CA No. 12-17371 IN THE UNITED STATES COURT OF APPEALS … · IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT * * * ... 94 ... Am. Int¶l Pictures, Inc. v. Foreman, 576

CA No. 12-17371

IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

* * *

ADOBE SYSTEMS INCORPORATED

Plaintiffs / Appellants, D.C. No. 2:10-cv-0422-LRH-GWF

(District of Nevada, Las Vegas)

v.

JOSHUA CHRISTENSON AND SOFTWARE

SURPLUS, INC.,

Defendants / Appellees.

Appeal from the United States District Court

for the District of Nevada, Southern Division

Honorable Larry R. Hicks, United States District Judge

APPELLEES’ ANSWERING BRIEF

J. ANDREW COOMBS

ANNIE S. WANG

J. Andrew Coombs, P.C.

517 East Wilson Ave., Ste. 202

Glendale, CA 91206

Telephone: (818) 500-3200

Facsimile: (818) 500-3201

Attorneys for Appellants

LISA A. RASMUSSEN Law Office of Lisa Rasmussen

601 S. 10th Street, Suite 100

Las Vegas, NV 89101

Telephone: (702) 471-1436

Facsimile: (702) 489-6619

Attorneys for Appellees

Case = 12-17371, 08/24/2013, ID = 8755266, DktEntry = 27, Page 1 of 101

i

TABLE OF CONTENTS

TABLE OF CONTENTS ........................................................................................... i

TABLE OF AUTHORITIES ................................................................................... iv

STATEMENT OF JURISDICTION.......................................................................... 1

ISSUES PRESENTED FOR REVIEW ..................................................................... 2

STATEMENT OF THE CASE .................................................................................. 3

STATEMENT OF FACTS ......................................................................................14

I. The Evidence Cited By Adobe Does Not Support Its Factual

Contentions. .........................................................................................18

A. The Evidence Does Not Support Adobe’s Contentions

Concerning Its Alleged Licensing Of Its Software. ..................19

B. The Evidence Does Not Support Adobe’s Contentions

Concerning The Alleged Restrictions And Limitations On Its

Software. ...................................................................................24

C. The Evidence Does Not Support Adobe’s Contentions

Concerning The Alleged “Requirements” Its Imagines Were

Somehow Imposed On Appellees, Nor Its Contentions That

Customers Were “Fooled”. .......................................................26

D. The Evidence Does Not Support Adobe’s Contentions

Concerning The Appellees’ Awareness Of Adobe’s Never

Produced Or Identified Alleged Licensing Agreements. ..........30

SUMMARY OF ARGUMENT ...............................................................................32

ARGUMENT ...........................................................................................................34

I. Standard Of Review. ...........................................................................34

A. Summary Judgment. .................................................................34

B. Burden Of Proof For Affirmative Defenses. ............................34

C. Evidentiary Rulings. .................................................................35


ii

D. Issues Raised For The First Time On Appeal. ..........................35

II. The District Court Properly Dismissed Adobe’s Copyright

Infringement Claim. ............................................................................36

A. The District Court Properly Held Adobe To The Burden Of

Proving That It Licensed Rather Than Sold The Software At

Issue...........................................................................................36

1. Legislative Background Concerning Burden Of Proof As

To The First Sale Doctrine. ............................................37

2. The District Court’s Determination That Adobe Was

Required To Prove That It Licensed Rather Than Sold

The Software Was Correct Based On Well-Established

Authority. ........................................................................39

3. Adobe’s Arguments That It Does Not Bear The Burden

Of Proving That It Licenses Versus Sells Its Software

Are Unavailing................................................................43

4. Adobe’s Arguments Concerning Software Licensing As

The Alleged “Norm” For Software Distribution Miss The

Mark, And Demonstrate Why Appellees’ Motion For

Summary Judgment Was Granted. .................................46

5. Adobe’s Public Policy Arguments Are Unavailing. ......51

6. Adobe’s Arguments That Foreman Does Not Support

Adobe Bearing The Burden Of Proving That It Licensed

Rather Than Sold The Software At Issue In This Case,

And That The Record Did Not Show That The Burden

Was Not Met, Are Belied By The Record. .....................55

B. Adobe Was Not Entitled To Summary Judgment On Its

Copyright Claims. .....................................................................62

III. The District Court Properly Granted Appellees’ Motion To Strike. ..65

A. The District Court Properly Excluded Evidence Relating To

Contract, Licenses Or Agreements Based On Adobe’s Flagrant

Discovery Violation. .................................................................66


iii

B. The District Court Order Granting Appellees’ Motion To Strike

Was Wholly Proper And In Complete Harmony With The

Magistrate Judge’s Order. .........................................................69

C. The District Court Properly Applied The Best Evidence Rule.77

D. The District Court’s Discovery Sanction Was Wholly

Appropriate. ..............................................................................82

IV. Summary Judgment Was Properly Granted on Adobe’s Trademark

Infringement Claim .............................................................................88

A. Adobe Failed To Produce Evidence Creating A Genuine Issue

Of Material Fact As To Nominative Fair Use. .........................88

B. The Defendants Did Not Fail To Prove The Nominative Fair

Use Doctrine .............................................................................90

CONCLUSION ........................................................................................................92

RELATED CASES ..................................................................................................93

CERTIFICATE OF COMPLIANCE .......................................................................93

CERTIFICATE OF SERVICE ................................................................................94


iv

TABLE OF AUTHORITIES

Federal Cases

Adobe Sys. v. Stargate Software, Inc., 216 F. Supp. 2d 1051 (N.D. Cal. 2002) .....15

Am. Int’l Pictures, Inc. v. Foreman, 576 F.2d 661 (5th Cir. 1978) ................. passim

AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979) ............................ 88, 89

Bennett v. Mueller, 322 F.3d 573 (9th Cir. Cal. 2003) ............................................37

Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908) ..................................................31

Burke & Van Heusen, Inc. v. Arrow Drug, Inc.,

233 F. Supp. 881 (E.D. Pa. 1964) ........................................................................31

Fjelstad v. Am. Honda Motor Co., Inc., 762 F.2d 1334 (9th Cir. 1985) .................83

General Elec. Co. v. Joiner, 522 U.S. 136 (1997) ...................................................35

Geurin v. Winston Indus., Inc., 316 F.3d 879 (9th Cir. 2002) ................................35

Grimes v. City & County of San Francisco, 951 F.2d 236 (9th Cir. Cal. 1991) .....35

Guatay Christian Fellowship v. County of San Diego,

670 F.3d 957 (9th Cir. 2011) ...............................................................................34

Iberia Foods Corp. v. Romeo, 150 F.3d 298 (3d Cir. 1998) ....................................36

Independent News Co. v. Williams, 293 F.2d 510 (3d Cir. 1961) ..........................31

ITSI TV Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289 (9th Cir. 1993) ................ 37, 40

Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351(2013) ................................64

Mapinfo Corp. v. Spatial Re-Engineering Consultants,

2004 U.S. Dist. LEXIS 3 (N.D.N.Y Jan. 5, 2004) ...............................................51

McIntosh v. Northern California Universal Enterprises Co.,

670 F. Supp. 2d 1069 (E.D. Cal. 2009) ...............................................................50

Medrano v. City of Los Angeles, 973 F.2d 1499 (9th Cir. 1992) ...........................35

Microsoft Corp. v. Big Boy Distribution LLC,

589 F. Supp. 2d 1308 (S.D. Fla. 2008) ................................................................50

Microsoft Corp. v. Harmony Computers & Elecs., Inc.,

846 F. Supp. 208 (E.D.N.Y. 1994) ............................................................... 38, 51

NCR Corp. v. ATM Exch., Inc.,

2006 U.S. Dist. LEXIS 30296 (S.D. Ohio May 17, 2006) ..................................51

NEC Elecs. v. CAL Circuit Abco, 810 F.2d 1506 (9th

Cir. 1987) ...........................36

Orr v. Bank of Am., NT & SA, 285 F.3d 764 (9th Cir. 2002) ................................35

Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332 (9th Cir. Cal. 1990)...........54


v

Sebastian Int’l, Inc. v. Longs Drug Stores Corp., 53 F.3d 1073 (9th Cir. 1995) ....36

Sebastian Int’l, Inc. v. Russolillo, 186 F. Supp. 2d 1055 (C.D. Cal. 2000) ............36

Smith v. Marsh, 194 F.3d 1045 (9th Cir. 1999).......................................... 21, 36, 78

Taylor Made Golf Co. v. MJT Consulting Group,

265 F.Supp.2d 732 (N.D. Tx. 2003) ....................................................................36

Telecom Technical Services Inc. v. Rolm Co.,

388 F.3d 820 (11th Cir. 2004) ................................................................ 80, 81, 82

Too, Inc. v. Kohl’s Dep’t Stores,

2002 U.S. Dist. LEXIS 21415 (S.D. Ohio Sept. 3, 2002) ............................ 50, 51

Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171(9th Cir. 2010) ...... 89, 91

UMG Recordings, Inc. v. Augusto, 628 F.3d 1175 (9th Cir. Cal. 2011) ................36

United States v. Hayes, 369 F.2d 671 (9th Cir. 1966) ...................................... 37, 40

United States v. New York, N. H. & H. R. Co., 355 U.S. 253 (1957) ....................37

United States v. Sumitomo Marine & Fire Ins. Co., Ltd.,

617 F.2d 1365(9th

Cir. 1980)................................................................................83

United States v. Taylor, 648 F.2d 565 (9th Cir. Cal. 1981).....................................79

United States v. Wise, 550 F.2d 1180 (9th Cir. 1977) ...................................... 36, 54

Valley Eng’rs v. Electric Eng’g Co., 158 F.3d 1051 (9th Cir. Cal. 1998) ..............84

Vernor v. Autodesk, Inc.,

2009 U.S. Dist. LEXIS 90906 (W.D. Wash. Sept. 30, 2009) ....................... 48, 49

Vernor v. Autodesk, Inc., 621 F.3d 1102 (9th Cir. Wash. 2010) .................... passim

Federal Statutes

15 U.S.C. § 1121 ........................................................................................................ 1

28 U.S.C. § 1291 ........................................................................................................ 2

28 U.S.C. § 1331 ........................................................................................................ 1

28 U.S.C. § 1332 ........................................................................................................ 1

28 U.S.C. § 1332(a) ................................................................................................... 1

28 U.S.C. § 1338(a) ................................................................................................... 1

28 U.S.C. § 1367(a) ................................................................................................... 1

28 U.S.C. § 636 ........................................................................................................72

28 U.S.C. § 636(b)(1)(A) .........................................................................................35


vi

Federal Court Rules

Fed R. Civ. P. 26 .............................................................................................. passim

Fed. R. Civ. P. 54(b) ............................................................................................2, 14

Fed. R. Evid. 1007 ...................................................................................................79

Other Authorities

2 McCormick on Evidence § 337 (John W. Strong ed., 4th ed. 1992) ....................37

H.R. Rep. No. 94-1476, 94th Congr., 2d Sess. 80-81, reprinted in 1976 U.S. Code

Cong. & Ad. News 5659, 5694-95 ................................................... 38, 41, 44, 45


1

STATEMENT OF JURISDICTION

This is a direct appeal from the district court’s order entered September 10,

2012 which disposed of some, but not all, claims in the proceedings below.1

Appellant Adobe Systems Incorporated’s (“Adobe”) Complaint asserted claims for

copyright and trademark infringement against Appellees Joshua Christenson

(“Christenson”) and Software Surplus, Inc. (“SSI”) based on SSI’s sales of

legitimate copies of actual Adobe software.2 Appellees countersued Adobe and

third-party defendant Software Publishers Association d/b/a Software &

Information Industry Association (“SIIA”) for state law claims of defamation, false

light, business disparagement, aiding and abetting, civil conspiracy, and alter ego /

instrumentality based on a November 12, 2009 press release produced and

published by Adobe and SIIA.3 The district court had jurisdiction over Adobe’s

copyright and trademark infringement claims under 15 U.S.C. § 1121, 28 U.S.C. §

1331, § 1332 and § 1338(a). The district court had jurisdiction over Appellees

counterclaims and third-party claims against Adobe and SIIA under 28 U.S.C. §

1332(a) and § 1367(a).

The district court’s September 10, 2012 order: (1) granted Appellees’

1 Adobe’s Excerpts of the Record (“ER”)6.

2 District Court Clerk’s Docket Entry (“CR”) 1.

3 CR39, 46, 47.


2

motion for summary judgment as to Adobe’s claims; (2) denied Adobe’s motion

for partial summary judgment and SIIA’s motion for summary judgment as to their

claims against Appellees; and (3) granted Appellees’ motion to strike certain

evidence.4 Although Appellees’ counterclaims and third-party claims were not

resolved by the order, the district court directed the clerk to enter final judgment as

to the dismissal of Adobe’s claims for purposes of appeal under Rule 54(b) of the

Federal Rules of Civil Procedure, and final judgment was entered on October 17,

2012.5 This Court has jurisdiction pursuant to 28 U.S.C. § 1291. Adobe filed its

notice of appeal on October 23, 2012.

ISSUES PRESENTED FOR REVIEW

1. Whether the district court properly found that the software at issue was

lawfully made or acquired, and properly placed the burden of production on

Adobe to show that it licensed rather than sold its software?

2. Whether the district court properly granted Appellees’ motion to strike

evidence that was precluded based on Adobe’s discovery violations, and

properly applied the best evidence rule?

3. Whether the district court properly dismissed Adobe’s trademark

infringement claim?

4 ER6.

5 CR175, 176.


3

STATEMENT OF THE CASE

On October 30, 2009 Adobe filed its Complaint against Appellees in the

Northern District of California.6 The Complaint alleged willful copyright

infringement and trademark infringement.7 It also alleged that Appellees “made”

unauthorized copies of Adobe software, i.e., that they manufactured and sold

counterfeits.8 Adobe never provided any evidence to support these latter

“counterfeiting” allegations, later conceding that these latter allegations were

groundless.9 The Complaint failed to specify any time period in which the acts

alleged took place, a problem which Adobe refused to correct and which produced

considerable difficulties in conducting discovery.10 The Complaint likewise failed

to identify when Adobe’s alleged copyrights and trademarks were allegedly

6 ER1624. On March 29, 2010, the case was transferred to the District of

Nevada on Appellees’ motion. CR29.

7 Id.

8 ER1625 ¶3, 1627 ¶16.

9 ER11 n.3; ER1069 ¶2; CR76 at 4:18-20 (excerpt from letter demanding

removal of the false allegation of production of unauthorized software); CR98-3 at

2:14-26 (only objection to assertions that Appellees never “copied, made or

manufactured Adobe software” being Adobe’s allegation that Appellees separated

authentic Adobe software from software packages to sell separately), 2:26-3:1 (not

disputing fact that Appellees never knowingly purchased or sold counterfeit

software).

10 CR70; CR76 at 2:7-19, 4:13-24, Ex. A ¶3; CR73, Exhibits A-C.


4

registered.11

On November 12, 2009, Adobe and its alter ego SIIA produced and

disseminated a defamatory press release accusing Appellees of fraud, software

piracy, and illegal activity.12 In response, on May 4, 2010, Appellees filed their

Answer and Counterclaim, which included various state-law counterclaims and

third-party claims against Adobe and against SIIA for defamation and defamation

per se, false light, business disparagement, aiding and abetting, civil conspiracy,

and alter ego / instrumentality, and filed two errata thereto to correct minor

errors.13

On August 24, 2010, Adobe served 406 requests for admission, 136 requests

for production, and 40 interrogatories on Appellees.14 Like Adobe’s Complaint,

the vast majority of these discovery requests contained no time context

whatsoever.15 After Adobe stipulated to an extension of time, Appellees responded

to this voluminous discovery on October 12, 2010, but because Adobe refused

Appellees requests to amend its Complaint to assert any time frames whatsoever,

Appellees were forced to assert objections based on this deficiency, as well as

11 ER1624.

12 ER1288-89.

13 ER1614-22; CR46, 47.

14 CR73, Ex. D.

15 CR76 at 5:11-17.


5

make a number of other relevant objections.16 The overbroad document requests

included over 44,000 pages of documents of SSI’s sales records with Google, Inc.

which Adobe was unwilling to pay for, despite Appellees best efforts to resolve the

issue.17 Among the requests for admission was Adobe’s audacious request that

Appellees “admit”—both directly and by implication—the validity of its alleged

copyrights and trademarks despite the fact that Adobe bore the burden of proof and

had failed to provide proof of the validity of its copyrights and trademarks.18

On September 2, 2010, Adobe issued a subpoena to Google, Inc., seeking

records relating to Appellees, of which Appellees received notice on September 22,

2010.19 Because the subpoena was vague, overbroad, contained no time context,

failed to differentiate between Adobe products and other products sold by SSI,

sought irrelevant and privileged documents, and was issued beyond the limits of

the Court’s jurisdiction, Appellees filed an emergency motion to quash it on

September 28, 2010.20 The issue was resolved by a stipulated Order allowing

Appellees to first review the documents for designation of confidential documents

16 CR73, Ex. E.

17 CR73, Ex. E at 203, 214, 225, 250, 275, 304; CR76 at 5:4-10; CR76, Ex.

A, ¶¶14, 15; CR76, Ex. A-5.

18 CR73, Ex. D at 123-127 (Request Nos. 1-81); CR73, Ex. D at 164-68

(Request Nos. 1-81); CR76 at 8:14-9:21.

19 CR60, Ex. A.; Id. at 2 ¶4.

20 CR61.


6

under a protective order entered in the case, as well as for privileged material,

before they were to be provided to Adobe.21

The parties conferred about outstanding discovery issues on November 3,

2010. Appellees reiterated their request that Adobe amend its Complaint to

include time frames so that discovery could proceed, and Adobe clarified a number

of its document requests.22 Appellees continued to gather documents that might be

responsive to Adobe’s discovery in good faith, but maintained their objections

concerning the absence of time frames in the Complaint and stated they would not

produce documents impacted by this issue until the Complaint was properly

amended.23 Adobe doggedly refused to amend its Complaint to add time frames,

and on December 5, 2010, Appellees were forced to file a motion for judgment on

the pleading to attempt to resolve the lack of time frames in the Complaint and the

resulting discovery problems.24

On December 20, 2010, still not having amended its Complaint, Adobe filed

a motion to compel response to its discovery requests, and misrepresented the

21 CR83; CR65.

22 CR76 at 6:24-7:2.

23 Id.; CR73, Ex. I.

24 CR70, 71.


7

results of the November 3, 2010 discovery conference.25 Apparently

acknowledging their impropriety, Adobe wholly abandoned a large number of its

discovery requests, including the 162 requests for Appellees to admit the validity

of its copyrights and trademarks, and did not seek remedy as to them in its motion.

In the end, Appellees were directed to respond to only 10 of Adobes 40

interrogatories, and less than half of Adobe’s 403 requests for admission.26 As to

Adobe’s requests for production, the Court noted that they were “arguably

overbroad” and “skirted the edge of what can be called ‘reasonable particularity,’”

and directed the Appellees to provide documents based on narrowed criteria

established by the Court.27

The discovery deadline in the case was January 28, 2011, and the dispositive

motions deadline was February 28, 2011.28 On May 28, 2010, September 2, 2010,

and January 11, 2011, Adobe made three discovery disclosures under Rule 26 of

the Federal Rules of Civil Procedure.29 None of these disclosures included any

documents.30 More important, none of them identified, described or even

25 CR76 at 6:24-8:10; CR73; CR84 at 2:18-3:10.

26 CR84 at 6-15.

27 CR84 at 16-17.

28 CR50 at 2-3.

29 ER297 ¶3; ER302-14.

30 ER297, ¶4.


8

mentioned contracts, licenses or agreements of any kind.31

Appellees provide over 2,700 pages of Rule 26 disclosures to Adobe by the

January 28, 2011 discovery deadline in four sets of disclosures beginning on June

17, 2010.32 Adobe failed to produce any documents at all by the January 28, 2011

discovery deadline.33 Adobe produced documents for the first time by mailing

them to Appellees on February 25, 2011, the Friday before the February 28, 2011

dispositive motions deadline.34 This disclosure included a document which Adobe

purported to be a contract or agreement—never identified in any of Adobe’s Rule

26 disclosures either generally or specifically—and which was heavily redacted to

the point of being unintelligible and was otherwise inadmissible.35 Adobe has filed

this document with this Court, which consists of 19 pages, of which approximately

3 pages are unredacted.36

On January 4, 2011, twenty-five (25) days before the January 28, 2011

discovery deadline, Appellees served 152 requests for admission, 11 requests for

31 ER298, ¶9; ER343:9-10.

32 CR86 ¶3.

33 ER250 n.1 (“On or about February 25, 2011, Adobe served disclosures

stamped Adobe 1-Adobe 700 on Defendants.”); ER297, ¶6.

34 Id.

35 Id.; ER672-93; ER542:16-544:10 & n. 2; see also AOB at 9.

36 ER672-693; ER542 n.2.


9

production, and 18 interrogatories on Adobe.37 Adobe refused to provide the

documents requested or otherwise substantively respond to the Appellees’

discovery requests, asserting that the discovery requests were untimely because

although they were filed well before the discovery cutoff date, they were not

served thirty days prior to that date.38 On February 24, 2011, Appellees filed a

motion to compel Adobe to respond to the discovery, which was denied.39

The parties filed cross-motions for summary judgment on February 28,

2011.40 Appellees asserted that they were entitled to summary judgment as to

Adobe’s copyright and trademark infringement claims based on the first sale and

the nominative fair use doctrines, that Adobe had failed to prove that it held valid

copyrights and trademarks as of the discovery deadline or the time of filing the

motion, that it failed to prove likelihood of confusion as to its alleged marks, that it

failed to prove willful infringement, and that its allegations that Appellees made,

manufactured or copied Adobe software was false and wholly unfounded.41

Contrary to Adobe’s assertion in their Opening Brief that Appellees first

37 CR85 at 3:19-24; CR86 ¶6 & Exhibits J-1, J-2 and J-3.

38 CR85 at 3:25-4:3, 5-7; CR86 ¶10 & Exhibits K-1, K-2, K-3.

39 CR85, 86, 111,

40 ER1073, 855.

41 ER855.


10

raised the best evidence rule in their reply brief,42 Appellees first raised this

evidentiary objection where it belonged and in the only place it could be raised—

i.e., in Appellees’ opposition Adobe’s motion for summary judgment where

Adobe’s first attempted to introduce the inadmissible evidence.43 Moreover, as

noted by district court, it was Adobe that wholly failed to address Appellees

assertions of the best evidence rule made in Appellees’ opposition to Adobe’s

motion for summary judgment.44

Appellees’ motion for summary judgment was based in large part on the fact

that Adobe could not meet its burden—to prove its ownership of the alleged

copyrights and trademarks, or to prove Appellees use of Adobe’s alleged

copyrights and trademarks was unlawful or likely to cause confusion—because

Adobe had failed to timely produce any actual documents whatsoever.45 In fact,

the only alleged contract or agreement provided by Adobe—redacted to a degree

that it was incomprehensible—was produced by Adobe on February 25, 2011, long

after the January 28, 2011 discovery cut-off date, and was not even received by

42 AOB at 3.

43 ER542:8-15, 544-50, 553:12-14, 554:28, 557:6, 559-61.

44 ER10:20-22.

45 ER864-67, 868-69, 875 (“Adobe cannot prove Defendants use of the

alleged copyrights was unlawful. It has produced no documents”); see also

ER343:11-19, 297 ¶6.


11

Defendants in time for the February 28, 2011 dispositive motion deadline.46 There

was no need or ability to object using the best evidence rule until Adobe

improperly attempted to introduce and rely on this never-before-provided or

identified and / or non-existent contract documents and related fabricated and

unproven terms and conditions it in its own motion for summary judgment and in

its opposition to Appellees’ motion for summary judgment. Thus, Appellees

properly raised the best evidence rule in their response to Adobe improper attempts

to introduce evidence in its motion for summary judgment, and in Appellees’ April

18, 2011 reply to Adobe’s opposition to Appellees’ motion for summary

judgment.47 Ironically, Adobe raised the issue of best evidence in exactly the same

manner, in response to Appellees’ motion for summary judgment.48

On April 22, 2011, Appellees filed their motion to preclude Adobe from

using or relying on contracts, licenses or agreements based on their failure to

identify such documents in their Rule 26 disclosures (“motion to preclude”).49 The

motion was granted by Order dated May 31, 2011, with the magistrate court ruling

that:

46 ER250 n.2.

47 ER542:8-15, 544-50, 553:12-14, 554:28, 557:6, 559-61; ER413:2, 416:14,

421:10-15.

48 ER853:12-13.

49 ER339.


12

Plaintiff Adobe Systems incorporated is precluded from using or

introducing license agreements in support of its motion for summary

judgment or at trial because Plaintiff failed to identify contracts or

license agreements in its Rule 26(a) disclosures. Plaintiff is not,

however, precluded from using contracts, license agreements or other

document produced by Defendant in Defendants’ disclosures or

responses to discovery requests.50

On July 18, 2011, Adobe filed a motion for “clarification” of the order

granting the motion to preclude.51 The magistrate court denied the motion on the

basis that it presented “nothing new before the court,” and because it “appear[ed]

to be nothing more than an attempt by Plaintiff to attain significant substantive

changes to the prior order for the purpose of circumventing its failure to provide

adequate Rule 26(a) disclosures.”52

On August 23, 2011, based the district court’s granting of their motion to

preclude and Adobe’s violation of the order and attempts to introduce, use, and

rely on the precluded evidence, Appellees filed their motion to strike the precluded

documents and related factual assertions and argument from Adobe’s motion for

summary judgment and its reply in support.53 The motion to strike was necessary

because Adobe’s motion for summary judgment and reply made repeated

50 ER31-32.

51 ER225.

52 ER29.

53 ER206; ER10.


13

references to licenses, contracts and / or agreements or alleged terms contained

therein which the district court had precluded because no such documents were

ever identified or produced in Adobe’s or SIIA’s Rule 26 disclosures. Specifically,

the motion sought the striking of specific references to such license agreements

and attendant conditions and restrictions, and the argument relying upon them,

from a very specific list of Adobe’s filings.54

On September 10, 2012, the district court granted Appellees’ motion to

strike, denied Adobe’s motion for summary judgment, and granted Appellees’

motion for summary judgment.55 The district court found the uncontroverted fact

that Appellees lawfully purchased legitimate copies of Adobe software from third-

party suppliers which Appellees explicitly identified, and likewise found that the

software at issue was lawfully made and acquired.56 Relying on these findings, the

district court properly placed the burden on Adobe to demonstrate that it merely

licensed and did not sell the genuine software which Appellees lawfully acquired

and resold.57 Because Adobe could not meet this burden based on its failure to

properly and timely identify or produce any admissible evidence of or the terms of

54 ER211-212.

55 ER6-21.

56 ER14-16.

57 Id.


14

any of its alleged license agreements and alleged restrictions therein, the district

court found that the first-sale doctrine protected Appellees software sales. 58 It also

found that the nominative fair use doctrine protected Appellees’ use of Adobe’s

alleged trademarks.59

On October 3, 2013, Adobe moved for an order for entry of judgment

pursuant to Fed. R. Civ. P 54(d) and to stay Appellees live pending state law

claims, which was granted.60 Judgment dismissing Adobe’s copyright and

trademark infringement claims was entered on October 17, 2012, and Adobe filed

its notice of appeal on October 25, 2012.61

STATEMENT OF FACTS

SSI operated an internet website which had been in business since October

2004 and which sold various software products to consumers at discount prices.62

Adobe products were included among the many software products which SSI

sold.63 As the district court correctly noted, “it is uncontroverted that Defendants

lawfully purchased genuine copies of Adobe software from third-party suppliers

58 Id.

59 ER16-20.

60 CR167, 175.

61 CR176, 177.

62 ER909-11. SSI no longer sells Adobe or any other software. It was driven

out of business by the instant litigation. ER927-31, 957.

63 ER1017 ¶2.


15

before reselling those copies.”64 SSI purchased and sold only authentic Adobe65

software manufactured by Adobe which it obtained from third parties.66 The

Adobe software sold by SSI came with authentic original Adobe activation codes /

serial numbers, was software for which Adobe had been paid, and when this

software was activated by the consumer, Adobe could trace the software back to

the alleged Adobe distributors who originally sold the software.67 Adobe conceded

64 ER14:16-17. In addition, Adobe admits in its Opening Brief that

Appellees sold only genuine Adobe products. AOB at 31 (“whether or not the

underlying goods were genuine (a fact not disputed by Adobe) is immaterial . . . .”)

65 Appellees’ reference to any of the products at issue as being “Adobe”

products is not an admission that Adobe possessed valid copyrights or trademarks.

Adobe asserts that its alleged copyrights on the products at issue herein are

undisputed. AOB 34. This is incorrect. Appellees disputed Adobe’s alleged

copyright and trademarks throughout the proceedings below. ER856 n.1. Adobe

never bothered to produce actual copyright registration certificates—and in fact

made no document productions at all—until February 25, 2011, well after the

January 28, 2011 discovery cut-off date, and only three days before it filed its

motion for summary judgment. ER343:11-19; ER250 n.1 (“On February 25, 2011,

Adobe served disclosures stamped Adobe 1-Adobe 700 on Defendants.”);

ER1130-36 ¶4, 1136; ER1137-1280; CR50 at 2:15-19. Adobe even went so far as

to attempt to compel Appellees to “admit” that Adobe owned the copyrights and

trademarks at issue, when it had provided no substantive evidence of such

ownership. CR76 at 5:26-6:7.

66 ER1017 ¶¶ 3, 4, 6.

67 Id.; ER433:24-435:8, 449:13-15, 580:2-10, 595:14-16, 857:10-18, 873:27-

874:2. Adobe never disputed these assertions. ER349-65, 614-35. See also, e.g.,

Adobe Sys. v. Stargate Software, Inc., 216 F. Supp. 2d 1051, 1052 (N.D. Cal.

2002) (“Adobe contends that Stargate’s suppliers acquired Adobe Educational

software from Adobe Educational distributor Douglas Stewart Co. pursuant to

valid [agreements with Adobe].”) Adobe has also never denied that it has been

paid for the software sold by Appellees, but rather merely objected to the assertion


16

that the SSI sold only authentic Adobe software with authentic activation codes,

and that the Adobe products SSI purchased and resold were manufactured by

Adobe.68

SSI always truthfully described the Adobe software it sold to consumers

using the brand names and images of the software, and never used the Adobe name

or its alleged marks to sell any products other than authentic software

manufactured by Adobe.69 It was Christenson’s understanding that at least some of

the suppliers from whom SSI purchased Adobe software had purchased that

software directly from Adobe and resold the software with Adobe’s approval and

consent.70 Appellees never unbundled any software from hardware for resale on

SSI’s website.71 Appellees never held themselves out as being affiliated or

associated with Adobe or as being authorized by Adobe.72 While Adobe’s

complaint groundlessly asserted that Appellees were counterfeiting Adobe

software, Adobe wisely abandoned this false assertion on summary judgment.73

as hearsay. Compare CR89 at 2 ¶2 with ER853:6-7.

68 CR89 ¶2; CR98-3 at 2:14-26, 3:2-4:7.

69 ER1017-18, ¶¶6, 14.

70 ER997-98.

71 ER950-51.

72 ER1018 ¶11; ER1464-66.

73 ER11 n.3.


17

As early as May 4, 2005 Adobe received notice of SSI’s sales of Adobe

products, and received regular notice of these sales.74 Shortly thereafter, in mid-

2004, SSI was contacted by an Adobe representative that approved of SSI’s sales

of Adobe’s academic software, and indicated Adobe had no problem with SSI’s

sales of Adobe products as long as SSI didn’t sell anything counterfeit.75 SSI spent

millions of dollars advertising Adobe products side by side with Adobe since 2007

using Google Ad Words, which also further alerted Adobe to Appellees’ software

sales.76 Despite its long-standing knowledge of these software sales by SSI, Adobe

never sent Appellees a letter identifying any of their sales as infringement, and in

fact the first indication Appellees had of Adobe’s assertion that SSI’s sales of

Adobe products allegedly constituted infringement was the initiation of the

proceedings below.77

Adobe’s feigned concerns about its alleged distribution rights are pure

74 CR116 ¶¶5, 6; ER1338-42; ER668, 644-67. The evidence of Adobe’s

May 4, 2005 notice was not provided by Adobe until March 24, 2011, well after

the February 28, 2011 dispositive motion deadline. CR125 at 2:23-3:27. Despite

Adobe’s late production of these documents, Appellees diligently filed a motion to

dismiss the Complaint based on laches on April 8, 2011, based on the over four-

year delay in Adobe filing its Complaint. CR125, 126. However, the motion was

not substantively addressed, but rather was denied on procedural grounds as

untimely. CR163; CR125 at 4:14-6:1; CR93.

75 ER933-37, 1019 ¶18.

76 ER1000, 1339-42.

77 ER1019 ¶17.


18

posturing; it manipulates the secondary market for its software and selectively

ignores its own alleged distribution rights while attacking vendors like SSI so that

it can eat its cake and have it at the same time. Resellers such as SSI sell Adobe

product for which Adobe has already been paid, and Adobe takes advantage of

those same resellers when it serves their interests, such as at the end of their

financial quarter.78 However, at other times, Adobe also threatens or files litigation

against any person who sells its products at competitive prices, regardless of how

properly it was obtained, seeking to cow smaller competitors into capitulation and

control the secondary market. The result is the maintenance of monopoly-like

profits for Adobe and its distributors. Despite the fact that Adobe can identify the

distributors who are the source of its software sold to and activated by consumers

via the activation codes / serial numbers, it has yet to sue any of its alleged

“authorized” distributors who clearly are the origin of the authentic Adobe

software which vendors like SSI sell to consumers.

I. The Evidence Cited By Adobe Does Not Support Its Factual

Contentions.

Adobe makes makes a host of factual assertions in its Opening Brief which

are unsupported by any admissible evidence. Adobe asserts that it maintains title

to its software and controls the channels of its distribution, that it licenses rather

78 ER976-77, 1378-79.


19

than sells its software, that it does so through license agreements which restrict

distribution, territory, transfer and use, and that these alleged license agreement

terms were known to and operated upon Appellees.79 However, a careful review of

the documents Adobe cites to support these assertions demonstrates that Adobe

neither produced nor identified any relevant or admissible evidence to support

them, and never produced any actual agreement that allegedly carried out these

functions in relation to the software at issue in the case, or in relation to any

particular software whatsoever.80

A. The Evidence Does Not Support Adobe’s Contentions

Concerning Its Alleged Licensing Of Its Software.

The evidence cited by Adobe does not support its unsubstantiated claims that

its alleged license agreements imposed restrictions, condition, or requirements on

the software or on Appellees, that Adobe did not sell its software but instead

licensed it, or that there were differences between what Adobe identifies as EDU

(academic), OEM (original equipment manufacturer), and “full” or “retail”

versions of its software at issue.81 Moreover, the following specific evidence

79 AOB at 4-5 & n.2; AOB at 6-8, notes 9, 10, 17, 18 and accompanying

text.

80 See AOB at 5, n.2 and AOB at 6, notes 9, 10.

81 Compare CR87-12 at 6, 7, 12, 13 (§§ U-7, U-8, U-9, U-10, U-12, U-13,

U-14, U-15, U-16, U-17, U-19, U-20, U-21, U-34) with ER452-49, 551-63, 569

(§§ U-7, U-8, U-9, U-10, U-12, U-13, U-14, U-15, U-16, U-17, U-19, U-20, U-21,


20

referenced by Adobe in notes 2, 9 and 10 of its Opening Brief does not support

these contentions in any manner:

• ER1036 / 1464, 1054 / 1465 (SSI website policy pages giving general

description of academic OEM software, telling purchasers that by

purchasing software from SSI they are assuring SSI that they are qualified to

use academic products and will be bound by the software’s EULAs and

making no mention of Adobe or the terms of any of Adobe’s alleged

agreements, shown to be irrelevant and inadmissible and / or to have no

valid evidentiary basis for the reasons it was proffered by Adobe, i.e., to

show that Appellees knew of the alleged licensing restrictions on

requirements which Adobe imposed on OEM and Academic software)82

• ER1055-57 / 1466 (SSI website disclaimer / policy page containing no

reference to Adobe, its software or its alleged license agreements, shown to

be irrelevant, inadmissible and / or to have no valid evidentiary basis for the

reasons it was proffered by Adobe, i.e., to show alleged licensing restrictions

Adobe places on OEM software and Appellees alleged awareness of same)83

• ER265-270 / 1473 (unauthenticated pages which Appellees’ counsel

downloaded from Adobe’s website on January 1, 2011 which Adobe never

purported or demonstrated applied to the software at issue and containing no

actual agreements or specific content of agreements, shown to be irrelevant,

inadmissible and / or to have no valid evidentiary basis for the reasons it was

proffered by Adobe, i.e., to show content of Adobe’s alleged licensing

agreements)84

U-34).

82 Compare CR87-12 at 6, 13 (§§ U-7, U-8 (citing ER1054 (original bates

no. SSI/JC 33)), U-9 (citing ER1036, 1464 (SSI JC 15)) , U-21 (citing ER1036,

1464, 1054 (original bates no. SSI JC 15, 33)) with ER542-45, 546-48, 560-63 (§§

U-7, U-8, U-9, U-21)

83 Compare CR87-12 at 6, 13, (§§ U-7, U-9 (citing ER1055 ((original bates

no. SSI/JC 34)), U-21 (citing ER1055 (original bates no. SSI/JC 34)) with ER542-

45, 546-48, 560-63 (§§ U-7, U-9, U-21).

84 Compare ER1079:21-24 (citing ER265 (original bates no. SSI/JC 470))


21

• ER271-286 (unauthenticated, undated, unsigned documents which

Appellees’ counsel downloaded from Adobe’s website, and which Adobe

never purported or demonstrated applied to the software at issue in the case.

In addition, ER271-282 was never referenced or proffered by Adobe in its

moving papers relating to the cross motions for summary judgment)85

• ER1478-80 (image of computer disk of Adobe Acrobat 9 Pro software,

packaging for Adobe Acrobat 8 software, and disc of Adobe Photoshop

Elements, containing no copies of or terms of alleged Adobe licensing

agreements)

• ER1481-1526 (SSI return merchandise authorization forms containing no

copies of or terms of alleged Adobe licensing agreements, shown to be

irrelevant, inadmissible and / or to have no valid evidentiary basis for the

reasons it was proffered by Adobe, i.e., to show that Appellees did not

comply with Adobe’s alleged licensing restriction on academic software)86

• ER205 (redacted invoice from Microidea which shows no purchases of

Adobe products, which does not reference any actual Adobe licensing

agreement or terms thereof, and the “Note” does not mention any specific

software or software manufacturer)

• ER288-294 (redacted invoices from Microidea which do not reference any

actual Adobe licensing agreement or terms thereof, and the “Note” does not

mention any specific software or software manufacturer)

• ER525-529, 531-32 (undated, unauthenticated screen shots which Appellees

counsel obtained from Adobe website after Adobe’s complaint was filed

(ER469 ¶3), showing that Adobe sells its software by way of the “buy”

button on the pages, which do not reference any Adobe licensing agreement

with ER542-45, § U-7).

85 This and other evidence and argument is being raised for the first time on

appeal, and therefore should not be considered by the Court Smith v. Marsh, 194

F.3d 1045, 1052 (9th Cir. 1999); see also references to ER525-29, 531-33, this

Section, infra.

86 Compare CR87-12 at 6, 7, 13 (§ U-7; §§ U-12, U-13, U-20, U-21 (all

citing pages found at ER1481-1526)) with ER542-45, 551-54, 559-63 (§§ U-7, U-

12, U-13, U-20, U-21).


22

or terms thereof, and which was not proffered by Adobe or referenced in any

argument in its moving papers concerning the cross-motions for summary

judgment)87

• ER639-40, 672-93 (Supplemental Declaration of Chris Stickle containing

unsupported legal conclusions, and the related Exhibit A-1, a highly

redacted, incomplete, undated, and unauthenticated contract which suffers

from a host of fatal evidentiary flaws, including the fact that it is

unauthenticated as to when it was used or in effect, whether it was ever

actually ever used, or used in relation to the software at issue in the case,

shown to be irrelevant, inadmissible and / or to have no valid evidentiary

basis for the reasons it was proffered by Adobe, i.e., to show that Adobe

allegedly maintains title to its software and placed restrictions on its

distribution, transfer and use)88

• ER1129-1136 ((First) Declaration of Chris Stickle consisting of assertions

regarding the alleged terms of Adobe’s alleged licensing agreements

consisting of inadmissible hearsay, vague and foundationless statements,

inadmissible legal conclusions, shown to be irrelevant, inadmissible and / or

to have no valid evidentiary basis for the reasons it was proffered by Adobe,

particularly as to the Adobe assertions that it licensed its software and placed

restrictions on its use, transfer, and distribution, and that Appellees had

notice of or violated same)89

• ER1316:23-1317 (transcript of Allison Christenson testimony concerning

questions she received from customers concerning academic software, with

no discussion of actual Adobe licensing restrictions or agreements, shown to

be irrelevant, inadmissible and / or to have no valid evidentiary basis for the

reasons it was proffered by Adobe, i.e., to show alleged awareness of and

87 See n.85, supra.

88 Compare ER639 ¶2, 616:24-617:2, 631:19-23, 633 n.7, with ER542-45 (§

U-7).

89 Compare CR87-12 at 6, 7, 12, 14, 15 (§§ U-7, U-8, U-9, U-10, U-11, U-

12, U-14, U-19, U-25, U-33, U-34 (all citing ER1129-36 and its exhibits)), with

ER541-69 (§§ U-7, U-8, U-9(a)(1), U-10, U-11(a)(1&2), U-12(a)(5), U-14(a)(2),

U-19(a)(5), U-25, U-33, U-34).


23

content of Adobe’s alleged licensing restrictions)90

• ER1343:1-23 (transcript of Joshua Christenson testimony about his general

understanding of OEM software, with no discussion of actual Adobe

licensing restrictions or agreements, shown to be irrelevant, inadmissible and

/ or to have no valid evidentiary basis for the reasons it was proffered by

Adobe, i.e., to show alleged licensing conditions associated with Adobe

OEM software and “violation of the license pursuant to which Adobe

distributed the OEM software”)91

• ER1355:7-1356:16 (transcript of Joshua Christenson testimony concerning

the fact that individuals who purchased academic software from SSI stated

that they were qualified to use it, with no discussion of actual Adobe

licensing restrictions or agreements, shown to be irrelevant, inadmissible and

/ or to have no valid evidentiary basis for the reasons it was proffered by

Adobe, i.e., to show “violation of the terms of the license pursuant to which

such Academic software was distributed, including by Adobe”)92

• As to ER1584, 1599, and 1554-1605(declaration, email and letter from SSI

customer Shelly Bernd who returned Adobe product after Chris Stickle told

him it was only for use in the Asia Pacific region and with certain hardware,

with Stickle providing no basis for these assertions and with no evidence of

any actual Adobe licensing restrictions or agreements in support, and shown

to be irrelevant, inadmissible and / or to have no valid evidentiary basis for

the reasons it was proffered by Adobe, i.e., to show alleged territorial

restrictions on Adobe software)93

In fact, Christenson never had any substantive conversations with anyone

90 Compare CR87-12 at 13 (§ U-21) (citing transcript pages 13:23-14:14)

with ER560-63 (§ U-21).

91 Compare CR87-12 at 6, 7, 13 (§§ U-9, U-14, U-21 (citing transcript pages

69:1-23)) with ER546-48, 554-55, 560-63 (§§ U-9, U-14, U-21)

92 Compare CR87-12 at 6-7 (§U-12 (citing transcript pages 90:7-91:16))

with ER551-53 (§ U-12).

93 Compare ER1082:7-10; ER1554-55 ¶¶5, 6; CR87-12 at 6, 14 (§§ U-10

(incorrectly citing paragraph 8 of the declaration instead of paragraph 5), U-11, U-

34), with ER548-51, 569 (§§ U-10, U-11, U-34).


24

concerning the alleged restrictions placed on Adobe software, and there is no

relevant or admissible evidence to the contrary, nor any relevant or admissible

evidence that he had any knowledge of or has actually even even see an authentic

Adobe license agreement, to the degree such a thing exists.94

B. The Evidence Does Not Support Adobe’s Contentions Concerning

The Alleged Restrictions And Limitations On Its Software.

Adobe’s assertions concerning the alleged restrictions it places on unbundled

foreign-made product, on OEM products, and EDU software are equally

unsupported.95 Adobe cites no relevant or admissible evidence to support these

contentions.96

• ER1134-35, 1478, 1599, 1584, 1036 / 1464, 1055/1466, 1343:14-1344:5,

1054 / 1465, 526, 1055 / 1466, 1355:7-156:16.97

ER1318:1-7 (transcript of Allison Christenson deposition, page 20,

discussing her understanding of OEM software, without any reference to or

proof of any such license agreement or terms shown to be irrelevant,

inadmissible and / or to have no valid evidentiary basis for the reasons it was

proffered by Adobe, i.e., to show “violation of the license pursuant to which

Adobe distributed the OEM software”)98

94 ER938-40; Compare CR87-12 at 13 §U-21 with ER560:28-563:12.

95 See AOB at 5, notes 3-6.

96 See AOB at 5, notes 3-6.

97 As to these documents cited in AOB notes 3-6, see reference to these

documents in Statement of Facts Section I(A), supra; see also ER541-69 (§§ U-7,

U-8, U-9(a)(1), U-10, U-11(a)(1&2), U-12(a)(5), U-14(a)(2), U-19(a)(5), U-25, U-

33, U-34).

98 As to the documents cited in AOB at 5 n.4, compare CR87-12 at 7, § U-14


25

• ER158-59 (these are simply photographs of Adobe Acrobat 9 Pro CD and

packaging)99

• ER1448:16-1449:9 (transcript of Joshua Christenson deposition discussing

SSI’s rare sales of more than one piece of software at a time, shown to be

irrelevant, inadmissible and / or to have no valid evidentiary basis for the

reasons it was proffered by Adobe, i.e., to show Adobe’s alleged licensing

restrictions and Appellees’ alleged awareness of same)100

• ER1457:15-1458:1 (transcript of Joshua Christenson deposition discussing

how Adobe already verifies that end users of its academic software are

qualified to use it when they register the software for use after purchasing

it).101

Adobe asserts that the alleged differences between the “full,” “retail,”

“OEM” or “EDU” software somehow benefit consumers.102 However, Adobe

provided no admissible evidence of these alleged differences, and Appellees

demonstrated that there is no appreciable difference between these different types

of software, a fact confirmed by Adobe employees.103

(citing transcript pages 20:1-4) with ER554-55, § U-14.

99 These documents are cited in AOB n. 4.

100 As to these documents cited in AOB at 5 n.5, compare CR87-12 at 13, §

U-21 (citing transcript pages 11:16-12:6) with ER560-63, § U-21.

101 These documents are cited in AOB at 5 n.5.

102 AOB at 5.

103 ER1072; ER438:18-439:6; CR87-12 at 6, 7, 13 (§§U-7(a)(1), U-8, U-9,

U-11, U-12, U-14, U-16, U-19, U-20, U-21); ER1069 ¶2; ER864:7-11; ER608:11-

14.


26

C. The Evidence Does Not Support Adobe’s Contentions Concerning

The Alleged “Requirements” Its Imagines Were Somehow

Imposed On Appellees, Nor Its Contentions That Customers

Were “Fooled”.

Adobe asserts that Appellees failed to take “required” steps to establish

customers’ proof of qualification to purchase its software.104 However, this

assertion not only erroneously presupposes the fact that Adobe had produced or

identified license agreements whose terms dictated any such requirement—which

it has not105—but it is also factually incorrect. The evidence used by Adobe to

support these erroneous assertions in note 14 of its Opening Brief is irrelevant and

inadmissible, as shown below.106

• ER1110-1124 (Declaration of Christopher Johnson and related exhibits,

demonstrating neither legal nor contractual “requirements” nor violation of

any such requirements.)107

• ER1128-1136 (Declaration of Chris Stickle, demonstrating neither legal nor

104 AOB at 6-7 & n. 14.

105 See Sections I(A) and (B), supra, and accompanying text.

106 See AOB at 6-7 & n. 14. As to Adobe’s claims of requirements

concerning its software generally, compare CR87-12 at 6, 7, 12-14 (§§ U-7, U-8,

U-9, U-12, U-13, U-14, U-15, U-16, U-19, U-20, U-25); ER618:10-619:13,

354:23-25 with ER542-48, 551-556, 557-60, 565 (§§ U-7, U-8, U-9, U-12, U-13,

U-14, U-15, U-16, U-19, U-20, U-25).

107 Compare CR87-12 at 6:26, 12:25, 13:5 (§§ U-12, U-19, U-20) with

ER551:18-552:16, 557:28-558:3, 559:17-27, 134, 1054; see also CR17 at 24-26

and CR17-1 at 3 (showing that Johnson omitted checkout page with customer

acknowledgement of SSI policies in bad faith).


27

contractual “requirements” nor violation of any such requirements.)108

• ER1319:20-23 (transcript of deposition of Allison Christenson, transcript

page 22 cited by Adobe for notion that customers returned software because

it was academic software, does not support Adobe’s contentions)109

• ER1351-52 (Joshua Christenson testimony discussing SSI’s store policy,


any such requirements.)110

• ER1379:22-1381:4 (Joshua Christenson testimony concerning OEM

software, transcript pp. 132-34, demonstrating neither legal nor contractual

“requirements” nor violation of any such requirements)111

• ER1481-1526 (SSI Return Merchandise Authorization forms (original bates

nos. SSI/JC 655-1625) from customers who mistakenly ordered academic

software and realized that they were in fact not qualified to use it, including

ER1483, 1490, 1494, 1497-99, 1500, 1504 consisting of unauthenticated

handwritten notes by customers containing inadmissible hearsay,


any such requirements)112

• ER1528-30, 1386-1435, 1467-72 (SSI website pages showing Adobe

108 Compare CR87-12 at 6, 7, 12, 14, 15 (§§ U-7, U-8, U-9, U-10, U-11, U-

12, U-14, U-19, U-25, U-34 (all citing ER1128-36 and its exhibits)), with

ER542:21-544:28, 545:15-546:8, 546:19-547:22, 548:3-11, 548:19-549:14,

549:22-550:23, 553:15-16, 554:12-555:3, 557:28-558:3, 558:26-559:3, 569:8-17

(§§ U-7, U-8, U-9(a)(1), U-10, U-11(a)(1&2), U-12(a)(5), U-14(a)(2), U-19(a)(5),

U-25, U-34).

109 Compare CR87-12 at 7 (§ U-13) with ER553:19-20; 554:3-11

110 See ER557:14-559:14, 1352-54, 1379-80.

111 Compare CR87-12 at 12:25, 13:5, 13:10 (§§ U-19, U-20, U-21) with

ER558:13-16, 559:28-560:4, 562:7-9 (§§ U-19, U-20, U-21).

112 Compare CR87-12 at 6:26-7:1, 7:5-7, 13:5-7, 13:15-17 (§§ U-12, U-13,

U-20, U-21) with ER552:23-553:5, 553:26-554:2, 560:5-16, 562:27-563:12 (§§ U-

12, U-13, U-20, U-21); see also ER413:19-414:15; CR17 a 24-26; CR17-1 at 3;

ER134, 1054.


28

software for sale, has no relevance to any alleged requirements concerning

Adobe software, and containing nothing misleading whatsoever, particularly

in light of the fact that there is no difference between “full” and “retail”

versions of Adobe software and the EDU and occasional OEM versions sold

by SSI, and in light of the fact that SSI notified customers that all software

for sale was academic unless otherwise noted, and required customers to

certify that they were qualified to use the software purchased at checkout)113

• ER1386-1435 (Exhibits 20-27 to the January 26, 2011 deposition of Joshua

Christenson, demonstrating neither legal nor contractual “requirements” nor

violation of any such requirements)114

Moreover, contrary to Adobe’s contentions, Appellees provided clear notice

to customers on its website concerning the customers’ responsibility for the

software sold by SSI, including what Adobe refers to as OEM, EDU, and other

types of software.115 SSI informed its customers that it was primarily and

academic software store, and its policies clearly stated such, and that all software

for sale there was academic unless otherwise noted.116 In fact, customers who

purchased any academic software from SSI—not just Adobe software—had to

certify at checkout that they were qualified to purchase it.117

Likewise, Adobe’s assertion of “misleading offers,” “false advertising and

113 See n.103, supra, and accompanying text; see also notes 116-123, infra,

and accompanying text.

114 Note that few of these documents were referenced by Adobe in any of its

filings concerning the cross motions for summary judgment.

115 ER1464-66.

116 ER1054, 115-116.

117 ER537-38, 1061, 1355-56, 133-135.


29

“fool[ing] customers” are meritless.118 In part, Adobe predicates this assertion on

the notion that there is some difference between the “full” or “retail” versions of

Adobe software, and the OEM and EDU versions, but as already noted, this is

incorrect.119 Appellees website made it clear to customers exactly what they were

receiving when and if they purchased OEM or academic software, notified

customers that the OEM software sold there generally did not come with technical

support, that SSI had no agreements with any of the companies who manufactured

the software it sold, and that purchasers of software from SSI would be bound by

the end user agreements that came with the software.120 The evidence cited by

Adobe to support this notion of false advertising does no such thing.121 Even the

118 AOB at 6 n.14 and accompanying text; AOB at 8.

119 See n.103, supra, and accompanying text.

120 ER133-35, 1025, 1032, 1036, 1055-56, 1464-66.

121 See AOB at 8 n.18. As to claims of false advertising and confusion as to

various forms of Adobe software generally, compare CR87-12 at 6, 7, 12, 13 (§§

U-9, U-13, U-14, U-15, U-19, U-20) with ER546-48, 553-555, 557-60 (§§ U-9,

U-13, U-14, U-15, U-19, U-20). As to ER1111 (declaration of Christopher

Johnson, ¶¶1-6), compare CR87-12 at 6, 12, 13 (§§U-12(a)(1), U-19, U-20(a)(1))

with ER551:18-552:16, 557:28-558:3, 559:24-27. As to ER1379-81 (Joshua

Christenson testimony concerning OEM software, transcript pp. 132-34), compare

CR87-12 at 12:25, 13:5, 13:10 (§§ U-19, U-20, U-21) with ER558:13-16, 559:28-

560:4, 562:7-9 (§§ U-19, U-20, U-21). As to ER1481-1526 (SSI Return

Merchandise Authorization forms (original bates no. SSI/JC 655-1625)), compare

CR87-12 at 6:26-7:1, 7:5-7, 13:5-7, 13:15-17 (§§ U-12, U-13, U-20, U-21) with

ER552:23-553:5, 553:26-554:2, 560:5-16, 562:27-563:12 (§§ U-12, U-13, U-20,

U-21); see also ER413:19-414:15; CR17 a 24-26; CR17-1 at 3; ER134, 1054.


30

unauthenticated emails provided by Adobe show that customers who visited the

SSI website knew whether the products were OEM or EDU, even before

purchasing anything.122 Finally, the district court correctly recognized that Adobe

made no claims for false advertising in its complaint, and noted Adobe’s improper

attempt to bootstrap such a claim into its trademark infringement claim.123

D. The Evidence Does Not Support Adobe’s Contentions Concerning

The Appellees’ Awareness Of Adobe’s Never Produced Or

Identified Alleged Licensing Agreements.

Adobe asserts that Appellees were somehow aware of the restrictions which

Adobe allegedly places on what it purports to be its OEM and EDU software.124

This argument is belied by the record. Not only did Adobe fail to identify any

contracts, licenses or agreements whatsoever in its Rule 26 disclosures that could

actually prove the existence of such restrictions, but it also failed to produce or

identify any contract, license or agreement which it alleged applied to any of the

Adobe products sold by Appellees. None of the examples from Appellees’ website

cited by Adobe to establish Appellees awareness of these never-produced-or-

122 ER652 (“The site sells products that are OEM or education versions.”),

654 (noting that site was selling the academic version of the software), 663 (“I

have now noticed that your website also describes the product as “Full Version for

Windows Priced for Academic Users.”)

123 ER17 at 12 n.4.

124 AOB at 7.


31

identified license agreements even refers to Adobe or its products whatsoever.125

Moreover, even if Appellees were aware of restrictions, it would have absolutely

no bearing on the case, because, as noted in another seminal case, “[t]he fact that

defendants knew of the restrictions which were part of the license agreement

between plaintiff and Beecham neither binds defendants to a contract to which they

were not parties nor widens the scope of control granted by the Copyright Act.”126

Adobe also makes reference to various alleged agreements it produced in its

discovery productions, as well as other documents which Adobe purports show

agreement terms applicable to the software at issue herein.127 These documents are

inadmissible and / or irrelevant and in fact show no such thing. The highly

redacted “template license agreement” produce by Adobe was inadmissible for a

host of reasons.128 In addition, because Adobe never identified any contracts or

agreements in its Rule 26 disclosures, this alleged agreement was properly

125 AOB at 7 n.16.

126 Burke & Van Heusen, Inc. v. Arrow Drug, Inc., 233 F. Supp. 881, 884

(E.D. Pa. 1964) (citing Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 350 (1908)

(where defendant had notice of the restriction) and Independent News Co. v.

Williams, 293 F.2d 510, 516 (3d Cir. 1961) (where defendant had no knowledge of

the restriction.)

127 AOB at 9-10 & notes 25, 27, 28.

128 ER542:16-544:10 & n. 2; ER297-98, ¶8.


32

excluded from evidence by the district court.129 The other alleged contract

documents produced by Appellees which Adobe references in its Opening Brief

are likewise inadmissible, irrelevant and / or never were proffered by Adobe to the

district court as addressing the core question of whether Adobe sells or licenses the

software at issue in this case. 130 In addition, Adobe has never demonstrated that

these documents were ever even seen by Appellees before Adobe’s complaint was

filed, and in fact never questioned Appellees about these documents during

depositions.131 As to the invoices proffered by Adobe as allegedly speaking to

licensing restriction, they in fact do no such thing.132

Finally, Adobe’s assertions concerning chain of title ignore the fact that

Adobe is fully empowered to trace the chain of title of its own software.133

SUMMARY OF ARGUMENT

The district court properly determined that Appellees’ sales of Adobe

software was protected by the first sale doctrine, correctly finding that the software

129 ER29-30.

130 See AOB at 9, n.27 and accompanying text (referencing ER265-86). As

to these documents, see notes 84, 85, supra, and accompanying text.

131 ER1385-1442.

132 AOB at 10, n. 28 (referencing ER288-94). ER288-94 consist of redacted

invoices from Microidea which do not reference any actual Adobe licensing

agreement or terms thereof, and the “Note” referenced by Adobe does not even

mention any specific software or software manufacturer.

133 AOB at 10; see notes 64-68, supra, and accompanying text.


33

was lawfully made and acquired, and properly holding Adobe to the burden of

demonstrating that it licensed rather than sold its software, a burden which Adobe

utterly failed to meet. In so doing, the district court adhered to the legislative

history of 17 U.S.C. § 109 and cases interpreting it, which requires that the party

with unique access to and knowledge of facts inaccessible to the other party should

bear the burden of proof. Moreover, the general rule of holding the plaintiff to the

burden of proof in criminal copyright cases is the rule to be followed in civil cases

as well. Adobe’s allegations of discovery misconduct by Appellees are false and

offensive, particularly because it is Adobe that engaged in repeated conduct to

impede discovery and reach the merits of the issues in the court below.

Adobe misrepresents the record concerning its discovery violation of failing

to identify contract evidence in its Rule 26 disclosures which resulted in it being

sanctioned by not being able to use or rely on contracts or licensing agreements

unless they were produced by Appellees. Adobe violated this sanction and order

by attempting to introduce and rely on this precluded evidence in its pleadings on

the cross-motions for summary judgment and as a result, this offending evidence

and related argument were properly stricken. In so doing, the district court

correctly ruled that the improper evidence Adobe sought to introduce violated the

best evidence rule.

Finally, the district court properly dismissed Adobe’s trademark


34

infringement claim. Adobe argued the incorrect legal standard concerning the

nominative fair use defense, and failed to produce any evidence whatsoever that

Appellees use of Adobe’s alleged marks created any likelihood of confusion. In a

desperate attempt to rescues its failed claim, Adobe improperly attempted to

bootstrap a false advertising claim which it never actually made in its complaint.

ARGUMENT

I. Standard Of Review.

A. Summary Judgment.

The summary judgment standards of review set forth in Adobe’s Opening

Brief are acceptable and incorporated herein.134 A district court’s decision on cross

motions for summary judgment is also reviewed de novo.135

B. Burden Of Proof For Affirmative Defenses.

The burden of proof standards of review set forth in Adobe’s Opening Brief

are acceptable and incorporated herein, excepting the self-serving and groundless

assertion that “the dismissal of Adobe’s claims clearly meets and exceeds the

requisite harm.”136

134 See AOB at 14.

135 See Guatay Christian Fellowship v. County of San Diego, 670 F.3d 957,

970 (9th Cir. 2011).

136 AOB at 15.


35

C. Evidentiary Rulings.

Alleged evidentiary errors by the district court are reviewed for abuse of

discretion.137 The district court’s ruling as to the exclusion of evidence on a

summary judgment motion is reviewed for abuse of discretion and the district

court’s ruling must be affirmed unless the “evidentiary ruling was manifestly

erroneous and prejudicial.”138

In reviewing orders entered by a magistrate, the Court considers the

following: (1) a non-dispositive order entered by a magistrate must be deferred to

unless it is clearly erroneous or contrary to law; (2) the district court reviews “the

magistrate’s order for clear error”; (3) “[p]retrial orders of a magistrate under

636(b)(1)(A) are reviewable under the ‘clearly erroneous and contrary to law’

standard; they are not subject to de novo determination . . . .”; and (4) the Court

may not simply substitute its judgment for that of the deciding court.139

D. Issues Raised For The First Time On Appeal.

This Court generally “will not consider” arguments or allegations “that are

137 See, e.g., General Elec. Co. v. Joiner, 522 U.S. 136, 141 (1997); Geurin v.

Winston Indus., Inc., 316 F.3d 879, 882 (9th Cir. 2002).

138 Orr v. Bank of Am., NT & SA, 285 F.3d 764, 773 (9th Cir. 2002)

(emphasis in the original); see also Medrano v. City of Los Angeles, 973 F.2d

1499, 1507 (9th Cir. 1992).

139 Grimes v. City & County of San Francisco, 951 F.2d 236, 241 (9th Cir.

Cal. 1991).


36

raised for the first time on appeal.”140

II. The District Court Properly Dismissed Adobe’s Copyright Infringement

Claim.

A. The District Court Properly Held Adobe To The Burden Of

Proving That It Licensed Rather Than Sold The Software At

Issue.

In the trademark context, the burden of proof in reference to the first sale

doctrine—which allows a party with genuine trademarked works to resell those

copies, and which in fact is not deemed to be an affirmative defense at all—has

always been on the alleged trademark holder to prove that the first sale doctrine

does not apply.141 This burden is likewise is on the plaintiff in criminal copyright

cases.142 However, the question of who bears the burden of proof for the first sale

defense in the copyright context is a matter of first impression before this Court.143

As discussed below, the district court correctly found that Appellees met

their burden of proving that the software at issue was lawfully made or acquired,

140 Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).

141 See, e.g., NEC Elecs. v. CAL Circuit Abco, 810 F.2d 1506, 1509 (9th Cir.

1987); Sebastian Int’l, Inc. v. Longs Drug Stores Corp., 53 F.3d 1073, 1074 (9th

Cir. 1995); Iberia Foods Corp. v. Romeo, 150 F.3d 298, 300-04 (3d Cir. 1998);

Taylor Made Golf Co. v. MJT Consulting Group, 265 F.Supp.2d 732, 739 (N.D.

Tx. 2003); Sebastian Int’l, Inc. v. Russolillo, 186 F. Supp. 2d 1055, 1072 (C.D.

Cal. 2000).

142 United States v. Wise, 550 F.2d 1180, 1191-92 (9th Cir. 1977).

143 See, e.g., UMG Recordings, Inc. v. Augusto, 628 F.3d 1175, 1178 (9th

Cir. Cal. 2011) (citing Wise, 550 F.2d at 1191-92).


37

and properly placed the burden of proving that Appellees’ sales were not first sales

upon Adobe.

1. Legislative Background Concerning Burden Of Proof As To

The First Sale Doctrine.

Although the burden of proving an affirmative defense is generally on the

party asserting it, it is well-settled that “‘[i]f proof of the facts is inaccessible . . . it

is usually fairer . . . to place the burden of proof and persuasion on the party

claiming its existence.’”144 Similarly, the burden of proof is never placed “upon a

litigant of establishing facts peculiarly within the knowledge of his adversary.”145

This principle is integral to the 1976 Copyright Act, and in fact the legislative

history of the Act expressing Congress’s intent relies on this principle verbatim in

considering burden of proof at to the first sale doctrine, noting that “the burden of

proof should not be placed upon a litigant to establish facts particularly within the

knowledge of his adversary” and noting that a because a defendant generally has

“knowledge of how possession of the particular copy was acquired,” he “should

have the burden of providing this evidence to the court.”146 In this case, however,

144 Bennett v. Mueller, 322 F.3d 573, 585 (9th Cir. Cal. 2003) (quoting 2

McCormick on Evidence § 337, at 431 (John W. Strong ed., 4th ed. 1992))

145 United States v. New York, N. H. & H. R. Co., 355 U.S. 253, 256 n.5

(1957); see also ITSI TV Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289, 1292 (9th Cir.

1993) (citing United States v. Hayes, 369 F.2d 671, 676 (9th Cir. 1966)).

146 See H.R. Rep. No. 94-1476, at 81 (1976), reprinted in 1976 U.S.C.C.A.N.


38

that particular factual knowledge lies exclusively with the plaintiff, Adobe, and it

must bear the burden.

Most important, however, the Historical Note to 17 U.S.C. § 109—the

source of the first sale doctrine—states that “[i]t is the intent of the Committee,

therefore, that in an action to determine whether a defendant is entitled to the

privilege established by section 109(a) and (b), the burden of proving whether a

particular copy was lawfully made or acquired should rest on the defendant,”

and Appellees clearly met this burden.147 It is upon this basis that the the Court in

American International Pictures, Inc. v. Foreman held that the burden of proof and

production can be shifted to the plaintiff in copyright cases with a defendant’s

production of evidence that (1) the plaintiff made first sales of the copies in

question, or (2) that the defendant “acquired [their] cop[ies] from a source . . . that

may have received title through a first sale,” thus compelling “plaintiff[] to trace

title backward to an illegitimate acquisition.”148 As discussed, infra, Appellees

presented evidence that the Adobe software they sold came from sources that

5659, 5695 (“Historical Note to § 109”) cited in Am. Int’l Pictures, Inc. v.

Foreman, 576 F.2d 661, 663 n.1 (5th Cir. 1978), and Microsoft Corp. v. Harmony

Computers & Elecs., Inc., 846 F. Supp. 208, 212 (E.D.N.Y. 1994); see also id.

(“the established legal principle that the burden of proof should not be placed upon

a litigant to establish facts particularly within the knowledge of his adversary.”)

147 Historical Note to § 109 (emphasis added); ER14:16-26.

148 576 F.2d at 665 (emphasis added).


39

“may” have received title through first sale and have from the outset asserted that

Adobe sells rather than licenses its software.149

In addition, this Court’s recent decision in Vernor v. Autodesk, Inc., 621

F.3d 1102 (9th Cir. Wash. 2010), establishes that any determination of whether

software is sold versus licensed requires consideration of “all the provisions of the

agreement” to determine whether the copyright owner has specified that the user is

only granted a license and imposed significant restrictions on transfer and use.

It is this authority which formed the foundation of the district court’s proper

determination to place the burden on Adobe to prove that it licenses rather than

sells the software at issue once Appellees showed that the software they sold was

lawfully made and acquired.150

2. The District Court’s Determination That Adobe Was

Required To Prove That It Licensed Rather Than Sold The

Software Was Correct Based On Well-Established

Authority.

The district court’s reasoning in requiring Adobe to prove that it licensed its

software is sound because the fact that Appellees lawfully made and acquired the

software at issue “from a source . . . that may have received title through a first

sale” (Foreman at 665) is a matter of record. Adobe concedes that SSI sold only

149 See Sections II(A)(2, 3, 6), infra; ER433:15-23.

150 ER14-15.


40

authentic Adobe software with authentic activation codes, and that the Adobe

products SSI purchased and resold were manufactured by Adobe.151 The district

court’s made factual findings that: (1) “it is uncontroverted that Defendants

lawfully purchased genuine copies of Adobe software from third-party suppliers

before reselling those copies”; (2) that “Defendants have identified their suppliers

and Adobe makes no contention that Defendants’ acquisition of any copies of

Adobe software was unlawful or that the copies were anything other than genuine

Adobe-manufactured products”; and (3) that “the uncontroverted evidence before

the court is that the particular copies at issue were lawfully ‘made [and] acquired,’”

are all correct.152

More important, in addressing the first sale doctrine, Congress fully

embraced the principle that the burden of proof concerning facts relating to a

disputed issue that are peculiarly within the knowledge of one party belongs to that

party.153 Therefore, as the district court aptly noted, because any alleged

151 CR89 ¶2; CR98-3 at 2:14-26, 3:2-4:7; see also AOB at 31 (“whether or

not the underlying goods were genuine (a fact not disputed by Adobe) is

immaterial . . . .”)

152 ER14:16-23; see also notes 147, 148, supra, and accompanying text.

Appellees disclosed their suppliers early on in the case. CR13 at 17, 21; ER906

(see Exhibits 29, 30, 34), 956, 973, 990, 991, 992, 999, 1335-37, 1358-60, 1370-

71, 1380, 1436-43, 1447-49, 1452; ER875:10-12; CR86, Exhibit G-1.

153 See ITSI TV Prods., Inc. v. Agric. Ass’ns, 3 F.3d 1289, 1292 (9th Cir.

1993) (citing United States v. Hayes, 369 F.2d 671, 676 (9th Cir. 1966)); see also


41

restrictions on ownership, transfer and use affirmatively imposed by Adobe in its

dealings with its distributors are particularly within Adobe’s knowledge, it should

“bear the burden of producing evidence that its sales to distributors and users were

governed by restrictive licensing agreements making them and subsequent

transferees mere licensees rather than owners.”154 Adobe admitted that “Adobe

and Adobe alone knows the parties with whom it contracts, and . . . the terms of

those contracts.”155 The facts relating to the ultimate origin of the software at

issue, and any licensing agreements that allegedly applies to it, are squarely in the

hands of Adobe. The Adobe software sold by SSI came with authentic original

Adobe activation codes / serial numbers, was software for which Adobe had been

paid, and when this software was activated by the consumer, Adobe could trace the

software back to the alleged Adobe distributors who originally sold the software.156

In fact, Appellees provided Adobe with scores of activation codes / serial

Historical Note to § 109 (“the burden of proof should not be placed upon a litigant

to establish facts particularly within the knowledge of his adversary.”)

154 ER15:21-16:6.

155 ER354:20-22; ER16:1-3.

156 Appellees made factual assertions in this regard in opposing Adobe’s

motion for summary judgment and in their own motion for summary judgment.

ER433:24-435:8, 449:13-15, 580:2-10, 595:14-16, 857:10-18, 873:27-874:2.

Adobe never disputed them. ER349-65, 614-35; see also notes 56, 66-67, 151-52,

supra, and notes 209-211, infra, and accompanying text.


42

numbers from the Adobe software sold by Appellees,157 and Adobe also purchased

software from Appellees, all of which contained all information necessary for

Adobe to determine the chain of custody of the software back to Adobe158.

Additionally, at least one of the suppliers from whom Appellees purchased Adobe

software indicated that they worked directly with Adobe.159 Adobe and Adobe

alone can track these activation codes / serial numbers, and Adobe alone knows the

origin of this software, knows the identity of the alleged distributor from which the

copies originated, and is uniquely situated in being able to trace any chain of

custody of this software. Of course, Adobe refuses to do so, because, as discussed

at pages 17-18, supra, doing so would impede Adobe’s convenient selective

enforcement of is alleged distribution agreements used to further its manipulation

of the secondary market in its products, to the degree such valid and executed

agreements even exist and are not voided by their own disregard of the same.

Based on these facts and analysis, the district court correctly framed the only

issue to be decided as being “whether Defendants’ distribution of the particular

copies of Adobe software that it lawfully purchased was not protected by the first

157 ER1481-1526 (return merchandize authorizations provided by Appellees

to Adobe showing the product key / serial number of the returned software.)

158 Adobe’s agent purchased Adobe software from Appellees in September

2009 and possesses the product key / serial number of that piece of software.

ER1111 ¶¶ 5, 6; ER1122-24.

159 ER1017-18 ¶8; ER997-98.


43

sale doctrine under either the licensing or origin exceptions.”160 The district court

then went on to note that Adobe’s only asserted contention in this regard was that it

licenses rather than sells its software.161 The district court correctly disposed of this

contention based on the fact that there was no admissible evidence to support it

because Adobe had been precluded from producing such evidence based on its

discovery violations.162

3. Adobe’s Arguments That It Does Not Bear The Burden Of

Proving That It Licenses Versus Sells Its Software Are

Unavailing.

Adobe’s arguments on the burden of proof and production question focus on

discrediting the Foreman ruling and relying on the Vernor ruling, but these

arguments are unavailing.163

First, Foreman’s holding that a defendant may shift the burden to plaintiffs

to prove illegitimate acquisition by showing that the defendant acquired possession

of a copy from a party that in turn “may have” received title through a first sale

(Foreman, 576 F.2d at 665) is in harmony with the intention of Congress set forth

in the legislative history of 17 U.S.C. § 109, i.e., that the burden proving whether a

160 ER14:23-25.

161 ER15:1-2.

162 ER15:2-6.

163 AOB at 18-19.


44

copy was “lawfully made or acquired” should rest on the defendant.164 As

discussed below, “lawfully made or acquired” does not impose a mandate that a

defendant prove acquisition of title, chain of title, or produce a distribution or

licensing agreement as Adobe erroneously argues.

Second, Adobe incorrectly assumes that the only way for the Appellees to

show that their copies of Adobe software were “lawfully made or acquired”165 is

for them to provide evidence of from whom they acquired title and prove that

Appellees entered a software licensing agreement with Adobe166. This is incorrect,

especially in light of the fact that neither 17 U.S.C. § 109 nor the Historical Note

and legislative history provide any such mandate.

The Historical Note states that “[t]he defendant . . . has the particular

knowledge of how possession of the particular copy was acquired, and should have

the burden of providing this evidence to the court,”167 a mandate followed in

Foreman when that court noted that “the burden of proving that a particular copy

was lawfully made or acquired rests on the defendant.”168 “Possession” is different

164 576 F.2d at 665.

165 Id. at 663 n.1 (citing Historical Note to § 109).

166 AOB at 19.

167 Historical Note to § 109 (emphasis added); ER14-15.

168 Foreman, 576 F.2d at 663 n.1.


45

from ownership or title.169 This is precisely why the Court in Foreman found that

if Foreman could show that he “acquired [i.e., received possession of] his copy

from a source, such as a film library or junk dealer, that may have received title

through a first sale,” this “could place the burden of going forward on the plaintiffs

to trace title backward to an illegitimate acquisition.”170 Adobe’s attempt to merge

“possession” into “title” on the question of the burden of proving if the software

was “lawfully made or acquired” is contrary to the legislative history of 17 U.S.C.

§ 109. Notably, Appellees did in fact provide evidence to the Court of how

possession of the Adobe software was acquired.171 Adobe’s attempt to impose a

requirement that Appellees produce a chain of title and a distribution agreement is

unprecedented and erroneous.

Third, even if this reference in the Historical Note to “possession” is

incorrectly held to refer to title or ownership, it is nevertheless beyond cavil based

on the Historical Note to § 109 that Congress intended that the “burden of proof

should not be placed upon a litigant to establish facts particularly within the

knowledge of his adversary.”172 In this case, the knowledge of title or ownership,

169 Foreman, at 665 (“Mere possession is not probative of title, because one

in possession acquires no better title than his seller.”)

170 Id.

171 ER14.

172 Historical Note to § 109.


46

as well as knowledge of the parties to Adobe’s contracts and the contents of those

contracts, is in the unique possession of Adobe (by its own admission), not

Appellees, and therefore the burden of proof falls on Adobe.173

Fourth, while this Court’s holding in Vernor does not address the issue of

which party bears the burden of proof as to the first sale doctrine, its language

concerning proof of licensure demonstrates a clear affirmative burden on the

alleged license holder to prove that any actual alleged licensing agreement actually

imposes conditions that create licensure rather than sale.174 In this case, this is a

burden Adobe cannot meet based on its discovery violations.

4. Adobe’s Arguments Concerning Software Licensing As The

Alleged “Norm” For Software Distribution Miss The Mark,

And Demonstrate Why Appellees’ Motion For Summary

Judgment Was Granted.

Adobe consumes several pages arguing the irrelevant and spurious

proposition that “licensing rather than sale is ubiquitous in the software industry,”

and otherwise expounding upon what this Court already knows quite well—i.e.,

that the first sale doctrine applies to an owner of software, and that in analyzing

whether this doctrine applies, courts looks to whether the software was sold versus

173 See notes 56, 66-67, 151-59, supra, and notes, 209-11, infra, and

accompanying text; ER15:21-16:6.

174 ER15:14-21.


47

licensed.175 These arguments are unpersuasive for several reasons.

First and foremost, Adobe’s argument that “licensing rather than sale is

ubiquitous in the software industry” is a transparent attempt to convince the Court

of the notion that merely because Adobe alleges that it licenses rather than sells its

software, that it must be assumed it does so without any proof or analysis.176 But

this implication is illogical and unsupported by any authority. If this contention

were true, there would be no need to carry out the analysis of the licensing

agreement mandated most recently in Vernor before determining whether the first

sale defense applied:

We hold today that a software user is a licensee rather than an owner

of a copy where the copyright owner (1) specifies that the user is

granted a license; (2) significantly restricts the user’s ability to

transfer the software; and (3) imposes notable use restrictions.

Applying our holding to Autodesk’s SLA [software licensing

agreement], we conclude that CTA was a licensee rather than an

owner of copies of Release 14 and thus was not entitled to invoke the

first sale doctrine or the essential step defense.177

Vernor is instructive to the instant case. In Vernor, the end user, CTA, had

purchased several copies of software from Autodesk that were to be destroyed

under Autodesk’s license, but end user CTA instead sold the undestroyed copies to

Vernor, who sought declaratory relief to protect his right to sell his copies of the

175 AOB at 20-22.

176 AOB at 21.

177 Vernor, 621 F.3d at 1111 (citations omitted).


48

Autodesk software acquired from CTA. On September 30, 2009—a month prior to

the instant case case being initiated—the district court in Vernor found that

Autodesk “sold” its software to CTA and held “that a first sale occurs whenever

the transferee is entitled to keep the copy of the work.”178 This ruling was

consistent with SoftMan and other cases finding favorable application of the first

sale doctrine to resellers of authentic software.179 Adobe does not require the

return of its software from end users or distributors, and has provided no evidence

that does, and in fact cannot produce any evidence of any of the terms of its alleged

licensing and / or distribution agreements—to the degree they even exist—because

it has been precluded from producing such evidence based on its discovery

violations. Thus, prior to and during the pendency of this case, Appellees’ software

sales clearly fell into the category of those protected under the first sale doctrine.

Appellees in fact relied upon the Softman ruling and even placed a public notice on

their website that per Softman, software sales on their website were protected

under the first sale doctrine.180

However, this Court reversed the district court’s holding in Vernor, and

178 Id.; see also Vernor v. Autodesk, Inc., 2009 U.S. Dist. LEXIS 90906

(W.D. Wash. Sept. 30, 2009).

179 SoftMan Prods. Co. v. Adobe Sys. Inc., 171 F. Supp. 2d 1075, 1080 (C.D.

Cal. 2001).

180 ER1018 ¶ 16, 1036-53, 535-37.


49

found that Autodesk’s purported licensure was indeed a licensure based upon a

complete reformulation of the test to determine whether a transfer of software is a

“first sale.”181 A review of the district court decision in Vernor as well as this

Court’s reversal of it, demonstrate just how unsettled this area of law is.182.

In the new incarnation of the first sale doctrine set forth in Vernor, while the

Court addressed a “transferee” receiving a copy of a work “pursuant to a written

agreement,” plaintiff Vernor, like Appellees herein, was never subject to the

written agreement at issue.183 Instead, the Vernor Court looked to the agreement

the end user, CTA, had with the alleged copyright holder, Autodesk, to determine

what sort of title Vernor received from CTA.184 At the very least, this stands for

the proposition that Appellees, who are not a party to any agreement with

Adobe,185 cannot be deemed to bear the burden of proof of the terms of any such

alleged agreement, a burden which Autodesk had to carry in Vernor, and which

Adobe must carry here.

181 Vernor, 621 F.3d at 1110-11.

182 See Vernor v. Autodesk, Inc., 2009 U.S. Dist. LEXIS 90906 (W.D. Wash.

Sept. 30, 2009); Vernor, 621 F.3d at 1107-15.

183 621 F.3d at 1106 (“‘He never agreed to the SLA’s [software licensing

agreements’] terms, opened a sealed software packet, or installed the Release 14

software.”)

184 Id. at 1112.

185 ER1017 ¶¶7, 8.


50

Appellees agree with Adobe that the Court should defer to the intent of

Congress as set forth in the legislative history of the Copyright Act.186 However,

as set forth in Section II(A) (1-3), supra, adherence to that legislative history

requires that Adobe bear the burden of proving that it licensed rather than sold the

software at issue herein. Moreover, the many cases cited by Adobe that allegedly

hold that the defendant bears the burden of proof concerning the first sale doctrine

in fact do no such thing, because they in one way or another rely on Foreman and

the legislative history of the Copyright Act addressed in Foreman in detail, which

when applied correctly here require that Adobe bear the burden of production and

proof that it licenses rather than sells its software concerning the first sale doctrine,

particularly where, as here, Appellees demonstrated that the software they sold was

lawfully made or acquired, and Adobe possesses all the facts relating to the

ultimate origin of the software at issue, and any licensing agreements that allegedly

apply to it.187

186 AOB at 24.

187 See AOB at 24-25. Adobe cites the following cases, all of which rely on

Foreman, the principles of which applied to this case require that Adobe bear the

burden of proving that it licenses rather than sells its software: Microsoft Corp. v.

Big Boy Distribution LLC, 589 F. Supp. 2d 1308, 1318 (S.D. Fla. 2008) (citing

Foreman at 664); McIntosh v. Northern California Universal Enterprises Co., 670

F. Supp. 2d 1069, 1098-99 (E.D. Cal. 2009) (citing Foreman at 663 n.1); Too, Inc.

v. Kohl’s Dep’t Stores, 2002 U.S. Dist. LEXIS 21415, *7 (S.D. Ohio Sept. 3,

2002) (citing Foreman at 664); Microsoft Corp. v. Harmony Computers &


51

5. Adobe’s Public Policy Arguments Are Unavailing.

Adobe argues that public policy supports the notion that Appellees should

bear the burden of proof as to the first sale doctrine in the instant case.188 These

arguments are meritless, and additionally have no bearing on the instant case.

Overwhelming principles of logic and due process dictate that the burden should

be on Adobe to prove that it licenses rather than sells its software.

First, the notion that the first sale doctrine is a “benefit” to defendants, and

“unfairly prejudice[s]” copyright holders is nonsensical,189 in keeping with

Adobe’s belief that it has unlimited right to control movement and sale of its

products on the secondary market regardless of first sale, and that it need not prove

the existence of any contractual restrictions. The first sale doctrine is a legal

principle codified in 17 U.S.C. § 109 that properly limits the extent of

Electronics, Inc., 846 F. Supp. 208, 212 (E.D.N.Y. 1994) (citing Foreman at 663

n.1). The following cases cited by Adobe rely on Harmony, which in turn relies on

Foreman: NCR Corp. v. ATM Exch., Inc., 2006 U.S. Dist. LEXIS 30296, *5 (S.D.

Ohio May 17, 2006) (citing Harmony at 212-14); Mapinfo Corp. v. Spatial Re-

Engineering Consultants, 2004 U.S. Dist. LEXIS 3, *10 (N.D.N.Y Jan. 5, 2004)

(citing Harmony at 212); Too, Inc. v. Kohl’s Dep’t Stores, 2002 U.S. Dist. LEXIS

21415, *7 (S.D. Ohio Sept. 3, 2002) (citing Harmony at 212-14); Microsoft Corp.

v. Software Wholesale Club, Inc., 129 F. Supp. 2d 995, 1002 (S.D. Tex. 2000)

(citing Harmony at 212-14.)

188 AOB at 25-28.

189 AOB at 25.


52

copyrights.190

Second, Adobe’s assertion that having Adobe bear its burden of proof will

somehow motivate defendants to assert mertiless defenses is illogical. Meritless

defenses by definition do not benefit defendants, and waste a defendant’s time.

Moreover, it is ironic that Adobe complains of fears of mertiless defenses, when it

was Adobe who knowingly made the false and groundless claim in its complaint

that Appellees were producing counterfeit software.191

Third, Adobe demonstrates its misunderstanding of the district court’s ruling

and the holding in Foreman when it discusses the notion that “defendants do not

have any initial burden.”192 As the district court ruling makes clear, Appellees in

fact met the burden of proving that the software they sold was “lawfully made or

acquired.”193

Fourth, Adobe’s assertion that Appellees were somehow dilatory in

discovery production is false and hypocritical.194 Appellees provide over 2,700

pages of Rule 26 disclosures to Adobe by the January 28, 2011 discovery deadline

190 SoftMan Prods. Co. v. Adobe Sys., 171 F. Supp. 2d 1075, 1082-1083

(C.D. Cal. 2001).

191 ER11 n.2; ER1069 ¶2.

192 AOB at 26.

193 ER14:16-26; Historical Note to § 109; Foreman, 576 F.2d at 663 n.1; see

also Section II(A) (1-3), supra.

194 AOB at 26.


53

in four sets of disclosures beginning on June 17, 2010. It is Adobe that failed to

produce any documents at all until February 25, 2011—long after the discovery

deadline and the Friday before the February 28, 2011 dispositive motions

deadline—and it is Adobe that engaged in sharp practices throughout this

litigation.195

Fifth, Adobe’s arguments that “it is nearly impossible for copyright owners

to track down the chain of title for each and every product sold by defendants” is

patently false.196 As discussed in detail, supra, Adobe is uniquely situated to know

exactly where the products at issue in this case came from as Adobe is able to track

the activation codes / serial numbers of the software provided to them by

Appellees.197 Moreover, Appellees have provided Adobe with the identity of all

the suppliers from whom they purchased Adobe software.198

Sixth, as already discussed in Section II(A)(1-3), supra, the legislative

history of 17 U.S.C. § 109 clearly establishes that it was Congress’s intent that the

burden of proof concerning the first sale doctrine be borne by the party with

particular knowledge of relevant facts. To the degree that is the chain of title and

195 See notes 10, 14-41, supra, and accompanying text.

196 AOB at 26.

197 See notes 56, 66-67, 151-59, supra, and notes, 209-11, infra, and

accompanying text.



54

terms of any alleged (and unproduced) licensing agreement concerning the

software actually at issue in this case, it is Adobe with that unique knowledge and

access to the facts, and therefore they bear the burden of proof and production to

show that their software was licenses rather than sold.

Seventh, common sense and due process dictates that Adobe bear the burden

of disproving first sale here. It is undisputed that the plaintiff carries the burden to

disprove first sale in criminal copyright proceedings.199 Adobe ignores the fact that

the elements necessary to prove criminal copyright infringement—a valid

copyright; willfully; infringed by the defendant; commercial advantage or private

financial gain200—are identical to those needed to prove the willful copyright

infringement Adobe alleges here as being willful and being associated with sales,

i.e., for gain.201 There is no difference between Adobe’s allegations and criminal

copyright infringement, and the facts developed in the instant case can be used to

criminally prosecute the Appellees. The burden to prove that Adobe licenses

versus sells its software belongs on Adobe.

199 United States v. Wise, 550 F.2d 1180, 1191-92 (9th Cir. 1977).

200 Id. at 1188.

201 ER1624:1-4, 1624:19-21, 1625:7-8, 1627:14-17, 1627:21-23. Civil

willful infringement requires a showing that any infringement was willful. Peer

Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1335 (9th Cir. Cal. 1990).


55

6. Adobe’s Arguments That Foreman Does Not Support

Adobe Bearing The Burden Of Proving That It Licensed

Rather Than Sold The Software At Issue In This Case, And

That The Record Did Not Show That The Burden Was Not

Met, Are Belied By The Record.

Adobe takes issue with several aspect of the district court’s ruling

concerning the application of the first sale doctrine in this case.202 Each one of

these arguments lacks merit.

First, contrary to Adobe’s assertions,203 neither Foreman nor the legislative

history of 17 U.S.C. § 109 require Appellees to show that that they acquired chain

of title to software.204 Instead, what Foreman, the legislative history, and well-

established legal precedent require is that the party with the particular knowledge

of and access to relevant facts bear the burden of proof and production.205

Second, Adobe’s reference to “unlicensed sellers” and “authorized

license[s]” are inapposite and groundless.206 The reference to these terms has no

place here, for Adobe has not established that it licenses its software at all, and

cannot do so based on its failure to identify contracts, licenses or agreements in its

202 AOB at 28-32.

203 AOB at 28.

204 See Section II(A)(1-3), supra.

205 See notes 144-49, supra, and accompanying text; see also Section

II(A)(1-3), supra.

206 AOB at 29.


56

Rule 26 disclosures.207

Third, Adobe’s assertion that Appellees failed to identify suppliers until after

the close of discovery is false.208 Appellees disclosed their suppliers as early as

December 21, 2009 in their motion for change of venue, and continued to do so

throughout the case, both in testimony and in document productions.209 Appellees

explicitly identified their suppliers by providing supplier invoices with their Rule

26 disclosures.210 In fact, Adobe subpoenaed records from suppliers identified by

Appellees.211

Fourth, Adobe’s parsing of the district courts September 10, 2012 order is

deceptive and misleading.212 The district court in fact noted that “Neither

defendant is an authorized distributor of Adobe software. Instead, Software

Surplus purchased Adobe software from third parties and advertised and sold it

through its website without Adobe’s permission.”213 Nothing in this excerpt limits

207 ER9:24-11:8, 28-30.

208 AOB at 29.

209 CR13 at 17, 21; ER906 (see Exhibits 29, 30, 34), 1335-37, 1358-60,

1370, 1380, 1436-43, 1447-49; ER875:10-12; CR86, Exhibit G-1; ER875:10-12;

ER618:6-7; CR87-12 at 2:23; CR86, Exhibit G-1.

210 See, e.g., CR86-1, Exhibit G-1 (referencing bates numbers 50-221) at 7:3-

4 & Exhibit G-3 at 3:22-23.

211 ER1310 ¶ 7, 1543-49, 906.

212 AOB at 29.

213 ER2:18-20.


57

the application of the first sale doctrine to Appellees or addresses the question of

whether Adobe licenses versus sells it’s the software at issue in the case. The

district court correctly found that the doctrine applied, finding that the Adobe

software which Appellees sold was lawfully made and acquired, and that Adobe

could not meet its burden to prove that it licensed rather than sold its software.214

Fifth, Adobe misrepresents the record when it asserts that the district court

somehow “recognized” some legislative intent placing the burden of proof of the

first sale defense on Appellees, and that Appellees somehow failed to meet this

burden under Foreman.215 The district court recognized that Foreman and the

legislative history demonstrated that Appellees had a burden of proof that the

software at issue was lawfully made or acquired, which Appellees fully met, and

further recognized that Foreman and the legislative history placed the burden of

production on the litigant with particular knowledge of relevant facts, which

clearly was Adobe in this case.216 The district court was correct in distinguishing

the instant case from Foreman based on the fact that Appellees had provided

uncontroverted evidence that the Adobe software they sold was lawfully made and

214 ER14:2-16:6.

215 AOB at 29-30.

216 ER14:4-13, 14:14-16:6; see also notes 56, 66-67, 151-62, 209-11, supra,



58

acquired, and that Adobe was in unique possession of the relevant facts.217

Sixth, Adobe’s assertion that “[t]here was no basis for the District Court’s

statement that facts supporting a presumption in favor or the Defendants were

‘uncontroverted,’” is meritless and contradicted by the record.218 The notion of a

presumption is Adobe’s fabrication. The District Court’s Order mentions no such

thing.219 Adobe’s possession of the relevant facts shifted the burden of proof to

them, as did Appellees presentation of irrefutable evidence that the software they

sold was lawfully made and acquired.220 The fact that Adobe persists in its

assertion that Appellees did not produce “evidence tracing title back from their

suppliers” demonstrates Adobe’s misunderstanding of Foreman and the relevant

legislative history, which requires no such thing.221

Seventh, Adobe’s assertion that “whether or not the underlying goods were

genuine (a fact not disputed by Adobe) is immaterial to the first sale analysis,” and

it assertion that “[t]o conclude that the genuineness of the goods means that the

presumption articulated in Foreman therefore applies effectively means that the

217 AOB at 30; ER14:16-25, 15:21-16:6.

218 AOB at 30-31.

219 ER6-21.

220 See notes 56, 66-67, 151-62, 209-211, supra, and accompanying text;

ER15:21-16:6.

221 AOB at 31; see also Section II(A)(1-3), supra


59

first sale defense would always apply,” are incorrect.222 As already noted, there

was no presumption at play here, but rather the proper shifting of the burden of

proof and production to Adobe after Adobe acknowledged the products were

genuine and Appellees identified their suppliers. Adobe also ignores the fact that

“genuine” goods can be stolen or otherwise unlawfully acquired, an obvious

impediment to a first sale defense.

Moreover, as the district court correctly noted, Appellees had to at least

prove that the software at issue was lawfully made or acquired, and did so.223

However, Adobe ignores the principle delineated in the legislative history and

followed by the district court, i.e., that burden to produce evidence of licensure

versus sale falls on the party with particular knowledge of relevant facts to that

issue, which clearly was Adobe in this case.

Adobe’s argument is also squarely contradicted by Foreman itself, where the

Court stated that “evidence that Foreman acquired his copy from a source, such as

a film library or junk dealer that may have received title through a first sale could

place the burden of going forward on the plaintiffs to trace title backward to an

illegitimate acquisition.”224 As already discussed, this distinction between

222 AOB at 31.

223 ER14:2-5.

224 576 F.2d at 665.


60

acquisition (possession) by parties such as Appellees down the chain from a

middleman who might have actual title is important.225 In Foreman, this distinction

was not applied because Foreman “described his record system as ‘self-liquidating’

and stated in a deposition that he knew better than to ask where his sources

acquired their films.”226 In contrast, Adobe not only conceded that that the Adobe

software sold by Appellees was genuine and had genuine activation codes and

serial numbers that allowed them to be fully traced—with Appellees even

supplying Adobe with these activation codes / serial numbers—but Appellees also

disclosed their suppliers in great detail, and have from the outset asserted that

Adobe sells rather than licenses its software.227

Eighth, Adobe’s assertion that it provided evidence that it retains title to its

software and only licenses its software is patently false.228 Not only did Adobe not

provide any admissible evidence of retaining title and licensure, but it was

explicitly forbidden from doing so based on its failure to identify any contract,

licenses or agreements in its Rule 26 disclosures.229

225 See Sections II(A)(1-3), supra.

226 Foreman, 576 F.2d at 664.

227 See notes 56, 66-67, 151-59, 209-11, supra, and accompanying text; see

also ER433:15-23.

228 AOB at 31, n.44.

229 See notes 28-54, supra, and accompanying text; see also Statement of


61

Ninth, Adobe’s argument that it was not uncontroverted that Appellees did

not “lawfully purchase[]” the Adobe software they sold is disingenuous to an

extreme.230 Adobe pretends that the only way to “lawfully” acquire its software is

through being an authorized distributor or obtaining it from one.231 But of course,

this presupposes precisely what there is no evidence of in this case and what is

explicitly precluded, i.e., a licensing or distribution agreement. Adobe ignores the

fact that Appellees can “lawfully” acquire Adobe software under the first sale

doctrine, as discussed above, from third parties who “may have received title

through a first sale,” and that there is no admissible evidence in the record that

Appellees acquired the software in violation of licensing or distribution

agreement.232

Tenth, Adobe’s allegation that Appellees somehow withheld documents

from Adobe, and that such imagined documents would show that Appellees were

selling software in violation of alleged licensing agreements, is not only wholly

unsupported and groundless, but is offensive.233 It was Adobe that impeded

discovery and failed to produce any evidence concerning its alleged licensing

Facts Section I, supra, pp. 19-32.

230 AOB at 31.

231 Id.

232 Foreman, 576 F.2d at 665.

233 AOB at 32.


62

agreements, not Appellees.234

The district court properly granted summary judgment. Contrary to Adobe’s

argument, there were no disputed issues of material fact that precluded granting

Appellees motion for summary judgment as to Adobe’s copyright claims, and there

was no admissible or relevant evident to support summary judgment in favor of

Adobe.235

B. Adobe Was Not Entitled To Summary Judgment On Its

Copyright Claims.

Adobe argues that it was entitled to summary judgment.236 This argument is

patently without merit.

First, Adobe did not prove its alleged copyrights, and Appellees maintained

their argument that Adobe failed to prove those copyrights.237 Contrary to Adobe’s

assertions, it did not provide certificates of registration with its Complaint, and in

fact did not produce any such certificates until after the discovery deadline had

passed, when Appellees were unable to investigate them.238 It also failed to

produce any independent evidence of when it first published the works at issue.

234 See notes 10, 14-39, 49-52, supra, and accompanying text; see also

Section III(D), infra.

235 ER14:2-16:6.

236 AOB at 34-35.

237 See AOB 34; see n.65, supra.

238 Id.; see also ER1133:17-19.


63

Second, Adobe’s attempt to argue that it provided evidence that its products

were licensed is not only half-hearted, but is also completely belied by the

record.239 Not only did Adobe not provide sufficient evidence to prevail on

summary judgment on the question of whether it licensed its software, it provided

no relevant or admissible evidence to support this notion, and was in fact precluded

from providing such evidence based on its discovery violations.240

Third, Adobe’s assertion that Appellees conducted no discovery is false.241

Appellees did indeed conduct discovery, but Adobe refused to comply with the

discovery requests, forcing Appellees to file a motion to compel which was

denied.242

Fourth, Adobe’s assertions that Appellees failed to carry their burden of

proof for their first sale defense incorrectly assumes that Appellees had such a

burden. As discussed in Section II(A), supra, Appellees showed that the Adobe

software they sold was lawfully made and acquired, and Adobe failed to meets its

burden to show that it licensed rather than sold its software.

Fifth, note 50 in Adobe’s Opening Brief is incomprehensible. It discusses

239 AOB at 35.

240 See notes 10, 14-41, 45-48, supra, and accompanying text; see also

Statement of Facts Section I, pp. 18-32, supra, and Section III(D), infra.

241 AOB at 35.

242 See notes 37-39, supra, and accompanying text.


64

foreign goods, but is used to support an unrelated allegation that Appellees failed

to meet their burden of proof as to the first sale defense.243

Sixth, Adobe’s argument that the idea that some of its products were made

abroad impedes a first sale defense is contrary to both the law and the record.244

The first sale doctrine applies to foreign-made products.245 Moreover, Adobe’s

argument that that the software at issue was foreign-made had no support in the

record to begin with. Assuming note 50 refers to this argument, the evidence

cited—statements and documents from Chris Stickle and Shelley Bernd and

statements from Joshua Christenson—fails to show that any of the software at

issue was foreign made or subject to any sort of agreement. Stickle’s statements

reference unauthenticated evidence, and his statements are inadmissible hearsay as

to the terms and conditions of any contract, license or agreement, not best

evidence, and pure legal conclusions.246

In fact, Stickle’s declaration contains no evidence that any software was

243 AOB at 35 n.50.

244 AOB at 35.

245 See Kirtsaeng v. John Wiley & Sons, Inc., 133 S. Ct. 1351, 1355-1356

(U.S. 2013) (“We hold that the “first sale” doctrine applies to copies of a

copyrighted work lawfully made abroad.”)

246 Compare CR87-12 at 6, 14 (§§ U-11 and U-34 alleging product not made

in the United States) with ER549-51, 569 (§§ U-11 and U-34). See also n.94,

supra, and accompanying text.


65

made in Asia as Adobe pretends. Instead, his assertions on this subject are limited

to the fact that he examined software provided by Shelley Bernd and determined

that it “was actually an OEM version designed for distribution and use in the

Asia Pacific region.”247 This provides no evidence whatsoever that the software

was made outside the United States. Likewise, nothing in Shelley Bernd’s

declaration indicates that any software was made outside the United States.248

Nothing in Christenson’s testimony indicates that the product at issue was

not made in the United States, and there would be no foundation for Christenson to

state that it was, for he had no such knowledge. Christenson merely states that he

purchased product from a supplier located in Singapore, but this does not mean

that the product was actually made in Singapore, not made in the United States, or

subject to any purported agreement. 249

Adobe’s motion for summary judgment was properly denied by the district

court.

III. The District Court Properly Granted Appellees’ Motion To Strike.

Adobe argues that the district court improperly granted Appellees’ motion to

strike specific evidence and references to evidence relating to contracts, licenses

247 ER1135 ¶11.

248 ER1554-56.

249 ER1358:9-12.


66

and agreements, after the district court had separately applied a discovery sanction

based on Adobe’s failure to identify evidence in its Rule 26 disclosures.250 Adobe

wholly misrepresents the district court’s ruling on the motion to strike and the

evidence it relates to, and makes a number of false representations to the Court.

From the outset, it must be pointed out that Adobe’s assertion that Appellees

raised the best evidence rule for the first time in their reply to their motion for

summary judgment is both false and illogical. Appellees raised this issue at the

proper moment, i.e., when Adobe attempted to introduce evidence that violated the

rule, and it was Adobe that failed to address the issue.251

A. The District Court Properly Excluded Evidence Relating To Contract,

Licenses Or Agreements Based On Adobe’s Flagrant Discovery

Violation.

Adobe violated Rule 26 by failing to identify contracts, agreements or

licenses in its discovery disclosures, and failed to produce such documents by the

January 28, 2011 discover cut-off date.252 Appellees successfully moved to have

such unidentified evidence excluded.253 Adobe made baseless and unsupported

allegations in its motion for summary judgment and in response to Appellees

motion for summary judgment based on the very evidence that was precluded, not

250 AOB at 36-49.


252 ER31-32, 341-43, 345-46.

253 ER339-48, 31-32, 27-30.


67

only referencing the unproduced / unidentified agreement documents, but also

relying on and fabricating the content and restrictions allegedly contained in these

unproduced and unidentified documents.254 Appellees were severely prejudiced by

the discovery violations, and successfully moved to strike all reference to the

precluded material from the cross motions for summary judgment and other

filings.255

Adobe asserts that Appellees admitted knowledge of Adobe’s licensing

agreements.256 The evidence cited by Adobe does not support this false

statement.257 Moreover, even if Appellees did have knowledge of Adobe’s alleged

license agreements, which is strictly denied, that fact would be irrelevant per

Beecham.258

Adobe references certain documents produced by Appellees in their

disclosures, referring to them as “agreements,” and implying that they were

254 ER583:9-585:15; see also Statement of Facts Section I, pp. 19-32, supra


255 ER346:9-18; ER9-11.

256 AOB at 37 n.54 and accompanying text.

257 See AOB at 37 n.54 (citing ER1316:23-1317:14, 1343:1-18, 1355:2-21,

1464-1466, 1473.) None of this evidence shows that Appellees had any

knowledge of any contents of any of Adobe’s alleged license agreements. See

Statement of Facts Section I, pp. 20, 22-23, supra, and references therein to

ER1316:23-1317:14, 1343:1-18, 1355:2-21, 1464-1466, 1473.)



68

somehow relevant to Adobe’s attempt to prove that it licenses its software.259 As

already noted, these documents prove nothing relating to Adobe’s alleged licensing

agreements.260 Moreover, they have absolutely no relevance to the district court’s

granting of Appellees’ motion to strike, and are being improperly presented here to

raise issues not raised in the district court.261

Adobe references an alleged “template agreement” it produced, again

implying that it had some relevance to the issue of whether they sold versus

licensed their software, and also implying that the exclusion of this evidence was

improper.262 Nothing could be further from the truth. On the one hand, this

document is so heavily redacted that it is unintelligible, and it is also completely

unauthenticated, undated, and was never shown to have any relationship to the

software at issue in the case.263 On the other hand, this document was not

produced until long after the January 28, 2011 discovery cutoff date, and being a

contract or agreement of precisely the type that was NOT disclosed in Adobe’s

Rule 26 disclosures, was properly precluded by the district court.

259 AOB at 37 notes 55, 57, and accompanying text.

260 See pp. 19-32, supra.

261 As to ER265-286 / 1473 cited by Adobe, see notes 84, 85 supra, and

accompanying text. ER526 is a screen shot from Adobe’s website that contains

not contracts, licenses or agreements whatsoever.

262 AOB at 37 n.56 and accompanying text.

263 See notes 32-36, supra, and accompanying text; see also ER542 n.2.


69

Adobe asserts that it was error for the district court to grant Appellees

motion to preclude, because it somehow “reward[ed] Defendants for their failure to

conduct any timely discovery concerning matters they knew to be relevant to their

affirmative defense.”264 This assertion is false and disingenuous. Appellees

attempted to conduct discovery, and it was Adobe that successfully objected to

it.265 Moreover, it was Adobe that was and is fully in possession of the alleged

contract and license agreements—to the degree they even exist—which Adobe

purport show that they license rather than sell their software. Adobe’s attempt to

blame Appellees for Adobe’s failure to even identify these documents in Adobe’s

Rule 26 disclosures is childish.

B. The District Court Order Granting Appellees’ Motion To Strike Was

Wholly Proper And In Complete Harmony With The Magistrate

Judge’s Order.

Adobe erroneously asserts that the district court’s order granting Appellees’

motion to strike was improper in its scope because it somehow contradicted the

magistrate court’s earlier ruling on the motion to preclude, i.e., that Adobe was not

“precluded from using contracts, license agreements or other document produced

by Defendant in Defendants’ disclosures or responses to discovery requests,” and

that such evidence was stricken by the district court and not considered in deciding

264 AOB at 37.



70

the motions for summary judgment.266 Adobe likewise argues that the ruling on

the motion to strike was allegedly overreaching for striking unsupported references

to software licensing and references allegedly contained in witness testimony and

documents produce by Appellees.267 Adobe misrepresents the district court’s

ruling on the motion to strike and the magistrate judge’s ruling on the motion to

preclude.

First, Adobe seeks to fabricate an issue that does not exist by claiming that

the district court’s order on the motion to strike violated the magistrate court’s

order on the motion to preclude. The district court did not such thing. The

magistrate judge’s ruling explicitly precluded Adobe from using or introducing

license agreements of any kind, with the exception of contracts, license agreements

or other documents actually produced by Appellees.268 That is the extent of the

ruling. A careful review of the motion to strike, the motion to preclude, and the

resulting orders reveals that the orders granting these motions are in complete

harmony.

Adobe grotesquely distorts the record when it asserts that the “District Court

was without authority to exclude evidence that the Magistrate Judge had already

266 AOB at 3-4, 38-39; ER32.

267 Id.

268 ER29-30 (quoting ER31-32).


71

expressly ruled to be admissible.”269 Not only did Adobe not make this argument

in the district court, it is also completely false and meritless, because Adobe never

actually identified any such documents from among those explicitly listed by

Appellees in the motion to strike. Adobe proffered a laundry list of evidence that it

erroneously alleged demonstrated “the existence” and “Defendants’ knowledge . . .

specific terms of licensing requirements applicable to the restricted software sold

by Defendants.”270 However, it never made the argument it makes now, i.e., that

specific documents deemed permissible under the magistrate judge’s order were

going to be improperly stricken in relation to the motions for summary

judgment.271 While Appellees meticulously identified 67 specific portions of

Adobe’s filings that violated the order granting the magistrate judge’s motion to

preclude,272 as the district court aptly noted, Adobe’s opposition to the motion to

strike completely failed to identify a single instance of the permissible

documents—i.e., those produced by Appellees in discovery disclosures—within

that list.273

269 AOB at 38.

270 ER93:19-22, 92:26-93:22.

271 ER91-95.

272 ER211-212; see also n.281, infra.

273 ER10:11-12 (noting that Adobe failed to “specifically address any of the

documents or passages identified in Defendants’ motion [to strike]”.)


72

Thus, Adobe’s assertion that specific evidence that was permissible under

the magistrate judge’s order on the motion to preclude was somehow

impermissibly stricken is an argument being made for the first time before this

Court, should have been made to the district court, and is improper here.

Nevertheless, the argument is wholly meritless, because the district court’s order

granting the motion to strike did not exclude any evidence deemed permissible by

the magistrate judge’s order on the motion to preclude.274 Adobe’s discussions of

28 U.S.C. § 636 are wholly irrelevant.275

Adobe egregiously attempts to distort the district court’s ruling on the

motion to strike by erroneously asserting that the district court improperly applied

the magistrate judge’s order on the motion to preclude, asserting that “[t]he District

Court was without authority to grant Defendants’ motion to strike excluding all

evidence of licensing, since the Magistrate Judge’s order was limited to a

specific document not identified in Adobe’s disclosures.”276 This is completely

false; the order did not apply to a single document, but rather precluded use and

274 Compare ER529:18-530:6 with ER9:24-11:8 and with ER211-212 (n.

257, infra.)

275 AOB at 38-39.

276 AOB at 39 (emphasis added); see also AOB at 46 (“The District Court

went well beyond the Magistrate Judge’s order which precluded the one

document at issue.”)(emphasis added).


73

reference not only to the highly redacted alleged template agreement,277 but also to

any and all contract or license agreements in any manner on summary judgment or

at trial.278 This is patently evident in the motion to preclude itself, which does not

seek relief as to a single document, but rather seeks preclusion of any and all

licenses, contract or agreements based on Adobe’s failure to identify any such

document in its Rule 26 disclosures, including 67 specific references in Adobe’s

own filings.279 This willful distortion is clear evidence of Adobe’s bad faith.

In fact, the order on the motion to preclude is extremely clear in this regard,

and does limit the relief to a single document as Adobe falsely alleges, but rather

orders that Adobe is “precluded from using or introducing license agreements in

support of its motion for summary judgment or at trial because Plaintiff failed

to identify contracts or license agreements in its Rule 26(a) disclosures.”280 The

Court need only look to the Appellees’ surgically precise references to Adobe’s

277 ER672-693 (the evidentiary deficiencies of this document were clearly

argued by Appellees, see ER542-45 § U-7);

278 ER29-30.

279 ER345:7-347:13. The prayer for relief makes this even more clear.

ER347:9-13 (“Accordingly, Defendants ask the Court to preclude consideration of

or reliance on the inadmissible and unauthenticated contract document produced

by Adobe (see CR98-1, Exhibit A-1), and further order that Adobe and SIIA be

precluded from introducing or relying on any contracts or agreements, including

any license agreements.”)

280 ER29-30.


74

pleadings where Adobe relied on evidence that could only be gleaned from the

precluded contracts or licenses to see the incredible liberties Adobe attempted to

take in this regard.281

Adobe also argues that the district court erred in refusing to consider various

witness statements.282 The district court disposed of all of these arguments,

properly holding that the best source of the contents of those alleged contracts and

agreements is the documents themselves, which were in fact precluded. The

281 Compare ER211-12 with the documents referenced therein: CR87-2

(Declaration of Chris Stickle) ER1133:25-1135:4, 1135:8-12, 1135:21-28;

ER1284:25-1286:7; CR87-5 (Declaration of Scott Bain) ER1284-85 ¶7; CR87-11

(Declaration of Shelley Bernd) ER1581; CR87-12 (Adobe’s and SIIA’s Statement

of Uncontested Facts and Conclusions of Law ) §§ U-7, U-8, U-9, U-10, U-12, U-

16, U-17, U-19, U-20, U-21, U-34, C-2, C-7, C-8, C-9; CR87 (Adobe’s Motion for

Summary Judgment) ER1078:26-1079:24, 1080:5- 23, 1081:2-11, 1082:1-4,

1082:17-23, 1085:21-1086:9, 1087:15-19, 1088:22-25, 1089:23-14:1, 1092:25-

1093:7, 1093:12-15, 1094:5-9, 1100:14-20, 1001:7-12, 1104:2-5; CR98-1

(Declaration of Chris Stickle) ER639 ¶2; CR98-3 (Adobe’s Separate Statement of

Controverted Facts in Opposition to Defendants’ Motion for Summary Judgment)

¶4(a)(i)(1), ¶4(a)(i)(3), ¶6(a), ¶7(a), ¶17(a), ¶19(a); CR98 (Adobe’s Opposition to

Defendants Motion for Summary Judgment) ER615:10-14, 616:22-617:25, 618:10-

15, 618:20-23, 621:12-18, 624:5-7, 626:3-9, 626:20-23, 627:3-9, 630:26-631:3,

631:9-11, 631:17-23, 633:4-9 & n.7; CR129 (Adobe’s and SIIA’s Reply In

Support Of Their Motion For Summary Judgment) ER350:12-20, 352:7-12, 353:1-

15, 354:5-355:3, 355:4-9, 356:2-9, 357:3-9, 358:7-19, 361:25-28, 362:25-363:6;

CR133 (Adobe’s Opposition To Defendants’ Motion To For Summary Judgment

Based On Laches And Statute Of Limitation) 3:14-17; ER212:22-26 (“All

references to Defendants’ alleged “unauthorized” sale of Adobe products or sale of

“unauthorized” Adobe products. In most cases, the question of whether the

products or sales were “authorized” or not is wholly contingent upon the alleged

terms, conditions, and / or restriction set forth in the precluded documents.”)

282 AOB at 39-41.


75

district court thus curtailed Adobe’s attempt to end-run its well-deserved discovery

sanction:

The court finds that Adobe and SIIA’s arguments miss the mark. As

will be seen, whether and on what terms Adobe licenses and restricts

the distribution and use of its software products is central to the

parties’ summary judgment motions. And under the best evidence

rule, which Adobe and SIIA fail to address, the licenses

themselves are required to prove their terms and, by extension,

their legal effect. . . . Defendants’ motion does not seek to entirely

bar the testimony of the declarants, but only those portions of

their declarations that are offered to prove the terms and legal

effect of Adobe’s licensing agreements—testimony which is

inadmissible in the absence of those writings.283

Adobe argues that the district court erred by excluding admissions and

documents that allegedly showed that Appellees were aware that Adobe licenses its

software, and that that Appellees admitted “key aspects of Adobe’s licensing

practices,” and knew Adobe’s licensing terms.284 One the one hand, this alleged

evidence is irrelevant and inadmissible, and on the other hand, the evidence Adobe

cites proves nothing of the sort.

As already noted, whether Appellees knew that Adobe licensed its software,

or knew the terms of those alleged license agreements, is wholly irrelevant.

Appellees were not bound by these agreements,285 there is no evidence that they

283 ER10:11-11:2 (emphasis added.).

284 AOB at 41-42.



76

ever saw any of Adobe’s alleged licensing agreements or knew their contents, that

any such contracts or licenses applicable to the software at issue even exists, and

Appellees were certainly were not competent to testify to them (having never seen

them), which is why the district court’s ruling concerning best evidence applies.

Moreover the evidence cited by Adobe proves nothing relevant or admissible as to

the question of whether Adobe actually sells versus licenses its software.286

Furthermore, Adobe characterization of the evidence it references on page

42 of its Opening Brief as being “stricken” is peculiar. It claims a host of material

that was not precluded by the order on the motion to preclude was nevertheless

stricken by the district court, claiming this was improper.287 However, the material

stricken by the district court is the material “identified in detail in Defendants’

motion and reproduced in an exhibit to their reply brief. (See Motion (#150), pp. 6-

7; Reply (#153), Rasmussen Decl.).”288 Curiously, Adobe fails to identify any of

the material it alleges was improperly stricken by the district court—the litany of

evidence referenced in notes 61-65 on page 42 of its Opening Brief—in the list of

materials that was actually stricken by the district court.

The reason for this omission is that Adobe needs to structure its illogical

286 The evidenced referenced by Adobe on page 42 of its Opening Brief,

notes 61-65, is addressed, supra, at Statement of Facts Section I, pp. 22-30.

287 AOB at 42.

288 ER10:8-10; ER211-12.


77

thought process to be more palatable. The district court’s granting of the motion to

strike began with the motion to preclude, but contrary to Adobe’s arguments, it did

not end there. The district court fully honored the magistrate judge’s order on the

motion to preclude, and then logically and permissibly applied the best evidence

rule to Adobe’s repeated references to the excluded contract evidence to exclude

the specific material identified by Appellees in the motion to strike. Adobe seems

to think that a district judge is not allowed to apply the rules of evidence to the

evidence before him, or is somehow forbidden from ruling on evidence that also

happened to be considered by a magistrate judge. The bottom line is that there is

absolutely no conflict between the magistrate judge’s ruling on the motion to

preclude and the district court’s ruling on the motion to strike.289

C. The District Court Properly Applied The Best Evidence Rule.

Adobe argues that the district court misapplied the best evidence rule in

granting Appellees’ motion to strike.290 The argument is mertiless. From the

outset, it must be noted that despite the fact that Appellees raised the best evidence

rule immediately after Adobe attempted to improperly introduce the precluded

contract evidence,291 none of the arguments made by Adobe on this subject were

289 ER31-32, 28-30, 9-11.

290 AOB at 43-45.



78

presented to the district court, and should be ignored here as being raised for the

first time on appeal.292

First, Adobe’s assertion that best evidence rule was ill-suited to this case

because the content of the evidence were “not in dispute” is ridiculous. As

already discussed, supra, Adobe was precluded from introducing any contracts or

agreements based on its failure to identify such documents in its Rule 26

disclosures. Appellees have never agreed that Adobe licenses its software, no

evidence has been presented that Appellees ever saw a license agreement

applicable to the software at issue, and in fact the terms and conditions of any such

agreements are and remain completely unknown as a matter of fact and the record,

because no such documents relating to the software at issue were ever produced.

When Adobe makes statements like, “Defendants themselves identified key

restrictions applicable to the Licensed Software,” it is Adobe’s lawyers silently

authenticating and openly testifying about licensing agreements that are not and

have never been before this Court or the district court.

Adobe’s arguments concerning party admissions under Rule 1007 of the

292 ER10:20-22 (“And under the best evidence rule, which Adobe and

SIIA fail to address, the licenses themselves are required to prove their terms and,

by extension, their legal effect. See Fed. R. Evid. 1002.”) (emphasis added); see

also Smith v. Marsh, 194 F.3d 1045, 1052 (9th Cir. 1999).


79

Federal Rules of Evidence are inapposite.293 The facts and evidence at issue

here—i.e., the explicit terms and conditions or Adobe’s alleged licensing

agreements which are necessary to determine whether Adobe sells versus licenses

its software—are not “also” being testified to by a witness. Adobe is seeking to

prove the contents of the actual writing, i.e., the actual terms and conditions of its

alleged licensing agreements, as for example, Vernor requires.294 For this, the

actual writing is necessary.295 This is particularly true here, where Adobe has not

event attempted to show, and cannot show, that Appellees have ever even seen a

licensing agreement relevant to the software at issue in this case.

Second, contrary to Adobe’s assertions, the notion that Adobe “licenses” its

software is not and cannot be “undisputed” here. The evidence cited by Adobe for

this proposition does not prove that Adobe licenses its software, and certainly does

not prove that Appellees do not dispute that Adobe allegedly licenses its

software.296 Moreover, the fact that Appellees have never seen any such licensing

agreement, and have never been shown to have seen one, make the very notion

Adobe proposes impossible. A party cannot admit to or ratify something they have

293 AOB at 43-44.


295 United States v. Taylor, 648 F.2d 565, 570 (9th Cir. Cal. 1981).

296 See AOB at 44, citing AOB at 5 n. 2. The material in note 2 of the

Opening Brief is address at pp. 22-26.


80

never been show to know exists or have never been shown to have ever seen.

Third, Adobe’s argument that the document is unobtainable or in control of

the party against whom it is offer is belied by the record, and frankly, silly.297 We

are talking about Adobe’s own licensing agreements. Moreover, it is undisputed

that Adobe is not only capable of tracing the chain of title of its software, but

Appellees have disclosed their suppliers, and provided Adobe with serial numbers

of the Adobe software they were selling.298 This argument, along with the notion

that Appellees are being rewarded for having their discovery deemed untimely,

cannot be taken seriously, particularly in light of Adobe’s significant efforts to

abuse the discovery process.299

Fourth, Adobe’s arguments, relying on Telecom, that the best evidence rule

does not apply to proving company policy, is meritless.300 Notably, Adobe did not

raise this case or this “company policy” argument with the district court

concerning the motion to strike, and should be precluded from doing so here.

Moreover, Adobe misapprehends the Telecom ruling in its argument that

297 AOB at 44.

298 See notes 56, 66-67, 151-59, 209-11, supra, and accompanying text.

299 See notes 10, 14-24, 41-43 supra, 313-16, infra, and accompanying text.

300 AOB at 44-45 (citing Telecom Technical Services Inc. v. Rolm Co., 388

F.3d 820, 830 (11th Cir. 2004)).


81

witness testimony was improperly precluded based on the best evidence rule.301

The instant case presents a situation wholly distinct from that present in Telecom,

where the court allowed the company to produce “unexecuted copies of its

licensing contracts instead of the actual contracts,” and found that “the district

court did not err in admitting these contracts.”302 Telecom is inapposite, and

neither it nor any other case stands for the bizarre proposition offered by Adobe,

i.e., that the question of sale versus license under the first sale doctrine can be

determined by mere testimony. Here, Adobe is precluded from producing or

using any contracts whatsoever based on its discovery violation,303 and all it argues

for here is the admission of nothing but testimony to prove sale versus license.

This flies in the face of every first sale case Appellees are aware of. In fact, this

Court’s ruling in Vernor requires that a determination of whether an entity sells

versus licenses its software requires that the terms of the actual licensing

agreement be analyzed.304 Neither Vernor nor Telecom nor any other case in any

jurisdiction stands for the notion that Adobe can prove sale versus license based on

301 AOB at 45.

302 Telecom, 388 F.3d at 829-30.

303 In addition, the redacted alleged licensing agreement Adobe attempted to

introduce is inadmissible and irrelevant for a host of reasons. ER542-45.

304 Vernor, 621 F.3d at 1111; see also notes 177, supra, and accompanying

text, and pp. 47-50, supra.


82

mere testimony.

In addition, the Eleventh Circuit’s ruling in Telecom allowing sale versus

license to be argue or proven based on a generic contract is unsupported by any

authority in this Circuit, and flies in the face of the very purpose of the best

evidence rule. The question of whether Adobe sold versus licensed the software at

issue in this case requires per Vernor that the Court to examine the actual alleged

licensing agreement—to the extent it even exists—between Adobe and the alleged

“authorized” distributor that was the source of the software sold by Appellees, and

Adobe is the party in possession both the contracts themselves and the ability to

identify the alleged distributor.305

D. The District Court’s Discovery Sanction Was Wholly

Appropriate.

Adobe argues that the district court’s abused its discretion because the

discovery sanction was too severe.306 The sanction was wholly appropriate, and,

based on Adobe’s egregious and bad faith misrepresentations herein and its

conduct in the court below on this issue, the sanctions were apparently not severe

enough. Although the imposition of discovery sanctions is reviewed for an abuse

of discretion, the Court gives particularly wide latitude to the district court's

305 See notes 56, 66-67, 151-59, 209-11, supra, and accompanying text.

306 AOB at 45-49.


83

discretion to issue sanctions under Rule 37(c)(1) in light of the fact that this

provision is deemed a “‘self-executing,’ ‘automatic’ sanction to ‘provide[]a strong

inducement for disclosure of material . . . .’”307

First, Adobe’s arguments that the sanction was too severe is mertiless, for

the authority Adobe relies on are inapposite. Adobe invokes cases where dismissal

or default are imposed, which in turn requires willfulness, fault, or bad faith.308

The flaw in this argument is obvious: Adobe was not given the extreme

punishment of default or dismissal. Adobe sheepishly refers to the district court

“effectively ordering dismissal of Adobe’s claim,” but this is highly disingenuous.

The ruling simply enforced Rule 26 under the auspices of a proper Rule 37

discovery sanction, which in this case resulted in Adobe being precluded from

using or introducing license agreements in support of its motion for summary

judgment or at trial based on its discovery violation.”309 For Adobe to equate this

with a ruling of dismissal or default cannot be taken seriously.

Notably, curiously absent from Adobe’s argument is the entirely different

307 Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1105-1106

(9th Cir. 2001) (citations omitted).

308 AOB at 46-47 (citing United States v. Sumitomo Marine & Fire Ins. Co.,

Ltd., 617 F.2d 1365, 1369 (9th Cir. 1980) (citations omitted)), Fjelstad v. Am.

Honda Motor Co., Inc., 762 F.2d 1334, 1338 (9th Cir. 1985), and other cases.)

309 ER31-32.


84

standard this Court applies to determine whether a dismissal sanction is just.310

Obviously, Adobe avoided discussing it because this test does not and cannot apply

in a case where dismissal or default is not the sanction. But even if it did, the

district court’s ruling would be found faultless. Adobe clearly violated the district

court’s motion to preclude, making the public interest and docket management

elements falling in support of sanctions.311 The risk of prejudice to Appellee was

extremely high, based on the fact that they crafted their defense based on Adobe’s

failure to disclose the contract evidence, also supporting sanctions.312 And the

factors of public policy favoring disposition of cases on the merits and of

availability of lesser sanctions shows clearly why Adobe’s attempt to use case law

that applies only to dismissal sanction cases is totally inappropriate, and also fall in

favor of dismissal. Adobe was of course not given a sanction of dismissal, but

rather received a completely appropriate sanction based on its failure to identify

documents in its Rule 26 disclosures. No “lesser sanction” was available or

appropriate, and the because the sanction Adobe did receive was not dismissal, the

310 See, e.g., Valley Eng’rs v. Electric Eng’g Co., 158 F.3d 1051, 1057 (9th

Cir. Cal. 1998) (defining a five part test: “(1) the public's interest in expeditious

resolution of litigation; (2) the court’s need to manage its dockets; (3) the risk of

prejudice to the [party seeking sanctions]; (4) the public policy favoring disposition

of cases on their merits; and (5) the availability of less drastic sanctions.”)

311 Id. at 1057 (“where a court order is violated, factors 1 and 2 support

sanctions”).

312 ER346:9-19.


85

merits factor falls in favor of the propriety of the sanction.

Moreover, for Adobe to play the victim is contrary to the record. Adobe

failed to produce a single document until after the discovery deadline in this

case.313 Adobe and its lawyers knew very well that the first sale doctrine was at

play in this case, based both on the obvious facts, and because it was raised as a

defense in Appellees’ answer. 314 They likewise knew that the question of terms of

any alleged licensing agreements might come into play. Adobe could have

produced reams of its own alleged licensing contracts into evidence by the

discovery deadline, but it chose not to do so. Could it be that it in fact was

Adobe that was attempting to conceal relevant evidence concerning Appellees’

first sale defense from Appellees—the very sort of allegation Adobe repeatedly

and groundlessly makes against Appellees?315 This notion is supported by the fact

that Adobe refused to comply with Appellees discovery requests seeking this very

same contract evidence on the basis that it was a few days late, and even filed

before the discovery deadline, forcing Appellees to file a motion to compel which


314 ER1612:7-10.

315 AOB at 14, 37, 44. Recall that it is Adobe, and not Appellees, that

possesses its own alleged licensing agreements and know the terms thereof to the

degree they exist.


86

failed.316 If Appellees were trying to avoid contract documents, they would not

have filed discovery for them, and would not have filed a motion to compel. It is

Adobe that actively concealed contract documents in this case. Adobe is crying

crocodile tears, particularly in light of the obvious fact that Adobe has exclusive

possession of its alleged contracts and license agreements and has exclusive

knowledge of what they contain.

Second, Adobe’s argument that the district court lacked authority to grant

the motion to strike because Adobe did not violate the motion to preclude is

disingenuous and borders on bad faith. The order on the motion to preclude was

crystal clear: “Plaintiff Adobe is precluded from using or introducing license

agreements in support of its motion for summary judgment or at trial because

Plaintiff failed to identify contracts or license agreements in its Rule 26(a)

disclosures.” Adobe’s argues that it “did not violate the Magistrate Judge’s order

where the Magistrate Judge specifically noted that ‘the district court retains

discretion to consider precluded documents that a witness is using to illustrate

testimony and not for introduction into evidence.’”317 The obvious flaw in this

assertion is that this portion of the order on the motion to strike clearly applies to

316 See notes 37-39, supra, and accompanying text. See also CR85 at 13:22-

28, 16:8-13.

317 AOB at 48.


87

trial witness testimony, not summary judgment. The other obvious flaw is that

nowhere in any of its pleadings on the cross-motions for summary judgment does

Adobe even purport to offer “documents that a witness is using to illustrate

testimony.” It could not do so, because there was no “testimony,” but rather only

factual declarations placing documents into evidence.

Adobe blatantly violated the order on the motion to preclude by attempting

to introduce the highly-redacted alleged template licensing agreement for its

content and truth, and then went on to repeatedly violate the order on the motion to

preclude by referencing terms, conditions, requirements and other factual aspects

of its never-produced alleged licensing agreement in its pleadings concerning the

pending summary judgment motions.318 Notably, Adobe did not cite a single word

of the alleged template licensing agreement in the district court.

Third, Adobe acted in bad faith when it challenged the order on the motion

to preclude and filed its motion for clarification.319 As the magistrate judge noted,

Adobe’s motion for clarification “appears to be nothing more than an attempt by

Plaintiff to attain significant substantive changes to the prior order for the purpose

of circumventing its failure to provide adequate Rule 26(a) disclosures.”320

318 See Section III(A) and (B), supra.

319 ER225-29.

320 ER29:19-21 (emphasis added).


88

The discovery sanction levied by the district court was wholly proper.

IV. Summary Judgment Was Properly Granted on Adobe’s Trademark

Infringement Claim.

Adobe asserts that the district court’s incorrect application of the test for

nominative fair use reflects a failure to appreciate the policy of the affirmative

defense. It avers that the district court erred when it ruled that “non-deception is

not required to invoke the nominative fair use defense.”321 In keeping with this

theme, Adobe also argues that summary judgment was improperly awarded to the

defendants.322

A. Adobe Failed To Produce Evidence Creating A Genuine Issue Of

Material Fact As To Nominative Fair Use.

The district court properly concluded in its order that:

[t]he uncontroverted evidence is that Defendants used Adobe’s marks

to refer to the Adobe software that it advertised and sold on the

website softwaresurplus.com, thus placing the burden on Adobe to

establish likelihood of confusion by negating nominative fair use,

which it has failed to do.323

Adobe did not produce any evidence regarding likelihood of confusion, they

just argue it. Importantly, there was no evidence of actual confusion ever

produced, a requirement under the incorrect Sleekcraft “likelihood of confusion”

321 AOB 52.

322 AOB 54-55.

323 ER18.


89

standard that Adobe asserts is controlling.324 Even if one were to apply the

Sleekcraft test that Adobe argues is applicable, there is no evidence to support

Adobe’s position and summary judgment was appropriate to dispose of this

claim.325

More important, Adobe incorrectly argues that this Court must apply the

Sleekcraft test.326 The district court, however, properly noted that while Sleekcraft

is generally the test applied, it does not apply where, as here, a defendant uses the

mark to refer to the trademarked good itself.327 Under the correct Toyota standard,

the district court properly found that Appellees were entitled to the nominative fair

use defense.328

Thus, Adobe is incorrect in asserting here that it, not the defendants, were

entitled to summary judgment. The Appellees are entitled to summary judgment

because Adobe failed to produce any evidence raising a genuine issue of material

fact relating to nominative fair use.

324 AOB at 55 (citing AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-54

(9th

Cir. 1979).

325 Id.; see also Statement of Facts Sections I(A-C), supra.

326 Id.

327 ER17:17-18:18 (citing Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610

F.3d 1171, 1185 (9th

Cir. 2010)) .

328 ER18:11-19:9.


90

B. The Defendants Did Not Fail To Prove The Nominative Fair Use

Doctrine.

Adobe asserts that the Appellees and the district court overlooked the policy

behind the nominative fair use doctrine by failing to establish or to require

“truthfulness.”329 They did not overlook this issue. It was raised in Adobe’s

pleadings, addressed by the Appellees, and the district court properly rejected it

and Adobe’s fabricated “truthfulness” requirement as a bad faith attempt to

bootstrap a false advertising claim into the case which it never made in its

Complaint.330 The district court also correctly pointed out that Adobe’s unpled and

fabricated false advertising claim and “truthfulness” standard were inapplicable

under the nominative fair use doctrine, which addresses whether “use of the mark

will inspire a mistaken belief on the part of the consumers that the speaker is

sponsored by the trademark holder.”331

The applicable test requires the analysis that the district court properly

applied: (1) whether the product was identifiable without the use of the mark; (2)

whether the defendant used more of the mark than necessary; or (3) whether the

329 AOB at 50-53.

330 ER19:10-26; ER17 n.4.

331 Id. (emphasis in the original).


91

defendant falsely suggested he was sponsored or endorsed by the trademark

holder.332

Applying these factors, the district court correctly concluded that the

defendants’ use of the mark was done in order to properly communicate that they

were offering genuine Adobe software for sale and using the mark accomplished

that goal.333 The district court also correctly concluded that the defendant’s use did

not imply sponsorship or endorsement to a reasonably prudent consumer in the

online marketplace because the very domain name from which the items were

purchased was “softwaresurplus.com” and this would notify the prudent consumer

that the defendants were resellers of software surplus.334

Accordingly, summary judgment against Adobe on its trademark

infringement claim was proper in this case because the defendants properly

established the applicable fair use doctrine, leaving no other issues to be

determined by the district court. Furthermore, as the district court noted, the

so-called untruthful statements were a nonexistent claim.

. . .

. . .

332 Toyota, 610 F.3d 1175-76.

333 ER19; ER14:16-25.

334 Id. (citing to Toyota, 610 F.3d at 1180) .


92

CONCLUSION

For the foregoing reasons, Appellees respectfully request that this Court

affirm the lower court’s September 10, 2012 order granting Appellees’ motion to

strike, denying Adobe’s motion for partial summary judgment, and granting

Appellees’ motion for summary judgment.

DATED: August 24, 2013. Respectfully submitted,

LAW OFFICE OF LISA RASMUSSEN

/s/ Lisa A. Rasmussen

______________________________

LISA A. RASMUSSEN



93

RELATED CASES

Pursuant to Circuit Rule 28-2.6, Appellees are not aware of any related cases

pending before this Court.

CERTIFICATE OF COMPLIANCE

I certify that:

☒ This brief complies with the enlargement of brief size granted by court order

dated August 6, 2013. The brief’s type size and type face comply with Fed. R.

App. P. 32(a)(5) and (6). This brief is 20,993 words, excluding the portions

exempted by Fed.R. App. P. 32(a)(7)(B)(iii), if applicable.

DATED: August 24, 2013. LAW OFFICE OF LISA RASMUSSEN


______________________________

LISA A. RASMUSSEN



94

CERTIFICATE OF SERVICE

I hereby certify that I served a copy of the foregoing Appellees’ Answering

Brief with the Clerk of the Court by using the CM / ECF system on the 24th

day of

August, 2013.

Participants in this case who are registered CM / ECF users will be served

by the appellate CM / ECF system.


____________________________________

LISA A. RASMUSSEN


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