyright Act. Third,

Reed’s employment resulted in significant contacts in the State of Indiana are directly connected

to this action, and Reed purposefully directed his wrongful conduct to the State of Indiana with

knowledge that the resultant harm would be felt in the State of Indiana. As such, this Court has

specific personal jurisdiction over Reed. Finally, the Southern District of Indiana is a proper forum

for this action, and Reed’s request for dismissal or transfer to Louisiana is not warranted. As such,

Reed’s motion should be summarily denied.

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I. STATEMENT OF RELEVANT FACTS

1. MaddenCo Inc. (“MaddenCo”), is an Indiana corporation with its principal place

of business located at 4847 E. Virginia Street, Suite G, Evansville, Indiana. (Dkt. 1 ¶ 1; Exhibit A,

Affidavit of Kim Poynter (“Poynter Aff.”) ¶ 2.)

2. The Evansville, Indiana office is the only physical office location maintained by

MaddenCo. (Poynter Aff. ¶ 4.)

3. James Reed (“Reed”) was employed by MaddenCo and is currently employed by

Autotech LLC (“Autotech”). (Dkt. 2 ¶ 2.)

4. MaddenCo develops and supports integrated software systems for independent

tire dealers and truck stop service centers. (Dkt. 2 ¶ 8; Poynter Aff. ¶ 3.)

5. MaddenCo spent years developing its proprietary software systems and owns a

copyright registration entitled “The Tire Dealer System”, Copyright Registration Number TX

0009171151, with an effective registration date of August 26, 2022. (Dkt. 2 ¶ 9.)

6. Reed was employed by MaddenCo on or about June 26, 2017, and eventually

served as a Software Development Manager. (Dkt. 2 ¶ 10; Poynter Aff. ¶ 6.)

7. Reed executed the MaddenCo Agreement Regarding Confidential Information and

Intellectual Property (“Confidentiality Agreement”) while physically present in the Evansville,

Indiana office. (Dkt. 2 ¶ 12; Poynter Aff. ¶ 7.)

8. Paragraph 1 of the Agreement prohibits Reed from disclosing MaddenCo’s

confidential information or material and required Reed to return all confidential information to

MaddenCo upon leaving MaddenCo’s employment. (Dkt. 2-3.)

9. The Agreement defined confidential information as any information or material:

(a) generated or collected or utilized in the operations of MaddenCo or its subsidiaries that relates

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to the actual or anticipated business or research and development of MaddenCo or its subsidiaries;

or (b) suggested by or resulting from any task assigned to [Reed] or work performed by [Reed] for

or on behalf of MaddenCo or its subsidiaries, and which has not been made available generally to

the public. (Dkt. 2-3.)

10. Pursuant to the Agreement, Reed assigned to MaddenCo his entire right, title and

interest in any idea, invention, design of a useful article, computer program and related

documentation, and other work of authorship (“Developments”) made or conceived jointly or by

Reed, or created wholly or in part by Reed, whether or not such Developments are patentable,

copyrightable or susceptible to other forms of protection; and the Developments: (a) relate to the

actual or anticipated business or research or development of MaddenCo or its subsidiaries, or (b)

are suggested by or result from any task assigned to Reed or work performed by Reed for or on

behalf of MaddenCo or its subsidiaries. (Dkt. 2-3.)

11. From 2017 to 2018, Reed rented an apartment in Indiana where he stayed during

the week, and then drove home to Tennessee on the weekends. (Dkt. 18-1, ¶ 4.)

12. From 2018 until March 2020, Reed stayed in a parked travel trailer in Kentucky

during the week and would drive to the MaddenCo office in Indiana. (Dkt. 18-1, ¶ 5.)

13. Beginning in March 2020, Reed became a fully remote employee of MaddenCo

until he quit his employment in August 2021. (Dkt. 18-1, ¶ 7.)

14. Reed was permitted to work remotely due to the COVID-19 pandemic. (Poynter

Aff. ¶ 8.)

15. During the time Reed worked remotely, Reed would regularly communicate with

co-workers located in Indiana using software and other programs based in the Evansville, Indiana

office of MaddenCo. (Poynter Aff. ¶ 10.)

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16. During the time Reed worked remotely, Reed used a remote desktop for his PC that

remained on location in the Evansville, Indiana office of MaddenCo. (Poynter Aff. ¶ 10.)

17. Reed used his PC located in Evansville, Indiana to access all information, software

and other programs required for his employment including, but not limited to, software code and

customer contact information. (Poynter Aff. ¶ 11.)

18. Between March 2020 and August 2021, Reed made two (2) trips to the MaddenCo

office in Indiana. (Dkt. 18-1, ¶ 7.)

19. During his employment with MaddenCo, Reed had access to MaddenCo

confidential information, including the code for The Tire Dealer System. (Dkt. 2 ¶ 17.)

20. It is believed that after Reed resigned his employment with MaddenCo, he copied

and took possession of MaddenCo confidential information including, but not limited to, customer

contact information and software code that he assisted in developming while an employee of

MaddenCo. (Poynter Aff. ¶ 12.)

21. On information and belief, Reed surreptitiously conspired with Dru Darby

(“Darby”) to use MaddenCo confidential information, including the code for The Tire Dealer

System to recreate, copy, or develop an alternative code for products that are competitive to

MaddenCo products, including The Tire Dealer System. (Dkt. 2 ¶ 17.)

II. LEGAL STANDARD

“To survive a motion to dismiss for failure to state a claim, a plaintiff must allege ‘enough

facts to state a claim to relieve that is plausible on its face.’” United States v. Healthnet, Inc., 2021

U.S. Dist. LEXIS 188142, at *7 (S.D. Ind. Sep. 30, 2021) quoting Bell Atl. Corp. v. Twombly, 550

U.S. 544, 570 (2007). “A claim has facial plausibility when the plaintiff pleads content that allows

the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”

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Id. quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). “In considering a Rule 12(b)(6) motion to

dismiss, the Court takes the complaint’s factual allegations as true and draws all reasonable

inferences in the plaintiff’s favor.” Id. citing Orgone Capital III, LLC v. Daubenspeck, 912 F.3d

1039, 1044 (7th Cir. 2019).

When a defendant moves to dismiss for lack of personal jurisdiction, “plaintiff bears the

burden of demonstrating the existence of jurisdiction.” Philpot v. Eagle Communs., Inc., 2015 U.S.

Dist. LEXIS 88367, at *3 (S.D. Ind. July 8, 2015) quoting Purdue Research Found. V. Sanofi-

Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). “As such, a plaintiff need only make a prima

facie showing of jurisdiction.” Id. “In evaluating whether the prima facie showing has been

satisfied, the plaintiff is entitled to the resolution in its favor of all disputes concerning relevant

facts presented in the record.” Id. quoting Purdue Research, 3378 F.3d at 782.

When a defendant moves to dismiss for improper venue, the plaintiff bears the burden of

establishing that venue is proper. Id. citing Grantham v. Challenge-Cook Bros., Inc., 420 F.2d

1182, 1184 (7th Cir. 1969). “In evaluating a Rule 12(b)(3) motion, the court accepts the plaintiff’s

well-pleaded facts as true and resolves any factual conflicts in the parties’ submissions in the

plaintiff’s favor.” Id. citing Moore v. AT&T Latin Am. Corp., 177 F.Supp.2d 785, 788 (N.D. Ill.

2001).

III. ARGUMENT

A. Plaintiff Adequately Pleads a Claim for Statutory Damages

Reed argues that MaddenCo’s claim for statutory damages and attorney’s fees should be

dismissed because (1) MaddenCo’s complaint lacks specificity as to a timeline of copyright

infringement, and (2) AutoTech’s software was in beta testing prior to the effective date of

MaddenCo’s copyright registration. Reed’s argument fails for several reasons.

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To start, Reed’s allegation that AutoTech’s software was in beta testing prior to the

effective date of MaddenCo’s registration is improper evidence submitted in support of a Rule

12(B)(6) motion to dismiss. Specifically, Reed’s affidavit contains the sworn statement as to the

date of beta testing of AutoTech’s software. “When ruling on a motion to dismiss, ‘a court may

consider matters outside of the pleadings to resolve factual questions pertaining to jurisdiction,

process, or indispensable parties.’” Deb v. SIRVA, Inc., 2017 U.S. Dist. LEXIS 3969, at *3 (S.D.

Ind., Jan 11, 2017) Deb v. SIRVA, Inc., 832 F.3d 800, 809 (7th Cir. 2016). However, on a motion

under Rule 12(b)(6), if “matters outside the pleadings are presented to and not excluded by the

court, the motion must be treated as one for summary judgment under Rule 56.” Id. quoting Fed.

R. Civ. P. 12(d).

In this case, Reed submitted an extensive affidavit in support of his flawed motion to

dismiss. While many of the averments bear on the issue of personal jurisdiction, and are therefore

proper, several averments have no bearing on jurisdiction and should be disregarded and stricken.

Id. (striking those portions of defendant’s declaration regarding the 12(b)(6) argument). Reed’s

affidavit testimony regarding the date of AutoTech’s software beta testing relates only to his Rule

12(b)(6) motion to dismiss the claim for statutory damages and attorney’s fee and, therefore,

should be stricken.

Without this improper affidavit testimony, Reed is left with the argument that MaddenCo’s

claim lacks specificity. A complaint must provide “a short and plain statement of the claim

showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The Supreme Court has held

that to survive a motion to dismiss, a complaint must be plausible on its face, meaning that the

plaintiff had pleaded “factual content that allows the court to draw the reasonable inference that

the defendant is liable for the misconduct alleged.” Ashcroft, 129 S. Ct. 1937, 1949 (2009). A

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complaint does not need detailed factual allegations, but it must “be enough to raise a right to relief

above the speculative level.” Twombly, 550 U.S. at 555. A complaint must give “enough details

about the subject-matter of the case to present a story that holds together.” Swanson v. Citibank,

N.A., 614 F.3d 400, 404 (7th Cir. 2010).

In this case, MaddenCo has certainly satisfied that standard – especially after Reed’s

improper attempt to inject matters outside the pleadings is disregarded. MaddenCo.’s Complaint

undoubtedly sets forth sufficient facts establishing a claim for statutory damages and attorney’s

fees under the Copyright Act. As such, Reed’s Rule 12(b)(6) motion to dismiss that claim should

be summarily denied.

B. MaddenCo’s State Law Claims for Breach of Contract and Breach of Fiduciary
Duty Are Not Preempted. 1

i. MaddenCo’s breach of Contract Claim is Not Preempted

Reed incorrectly asserts that MaddenCo’s breach of contract claim is preempted by the

Copyright Act. It is well-established that “Section 301(a) of the Copyright Act preempts ‘all legal

and equitable rights [under state law] that are equivalent to any of the exclusive rights within the

general scope of copyright as specified in section 106’ and are ‘in a tangible medium of expression

and come within the subject matter of copyright as specified by sections 102 and 103.’” Art of

Design, Inc. v. Pontoon Boat, LLC, 2018 U.S. Dist. LEXIS 101321, at *11 (N.D. Ind. June 18,

2018) quoting Seng-Tiong Ho v. Taflove, 648 F.3d 489, 500 (7th Cir. 2011).

“The Seventh Circuit has ‘distilled’ two elements from the language of § 301: ‘First, the

work in which the right is asserted must be fixed in tangible form and come within the subject

matter of copyright as specified in § 102. Second, the right must be equivalent to any of the rights

1
MaddenCo concedes that its claim for Unfair Competition is based upon a theory of “reverse
passing off”, which is preempted by the Copyright Act.
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specified in § 106.’” Id. at *11-12 quoting Seng-Tiong Ho, 648 F.3d at 500. The rights specified

in § 106 include the “reproduction, adaption, publication, performance and display of the

copyrighted work.” Id. quoting Sent-Tiong Ho, 648 F.3d at 500. “Also among that list is the

exclusive right to distribute copies of the copyrighted work to the public by sale.” Id. citing 17

U.S.C. § 106(3).

“To avoid preemption, a state law must regulate conduct that is qualitatively

distinguishable from that governed by federal copyright law, meaning conduct other than

reproduction, adaption, publication, performance, display, or distribution.” Id. quoting Toney v.

L’Oreal USA, Inc., 406 F.3d 905, 909 (7th Cir. 2005). “The Seventh Circuit disfavors preemption

of state law breach of contract claims.” Id. As the Seventh Circuit has explained, “copyrights create

a right of the author ‘against the world’ and ‘restrict the options of persons who are strangers to

the author.’” ProCD v. Zeidenberg, 86 F.3d 1447, 1454 (7th Cir. 1996). “Contracts, by contrast,

generally affect only their parties; strangers may do as they please, so contracts do not create

‘exclusive rights.’” Id. Thus, “§ 301 does not itself interfere with private transactions in intellectual

property,” and “a simple two-party contract is not ‘equivalent to any of the exclusive rights within

the general scope of copyright and therefore may be enforced.’” Id at 1455.

In Art of Design, Inc., the Northern District of Indiana – in reliance upon the principles

established in ProCD – declined to hold that a breach of contract claim was preempted because

the contract “was nothing more than a ‘simple two-party’ agreement” and its breach does not seek

to enforce any rights equivalent to those in the Copyright Act. 2018 U.S. Dist. LEXIS 101321, at

*13. In Gail Green Licensing & Design, Ltd. v. Accord, Inc., the Northern District of Illinois held

that a claim for breach of a Non-Disclosure and Confidentiality Agreement for disclosing

copyrighted works and other confidential information was not preempted by the Copyright Act

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because “[a] claim that Defendants breached a contractual duty of confidentiality is not the

equivalent of the exclusive rights copyright holders have under the Copyright Act.” 2006 U.S.

Dist. LEXIS 72713, at *19 (N.D. Ill. Oct. 5, 2006).

MaddenCo’s breach of contract claim is based upon Reed’s disclosure and misuse of

confidential information, which includes (but is not limited to) software code and customer contact

information. MaddenCo’s breach of contract claim – and its declaratory judgment claims – is based

upon the failure to assign and deliver software code he developed. The Agreement forming the

basis of the claim is a simple two-party contract between Reed and MaddenCo that was executed

as a result of Reed’s employment with MaddenCo. Like the breach of contract claim in Gail Green

Licensing and Design, Ltd., MaddenCo’s breach of contract claim is not the equivalent of the

exclusive rights copyright holders have under the Copyright Act and, therefore, is not preempted.

For the same reason, MaddenCo’s declaratory judgment claim is not preempted. Accordingly,

Reed’s Motion to Dismiss should be denied.

ii. Plaintiff’s Breach of Fiduciary Duty Claim is Not Preempted

MaddenCo’s breach of fiduciary duty claim is, likewise, not preempted. The Seventh

Circuit has held that if a state cause of action requires an “extra element” that is not necessary in

order to demonstrate infringement of a right protected by the Copyright Act there is no preemption.

LawBase, Inc. v. Software Servs., 2001 U.S. Dist. LEXIS 28541, at * 5 (E.D. Wisc., Sept. 28,

2001); See also Baltimore Orioles, Inc. v. Major League Baseball Players Ass’n, 805 F.2d 663,

677 n. 26 (7th Cir. 1986). Under Indiana law, a claim for breach of fiduciary duty requires proof of

the existence of a fiduciary relationship. Konecranes, Inc. v. Davis, 2014 U.S. Dist. LEXIS 19710,

at * 18 (S.D. Ind., Feb. 18, 2014). A copyright infringement claim does not, however, require the

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existence of a fiduciary duty and, therefore, MaddenCo’s claim for breach of fiduciary duty is not

preempted. Lawbase, Inc., 2001 U.S. Dist. LEXIS, at * 15.

C. This Court Has Personal Jurisdiction Over Defendant James Reed

Reed has significant contacts with the State of Indiana that are directly connected to this

litigation. Moreover, Reed purposefully aimed his wrongful conduct at MaddenCo – who is located

in the State of Indiana – with knowledge that his actions would cause harm in the State of Indiana.

Accordingly, this Court has specific personal jurisdiction over Reed.

“A federal district court exercising diversity jurisdiction has personal jurisdiction over a

nonresident defendant ‘only if a court in the state in which it sits would have such jurisdiction.’”

World Fin. Group, Inc. v. Steele, 2002 U.S. Dist. LEXIS 17376, at *3 (S.D. Ind., Aug. 15, 2002)

quoting RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). “In Indiana, personal

jurisdiction depends on whether the requirements of the state long-arm statute are met and whether

federal due process requirements are satisfied.” Guide Techs., LLC v. Killeen, 2009 U.S. Dist.

LEXIS 44374, at *6 (S.D. Ind., May 20, 2009) citing Purdue Research v. Sanofi-Synthelabo, S.A,

338 F.3d 773, 779 (7th Cir. 2003).

“Indiana Trial Rule 4.4(A) serves as Indiana’s long-arm statute governing the extent of

personal jurisdiction. It provides in part that ‘a court of this state may exercise jurisdiction on any

basis not inconsistent with the Constitutions of this state or the United States.’ This provision ‘was

intended to, and does, reduce the analysis of personal jurisdiction to the issue of whether the

exercise of personal jurisdiction is consistent with the Federal Due Process Clause.’” Id. quoting

LinkAmerica Corp. v. Albert, 857 N.E.2d 961, 967 (Ind. 2006). “Retention of the enumerated acts

found in Rule 4.4(A) serves as a handy checklist of activities that usually support personal

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jurisdiction but does not serve as a limitation on the exercise of personal jurisdiction by a court of

this state.” LinkAmerica Corp, 857 N.E.2d at 967.

“Personal jurisdiction may be either specific or general.” Commissioning Agents, Inc. v.

Long, 143 F.Supp.3d 775, 787 (S.D. Ind. 2015) citing Wilson v. Humphreys (Cayman) Ltd., 916

F.2d 1239, 1244 (7th Cir. 1990). “Specific jurisdiction exists for controversies that arise out of or

are related to the defendant’s forum contacts.” Id. citing Helicopteros Nacionales de Colombia,

S.A. v. Hall, 466 U.S. 408, 414 n. 8 (1984). To establish personal jurisdiction, “the action must

directly arise out of the specific contacts between defendant and the forum state.” Id. citing RAR,

Inc., 107 F.3d at 1278. “A single contact with the forum state may satisfy the standard of minimum

contacts if the contact produces a substantial connection with the forum state and the connection

is related to the lawsuit.” Id.

“Specific jurisdiction may be based on relatively modest contacts with the forum if they

have a substantial connection to the plaintiff’s action.” World Fin. Group Inc., 2002 U.S. Dist.

LEXIS 1737 at *3. “At a minimum, the court must find ‘some act by which the defendant

purposefully avails itself of the privilege of conducting activities within the forum State, thus

invoking the benefits and protections of its laws.’” Lee v. Goshen Rubber Co., 635 N.E.2d 214,

216 (Ind. Ct. App. 1994) quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958). “

“In cases involving breach of contract claims…personal jurisdiction often turns on whether

the defendant ‘purposely availed’ himself of the privilege of conducting business or engaging in a

transaction in the forum state.” Commissioning Agents, 143 F.Supp. 3d at 788 citing Tamburo v.

Dworkin, 601 F.3d 693, 702 (7th Cir. 2010). “In cases involving intentional torts, however, the

inquiry focuses on whether the conduct underlying the claims was purposefully directed at the

forum state,” which is established when the following factors are met: (1) intentional conduct; (2)

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expressly aimed at the forum state; and (3) with the defendant’s knowledge that the effects would

be felt in the forum state. Id. at 788, 791.

The latter is commonly called the “effects doctrine,” which gives specific personal

jurisdiction over a nonresident defendant when the defendants’ intentional tortious acts aimed at

the forum state cause harm to the plaintiff in the forum state, and the defendant knows such harm

is likely to be suffered. Lighthouse Carwash, Sys., LLC v. Illuminator Bldg. Co., LLC¸ 2004 U.S.

Dist. LEXIS 21666, at *11 (S.D. Ind., Aug. 31, 2004).

In Lee, the Indiana Court of Appeals held that a former employee of an Indiana employer

had “significant” contacts with Indiana for purposes of establishing personal jurisdiction. 635

N.E.2d at 216. Specifically, the Court noted that the defendant was employed by an Indiana

company, visited Indiana on two (2) occasions and used the mail and telephone to maintain contact

with his employer in Indiana for employment related matters. Id. According to the Court, there

was a significant nexus between the employee’s contacts and the employer’s cause of action for

breach of an employment contract, submission of fraudulent expense vouchers and conversion of

funds paid as compensation. Id. at 217.

In Commissioning Agents, this Court considered whether a former employee of an Indiana

company was subject to personal jurisdiction in the state for claims of breach of contract, breach

of fiduciary duty, fraud and other intentional torts as a result of the former employee’s theft and

use of proprietary information for the benefit of a competitor and submission of falsified

timesheets and expense reports. 143 F.Supp. 3d at 779. This Court held that the former employee

was subject to personal jurisdiction of Indiana because his employment with an Indiana company

was “precisely what made his alleged scheme of fraud possible,” and the ability to steal the

confidential information was “facilitated by [his] employment” with the Indiana company. Id.

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Finally, in Lighthouse Carwash, this Court found that defendants accused of copyright

infringement, unfair competition and other tortious conduct were subject to specific personal

jurisdiction pursuant to the “effects doctrine” because defendants knew the plaintiff was based in

Indiana. 2004 U.S. Dist. LEXIS 21666 at *15. Thus, defendants knew that the injury would be felt

mainly in Indiana. Id. This Court noted that the Seventh Circuit interprets the effects doctrine

broadly to mean that “the state in which the victim suffers the injury may entertain a suit against

the accused tortfeasor” even if all the other relevant conduct took place outside of the forum state.

Id. at *11 citing Janmark, Inc. v. Reidy, 132 F.3d 1200, 1202 (7th Cir. 1997); Indianapolis Colts,

Inc. v. Metro. Baltimore Football Club, 34 F.3d 410, 411 (7th Cir. 1994).

In this case, Reed’s contacts with the State of Indiana are far more significant than the

contacts of the defendants in Lee and Commissioning Agents. To start, Reed was employed by

MaddenCo – an Indiana company with its only physical office location in Indiana – for over four

(4) years. As part of his employment, Reed executed the Agreement with MaddenCo in Indiana.

Then, during the first year of employment, Reed rented an apartment in Indiana and spent five (5)

days a week working, living and sleeping in Indiana. During Reed’s second and third year of

employment, Reed slept in Kentucky but continued to drive to MaddenCo’s principal office in

Indiana and work from the principal office five (5) days per week. During his final year and a half

of employment, Reed worked virtually, but continued to maintain contact with MaddenCo in the

State of Indiana.

With respect to MaddenCo’s breach of contract claim, there is no question that Reed

purposefully availed himself of the privilege of conducting business and engaging in a transaction

in Indiana when he accepted employment with an Indiana company and executed the Agreement

in Indiana. Moreover, Reed’s breach of the Agreement – which is premised upon the disclosure of

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confidential information and refusal to assign intellectual property – is directly connected to his

employment with an Indiana company and the contacts that Reed maintained during his

employment MaddenCo.

With respect to the remaining claims, Reed’s wrongful conduct – like the conduct of the

former employee in Commissioning Agents – was undoubtedly facilitated by his employment with

MaddenCo and substantial contacts with the State of Indiana that Reed maintained during his

employment. For over four (4) years, Reed was granted access to confidential information located

in Indiana – through his PC located in Indiana – by virtue of his employment with MaddenCo (and

execution of the Agreement). Reed’s employment included hundreds of trips to Indiana, and

continuous communication and contact with co-workers in Indiana. After leaving MaddenCo’s

employment, Reed unlawfully disclosed confidential information that is stored in Indiana. It is

clear that Reed’s conduct was aimed at Indiana with knowledge that the effects of that conduct

would be felt in Indiana.

Like the defendants in Lighthouse Carwash, Reed is undoubtedly aware that MaddenCo is

located in Indiana and maintains its confidential information and copyrighted material in Indiana.

Thus, this Court may infer that by engaging in the alleged tortious conduct, Reed knew the damage

would be incurred in Indiana. Thus, specific personal jurisdiction is appropriate pursuant to the

“effects doctrine.”

Finally, this Court must determine whether exercising personal jurisdiction over Reed

would offend traditional notions of fair play and substantial justice. Int’l Shoe Co. v. Washington,

326 U.S. 310, 316 (1945). The following factors are relevant in making this determination: “the

burden on the defendant, the forum State’s interest in adjudicating the dispute, the plaintiff’s

interest in obtaining convenient and effective relief, the interstate judicial system’s interest in

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obtaining the most efficient resolution of controversies, and the shared interest of the several states

in further fundamental substantive social policies.” Burger King v. Rudzewicz, 471 U.S. 462, 477

(1985).

“Indiana has a strong interest in providing a forum for its local businesses to seek redress

for tortious injuries inflicted by out-of-state actors and suffered within the state.” Commissioning

Agents, 143 F.Supp.3d at 794. Finally, “it would not be unfair” for Reed to defend an “action in

the state of his former employer, with whom he had repeated and sustained contact during his

employment. W. Capra Consulting Grp., Inc. v. Snyder, 2019 U.S. Dist. LEXIS 140692 (N.D. Ill.

Aug. 20, 2019). Simply put, exercising jurisdiction over Reed would not offend traditional notions

of fair play and substantial justice.

D. Venue is Proper in the Southern District of Indiana

Reed asserts that venue in the Southern District of Indiana is improper because (1)

copyright infringement is the sole claim remaining; and (2) the Southern District of Indiana is not

the proper venue under the venue provision of the Copyright Act. Reed’s argument lacks merit.

To start, for the reasons set forth above, MaddenCo’s claims for breach of contract, declaratory

judgment and breach of fiduciary duty are not preempted and, therefore, 28 U.S.C. § 1391 is

applicable. And, there is no question, that a substantial part of the events giving rise to the claim

occurred in Evansville, Indiana and involves the theft of confidential information from Evansville,

Indiana. Specifically, Reed signed the Agreement that is the subject of the breach of contract claim

in Indiana. In addition, Reed used his employment with an Indiana company and his company-

issued PC located in Indiana to access and steal confidential information. As such, venue in the

Southern District of Indiana is proper pursuant to 28 U.S.C 1391(b)(2).

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Venue for copyright infringement claims, however, is established by 28 U.S.C. § 1400 (a),

which provides that copyright infringement claims may be instituted in the district in which the

defendant or his agent resides or may be found. The Seventh Circuit has interpreted 28 U.S.C.

1400 (a) to mean that venue for copyright cases is proper where personal jurisdiction is proper. In

re LimitNone, L.L.C., 551 F.3d 572, 575 n. 1 (7th Cir. 2008). In a very similar matter, the Northern

District of Illinois found that out-of-state defendants that infringed upon a copyright whose owner

was located in Illinois were subject to personal jurisdiction in Illinois. See Ingram v. Page, 1999

U.S. Dist. LEXIS 11871 (N.D. Ill., July 27, 1999). Because defendants are subject to personal

jurisdiction in a district, then venue is proper for purposes of copyright infringement. Id. As set

forth in more detail above, this Court has personal jurisdiction over Reed and, therefore, venue in

the Southern District of Indiana is also proper pursuant to 28 U.S.C. § 1400 (a).

E. Louisiana is Not a More Convenient Venue

Change of venue is governed by 28 U.S.C. § 1404(a), which provides: “For the

convenience of the parties and witnesses, in the interest of justice, a district court may transfer any

civil action to any other district or division where it might have been brought.” In considering a

request to transfer venue, “the court’s inquiry must focus on the remaining preconditions to transfer

contained in Section 1404: (1) the convenience of the parties; (2) the convenience of the witnesses;

and (3) the interest of justice. Lighthouse Carwash Sys., LLC v. Illuminator Bldg. Co., LLC, 2004

U.S. Dist. LEXIS 24284, at *9 (S.D. Ind., Oct. 7, 2004).

“While the court is limited to the three listed factors, they are ‘best viewed as placeholders

for a broader set of considerations, the contours of which turn upon the particular facts of each

case.’” Id. quoting Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219 n. 3 (7th Cir. 1986). The

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movant for transfer bears the burden of demonstrating that the transferee forum is “clearly more

convenient” than the transferor forum. Id. quoting Coffey, 796 F.2d at 220.

“As a general rule, a plaintiff’s choice of forum is entitled to substantial weight in the

Section 1404(a) analysis, especially when it is also the plaintiff’s home.” Id. citing Vandeveld v.

Christoph, 877 F.Supp. 1160, 1167 (N.D. Ill. 1995). “In fact, a plaintiff’s choice of forum should

‘rarely be disturbed’ unless the balance weighs ‘strongly’ in the defendant’s favor.” Id. quoting IN

re Nat’l Presto Indus., Inc., 347 F.3d 662, 663-64 (7th Cir. 2003). “Such deference permeates the

Section 1404 inquiry, putting the scales initially in the Plaintiffs’ favor.” Id.

Reed simply has not satisfied the substantial burden of demonstrating that Louisiana is a

more convenient forum. With respect to the convenience of the parties, it should be noted that

MaddenCo is based in Indiana and HG Autotech, LLC is based in Louisiana. Reed lives in

Tennessee and Darby lives in Louisiana. Reed’s location in Tennessee does not render Indiana any

more or less convenience that Louisiana. Thus, a transfer to Louisiana would simply shift the

inconvenience from HG Autotech and Darby to MaddenCo, which cuts against a change in venue.

Id. citing Vandeveld, 877 F.Supp. at 1169. It should also be noted that both Darby and Reed

previously worked for MaddenCo and traveled to Indiana routinely (5 days a week in Reed’s case).

Thus, the convenience of the parties factor weighs against transfer.

With regard to the convenience of witnesses, it is the burden of the movant to establish,

“by reference to particular circumstances, that the transferee forum is clearly more convenient.”

Hill v. White Jacobs & Assocs., 2015 U.S. Dist. LEXIS 49400, at *11 (S.D. Ind., April 15, 2015)

citing Coffey, 796 F.2d at 219-220. “The movant requesting a change of venue…must clearly

describe the identity and anticipated testimony of its key witnesses.” Lighthouse Carwash, Sys.,

LLC, 2004 U.S. Dist. LEXIS 24284 at *11. “The court must examine ‘the residence of the

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witnesses, the cost of obtaining their attendance, the nature of their potential testimony, and the

availability of compulsory process for nonparty witnesses.’” Id.

Reed wholly fails to satisfy this burden. Rather, Reed simply argues that it would be

difficult and costly to compel AutoTech employees to testify. This argument falls far short. To

start, it is not uncommon for parties to navigate the process of obtaining testimony from out-of-

state witnesses in litigation. This is especially true given the increased use of remote depositions

for discovery. Nonetheless, MaddenCo will have a large portion of the documentary evidence, and

many of its witnesses reside in Indiana. And while Reed, Darby and other AutoTech employees

may be witnesses, a change in venue would simply shift the inconvenience to MaddenCo, which

does not warrant a change in venue – nor does it satisfy Reed’s stringent burden in moving for a

change in venue.

With regard to the interest of justice factor, the court must consider whether a transfer

would facilitate a speedy trial for the litigants and whether the federal court in either district is

more familiar with the applicable law. Id. at *14. Interestingly, Reed states that he does not know

whether the Eastern District of Louisiana would be more efficient than the Southern District of

Indiana. And Reed admits that both districts would be familiar with the applicable law. Instead,

Reed simply argues that any alleged infringement occurring in Tennessee or Louisiana should be

adjudicated in those districts. However, Reed offers no authority for this position as justification

for a transfer of venue. Simply put, Reed has not – and cannot – satisfy the stringent burden of

demonstrating that this matter should be transferred to the Middle District of Louisiana.

IV. CONCLUSION

For the foregoing reasons, the Plaintiff, MaddenCo, Inc. respectfully requests that

Defendant James Reed’s Rule 12(b)(6) Motion to Partially Dismiss, Rule 12(b)(2) Motion to

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Dismiss for Lack of Personal Jurisdiction, and Rule 12(b)(3) Motion to Dismiss for Lack of Proper

Venue and, Alternatively, Motion to Transfer Venue be Denied.

Respectfully Submitted,

DELK McNALLY LLP

/s/ Michael T. McNally

Michael T. McNally, Attorney No. 23676-49
Daniel J. Gibson, Attorney No. 27113-18
Attorney for Plaintiff

610 N. Rangeline Road

Carmel, IN 46033
Telephone: 317/442-4444
Facsimile: 888/453-0545

CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the above and foregoing has been served via the
Court’s electronic case filing system this 27th day of December 2022 upon the following.

C. Richard Martin
Martin IP Law Group, PC
rick@ipsolutionslaw.com

Scott N. Hensgens
Danielle L. Borel
Breazeale Sachese & Wilson, L.L.P.
Scott.Hensgens@bswllp.com
Danielle.Borel@bswllp.com

/s/ Michael T. McNally

Michael T. McNally, Atty. No. 23676-49
DELK McNALLY LLP
610 N Rangeline Road
Carmel, Indiana 46033
mcnally@delkmcnally.com

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