Adobe Systems Inc. v. Kornrumpf
780 F. Supp. 2d 988
| N.D. Cal. | 2011Background
- Adobe filed suit for copyright and trademark infringement against Kornrumpf and Hoops; Hoops and Kornrumpf answered; Hoops asserted copyright misuse and UCL counterclaims; SIIA is a third-party defendant; Adobe and SIIA move to dismiss Hoops's claims; court granted motion to dismiss some claims and allowed leave to amend others.
- Hoops allegedly resells Adobe software without license and alleges Adobe/SIIA misuse by extending copyright beyond first sale doctrine; Hoops seeks damages, declaratory relief, and UCL relief.
- Court analyzes copyright misuse (damages unavailable, declaratory relief disputed), first sale doctrine applicability (Hoops lacks ownership of copies or transfer of title), and UCL viability (unfair competition requires cognizable violation)
- Court applied Ninth Circuit and California law to dismiss copyright misuse damages with prejudice, dismissed copyright misuse for declaratory relief and UCL claims with leave to amend, and set briefing schedule for amended pleadings.
- If Hoops amends, Adobe and SIIA will respond; order grants dismissal and permits amendment within 14 days.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Hoops may claim damages for copyright misuse | Hoops argues damages are recoverable under misuse doctrine | Adobe/SIIA contend misuse damages not cognizable | Damages dismissed with prejudice |
| Whether Hoops may obtain declaratory relief for copyright misuse | Hoops seeks declaratory relief against Adobe and SIIA | Court should limit misuse relief due to lack of cognizable facts | Dismissed with leave to amend |
| Whether first sale doctrine shields Hoops from liability | Hoops claims resale of copies was authorized by first sale | Hoops lacks ownership of particular copies; not enough to invoke first sale | Hoops fails to plead ownership of copies; first sale doctrine not applicable; dismissal with leave to amend |
| Whether Hoops may pursue UCL claims based on alleged unfair competition | Hoops argues Adobe/SIIA unlawful enforcement harms competition | Enforcement of copyrights lawful; not unfair competition | UCL claims dismissed with leave to amend |
Key Cases Cited
- A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (copyright misuse cannot create a separate damages claim; misuse as defense)
- Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970 (4th Cir. 1990) (misuse doctrine limits enforcement not the copyright itself)
- Practice Mgmt. Info. Corp. v. Am. Med. Ass'n, 121 F.3d 516 (9th Cir. 1997) (misuse bars enforcement during period of misuse; damages not available)
- Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. 2010) (first sale doctrine in software licensing context; ownership of copies required)
- UMG Recordings, Inc. v. Augusto, 628 F.3d 1175 (9th Cir. 2011) (first sale and transfer of title issues; software copies and licensing)
- Altera Corp. v. Clear Logic, Inc., 424 F.3d 1079 (9th Cir. 2005) (copyright misuse limitations and scope)
- Cel-Tech Comm'ns, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (2000) (unfair competition requires incipient antitrust concern or policy violation)
- Gov't Employees Ins. Co. v. Dizol, 133 F.3d 1220 (9th Cir. 1998) (factors for declaratory relief jurisdiction)
- Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042 (9th Cir. 2000) (UCL implication of other violated laws)