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2:16-cv-13041-LJM-EAS Doc # 13 Filed 01/17/17 Pg 1 of 23 Pg ID 120

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
KNOWLEDGE BASED SOLUTIONS, )
INC., ) Case No.: 2:16-cv-13041-LJM-EAS
d/b/a Genworks, )
d/b/a Genworks International, ) Hon. Laurie J. Michelson
d/b/a KBS International, ) Mag. Elizabeth A. Stafford
)
Plaintiff, )
)
v. )
)
REINIER VAN DIJK )
)
Defendant. )
___________________________________________________________________

FIRST AMENDED COMPLAINT
The Plaintiff, Knowledge Based Solutions, Inc., doing business as

Genworks, Genworks International, and KBS International (collectively "Genworks")

states as follows in its First Amended Complaint against the Defendant, Mr. Reinier van

Dijk (the "Defendant"):

NATURE OF ACTION

1. This Complaint is an action of the following claims by Genworks against

the Defendant:

A. Breach of various contracts between Genworks and the Defendant,

including the "Genworks Software License Agreement" (the "SLA"), the "Genworks

Non-Disclosure/Non-Compete Agreement" (the "NCA"), the open source contract titled

"GNU Affero General Public License, Version 3" (the "AGPL"), and the "Contributor
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Agreement" (the "CA"). The SLA, NCA, AGPL, and CA are referred to collectively as

the "Contracts". A true and accurate copy of the SLA is attached as Exhibit C. A true

and accurate copy of the NCA is attached as Exhibit D. A true and accurate copy of the

AGPL is attached as Exhibit E. A true and accurate copy of the CA is attached as

Exhibit F. The GDL Software is distributed through proprietary licenses ("Proprietary

GDL") such as the SLA attached as Exhibit C as well as through open source licenses

("Open Source GDL") such as the AGPL attached as Exhibit E. In the alternative to

the breach of contract claims, Genworks also raises claims of promissory estoppel and

unjust enrichment.

B. Copyright infringement under 17 U.S.C. §101, et seq., by

Genworks against the Defendant for infringement of U.S. Copyright Registration

Number TX0007456029 (the "Registration"). Evidence of the Registration is attached

as Exhibit A. The Registration pertains to the GDL Genworks software (the "GDL

Software") that is described in the website printout attached as Exhibit B. As an

alternative to copyright infringement under U.S. law, an alternative cause of action based

on copyright infringement under the Dutch Copyright Act is also raised.

C. Tortious interference by Defendant with respect to activities

conducted individually by Defendant and through his new business entity named ParaPy

B.V. ("ParaPy"), an entity founded and owned by Defendant (see Exhibits G and H)

using code components developed as a result of Defendant's breach of the Contracts and
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of Defendant's infringement of the copyrights in the GDL Software owned by Genworks

(see Exhibit I). All of ParaPy's customers, such as the Technical University of Delft

(the "University"), Fokker Aerostructures, Fokker Elmo, and any other customer of

Defendant's ParaPy software are the result of the tortious interference of Defendant with

respect to the customers and/or business relationships of Genworks. Defendant has also

induced several individuals associated with the University to breach the SLA (Exhibit

C) between Genworks and TU Delft. Defendant is misusing the technology of

Genworks to compete against Genworks. Defendant is purposefully using the

technology of Genworks to develop business for ParaPy, as indicated by the Aero-Space

Conference & Expo in the United States conducted in August 2016 (see Exhibit H).

E. Trade secret misappropriation by Defendant through the misuse of

technology and confidential information shared by Genworks. The disclosed technology

and information is of real economic value, and Genworks takes substantial efforts to

preserve the confidentiality of such technology and information.

PARTIES

2. The parties to this litigation are as follows:

A. Genworks is a Michigan corporation with its principal place of

business at 255 E. Brown Street, Suite 310 in Birmingham, Michigan 48009.

B. Upon information and belief, Defendant is an individual residing in

the Netherlands. Upon information and belief, Defendant is conducting business as the
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CEO and Founder of ParaPy (see Exhibit H). ParaPy is identifiable by the Chamber of

Commerce Number 65859812. ParaPy has a listed address of Leehoeve 34 in the province

of South-Holland at zip code 2614MH DELFT in the Netherlands (see Exhibit G).

JURISDICTION AND VENUE

3. This Court has subject matter jurisdiction over the claims raised in this

Complaint against the Defendant.

A. This Court has subject matter jurisdiction over the U.S. copyright

infringement claims under 17 U.S.C. §101, et seq.

B. This Court has subject matter jurisdiction over all other claims

pursuant to pursuant to 28 U.S.C. §1332.

C. This Court also has subject matter jurisdiction over all claims in the

Complaint pursuant to 28 U.S.C. §1367.

4. This Court has personal jurisdiction over the Defendant.

A. The intellectual property rights embodied in the GDL Software

were created and managed within the Eastern District of Michigan. (Exhibit J: ¶ 2,

Exhibit A). The activities pertaining to those intellectual property rights are not

"one-shot" sales, but rather ongoing permission to utilize intellectual property in

certain ways while certain restrictions are complied with on a similarly ongoing

basis.
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B. Defendant has purposely availed himself to intellectual property

rights originating from and managed in the Eastern District of Michigan.

Contracting with Genworks was the only way to obtain access to source code for the

knowledge-based engineering ("KBE") software. (Exhibit J: ¶ 35).

C. Defendant has purposely availed himself to certain contractual

rights originating from and managed within the Eastern District of Michigan.

Section 10 of the SLA attached as Exhibit C, Section 5 of the NCA attached as

Exhibit D, and Section 5 of the CA attached as Exhibit F each include a choice of

law provision in which Michigan law shall govern any and all disputes.

D. As result of the Contracts between the Defendant and Genworks,

the Defendant was given access to source code, trade secrets, and other intellectual

property rights located within the Eastern District of Michigan on an ongoing basis

over time in order to obtain a complete understanding that would not otherwise have

been possible. (Exhibits I and J: ¶ 8).

E. As result of the Contracts between the Defendant and Genworks,

the Defendant was given the ability to engage with Genworks personnel on an

ongoing basis over time in order to obtain a complete understanding that would not

otherwise have been possible. (Exhibits I and J: ¶ 8, 39).

F. Defendant has publicly posted comments on the Internet about

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the subject matter of the Contracts and the Registration. The forum for those

comments is operated within the Eastern District of Michigan. A true and accurate

copy of those comments are attached as Exhibit I.

G. Defendant is actively conducting business in the United States by

presenting at a seminar as a "CEO" of "ParaPy B.V." as illustrated in Exhibit H. The

businesses being courted include companies such as Boeing and Lockheed Martin,

both of which employ individuals within the state of Michigan. (Exhibit J: ¶ 29).

H. Defendant is actively disparaging the GDL Software in the

United States. (Exhibit J: ¶ 29, 45). The businesses receiving such disparagement

include businesses with operations and personnel located in the state of Michigan.

I. This Court has personal jurisdiction over the Defendant pursuant

to M.C.L. § 600.705.

J. The Defendant is actively marketing the ParaPy Software in the

United States. Those marketing activities are reaching businesses located in

Michigan.

5. This Court is the proper venue for the litigation of the claims set forth

in the Complaint.

A. Venue is proper pursuant to 28 U.S.C §1391.

B. The choice of law provisions in the SLA (attached as Exhibit C),
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the NCA (attached as Exhibit D), and the CA (attached as Exhibit F) are consistent

with this Court being the proper venue.

COMMON FACTUAL ALLEGATIONS

6. Genworks is in the business of licensing software and providing software

related services. (Exhibit B).

7. "GDL Genworks" ("GDL Software") is an important product of Genworks.

GDL combines aspects of a spreadsheet, a dynamic object-oriented programming

language, a parametric computer aided design system, a web application server, and a

knowledge-management system. Exhibit B is a website screen print that provides

information about the GDL Software.

8. The copyright Registration attached as Exhibit A covers the software

components that make up the GDL Software. The copyrightable subject matter of the

GDL Software include but are not limted to the following components:

A. the "look and feel" of the GDL Software, such as the graphical

user interface, colors, shapes, layouts, typefaces, menus, and user controls;

B. the GDL Software in the form of source code;

C. the GDL Software in the form of object code;

D. the structure of the GDL Software;

E. the sequence of the GDL Software;

F. the organization of the GDL Software;

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G. terminology and variable names used in the GDL Software;

H. the expression of the mechanisms used for meta-programming

including code generation for the realization of such run-time features as value

caching and dependency-tracking;

I. the expression of the mechanisms used to implement KBE

functionality; and

J. the expression of the mechanisms used to define and process

declarative object definitions.

9. GDL Software is licensed to customers on a proprietary basis ("Proprietary

GDL") as well as on an open source basis ("Open Source GDL"). The Open Source

GDL is sometimes marketed under the GENDL® or GENDL® PROJECT trademarks.

A. Every component of Open Source GDL is included in Proprietary

GDL. Open Source GDL is a subset of Proprietary GDL components. (Exhibit J: ¶ 7).

B. Certain specified components, including but not limited integration to

SMLib, a surfaces/solids geonetry modeling kernal library written in C/C++, are present

in the Proprietary GDL but absent from the Open Source GDL. (Exhibit J: ¶¶ 7A-7E).

10. Defendants use of Proprietary GDL was subject to the SLA. Exhibit C is a

true and accurate copy of the SLA.

A. Section 5.1(2) of the SLA does not allow the Defendant to "alter,

modify, translate, reverse engineer, decompile, disassembly, macroexpand, or copy

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(except for the program backup copy) the program or the accompanying documentation,

or otherwise attempt to discover the internal workings or any Trade Secrets contained

within the Software." The Defendant has acknowledged that he has macroexpanded the

GDL Software in order to develop a full understanding of it. Exhibit I.

B. Section 5.1(8) of the SLA prohibits the use of the program in a

"commercial setting" when the license is "Academic".

C. Section 5.2 of the SLA states that "it is specifically forbidden, without

express written consent from Genworks, to make use of a GDL installation licensed under

this Agreement to convert code which has been developed at any time using an AGPL-

licensed Gendl into closed-source binaries or applications."

D. Section 6 of the SLA does not allow the Defendant to "derive any

financial benefit or commercial value, or authorize or permit any third party to derive any

direct financial benefit or commercial value, in each case directly or indirectly, from such

distribution or deployment."

11. Defendant personally executed a binding "Genworks Non-Disclosure/Non-

Compete Agreement" ("NCA") with Genworks on December 13. 2009. A true and

accurate copy of the NCA is attached as Exhibit C.

A. Section 1 of the NCA provides that "[a]ny information received by

Recipient from Genworks which is not otherwise marked or labeled, shall be considered

as 'Proprietary' and 'Trade Secret' and shall be covered by the terms of this Agreement."

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B. Section 3 of the NCA requires that the Defendant "refrain from using

the Information [about the Genworks Software] in any manner or for any purpose which

can be considered as competitive with Genworks".

C. Section 4 of the NCA requires that the Defendant "contribute any

useful results or derivations from the Information [about the Genworks Software] back to

Genworks".

12. Defendant accepted the terms and conditions of the AGPL when he utilized

the Open Source GDL. A true and accurate copy of the AGPL is attached as Exhibit D.

A. AGPL is a copyleft license.

B. Section 6 of the AGPL license requires that Defendant publish the

source code of any derivative work created by the Defendant using Open Source GDL.

C. Section 10 of the AGPL prohibits Defendant from charging a license

fee for the distribution of any derivative work of Open Source GDL.

13. Defendant is selling licenses to third parties of a software product that he

refers to as ParaPy (the "Derivative Works").

14. Genworks has put Defendant on notice of how the Defendant's conduct has

made the Defendent liable under various causes of action.

15. Defendant has refused to cease and desist from the liability-inducing

conduct.

16. Defendant has refused to license the ParaPy Software on an open source

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basis.

COUNT I: BREACH OF CONTRACT

17. Genworks incorporates by reference paragraphs 1-16 as if fully set forth

herein.

18. Defendant entered into certain Contracts with Genworks. Those

Contracts are attached as Exhibits C – F.

A. The NCA and CA were personally signed by the Defendant.

(Exhibits D and F).

B. The Defendant gave an affirmative indication of agreement to the

terms and conditions of the SLA by checking a box in order to access the GDL

Software. (Exhibit J: ¶ 42).

C. The Defendant gave an affirmative indication of agreement to the

terms and conditions of the AGPL by accessing the source code. (Exhibit E).

19. Defendant breached his obligations under the Contracts.

A. Defendant breached §5 of SLA by reverse engineering the GDL

Software in order to "discover the internal workings or any Trade Secrets contained

within the Software". (Exhibit C: §5.1(2)). The use of macroexpanded code was

specifically prohibited. The Defendant has specifically acknowledged using "macro-

expanded code" in order to develop an understanding of "each and every tiny detail"

of the GDL Software. (Exhibit I).

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B. Defendant breached §5 of the NCA by utilizing the information

obtained pursuant to the NCA and the examination of GDL Software "in any manner

or for any purpose which can be considered as competitive with Genworks". (Exhibit

D). Defendant used the information and understanding he received through the NCA

to create ParaPy Software, a direct competitor to the GDL Software. (Exhibit J: ¶¶

46, 48).

C. Defendant also breached §2 of the NCA by utilizing the

information obtained pursuant to the NCA in the creation of the ParaPy Software with

its co-creator. Defendant was prohibited from sharing such information with any third

party.

D. Defendant breached the AGPL by creating a Derivative Work for

which third parties are charged a license fee.

E. Defendant breached the CA by failing to assign an ownership

interest to the Derivative Work to Genworks.

30. Genworks has suffered monetary damages as a result of Defendant's

conduct.

31. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money.

COUNT II: PROMISSORY ESTOPPEL/RELIANCE

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32. Genworks incorporates by reference paragraphs 1-31 as if fully set forth

herein.

33. In the alternative to claims of contractual breach, Genworks raises claims

of promissory estoppel/reliance should, for any reason, any of the Contracts or

contractual provisions be found to be invalid.

34. Defendant made certain representations to Genworks in order to induce

information sharing by Genworks. (Exhibit J: ¶ 48). Even if such promises were not

legally binding, Genworks relied upon those promises when Genworks disclosed

Proprietary GDL and other confidential information to Defendant.

35. Genworks relied upon those representations to its detriment. Genworks

relied upon the promises of Defendant not to create a competiting product before

Genworks decided to provide Defendant with access to source code or to permit

reverse engineering of the GDL Software. (Exhibit J: ¶ 48).

36. Defendant failed to honor his representations in creating the ParaPy

Software. (Exhibit J: ¶ 48).

37. Defendant failed to honor his representations in marketing ParaPy

Software to third parties.

38. Genworks has been damaged in the marketplace as Defendant has

created ParaPy to compete against the GDL Software.

39. Genworks has suffered monetary damages as a result of Defendant's

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conduct.

40. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money.

COUNT III: UNJUST ENRICHMENT/RESTITUTION

41. Genworks incorporates by reference paragraphs 1-40 as if fully set forth

herein.

42. In the alternative to claims of contractual breach and promissory

estoppel/reliance, Genworks raises claims of ujust enrichment.

43. Defendant has unjustly utilized access to confidential information

pertaining to the GDL Software to create the ParaPy Software that is now being marketed

in competition against the GDL Software.

44. It would be unjust for the Defendant to retain those benefits. (Exhibit J: ¶

48).

45. Genworks has suffered monetary damages as a result of Defendant's

conduct.

46. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money.

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COUNT IV - COPYRIGHT INFRINGEMENT UNDER U.S. LAW

47. Genworks incorporates by reference paragraphs 1-46 as if fully set forth

herein.

48. Genworks owns the copyright to the GDL Software. Those copyrights

have been registered at the U.S Copyright Office. Evidence of that Registration is

attached as Exhibit A.

49. Defendant had access to the copyrighted materials covered in the

Registration. (Exhibit I; Exhibit J: ¶48). That access was comprehensive and over

a period of many years. There is no other KBE system that Defendant had such access

to. (Exhibit J: ¶¶35-39).

50. It was only after Defendant completed his "academic" analysis of the

how the GDL Software functioned that he created the ParaPy Software as a Derivative

Work of the GDL Software and a competing commercial offering to the GDL

Software.

51. Defendant has made Derivative Works of the GDL Software and is

actively marketing those Derivative Works to third parties. Such derivative works

infringe the copyright to the GDL Software held by Genworks.

52. Defendant is distributing Derivative Works derived from the GDL

Software.

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53. Defendant is charging customers a license fee to use the Derivative

Works.

54. Defendant's conduct is not authorized by Genworks.

55. At all relevant times, Genworks has been the holder of the pertinent

exclusive rights infringed by the Defendant.

56. Defendant has been put on notice that Defendant's conduct is contrary to

the Registration held by Genworks.

57. The foregoing acts of infringement constitute a collective enterprise of

shared, overlapping facts and have been willful, intentional, and in disregard of and with

indifference to the rights of Genworks.

58. The infringing behavior of the Defendant involved many ties to the

United States.

A. The Defendant has accessed object code, source code, and non-

public information pertaining to the operation of the GDL Software that was created,

stored, and managed in the state of Michigan.

B. The Defendant agreed on three separate occasions that the laws of

Michigan would govern any dispute between the parties.

C. The Defendant engaged in ongoing communications with a

business from Michigan, the only KBE business willing to share source code with the

Defendant.

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D. The Defendant has personally marketed the ParaPy Software in

the United States. (Exhibits H; J: ¶45). Companies such as Boeing and Lockheed

Martin have employees, suppliers, and operations in Michigan. The Defendant has

personally disparaged the Genworks Software to such third parties. (Exhibit J: ¶45).

59. As a result of Defendant's infringement of the exclusive rights of

Genworks under copyright, Genworks is entitled to relief pursuant to 17 U.S.C. §504

and to its attorneys' fees and costs pursuant to 17 U.S.C. §505.

60. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money. Genworks has no adequate remedy at

law. Pursuant to 17 U.S.C. §§502 and 503, Genworks is entitled to injunctive relief

prohibiting Defendant from further infringing Plaintiff's copyright and ordering that

each Defendant destroy all Derivative Works developed through use of the GDL

Software.

COUNT V - COPYRIGHT INFRINGEMENT UNDER
THE LAWS OF THE NETHERLANDS

61. Genworks incorporates by reference paragraphs 1-60 as if fully set forth

herein.

62. In the alternative to claims of copyright infringement under U.S. law,

Genworks raises a claim of copyright infringement under the copyright laws of the

Netherlands. See Rundquist v. Vapiano, 798 F. Supp. 2d 102 (D.D.C. 2011).
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63. Genworks holds a valid copyright to the GDL Software. The

Netherlands has no regisration requirement, and the Netherlands is a signatory to the

Berne Convention.

64. The Defendant had access to the copyrighted subject matter in the GDL

Software.

65. The Defendant infringed upon the Genworks copyright in the GDL

Software when the Defendant created the ParaPy Software.

66. As a result of Defendant's infringement of the exclusive rights of

Genworks under copyright, Genworks is entitled to both monetary damages and

injunctive relief.

67. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money. Genworks has no adequate remedy at

law. Genworks is entitled to injunctive relief prohibiting Defendant from further

infringing Plaintiff's copyright and ordering that each Defendant destroy all

Derivative Works developed through use of the GDL Software.

COUNT VI: TRADE SECRET MISAPPROPRIATION

68. Genworks incorporates by reference paragraphs 1-67 as if fully set forth

herein.

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69. Genworks has developed confidential information about the GDL Software

that has real economic value and that information is subject to reasonable efforts of

secrecy by Genworks. Trade secrets held by Genworks include but are not limited to:

A. an integration to SMLib, a surfaces/solids geometry modeling

kernel library written in C/C++;

B. functions and objects that enable generating GDL applications as

standalone runtime executables;

C. an enhanced out-of-the-box turnkey development environment for

using Proprietary GDL;

D. package locking to prevent user code from accidentally redefining

built-in functionality;

E. a software load-balancer application to enable large-scale web

deployments using server farms of applications; and

F. the expertise in processing logic and program structure that is

obtained through the analysis of macro-expanded code components.

70. Defendant misappropriated these Trade Secrets when Defendant utilized

information that was either obtained under false pretenses of an academic purpose or by

changing paths and applying information obtained for academic purposes and using it

for commercial purposes. The confidential nature of the Trade Secrets was preserved in

the SLA, NCA, and CA agreements.

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71. The CSA required that the Defendant treat such trade secrets in a

confidential manner. The CSA prohibited the Defendant from utilizing those trade

secrets for the commercial benefit of the Defendant.

72. The creation of the ParaPy Software utilizing confidential information of

the GDL Software by the Defendant involved the misappropriation of trade secrets

owned by Genworks.

73. The distribution of ParaPy Software by Defendant constitutes a

misappropriation of those trade secrets.

74. Genworks has suffered monetary damages as a result of Defendant's

conduct.

75. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money.

COUNT VII: TORTIOUS INTERFERENCE

76. Genworks incorporates by reference paragraphs 1-75 as if fully set forth

herein.

77. Defendant has wrongfully interfered with existing contractual

arrangements and the business interests and expectations of Genworks by creating and

marketing the ParaPy Software.
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78. Genworks has existing contractual arrangements and business interests

with a wide number of users of KBE systems, including but not limited to TU Delft.

79. Defendant has wrongfully obtained and used confidential information

pertaining to the GDL Software and is utilizing that information to unfairly interfere with

the contracts between Genworks and its licensees as well as with the business

relationships between Genworks and its potential customer base.

80. Genworks has suffered monetary damages as a result of Defendant's

conduct.

81. The conduct of Defendant is causing and, unless enjoined and restrained

by this Court, will continue to cause Genworks great and irreparable injury that cannot

fully be compensated or measured in money.

DEMAND FOR A JURY TRIAL

Genworks hereby demands a trial by jury of all issues so triable.

PRAYER FOR RELIEF

WHEREFORE, Genworks respectfully requests the following relief:

A. Entry of an order that includes the following:

1. a finding that the Defendant has infringed the copyright identified in

the Registration;

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2. a permanent injunction providing that Defendant may not import the

software currently named "ParaPy" into the states and territories of the United States.

B. Judgment in favor of Genworks and against the Defendant:

1. a finding that Defendant willfully infringed the rights of

Genworks in its federally registered copyright pursuant to 17 U.S.C. §501, and that

Defendant's liability to Genworks for actual damages, lost profits, and/or statutory

damages is at least $150,000;

2. a finding that Defendant breached the Contracts and caused

injuries to Genworks in an amount that is at least $150,000;

3. a finding that Defendant is liable to Genworks on the basis of

tortious interference, promissory estoppel/reliance, unjust enrichment/restitution,

unfair competition, and trade secret misappropriation in an amount that is at least

$150,000;

4. For an Order of Impoundment under 17 U.S.C. §§503 and

509(a) impounding all of Defendant's Derivative Works, including the ParaPy

Software;

5. For Judgment in favor of Genworks and against Defendant

awarding attorneys’ fees, litigation expenses (including fees and costs of expert

witnesses) and other costs of this action to Genworks.
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6. For Judgment in favor of Genworks against Defendant,

awarding Genworks such further declaratory and injunctive relief as may be just

and proper under the circumstances.

DATED: January 17, 2017 Respectfully submitted,

Plaintiff: Knowledge Based Solutions

By: s/ Christopher J. Falkowski
Christopher J. Falkowski (P57019)
FALKOWSKI PLLC
50064 Drakes Bay Drive
Novi, MI 48374
Phone (248) 893-4505 x1
Fax (248) 412-4078
E-Mail: chris@falkowskipllc.com

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