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GRAHAM TECH. SOLUTIONS v. THINKING PICTURES

January 7, 1997

GRAHAM TECHNOLOGY SOLUTIONS, INC., a California corporation, Plaintiff,
v.
THINKING PICTURES, INC., a New York corporation, Defendant.



The opinion of the court was delivered by: INFANTE

 I. INTRODUCTION & PROCEDURAL BACKGROUND

 Plaintiff Graham Technology Solutions, Inc. ("GTSI"), filed suit against defendant Thinking Pictures, Inc. ("TPI") alleging copyright infringement, unfair competition and false advertising. After filing suit, GTSI filed an expedited motion seeking relief from the automatic stay of formal discovery required by Civil L.R. 16-3 on the grounds that such discovery was required to determine the extent of TPI's alleged unlawful conduct prior to GTSI's filing of a motion for preliminary injunction. TPI opposed the motion, and filed a motion to dismiss, asserting that the appropriate venue for this action is the Southern District of New York. TPI argued that a choice of law provision contained within a Professional Services Agreement executed by John Graham, President of GTSI, barred venue in this district. Finding that the issue of venue must be resolved prior to any other procedural or substantive issues in this case, the court deferred GTSI's motion for expedited discovery and for entry of a protective order and set a briefing schedule for the motion to dismiss. The parties are presently before the court on defendant TPI's Motion to Dismiss or Transfer for Improper Venue.

 II. FACTUAL BACKGROUND

 A. TPI: The Development of Rock.com and the Professional Services Agreement

 TPI is a privately owned corporation engaged in the development of technology which broadcasts sound and video images through interactive media, including the Internet. See Declaration of Stephan Fitch ("Fitch Decl."), P 4. In 1994, TPI began developing a new product called rock.com Id P 4. Rock.com permits live audio and video transmission of rock and roll concerts through the Internet. By utilizing a process known as video streaming and audio streaming, digital video images and sounds are conveyed to a web page that can be accessed without additional software." Id. The concept for rock.com is described by Stephan Fitch, Chief Technology Officer and founder of TPI, as follows:

 Fitch Decl., P 6.

 In order to successfully complete the rock.com project, TPI required the assistance of a programmer. Id., P 6-7. In 1995, TPI contacted John Graham to provide the programming assistance required for the rock.com project. On or about May 4, 1995, Mr. Graham signed a non-disclosure agreement and began to review conceptual materials and schematics for rock.com. Fitch Decl., P 8. In July 1995, Mr. Graham entered into a Professional Services Agreement ("PSA") on behalf of "John Graham and Graham Technology Solutions, a corporation organized under the laws of the State of California." *fn1" Fitch Decl., Ex. A, p.1. The PSA "related to services to be provided to TPI [] in connection with the development of the prototype of; or other preliminary services in connection with an interactive multimedia product tentatively entitled 'rock.com.'" Id.

 The terms of the PSA provided that TPI would own all right, title and interest to the completed work product described in Schedules A and B of the PSA as well as to all additions to, deletions from, alterations of or revisions in said work product. *fn2" Id., p.5, P 4.1. TPI would also own all right, title and interest to all other materials provided to Mr. Graham by or at the expense of TPI, and all other materials developed or furnished by Mr. Graham in connection with the services he provided under the PSA Id. The PSA further provided that: (1) TPI would have exclusive rights to Mr. Graham's completed work product; (2) Mr. Graham's work and services would be "work made for hire" for TPI; and (3) in the event that any work product of Mr. Graham's was determined not to be a work for hire, said work would be irrevocably assigned, transferred, released and conveyed to TPI. Id., p.5, PP 4.2-4.4. In addition the PSA contained a forum selection clause which stated:

 
10.11 The validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties hereto shall be governed by and construed in accordance with the substantive laws of the state of New York, without reference to laws relating to conflicts of laws. The parties agree to submit to the exclusive jurisdiction over all disputes hereunder to the federal and state courts in the State of New York located in New York County.

 See Fitch Decl., Ex. A, p. 10, P10.11 (emphasis added).

 
Everything looks good, the only thing I added is the spec on the Hardware 128 Meg RAM. . . . Here's the Agenda we took to SUN. It should be easy to break this down into software and hardware products which SUN can provide. Also look at the Engineering tasks and determine a cost estimate. I will give this list to Surya Johsua ...

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