Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 1 of 10
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Archie Comic Publications, Inc.,
10 Civ. 8858 (RMB)
Kenneth W. Penders, II,
P/K/A/ Ken Penders,
DEFENDANT’S MEMORANDUM OF LAW IN OPPOSITION TO PLAINTIFF’S
RULE 12 MOTION TO DISMISS PENDERS’ COUNTERCLAIMS, AFFIRMATIVE
DEFENSES AND CERTAIN DEMANDS FOR RELIEF, WITH PREJUDICE
August 12, 2011
R. Christopher Harshman
Michael L. Lovitz
Lovitz IP Law PC
9701 Wilshire Blvd. Ste 1000
Beverly Hills, CA 90212
Counsel for Defendant
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 2 of 10
Defendant Kenneth W. Penders, II (“Penders”) respectfully submits this memorandum of
law in opposition to the Motion to Dismiss Penders’ Counterclaims, Affirmative Defenses and
Certain Demands for Relief, With Prejudice, brought by Archie Comic Publications, Inc. (“Archie”).
Archie’s motion should be denied. Each of the counterclaims plead in Penders’ Amended
Answer, Affirmative Defenses, and Counterclaims (D.E. 27, the “Answer”) “assert ‘enough facts to
state a claim to relief that is plausible on its face.’ “ Lee v. Sony BMG Music Entm't Inc., 557 F.Supp.2d
418, 424 (S.D.N.Y.2008) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1973-74, 167
L.Ed.2d 929 (2007)), and thus satisfy both Rule 8(a) and Rule 12(b)(6). Further, Archie’s arguments
regarding equitable estoppel, the statute of limitations, and Penders’ requested relief are not matters
proper for a Motion to Dismiss, but should either be brought in a Motion for Summary Judgment, if
the undisputed facts in this action so permit, or disposed of in a trial on their merits.
Archie focuses its motion on several perceived deficiencies, but none has merit upon
ARCHIE HAS NOT PLED, INCORPORATED, OR PROVIDED THE ALLEGED 1995
Archie bases most of its argument in the instant motion on a reference Penders made to a
“work-for-hire form that Scott Fulop originally sent to [Penders] … back in late ’95.” (D.E. 40-2, p7
&c.) Archie treats this mystical document as a sort of smoking gun, and proceeds as if this
unsupported mention of an unseen document somehow vitiates Penders’ Answer while making
Archie’s own claims seemingly ironclad.
Inexplicably, however, Archie has not provided, incorporated by reference, or even quoted
the language of this “Work-for-hire agreement” that Penders referenced and may have signed.
Indeed, prior to the instant motion, Archie has alleged only the existence of, incorporated into its
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 3 of 10
pleadings, or provided the purported language of, a “Revised Newsstand Comic Independent
Contractor’s Agreement” and an “ACP Licensed Comic Books Independent Contractor’s
Agreement,” neither of which they have alleged were “signed under Scott [Fulop],” much less “the
Work-for-hire agreement” Penders may have signed while “under” Scott Fulop.
Indeed, as Justin Gabrie replaced Scott Fulop in 1996 (Penders’ Answer, D.E. 27, p28, ¶60),
the agreement Penders asked about in his emails was (if it, in fact, exists) “signed back in 1995”
(Archie’s memorandum in support of the instant motion, D.E. 40, p. 4), as the agreements
consistently provided and quoted by Archie both bear purported execution dates in December 1996
(Exhibits A and B to Archie’s Complaint; also filed as D.E. 40-3, p. 6; D.E. 40-4, p.3), and as
Archie themselves state the “written agreements [were] executed in 1996” (D.E. 40, p2), it is readily
apparent from the face of the pleadings that this 1995 agreement, executed while Scott Fulop was
the editor of the Sonic comic books at Archie (Answer, D.E. 27, p. 23 ¶34; p. 27 ¶60), does not
reference the 1996 agreements Archie has provided and relies upon. Archie themselves are
inconsistent, claiming the agreements that on their face have 1996 execution dates and were, per its
own argument, “executed in 1996,” were somehow “signed [by Penders] … in late 1995 while Scott
Fulop (then editor at ACP for Sonic products) was overseeing his work.” (Archie’s instant motion,
D.E. 40, p.3).
When ruling on a dismissal motion, a “court may consider the facts as asserted within the
four corners of the complaint together with the documents attached to the complaint as exhibits,
and any documents incorporated in the complaint by reference.” Peter F. Gaito Architecture, LLC v.
Simone Dev. Corp., 602 F.3d 57, 64 (2d Cir. 2010) (internal quotation and citation omitted). As Archie
has not provided this 1995 Agreement, nor credibly established how an agreement that may have
been signed in 1995 somehow became multiple agreements executed in 1996, the Court should not
consider that 1995 agreement as not being set forth within the four corners of the pleading papers in
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 4 of 10
this action (or, indeed, at all), and should disregard Archie’s misplaced reliance on Penders’ email
discussions and the purported “ACP-Penders [1996 “Gabrie”] Agreements,” which Penders has not
admitted he signed.
II. THE COUNTERCLAIMS SATISFY RULE 8(A) BECAUSE EACH EXCEEDS THE
“SHORT AND PLAIN STATEMENT” REQUIREMENT
“On a motion to dismiss a claim for relief pursuant to Rule 12(b)(6), a court accepts the
truth of the facts alleged in the [claim] and draws all reasonable inferences in the [claimant’s] favor.”
Qasem v. Toro, 737 F.Supp.2d 147, 150 (S.D.N.Y. 2010) (citing Global Network Commc'ns, Inc. v. City of
N.Y., 458 F.3d 150, 154 (2d Cir. 2006)).
“As a general matter, ‘[t]o survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ’ [Ashcroft v. Iqbal,
129 S. Ct. 1937, 1949 (2009)] (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955
(2007)).” S. Cherry St., LLC v. Hennessee Group LLC, 573 F.3d 98, 110 (2d Cir. 2009).
A. Penders’ Second Counterclaim for Copyright Infringement
To state a claim for copyright infringement, a claimant must plead “(i) ownership of a valid
copyright; and (ii) unauthorized copying of the copyrighted work.” Inst. for Dev. of Earth Awareness v.
People for Ethical Treatment of Animals, 768 F. Supp. 2d 672, 678 (S.D.N.Y. 2011) (citing Jorgensen v.
Epic/Sony Records, 351 F.3d 46, 51 (2d Cir.2003)).
Penders’ Answer clearly sufficiently pleads ownership of valid copyrights, including the facts
of his creation of the works. D.E. 27, pp.22-29, ¶¶23-40, 46-50, and 65-67, with that ownership
amply supported by sufficient facts that is plausible on its face. Penders requests the Court exercise
its discretion and afford the certificate of copyright registrations provided by Penders (Exhibit 1 to
his Answer, D.E. 27-1) the evidentiary weight appropriate to registrations issued after considerable
review and inquiry by the Copyright Office, pursuant to 17 U.S.C. § 410(c).
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 5 of 10
Penders’ Answer additionally clearly pleads facts sufficient to show unauthorized copying;
D.E. 27, pp.29-30, ¶¶69-71, and the many pages of Exhibit 4, D.E. 27-4, pp. 1-30, incorporated by
reference into Penders’ Answer.
Further, Penders did specifically identify the characters, etc., infringed in his Exhibit 4,
contrary to Archie’s assertion in the instant motion (D.E. 40, p. 11) that he did not. For example,
D.E. 27-4, p. 13, Penders identifies the characters “Enerjak, Julie-Su, Locke, Archimedes, Sleuth
Dawggy-Dawg, Drago, Evil Sonic, Reverse Freedom Fighters, Lien-Da, the Dark Legion, Kragok,
Dimitri, Edmund, Menniker, Steppenwolf, Moonwatcher, Rembrandt, Harlan, Matthias, Hawking,
Tobor, Spectre, Thunderhawk, Constable Remington, Janelle-Li, Sabre, Aaron, Jordan, Sojourner,
Moritori Rex, [and] Luger,” along with other protected elements, that were specifically infringed by
Additionally, Penders disputes the authenticity and, even if authentic, the validity and thus
enforceability, of the ACP-Penders Agreements Archie alleges. (D.E. 40, p13; D.E. 27, pp. 2-7, ¶¶4,
20-32.) As this Court must construe the pleadings in the light most favorable to Penders as the non-
moving party for the purposes of a motion to dismiss (Desiano v. Warner–Lambert Co., 326 F.3d 339,
347 (2d Cir.2003)), Archie’s repeated insistence on relying on these disputed agreements is
misplaced. Archie is asking the Court to make findings of fact in a motion to dismiss, which the
Court should not countenance.
Penders has supplied facts that, accepted as true for the purpose of this motion, greatly
eclipse the showing required even under the heightened pleading requirement post-Iqbal.
Accordingly, Archie’s motion to dismiss Penders’ first counterclaim for copyright infringement must
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 6 of 10
B. Penders’ Third Counterclaim for Vicarious Copyright Infringement and Fourth
Counterclaim for Contributory Copyright Infringement
In order to establish his claim for vicarious copyright infringement, Penders had to make a
prima facie showing infringing activities, and that Archie had the “right and ability to supervise the
infringing activities, as well as a direct financial interest in those activities.” Roy Exp. Co. Establishment
v. Trustees of Columbia Univ., 344 F. Supp. 1350, 1352 (S.D.N.Y. 1972) (citing Gershwin Publishing Corp.
v. Columbia Artists Management, Inc., 443 F.2d 1159 (2d Cir. 1971); Shapiro, Bernstein & Co. v. H. L.
Green Co., 316 F.2d 304 (2d Cir. 1963)).
“In order to establish a claim for contributory copyright infringement, a plaintiff must allege
that the defendant, ‘with knowledge of the infringing activity, induce[d], cause[d], or materially
contribute[d] to the infringing conduct of another.’” Michael Aram, Inc. v. Laurey, a Div. of Strategic
Brands, 05 CIV. 8380 (CSH), 2006 WL 510527 (S.D.N.Y. Mar. 1, 2006) (citing Gershwin Publ'g Corp. v.
Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir.1971)).
Penders has met these pleading requirements. Paragraph 77 establishes the infringing
activities by incorporating by reference paragraphs 69-71, discussing third parties making available
“electronic media versions of the Penders Copyrighted Works for distribution via electronic
channels, e.g., via iTunes for iPhone, iPod, and iPad devices, as Sony PlayStation Digital Comics,
etc.” and incorporate, in turn, Exhibit 4, which sets forth the specific infringing conduct in great
detail. (Contrary to Archie’s assertion that Penders “fails to allege the existence of [a third] party, let
alone identify who that third party is” (D.E. 40, p.16), Penders has, to the extent possible at such an
early stage in this litigation, identified Apple, Inc.’s “iTunes” and “Sony” third party infringement;
the specific identities of those directly committing those infringements Penders expects to establish
during discovery in this action.)
With regards to vicarious copyright infringement, paragraphs 78 and 79 establish, to the best
of Penders’ ability given the early state of the litigation, and the extremely limited discovery that had
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 7 of 10
occurred, when his amended answer and associated counterclaims were filed, direct financial benefit
(“revenue sharing and/or royalty payments for each electronic version sold”) and the right and
ability to supervise (“contractual rights, license agreement(s), and/or approval rights”).
Likewise, with respect to contributory copyright infringement, paragraph 83 establishes the
infringing activities by incorporating by reference paragraphs 69-71. Paragraph 85 sets forth facts,
with the same caveat as to the early stage of this litigation, sufficient to establish inducement,
causation, and/or material contribution in the form of, e.g., “commissioning and/or licensing the
electronic versions of the Copyrighted Works, and providing galley proofs or similar high-quality
source material for rendition into electronic format,” while paragraph 84 satisfies the pleading
requirement for Archie’s knowledge (“as evidenced by the written communication between Penders
and ACP that ACP cites in its Complaint”).
Those facts, accepted as true as the Court must in a motion to dismiss, establish the requisite
elements for Penders’ vicarious and contributory infringement of copyright claim, which must not
III. THE AFFIRMATIVE DEFENSES ARE SUFFICIENTLY STATED AND SATISFY RULE 8
Plaintiff cites to Aspex Eyewear, Inc. v. Clariti Eyewear, Inc., 531 F. Supp. 2d 620 (S.D.N.Y.
2008) in support of its proposition that affirmative defenses must be pled with the same level of
particularity the Supreme Court has recently held Rule 8(a) requires (i.e., a “a short and plain
statement” of the defense). The court in Aspex Eyewear stated, with scant discussion, that this
standard applies to “a motion to strike an affirmative defense pursuant to Rule 12(f).” Id., at 622.
More recently, however, the United States District Court for the Southern District of New
York has held, citing substantially more authority and specifically disavowing Aspex Eyewear, that
instead Rule 8(c)(1) continues to provide the applicable standard (“a party must affirmatively state
any … affirmative defense”):
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 8 of 10
“Rule 12(f), Fed.R.Civ.P., provides that, ‘[t]he court may strike from a pleading an
insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.’ ‘Motions to
strike are viewed with disfavor and [are] infrequently granted.’ RSM Prod. Corp. v. Fridman, 643
F.Supp.2d 382, 394 (S.D.N.Y.2009). The Second Circuit has instructed that, as a general proposition,
‘courts should not tamper with the pleadings unless there is a strong reason for so doing.’ Lipsky v.
Commonwealth United Corp., 551 F.2d 887, 893 (2d Cir.1976). ‘A motion to strike an affirmative
defense under Rule 12(f), Fed.R.Civ.P. for legal insufficiency is not favored and will not be granted
‘unless it appears to a certainty that plaintiffs would succeed despite any state of the facts which
could be proved in support of the defense.’’ William Z. Salcer, Panfeld, Edelman v. Envicon Equities
Corp., 744 F.2d 935, 939 (2d Cir.1984), vacated on other grounds by 478 U.S. 1015, 106 S.Ct. 3324,
92 L.Ed.2d 731 (1986) (quoting Durham Industries, Inc. v. North River Insurance Co., 482 F.Supp. 910,
913 (S.D.N.Y.1979)). ‘[A] motion [to strike] should be granted if substantial questions of law or fact
do not exist and if the insufficiency of the defense is clearly apparent on the face of the pleading.’
Nat'l Acceptance Co. of Am. v. Regal Prods., Inc., 155 F.R.D. 631, 634 (E.D.Wis.1994).” Wireless Ink Corp.
v. Facebook, Inc., 10 CIV.1841 (PKC), 2011 WL 2089917 (S.D.N.Y. May 26, 2011).
Here, Penders’ pleadings taken as a whole do not support the proposition that, on their face,
the affirmative defenses are insufficient. Each affirmative defense, if proven, is a legally sufficient
defense to one or more of Archie’s claims. As such, the Court should deny Archie’s motion to strike
Penders’ affirmative defense.
IV. ARCHIE’S EQUITABLE ESTOPPEL ARGUMENT IS UNSUPPORTED
Archie makes an argument, inappropriate in a motion to dismiss, arguing equitable estoppel.
“‘A motion to dismiss is often not the appropriate stage to raise affirmative defenses,’ which may be
‘riddled with questions of fact which [must be established].’” Ortiz v. City of N.Y., No. 10 Civ. 3576,
2010 WL 5116129, at *1 (E.D.N.Y. Dec. 13, 2010) (internal citation and quotations omitted).
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 9 of 10
Indeed, Archie’s basis for this argument appears to be Penders’ “silence” and “the Work-for-
hire agreement [Penders] signed under Scott.” (D.E. 40, p. 21). However, “silence” does not, of
course, appear anywhere in the pleading documents in this matter, and the unavailability of this
purported “Work-for-hire agreement” has already been established, infra.
Since we can only speculate as to what right(s), and on what terms, might have been granted
or transferred in a document not provided, incorporated by reference, or quoted, such a document
cannot form the basis of a motion to strike or dismiss, and Archie’s equitable estoppel argument is
at best premature.
V. ARCHIE’S STATUTE OF LIMITATIONS AND REQUESTED RELIEF ARGUMENTS
At this stage in this litigation, with discovery still ongoing, Penders does not have a full and
complete picture of Archie’s copyright infringement and lacks a comprehensive knowledge of, e.g.,
publication dates in all markets for the works set forth in Exhibit 4 to Penders’ Answer. However, to
the extent that the statute of limitations clearly has expired, or the first act(s) of infringement
occurred before Penders’ registration, he does not oppose Archie’s proposed relief. However, this,
too, is premature given the ongoing discovery in this matter, and should not be decided in a motion
to dismiss or strike.
The Court must review the allegations and averments found within the four corners of the
pleading papers in this action in the light most favorable to the non-moving party, and must accept
those allegations and averments as true, for the purpose of a motion to dismiss. Too, Penders is
required merely to ‘state’ his affirmative defenses, which he has done. Against those requirements,
Archie’s motion to dismiss Penders’ counterclaims, and to strike Penders’ affirmative defenses, must
fail. Penders anticipates establishing the facts he has averred, and challenging those averments of
Case 1:10-cv-08858-RMB Document 42 Filed 08/13/11 Page 10 of 10
Archie which he disputes, at the appropriate time and in the appropriate context, and this Court
must permit him the opportunity to do so by denying Archie’s instant motion.
Dated: August 12, 2011
Beverly Hills, CA
Lovitz IP Law PC
By: /s/ R. Christopher Harshman
R. Christopher Harshman (pro hac vice)
Michael L. Lovitz (pro hac vice pending)
9701 Wilshire Blvd. Ste. 1000
Beverly Hills, CA 90212
Counsel for Defendant