­

Copyright suit against Russ Whitney and his book publisher by Pete and Tony Youngs 4 FACTUAL ALLEGATIONS I. The Whitney Business 13. Russ Whitney is the Chairman, President, and Chief Executive Officer of WIN. WIN is a publicly traded company. WEG, a subsidiary of WIN, provides a variety of post-secondary educational services to consumers relating to financial investing, including training programs, seminars, and publications. WLG owns several copyrights to WIN's and WEG's educational materials. 14. WIN is in the business of marketing and promoting educational training programs and publications. WIN markets WEG's publications, videos, and training courses through a number of media, including newspapers, periodic publications, direct mail, telemarketing, television, radio, internet, and word of mouth. 15. WEG conducts training seminars on a variety of real estate investing and related topics. 16. WEG also produces approximately twenty-five (25) publications on a variety of real estate investing and related topics. 17. WEG has provided foreclosure and pre-foreclosure training seminars to students since 1992. Most of WEG's trainers have experience with foreclosure and pre-foreclosure, as these subjects overlap with many of WEG's other seminars. II. The Whitney Relationship With the Youngs and David Keller 18. WEG hired the Youngs in 1997 to teach a WEG foreclosure seminar. The Youngs signed a WIN SYSTEMS, INC. TRAINING AGREEMENT (Training Agreement) on March 7, 1997. Under the Training Agreement, the Youngs agreed to be trainers at WEG's foreclosure seminars, which provide students information and ideas about purchasing, rehabilitating, and selling foreclosed property. 19. All materials used in the seminars taught by the Youngs were subject to WEG's review and approval. 20. WEG is solely responsible for advertising, marketing, and promoting all of its seminars, including the seminars that were taught by the Youngs. 21. The Youngs' employment relationship with WEG ended in May of 2003. 22. WEG developed its own materials for its ongoing foreclosure seminars. WEG asked David Keller to create, with the help of WEG staff, a new manual (the Manual) for the WEG foreclosure seminars. David Keller is experienced in real estate investing, particularly in the area of purchasing, rehabilitating, and selling foreclosed property. 23. The Youngs allege in their Amended Complaint that the Manual created by David Keller and WEG infringes certain of the Youngs' purported copyrighted videotapes, audiotapes, and written materials attached to the Youngs' Verified Complaint as Exhibits Al-A11 (the Youngs' Works). 24. The Youngs' Works regarding pre-foreclosure and foreclosure real estate purchasing and rehabilitating techniques include derivative works or factual compilations from various sources. Most of the information contained in the Youngs' Works is well known and in the public domain. Numerous third parties have published books relating to these same subject matters. 25. The only similarities between the Youngs' Works and the Manual include the ideas for the reasons to buy real estate and the fears commonly associated with purchasing real estate. These ideas are in the public domain and are not copyright protected expressions. The Manual explains these ideas in an original manner. 26. The Manual is not substantially similar to any copyright protected expression in the Youngs' Works. III. Millionaire Real Estate Mentor Book 27. Russ Whitney has authored three books relating to real estate investing. The most recent book, Millionaire Real Estate Mentor: The Secrets To Financial Freedom Through Real Estate Investing (Millionaire Real Estate Mentor), was published in April 2003 by Dearborn Trade Publishing (Dearborn). 28. In the summer of 2000, Russ Whitney approached many of the WEG trainers, including the Youngs, about contributing information to a book that he was authoring about real estate investing. 29. The Youngs agreed to contribute some of their ideas and information for inclusion in the book and contributed to the effort throughout 2000, 2001, and 2002 by providing information about purchasing and rehabilitating pre-foreclosure or foreclosure real estate. 30. The Youngs consented to have their information regarding purchasing and rehabilitating pre-foreclosure and foreclosure property included in the Millionaire Real Estate

Mentor book. 31. The ideas and information contained in the Millionaire Real Estate Mentor book do not infringe any copyright protected expression from the Youngs' Works. 32. The Youngs are acknowledged as co-authors of the Millionaire Real Estate Mentor book, as part of the Wealth Team. Their pictures and biographies are featured in the Millionaire Real Estate Mentor book. 33. The Youngs allege in their Amended Complaint that Chapters 6 and 10 of the Millionaire Real Estate Mentor book (attached to Plaintiffs' Verified Complaint as Exhibit D) infringe the Youngs' works. Plaintiffs' Verified Complaint also alleged a claim against Dearborn Financial Institute, Inc., d/b/a Dearborn Trade Publishing, for copyright infringement in connection with the Millionaire Real Estate Mentor book. After the Court denied Plaintiffs' Emergency Motion for Temporary Restraining Order, Plaintiffs dismissed Dearborn from this action. IV. The Youngs Have Failed To Show Copyright Infringement 34. At the hearing on Plaintiffs' Emergency Motion for Temporary Restraining Order, which Plaintiffs filed concurrently with the Verified Complaint, Plaintiffs failed to demonstrate a substantial likelihood of success on the merits on their copyright infringement claim. 35. After stating the standards for substantial likelihood of success on copyright infringement claims, the Court found that under these standards, Plaintiffs have not shown a substantial likelihood of success. Plaintiffs have not demonstrated copying or substantial similarity between the expressive elements of their works and either the Whitney Defendants' seminar materials or the Millionaire Real Estate Mentor book. (July 22, 2003 Order, at 4.) 36. The Order stated that Plaintiffs have failed to demonstrate that the allegedly infringing materials incorporate protected expression that is substantially similar to Plaintiffs' copyrighted work. (Id. at 6.) COUNT ONE DECLARATORY JUDGMENT FOR COPYRIGHT INFRINGEMENT CLAIM 37. Counterclaim Plaintiffs incorporate herein and reallege, as if fully set forth herein, the allegations in Paragraphs 1 through 36 above. 38. There is an actual controversy between Counterclaim Plaintiffs and Counterclaim Defendants as to whether Counterclaim Plaintiffs' Manual or the Millionaire Real Estate Mentor book infringes the Youngs' Works. The Youngs, as Plaintiffs, have brought an action against Defendants for copyright infringement. Defendants, as Counterclaim Plaintiffs, are entitled to bring this declaratory judgment action to establish the parties' respective rights. 39. Counterclaim Defendants have asserted that Counterclaim Plaintiffs cannot use the Manual or conduct seminars using the Manual, because they contend the Manual infringes the Youngs' Works. 40. Counterclaim Plaintiffs are entitled to use the Manual and the Millionaire Real Estate Mentor book because these materials do not infringe any protected element of the Youngs' Works. 41. Counterclaim Plaintiffs seek declaratory relief from this Court pursuant to 28 U.S.C. '§ 2201 for the purpose of determining a question of actual controversy between the parties. 42. Counterclaim Plaintiffs request that the Court enter a declaratory judgment that the portions of the Youngs' Works which the Youngs claim Counterclaim Plaintiffs infringed are not copyright protected expressions. 43. Counterclaim Plaintiffs request that the Court enter a declaratory judgment that the Youngs have not demonstrated copying or substantial similarity between any original expressive elements of the Youngs' Works and either the Manual or the Millionaire Real Estate Mentor book. 44. Counterclaim Plaintiffs request that the Court enter a declaratory judgment that the Manual and the Millionaire Real Estate Mentor book do not infringe any copyright protected element of the Youngs' Works. COUNT TWO CLAIM FOR ATTORNEYS' FEES 45. Counterclaim Plaintiffs incorporate herein and reallege, as if fully set forth herein, the allegations in Paragraphs 1 through 44. 46. The Youngs cannot establish the elements necessary to prevail on their copyright infringement claim. 47. Since the Youngs are unable to prove copyright infringement, Counterclaim Plaintiffs are the prevailing party on the Youngs' copyright infringement claim under 17 U.S.C. '§ 505. 48. WEG may be required to indemnify the dismissed defendant Dearborn for its costs and attorneys' fees incurred in this action. 49. Counterclaim Plaintiffs request the costs and attorneys' fees incurred by each Defendant, and the dismissed defendant Dearborn, pursuant to 17 U.S.C. '§ 505. PRAYER FOR RELIEF WHEREFORE, having fully answered Plaintiffs' Amended Complaint and having asserted against the Youngs their Counterclaim, as set forth above, Whitney Education Group, Inc. (WEG), Whitney Leadership Group, Inc. (WLG), Whitney Information Network, Inc. (WIN), Russ Whitney, and David Keller respectfully pray for relief as follows: (1) That the Court dismiss Defendants Russ Whitney, WLG, and David Keller for lack of personal jurisdiction; (2) That the Court dismiss Plaintiffs' Amended Complaint, and each and every claim and count thereof, with prejudice, and that judgment be entered in favor of Defendants on Plaintiffs' Amended Complaint, and each and every count thereof, and that Plaintiffs take nothing by this action; (3) That the Court dismiss Plaintiffs' Count One for Copyright Infringement, with prejudice, and that judgment be entered in favor of Defendants on Plaintiffs' Count One for Copyright Infringement, and that Plaintiffs take nothing from this claim; (4) That, pursuant to 28 U.S.C. '§ 2201, the Court enter a declaratory judgment that the Manual and the Millionaire Real Estate Mentor book do not infringe any copyrighted expression of Plaintiffs; (5) That the Court award all Defendants' attorneys' fees, costs, and expenses pursuant to 17 U.S.C. '§ 505 for defending Count One of Plaintiffs' Amended Complaint for copyright infringement, including without limitation, any indemnification of fees, costs, and expenses to other parties; and (6) For such other and further relief as may be just and proper. END OF DOCUMENT United States District Court, N.D. Georgia. Pete YOUNGS and Tony Youngs, Plaintiffs, v. WHITNEY EDUCATION GROUP, INC., Whitney Leadership Group, Inc., Whitney Information Network, Inc., Russ Whitney, and David Keller, Defendants. Civil Action File No. 1-03-CV-1697-TWT. September 24, 2003. Plaintiffs' Answer and Defenses to Defendants' Counterclaim Plaintiffs Pete Youngs and Tony Youngs (collectively, Plaintiffs) hereby submit this their Answer and Defenses to Defendants' Counterclaim, showing as follows: Nature of Counterclaim 1. In response to the allegations in Paragraph 1 of the Counterclaim, Plaintiffs state that the allegations set forth in the Amended Verified Complaint filed in this proceeding presents questions of actual controversy between the Parties, satisfying the requirements of 28 U.S.C. '§2201. 2. Plaintiffs deny that Defendants are entitled to attorney's fees and expenses under the copyright law of the United States, 17 U.S.C. '§ 505. Jurisdiction and Venue 3. Plaintiffs admit the allegations in Paragraph 3 of the Counterclaim. 4. Plaintiffs admit the allegations in Paragraph 4 of the Counterclaim. 5. Plaintiffs admit the allegations in Paragraph 5 of the Counterclaim. 6. Plaintiffs admit the allegations in Paragraph 6 of the Counterclaim. 7. Plaintiffs admit the allegations in Paragraph 7 of the Counterclaim. 8. Plaintiffs admit the allegations in Paragraph 8 of the Counterclaim, and further state that Whitney Leadership Group does business in the State of Georgia, Cobb County. 9. Plaintiffs admit the allegations in Paragraph 9 ofthe Counterclaim, and further state that does business in the State of Georgia, Cobb County. 10. Plaintiffs admit the allegations in Paragraph 10 of the Counterclaim, and further state David Keller does business in the State of Georgia, Cobb County. 11. In response to Paragraph 11 of the Counterclaim, Plaintiffs state that this Court has jurisdiction over Defendants Russ Whitney, Whitney Leadership Group, and David Keller because each conducts business in the State of Georgia, Cobb County. In addition, Defendants Russ Whitney, Whitney Leadership Group, and David Keller have waived jurisdiction and venue by filing the instant Counterclaim. The remaining allegations in Paragraph 11 are denied. 12. Plaintiffs admit the allegations in Paragraph 12 of the Counterclaim. Factual Allegations I. The Whitney Business 13. Plaintiffs admit that Russ Whitney is the Chairman, President, and Chief Executive Officer of Whitney Information Network. Plaintiffs further admit that Whitney Information Network is a publicly traded company. Plaintiffs are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 13 of the Counterclaim and, therefore, deny those allegations. 14. Plaintiffs admit that Whitney Information Network is in the business of marketing and promoting educational training programs and publications. Plaintiffs are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in Paragraph 14 of the Counterclaim and, therefore, deny those allegations. 15. Plaintiffs admit the allegations in Paragraph 15. 16. Plaintiffs are without knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 16 of the Counterclaim and, therefore, deny those allegations. 17. Plaintiffs are without knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 17 of the Counterclaim and, therefore, deny those allegations II. The Whitney Relationship With the Youngs and David Keller 18. Plaintiffs deny the allegations in Paragraph 18 of the Counterclaim. 19. Plaintiffs deny the allegations in Paragraph 19 of the Counterclaim. 20. Plaintiffs deny the allegations in Paragraph 20 of the Counterclaim. 21. Plaintiffs deny the allegations in Paragraph 21 of the Counterclaim. 22. Plaintiffs deny the allegations in Paragraph 22 of the Counterclaim. 23. Plaintiffs admit the allegations in Paragraph 23 of the Counterclaim. 24. Plaintiffs deny the allegations in Paragraph 24 of the Counterclaim. 25. Plaintiffs deny the allegations in Paragraph 25 of the Counterclaim. 26. Plaintiffs deny the allegations in Paragraph 26 of the Counterclaim. III. Millionaire Real Estate Mentor Book 27. Plaintiffs admit that Russ Whitney participated in authorship of three books relating to Real Estate investing, however, Plaintiffs deny that Russ Whitney was the sole author of these publications. Plaintiffs further admit that Millionaire Real Estate Mentor: The Secrets to Financial Freedom Through Real Estate Investing was published by Dearborn Trading Publishing. All other allegations in Paragraph 27 are hereby denied. 28. Plaintiffs admit the Plaintiffs were approached by Russ Whitney about a book he was co-authoring. All other allegations in Paragraph 28 of the Counterclaims are denied. 29. Plaintiffs admit they conditionally agreed to contribute their copyrighted materials to Russ Whitney, and did so in 2000 to 2002. All other allegations in Paragraph 29 of the Counterclaim are denied. 30. Plaintiffs deny the allegations in Paragraph 30 of the Counterclaim. 31. Plaintiffs deny the allegations in Paragraph 31 of the Counterclaim. 32. Plaintiffs admit their pictures and biographies are in the book. The remaining allegations in Paragraph 32 of the Counterclaim are denied. 33. Plaintiffs admit the allegations in Paragraph 33 of the Counterclaim. IV. The Youngs have failed to show copyright infringement 34. Plaintiffs deny the allegations in Paragraph 34 of the Counterclaim. 35. Plaintiffs admit the allegations in Paragraph 35 of the Counterclaim. 36. Plaintiffs admit the allegations in Paragraph 36 of the Counterclaim. COUNT ONE DECLARATORY JUDGMENT FOR COPYRIGHT INFRINGEMENT CLAIM 37. Plaintiffs incorporate herein and re-allege it, as is fully set forth herein, their Answers and Defenses to allegations in Paragraphs 1 through 36 above. 38. Plaintiffs admit the allegations in Paragraph 38 of the Counterclaim. 39. Plaintiffs admit the allegations in Paragraph 39 of the Counterclaim. 40. Plaintiffs deny the allegations in Paragraph 40 of the Counterclaim. 41. Plaintiffs are without knowledge or information sufficient to form a belief as to the truth of the allegations in Paragraph 41 of the Counterclaim and, therefore, deny those allegations. 42. Plaintiffs deny the allegations in Paragraph 42 of the Counterclaim. 43. Plaintiffs deny the allegations in Paragraph 43 of the Counterclaim. 44. Plaintiffs deny the allegations in Paragraph 44 of the Counterclaim. COUNT TWO CLAIM FOR ATTORNEYS' FEES 45. Plaintiffs incorporate herein and re-allege it, as is fully set forth herein, their Answers and Defenses to allegations in Paragraphs 1 through 44 above. 46. Plaintiffs deny the allegations in Paragraph 46 of the Counterclaim. 47. Plaintiffs deny the allegations in Paragraph 47 of the Counterclaim. 48. Plaintiffs deny the allegations in Paragraph 48 of the Counterclaim. 49. Plaintiffs deny the allegations in Paragraph 49 of the Counterclaim. 50. Plaintiffs deny that Defendants are entitled to any of the relief set forth in the unnumbered WHEREFORE Paragraph following Paragraph 49 of the Counterclaim. 51. Plaintiffs deny each and every allegation contained in the Counterclaims which is not specifically admitted herein. FIRST DEFENSE Defendants' Counterclaim, and each and every claim and count thereof, fails to state a claim against Plaintiffs upon which relief can be granted. SECOND DEFENSE Defendants have subjected themselves to the jurisdiction and venue of this Court by filing their Counterclaim. THIRD DEFENSE Defendants are not entitled to an award of costs and attorneys' fees because all claims asserted by Plaintiffs are made in good faith and reasonably based in law and fact. FOURTH DEFENSE Defendants are not entitled to any costs or attorneys' fees incurred by Dearborn Publishing, formerly a Defendant to this action, because Plaintiffs reached a mutual settlement and release of all issues with Dearborn and cannot now be held responsible for Dearborn's costs and attorneys' fees. FIFTH DEFENSES Release. SIXTH DEFENSE Accord and satisfaction. SEVENTH DEFENSE Plaintiffs hereby give notice that they intend to rely on defenses that may become apparent or arise during the course of this litigation and reserve their right to amend this Answer and Defenses to the Counterclaim by providing such defenses. END OF DOCUMENT John T. Reed, a.k.a. John Reed, Jack Reed, 342 Bryan Drive, Alamo, CA 94507, Voice: 925-820-7262, Fax: 925-820-1259, www.johntreed.com

Log in to comment
­