Vantage Learning USA, LLC v. Edgenuity, Inc. - Online Educational Software Litigation

Our client, Edgenuity, Incorporated, provides on-line educational technology. The plaintiff in this matter, Vantage Learning USA, LLC agreed to provide Edgenuity with its so-called “adaptive learning software.” Vantage's software provided essay topics (“prompts”) that were accessed by students using Edgenuity’s technology. Edgenuity’s students wrote essays on those topics and submitted them on-line, and Vantage provided computer-generated grades. In the spring of 2014, essays submitted by students got recycled and re-graded over and over again; the way the system worked, this went unrealized for several weeks. As a result, 349 essays were graded more 700,000 times. Vantage claimed that this was Edgenuity’s fault, and billed for all of the resubmissions at the per-submission rate in the contract. With contractual interest of 1.5% per month, the amount claimed approached $900,000. Vantage filed a complaint in Pennsylvania state court alleging breach of contract, unjust enrichment and negligence. We removed the case to federal court in Philadelphia based on diversity jurisdiction, and Vantage then amended its complaint to add a claim for copyright infringement, alleging that Edgenuity continued to use Vantage’s copyrighted prompts after the parties’ agreement had expired. We moved to dismiss the unjust enrichment claim on the ground that, under Pennsylvania law, a claim for unjust enrichment isn’t available to a plaintiff alleging that the parties’ relationship is governed by an express written contract. We also moved to dismiss the negligence claim based on Pennsylvania’s “gist of the action” doctrine, i.e., a claim sounding in tort will not lie when based entirely on a defendant’s actions in breach of its contract. Finally, we moved to dismiss the claims in the copyright count for statutory damages and attorneys’ fees under the federal Copyright Act because the alleged infringement began before the alleged copyrighted material was registered. On March 30, 2017, the court granted our motion in its entirety, dismissing the claims at issue with prejudice.

This engagement is exemplary of Verrill Dana’s collaborative approach to client service and its ability to assemble “right sized” teams to best meet clients’ needs.