MEMORANDUM OPINION AND ORDER Plaintiff Automated Management Systems, Inc. (“AMSI”) brings this action against Defendants Rappaport Hertz Cherson Rosenthal, P.C. (“RHCR”), its four named partners William Rappaport, Steven M. Hertz, Eliot J. Cherson, and Michael C. Rosenthal (the “Individual Defendants,” and together with RHCR, the “RHCR Defendants”), and Defendant Branko Rakamaric (collectively, “Defendants”) for copyright infringement, breach of contract, and unfair competition. On August 30, 2017, this Court granted Defendants’ motion to dismiss Plaintiff’s Amended Complaint in its entirety. (Docket entry no. 66, the “August Opinion.”) On July 12, 2018, the Court granted AMSI’s motion for leave to file a Second Amended Complaint (docket entry no. 83,1 the “SAC”). (Docket entry no. 97, the “July Opinion.”) Before the Court is the RHCR Defendants’ motion to dismiss the SAC (docket entry no. 100), and AMSI’s motion for sanctions (docket entry no. 111). This Court has subject matter jurisdiction of Plaintiff’s federal copyright infringement claim pursuant to 28 U.S.C. §§1331 and 1338, and may exercise supplemental jurisdiction of Plaintiff’s state law claims pursuant to 28 U.S.C. §1367. The Court has carefully considered the parties’ submissions and, for the following reasons, the RHCR Defendants’ motion to dismiss the Second Amended Complaint is denied and AMSI’s motion for sanctions is denied.BACKGROUNDThe Court assumes the parties’ familiarity with the background of this case, which is laid out in detail in the August and July Opinions. (August Opinion at 2-3; July Opinion at 2-3.) The allegations of fact underlying AMSI’s copyright infringement claim are materially unchanged from the proposed SAC filed in connection with AMSI’s motion for leave to amend, and the Court adopts the factual recitation from the July Opinion relating to those claims. Specifically, AMSI alleges that it licensed its Landlord-Tenant Legal System (“LTLS”) software to RHCR pursuant to a Software Subscription Agreement entered into on January 2, 2007. (SAC 9, Ex. C (the “Agreement”).) In 2007, AMSI installed new software at RHCR. (SAC 3.) The SAC alleges that this new software was registered with the U.S. Copyright Office under registration number TX 7-232-319, for a work titled “Landlord & Tenant Legal System” that was completed in 2007 and first published on November 1, 2007. (SAC 6, Ex. A (the “Landlord & Tenant Copyright”).) The software installed in 2007 replaced a prior software system, which was registered with the U.S. Copyright Office under registration number TX 7-232-302. (SAC
7-8.) Registration TX 7-232-302 is for a work titled “L&T Legal System” that was completed in 1998 and first published on September 1, 1998. (SAC Ex. B (the “L&T Copyright”).) AMSI alleges that “[t]o the extent that copyrightable elements of the prior software were incorporated into” the software installed in 2007, they continue to be protected by the L&T Copyright. (SAC 8.) The Landlord & Tenant Copyright and the L&T Copyright were both registered on September 3, 2010. (SAC Exs. A & B.)AMSI alleges that Defendants have been copying the software installed in 2007 onto a separate server run by RHCR since at least October 18, 2015, and that Defendant Rakamaric, in his capacity as an information technology services provider, modified and developed a derivative of the software. (SAC
