Adobe System Inc. v. Blue Source Group, Inc.
125 F. Supp. 3d 945
N.D. Cal.2015Background
- Adobe, a California-based software company, sued Blue Source (a Colorado corporation) alleging trademark infringement, false designation of origin, trademark dilution, copyright infringement, and UCL violations for selling or supplying unauthorized, OEM, EDU, ESD, or foreign versions of Adobe software.
- The claims arise from prior litigation and settlement (Adobe I) with SoftwareMedia defendants; Adobe alleges Blue Source supplied infringing product to SoftwareMedia.
- Adobe asserts its software is licensed (SLA) with distribution/use restrictions (so distributors/licensing issues are central to copyright claims).
- Blue Source moved to dismiss the Second Amended Complaint for: improper lumping under Rule 8; failure to state claims under Rule 12(b)(6); lack of personal jurisdiction under Rule 12(b)(2); and improper venue under Rule 12(b)(3).
- Adobe produced declarations showing Adobe’s address on product packaging and an invoice evidencing Blue Source shipped Adobe product to SoftwareMedia; Adobe is the sole California plaintiff and alleges harm in California.
- The court denied Blue Source’s motion in full, finding (inter alia) personal jurisdiction and venue proper and that Adobe sufficiently pleaded each federal and state claim at the pleading stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction / venue | Adobe: Blue Source knowingly sold infringing Adobe products and knew Adobe was based in Northern District of CA; harm was suffered in CA, supporting specific jurisdiction and venue. | Blue Source: lacked sufficient contacts with California; venue improper absent personal jurisdiction. | Held: Court found a prima facie showing of purposeful direction (Calder test satisfied), relatedness, and Blue Source failed to show unreasonableness; personal jurisdiction and venue proper. |
| Rule 8 "lumping" allegations | Adobe: sufficiently alleges Blue Source as a supplier of infringing products and identifies which claims apply to Blue Source. | Blue Source: complaint lumps defendants together, failing to attribute specific acts to Blue Source. | Held: Court rejected lumping challenge; pleadings provided adequate notice and specific allegations against Blue Source. |
| Trademark / §1114 and §1125(a) claims | Adobe: alleges use of marks on counterfeit/unauthorized products causing consumer confusion and dilution. | Blue Source: contends it sold only genuine, unaltered key/activation cards (argues no infringement). | Held: Court denied dismissal — allegations adequately pleaded likelihood of confusion and commercial use; Blue Source’s extrinsic factual assertions (Abramson decl.) not considered on 12(b)(6) and summary-judgment conversion was inappropriate at this early stage. |
| Copyright infringement and first-sale/license issues | Adobe: software is licensed (SLA) with distribution restrictions; defendants exceeded license scope by distributing unauthorized copies. | Blue Source: argues factual defenses (sold legitimate key cards / first-sale possible). | Held: Court found Adobe adequately pleaded that copies were licensed (not owned) and alleged distribution beyond license scope; claim survives dismissal (factual defenses premature). |
| Trademark dilution | Adobe: famous marks harmed by use on substandard/unauthorized products; distinctiveness impaired. | Blue Source: argues lack of factual allegation and that sale of genuine goods negates dilution. | Held: Court held dilution claim sufficiently pleaded as to commercial use and impairment of distinctiveness; denial of dismissal. |
| UCL claim (California law) | Adobe: as a California resident harmed in CA, UCL reaches out-of-state wrongful acts causing injury in California. | Blue Source: UCL has no extraterritorial application to out-of-state conduct. | Held: Court found Adobe (a CA resident injured in CA) may bring UCL claim; dismissal denied. |
| Joint and several liability | Adobe: distribution-chain members (suppliers) can be jointly and severally liable for IP infringement. | Blue Source: insufficient pleading for conspiracy/joint liability. | Held: Court: distribution-chain allegations suffice to plead joint tortfeasor liability; claim survives dismissal. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard)
- Ashcroft v. Iqbal, 556 U.S. 662 (limits on conclusory allegations)
- Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025 (pleading construed for nonmoving party)
- Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797 (minimum contacts and specific jurisdiction framework)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (due process/minimum contacts)
- Washington Shoe Co. v. A–Z Sporting Goods, Inc., 704 F.3d 668 (intentional act/express-aiming in IP context)
- Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124 (personal jurisdiction and venue analysis; consideration of affidavits)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (reasonableness of jurisdiction and single-act contacts)
- Dole Food Co. v. Watts, 303 F.3d 1104 (Calder test elements for purposeful direction)
- Vernor v. Autodesk, Inc., 621 F.3d 1102 (software licensing vs. ownership and first-sale defense)
- MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928 (exceeding license scope can be copyright infringement)
- Levi Strauss & Co. v. Blue Bell, Inc., 778 F.2d 1352 (elements of trademark infringement)
- Abercrombie & Fitch Co. v. Moose Creek, Inc., 486 F.3d 629 (likelihood of confusion core to trademark claims)
- Mattel, Inc. v. MCA Records, Inc., 296 F.3d 894 (concept of trademark dilution)