Alexander Williams, Jr., United States District Judge
Plaintiff Metropolitan Regional Information Systems, Inc. (“MRIS”) filed suit against Defendants American Home Realty Network (“AHRN”) and AHRN CEO Jonathan Cardella on March 28, 2012, alleging copyright infringement, violations of the Lanham Act, and tortious conversion and unjust enrichment. Doc. No. 1. MRIS’s claims are based on AHRN’s alleged reproduction of real estate listing content from the MRIS Database onto AHRN’s website, Neighborcity.com.
On August 24, 2012, the Court granted Cardella’s Motion to Dismiss, denied AHRN’s Motion to Dismiss, and granted MRIS’s Motion for a Preliminary Injunction. Doc. Nos. 34–35. Specifically, the Court ordered that “Defendant AHRN and all persons acting under its direction, control or authority are hereby enjoined from unauthorized copying, reproduction, public display, or public distribution of copyrighted content from the MRIS Database, and from preparing derivative works based upon the copyrighted content from the MRIS Database.” Doc. No. 35. The Court subsequently granted-in-part AHRN’s Motion to Clarify, Reconsider, or Suspend the Preliminary Injunction Order, and modified the Order as follows: “AHRN and all persons acting under its direction, control or authority are hereby preliminarily enjoined from unauthorized copying, reproduction, public display, or public distribution of MRIS’s copyrighted photographs and from preparing derivative works based upon MRIS’s copyrighted photographs.” Doc. No. 65 (emphasis added).
On September 24, 2012, AHRN filed its Answer to MRIS’s Complaint as well as Counterclaims against MRIS, National Association of Realtors (“NAR”), and Does #1–25. Doc. No. 46. After MRIS and NAR separately moved to dismiss AHRN’s Counterclaims, Doc. Nos. 62–63, AHRN filed First Amended Counterclaims on November 26, 2012, Doc. No. 68. On December 13, 2012, MRIS moved to dismiss or summarily adjudicate AHRN’s First Amended Counterclaims. Doc. No. 76. NAR moved to dismiss the First Amended Counterclaims on December 21, 2012. Doc. No. 81. AHRN subsequently moved to strike the Declaration of MRIS CEO David Charron from MRIS’s Motion and for other miscellaneous relief. Doc. No. 83. MRIS also filed a Motion for Leave to File a Surreply to AHRN’s Motion to Strike. Doc. No. 95. On May 3, 2013, the Court ordered the parties to appear for a hearing on the pending motions on May 29. Six days before the hearing, AHRN filed a Motion for Leave to file Second Amended Counterclaims and a Motion to Seal attachments thereto. Doc. Nos. 128, 132.
The Court has reviewed the First Amended Counterclaims and motion papers, and has carefully considered the arguments of counsel at the May 29 hearing. For the reasons articulated below, MRIS’s Motion to Dismiss or Summarily Adjudicate and NAR’s Motion to Dismiss AHRN’s First Amended Counterclaims will be GRANTED-IN-PART and DENIED-IN-PART. Counts I, V, VI, and VII will be dismissed with prejudice, while Counts II, III, and IV will be dismissed without prejudice. AHRN will be granted fourteen days to file second amended counterclaims with respect to Counts II, III, and IV. The remaining motions will be DENIED as moot.
I. FACTUAL BACKGROUND
The following facts are taken from AHRN’s First Amended Counterclaims. The Court also incorporates by reference the factual background from its August 24, 2012 and November 13, 2012 Memorandum Opinions.
AHRN is a five-year old San Francisco-based real estate brokerage referral services and technology company. AHRN, through its website Neighborcity.com and its AgentMatch software, provides information to home buyers and sellers on a nationwide basis by identifying real estate agents best suited to assist them in purchasing or selling properties in their local market. AHRN searches the Internet for data on real estate listings, identifies, rates, and ranks real estate agents most suitable to represent potential buyers and sellers in proposed transactions, facilitates the introduction of the agents to its individual customers, and monitors its customers’ satisfaction with the agents to whom they were introduced. AHRN is compensated by receiving a percentage of a broker’s commission if the broker accepts an AHRN client-referral and the referral results in a closed transaction. Consumers in the residential real estate market have responded positively to the increased access to information that AHRN has provided, and AHRN has grown significantly in the last year in terms of its revenues, transactions referred, and fulltime employees.
Counterclaim-Defendant MRIS provides what is known in the real estate industry as multiple listing services (“MLS”). MRIS facilitates real estate transactions in the mid-Atlantic region by operating and maintaining an automated database consisting of compiled property listings and related informational content (the “MRIS Database”). To use the database, real estate brokers and agents must execute a subscription agreement, under which they agree to upload their real estate listings to the database and upon payment to MRIS are granted access to all the listings in the database and the right to display those listings on their own websites via a licensed data feed. Counterclaim-Defendant NAR is a trade organization which establishes and enforces policies and professional standards for its over one million individual member real estate brokers and their affiliated agents and sales associates, and 1, 600 state and local member boards, which control approximately 80% of the roughly 1, 000 MLSs in the United States. NAR’s members compete with one another in local brokerage referral services markets to represent consumers in real estate transactions.
AHRN also names as Counterclaim-Defendants Does #1–25, who are thought to be brokers and/or other MLSs and their principals. AHRN intends to amend its counterclaims to add the true names and capacities of these Counterclaim-Defendants once they become known. AHRN does not name Regional Multiple Listing Service of Minnesota, Inc. (“RMLS” or “Northstar”) as a Counterclaim-Defendant at this time. However, RMLS is the plaintiff in a similar action filed against AHRN in the District of Minnesota. See Regional Multiple Listing Service of Minnesota, Inc. d/b/a NorthstarMLS v. American Home Realty Network, Inc., Case No. 12cv965 (D. Minn.).
In broad terms, the thrust of AHRN’s First Amended Counterclaims is that Counterclaim-Defendants instigated a program to register and obtain sham compilation copyrights for MLS listings, threatened to and actually enforced those copyrights against AHRN, refused to deal with and refused to license MLS data to AHRN, made false and misleading statements related to their copyrights and concerning AHRN, and passed anticompetitive MLS rules consistent with their goal of driving AHRN and similar innovators out of the market.
A. MRIS Guidance Paper and Copyright Program
In 2005, MRIS President and CEO David Charron, MRIS General Counsel Erik M. Feig, and MRIS outside counsel J.T. Westermeier jointly wrote a two-part Guidance Paper issued in several versions and titled in the 2006 version, “Strengthening the Foundation: The Real Estate Listing Content Copyright FAQ and An Updated Program to Administer, Secure, and Enhance the Value of Real Estate Listing Content.” The purpose of the Guidance Paper was to invite the MLS industry to join MRIS’s Copyright Program, the object of which was to defeat “the emergence of several high profile initiatives proclaiming ‘new’ and ‘improved’ alternative business models that they propose will dramatically change the real estate industry.”
The authors heavily publicized the Guidance Paper, featuring it and distributing it at various MLS industry conferences throughout 2005. According to AHRN, the Guidance Paper proposed the defeat of the alternative business models through subversion of the copyright process by claiming the existence of and encouraging the enforcement of copyrights in unregistered and uncopyrightable listing data consisting of facts assembled in compilations. The Guidance Paper urged the MLS industry to stop using the term “listing data” because the term implies that the real estate information supplied by MLSs is merely factual and thus not copyrightable. Instead, the Guidance Paper urged use of the term “listing content, ” noting that “[w]hile listing content may not, on the surface, have the degree of creativity we associate with a song or a story or other types of so-called ‘creative’ works, there should be little question that listing content is protectable by copyrights.”
The MRIS Copyright Program, as outlined by the Guidance Paper, also urged “making each property listing a joint work owned by the broker and the MLS for copyright purposes. This joint work is created by merging each listing broker’s and MLS’s respective copyright contributions into a merged, unitary property listing with co-ownership of the respective copyrights. Joint ownership is a key building block of the Program.” The Copyright Program also devised the “mashing” of non-copyrightable listing data from different sources after renaming it “content” in the MLS databases and urged MLSs to register the listing content under compilation copyright procedures for automated databases, thereby claiming coverage for both “the compilation and collection of content in the database . . . and to the jointly owned copyrighted content in each individual listing.”
With respect to copyright registration, the Program devised a practical strategy which AHRN alleges was motivated by a desire to evade the Copyright Office’s fee structure for individual copyright and published database copyright registrations:
Given the number of listings in a typical MLS database and the number of updates occurring on a daily basis, as a practical matter registering the claims of copyright ownership in each individual listing with the U.S. Copyright Office is impractical and not cost effective. What we contend is needed is a practical strategy that protects the copyrights in each individual property listing as well as the compilation and collection of property listings contained in the MLS database.
AHRN further alleges that the MLS industry’s registration of databases as “unpublished” rather than “published” compilations saves the industry and deprives the Copyright Office of trillions of dollars per year in registration fees due to the difference in fees between quarterly and daily registration. Similarly, AHRN alleges that foregoing registration of listing photographs in group registration copyrights and instead claiming the photographs as covered under the database registration saves the MLS industry and deprives the Copyright Office of hundreds of billions of dollars annually.
The MLS industry adopted the Copyright Program “under the auspices of, and with the encouragement and guidance of NAR.” NAR held its annual meeting in Anaheim, California from November 11-14, 2011. “On information and belief, ” this meeting featured discussions of the perceived threat AHRN posed to the industry and what the industry could do to “shut down” AHRN. “[A]t a time yet unknown, ” NAR advised its members to follow MRIS’s recommended “sham compilation copyright registration process.” In its publication titled MLS Copyright Compilation Registration, NAR instructed its member MLSs to state in their compilation copyright applications that “the materials included in this compilation are preexisting materials” and to make it clear that these materials “were ‘selected’ and ‘arranged, ’ in order to assure that the compilation receives copyright protection.” The NAR publication also included “MLS Registration Tips, ” which provided instructions on compilation copyright registration.
B. Cease-and-desist Letters and Related Communications Concerning AHRN
Beginning in November 2011, just before the Anaheim meeting, AHRN began to receive what would become, following the Anaheim meeting, “a torrent of cease-and-desist letters” from brokers and MLSs. Through 2012 AHRN received 32 letters, all substantially similar in form and content, and all alleging copyright infringement and threatening legal action. AHRN received eleven additional letters from brokers complaining about its referral program, and three letters involving complaints to government agencies regarding infringement or licensing violations. AHRN received a cease-and-desist letter from Northstar on November 15, 2011, the day after the NAR Anaheim meeting ended, and another letter from MRIS on November 18, 2011. AHRN also received a number of phone calls and e-mails from other MLSs and their consultants that stated that they were in attendance or participated in the Anaheim meeting.
On December 22, 2011, AHRN was copied an on e-mail from a Northstar employee, John Mosey, in which Mosey stated that MLSs across the country had “called in the full force and fury of their respective legal advisors” and dropped C&Ds (cease-and-desist letters) “on the head of the bad fellow, ” AHRN CEO Jonathan Cardella. Mosey continued by saying:
How do we connect the dots between all of the MLS’s [sic] that have been abused so that we can act collectively, either in cost sharing and/or strategically by taking an action against Mr. Cardella that has the desired outcomes of:
1. Getting all of our listings off of his site[.]
2. Discovering where he has been getting the listings[.]
3. Throwing a world of hurt on both[.]
4. Sending a message that our copyrights are enforceable and we are serious about punishing anyone who doesn’t take us seriously.
At the NAR Mid-Year meeting in Washington, D.C. in May 2012, the General Counsel of NAR allegedly advised local MLSs to send cease-and-desist letters if their data was taken.
C. AHRN’s Offer to Negotiate Licenses
In response to the cease-and-desist letters, AHRN responded to each letter with an offer to negotiate a license for the use of the broker’s or MLS’s website. In most cases, AHRN’s overtures to negotiate were rebuffed, always in the same format and in essentially the same language. In instances in which agreements were reached or negotiations had commenced with brokers over referral agreements and AHRN’s use of listing information, the brokers repudiated these agreements in January 2012. AHRN alleges “upon information and belief” that this repudiation was in response to pressure from MLSs. Each repudiation letter from these brokers stated in “remarkably similar language” that AHRN’s overtures were brought to the broker’s attention, that the broker had no interest in entering into any agreements with Neighborcity.com or AHRN, and that any agreements purporting to bind the broker were void and of no legal effect. AHRN has received nearly identical letters from brokers across the country intending to cease solicitations by AHRN and repudiating agreements with AHRN.
D. Sham Litigation
AHRN alleges “[o]n information and belief” that MRIS’s lawsuit in this case and Northstar’s lawsuit against AHRN “are the direct and concerted action discussed and sought by the concerted action at the Anaheim NAR Annual Meeting.” AHRN adds that these actions followed AHRN’s roll-out of updated professional profile pages for real estate agents in March 2012. AHRN alleges that Redfin and other companies that introduced similar real estate agent profile pages discontinued publication under pressure from MRIS and other MLSs within days of launch. AHRN also alleges “[o]n information and belief” that NAR voted on Saturday, May 19, 2012, at the end of its Midyear Meeting in Washington, D.C., to fund the MRIS lawsuit and the Northstar lawsuit against AHRN in Minnesota. According to AHRN, NAR “seeks to fund the litigations for its own financial gain.” In May 2012, the NAR Board allegedly approved $161, 667 in legal assistance for seven cases, including the challenged misappropriation of MLS data by a third-party website.
E. NAR Rules
NAR promulgates rules which govern the conduct of MLSs and requires its member boards to adopt such rules, including those that prohibit or strongly discourage MLSs from licensing their listing databases to third parties like AHRN. According to AHRN, these rules inhibit entities like AHRN from ranking or evaluating real estate agents, selling referrals, and using the MLS licensed data for unauthorized purposes.
For example, in November 2009, NAR revised its MLS Policy Statement to prevent brokers from using their MLSs’ IDX data feeds “for any purpose other than display on their websites.” Furthermore, as of February 9, 2010, another NAR rule, addressed by NAR’s Statement of MLS Policy 7.85, provided:
Use of listings and listing information by MLSs for purposes other than the defined purposes of MLS requires participants’ consent. Such consent cannot be required as a condition of obtaining or maintaining MLS participatory rights. MLSs may presume such consent provided that listing brokers are given adequate prior notice of any intended use unrelated to the defined purpose of MLS, and given the opportunity to affirmatively withhold consent for that use.
According to 7DS Associations, a frequent participant in real estate industry events, the primary motivation behind NAR’s rules is to take back control of broker listings and prevent further loss of control over such listings.
F. False and Misleading Statements
G. Nature of MLS Databases
AHRN alleges “[o]n information and belief” that MRIS, Northstar, and other MLS listing databases are “based on third party-created software layouts in templates of fields and field descriptors into which brokers or their assistants insert individual numbers, words, and short phrases, individual unadorned facts they have obtained from prospective sellers of real estate.” AHRN alleges that MRIS, Northstar, and “as much as half” of the real estate industry use the same MLS Matrix database software by CoreLogic, and that if any authorship is involved in the collection and arrangement of material in MLS listing databases, it would involve the creativity of CoreLogic, not the MLSs. AHRN alleges “[o]n information and belief” that NAR has ...