Case5:14-cv-02150-BLF Document32 Filed11/14/14 Page1 of 8
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`ADOBE SYSTEMS INCORPORATED,
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`Plaintiff,
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`v.
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`MY CHOICE SOFTWARE, LLC, et al.,
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`Defendants.
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`Case No. 14-cv-02150-BLF
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`ORDER DENYING MOTION TO
`DISMISS; DENYING ALTERNATIVE
`MOTION FOR MORE DEFINITE
`STATEMENT; AND DENYING
`MOTION FOR TRANSFER
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`[Re: ECF 24]
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`Plaintiff Adobe Systems, Inc. (“Adobe”) asserts trademark, copyright, and related claims
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`against My Choice Software, LLC (“My Choice”) and two of its part-owners, Nathan Mumme
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`(“Mumme”) and Daniel Parker (“Parker”) (collectively, “Defendants”), based upon their alleged
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`sales of pirated, counterfeit, and otherwise unauthorized Adobe software products. Before the
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`Court are (1) Defendants’ motion to dismiss the operative first amended complaint (“FAC”) under
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`Federal Rule of Civil Procedure 12(b)(6); (2) Defendants’ alternative motion for more definite
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`statement under Federal Rule of Civil Procedure 12(e); and (3) Defendants’ motion for transfer of
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`venue to the Central District of California under 28 U.S.C. § 1404(a). The Court has considered
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`the briefing and the oral argument presented at the hearing on November 13, 2014. For the
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`reasons discussed below, the motion to dismiss is DENIED, the alternative motion for more
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`definite statement is DENIED, and the motion for transfer is DENIED.
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` I.
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`BACKGROUND1
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`Adobe is a corporation organized under the laws of Delaware with its principal place of
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`business in San Jose, California. Adobe develops and distributes computer software. It has
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`1 The facts contained in the Background section are drawn from the FAC, the well-pled allegations
`of which are accepted as true for purposes of this motion.
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`Case5:14-cv-02150-BLF Document32 Filed11/14/14 Page2 of 8
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`gained significant common law trademark recognition of its ADOBE and ACROBAT marks, has
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`obtained registrations for its ADOBE and ACROBAT marks from the United States Patent and
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`Trademark Office, and has obtained registrations for copyrightable ADOBE ACROBAT software
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`and other software from the United States Copyright Office.2
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`My Choice is a limited liability company organized under the laws of California with its
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`principal place of business in Mission Viejo, California. My Choice was authorized to distribute
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`Adobe’s software under certain terms pursuant to an “Adobe Partner Connection Program Reseller
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`Agreement” (“Agreement”). See FAC Exh. C.3 Adobe claims that My Choice breached the
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`Agreement and infringed upon Adobe’s trademarks and copyrights by ordering Adobe software
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`products from unauthorized distributers, selling licenses for counterfeit and/or unauthorized OEM
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`software products, and selling electronic software downloads without a license. Adobe asserts the
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`following claims against My Choice, Mumme, and Parker: (1) infringement of registered
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`trademarks under 15 U.S.C. § 1114; (2) false designation of origin, false or misleading
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`advertising, and unfair competition under 15 U.S.C. § 1125(a); (3) dilution under 15 U.S.C. §
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`1125(c); (4) copyright infringement under 17 U.S.C. § 501(a); (5) unlawful, unfair, and fraudulent
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`business practices under § 17200; and (6) breach of contract.
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` II. MOTION TO DISMISS AND MOTION FOR MORE DEFINITE STATEMENT
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`A.
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`Legal Standard
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`1.
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`Motion to Dismiss
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`“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
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`claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation
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`Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d
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`729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts
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`as true all well-pled factual allegations and construes them in the light most favorable to the
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`2 Non-exhaustive lists of Adobe’s trademark and copyright registrations are attached to the FAC
`as Exhibits A and B, respectively.
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` Because the Agreement has been filed under seal, its terms are not discussed with specificity
`herein.
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`plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the
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`Court need not “accept as true allegations that contradict matters properly subject to judicial
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`notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or
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`unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008)
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`(internal quotation marks and citations omitted). While a complaint need not contain detailed
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`factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to
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`relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl.
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`Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the
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`court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id.
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`2.
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`Motion for More Definite Statement
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`Under Federal Rule of Civil Procedure 12(e), “[a] party may move for a more definite
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`statement of a pleading to which a responsive pleading is allowed but which is so vague or
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`ambiguous that the party cannot reasonably prepare a response.” Fed. R. Civ. P. 12(e).
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`“However, motions for a more definite statement are disfavored, and ordinarily restricted to
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`situations where a pleading suffers from unintelligibility rather than want of detail.” I.R. ex rel.
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`Nava v. City of Fresno, No. 1:12-CV-00558 AWI GSA, 2012 WL 3879974, at *1 (E.D. Cal. Sept.
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`6, 2012) (internal quotation marks and citations omitted). A Rule 12(e) motion must be denied “if
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`the complaint is specific enough to notify defendant of the substance of the claim being asserted,”
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`or “if the detail sought by a motion for a more definite statement is obtainable through the
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`discovery process.” Id.
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`B.
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`Discussion
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`1.
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`Trademarks and Copyrights are Adequately Identified
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`Defendants argue that Claims 1-4, Adobe’s trademark and copyright claims, “fail[] to
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`identify the trademarks or copyrights that Defendants purportedly infringed upon.” Mot. at 3,
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`ECF 24-1. The Court disagrees. The FAC alleges that on October 9, 2013, Adobe’s investigator
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`paid $97.41 to buy a purported “Adobe Acrobat X Standard - PC – OEM Download” from
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`mychoicesoftware.com. FAC ¶ 36, ECF 17. The investigator was provided with installation
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`instructions and a serial number to activate the download. Id. ¶ 37. The FAC alleges that the
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`serial number was an “unauthorized OEM product not for resale” and thus that the sale violated
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`Adobe’s rights in its “A,” “ADOBE,” and “ACROBAT” word and design trademarks. Id. ¶ 38.
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`The FAC identifies, by registration number, twenty-nine specific trademarks and one copyright
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`allegedly violated by the sale of the download to the investigator. Id. When Adobe conducted
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`further investigation regarding Defendants, it discovered facts leading it to believe that
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`Defendants’ primary business is selling pirated and otherwise unauthorized downloads of Adobe’s
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`products and, indeed, that Defendants entered into the Agreement with Adobe to give its activities
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`the appearance of legitimacy. Id. ¶¶ 39-41.
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`The FAC describes several ways in which Defendants allegedly obtain pirated and
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`otherwise unauthorized versions of Adobe’s software for resale to Defendants’ customers. For
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`example, it is alleged that Defendants illegally copy trial versions of Adobe’s software and then
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`resell those trial versions as fully functioning versions to My Choice customers. Id. ¶¶ 42-46.
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`Defendants also allegedly sell OEM software directly to customers in violation of the Agreement,
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`which provides that the software is to be provided only in bundled sales with new purchases of
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`specific hardware. Id. ¶ 47. In addition, Defendants allegedly sell EDU products, which are to be
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`provided only to certain qualifying customers, to any customers who request them. Id. ¶ 48. The
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`FAC alleges, on information and belief, that in addition to the trademarks and copyrights
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`identified in paragraph 38, Defendants’ may have infringed Adobe’s rights in other trademarks
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`and copyrights, including those listed in Exhibits A and B to the FAC. Id. ¶ 38.
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`These allegations are more than adequate. Defendants’ argument that Adobe has identified
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`too many trademarks and copyrights is unpersuasive. This case is wholly distinguishable from
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`Four Navy Seals v. Associated Press, 413 F. Supp. 2d 1136, 1148 (S.D. Cal. 2005), relied upon by
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`Defendants, in which the court found inadequate an allegation that “at least one unidentified
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`photograph” out of a pool of 1,800 photographs had “been copyrighted by an unidentified ‘NAVY
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`SEAL ONE.” Here, Adobe has provided the registration numbers of twenty-nine trademarks and
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`one copyright that Adobe contends were infringed by Defendants’ sale of a particular download to
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`Adobe’s investigator. To the extent that Defendants contend that not all of the identified
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`registration numbers actually relate to the downloaded Acrobat X product purchased by the
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`investigator, that is a factual challenge to the FAC that is not appropriately raised in the context of
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`a Rule 12(b)(6) motion. Moreover, Defendants have not demonstrated any impropriety in
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`Adobe’s inclusion of appendices listing trademark and copyright registration numbers that it
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`believes Defendants may have infringed in other transactions. The inclusion of those appendices
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`does not render any less definite Adobe’s allegations regarding the download purchased by its
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`investigator, and it puts Defendants on notice that Adobe will be seeking information during
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`discovery regarding what Adobe believes to be extremely egregious and widespread infringement
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`of its rights by Defendants. Adobe has described several methods by which it believes Defendants
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`have obtained and improperly resold Adobe software products. The fact that the precise scope of
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`Defendants’ misconduct (if any) remains to be fleshed out in discovery does not render the FAC
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`inadequate.
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`Accordingly, Defendants’ motion to dismiss and alternative motion for a more definite
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`statement based upon Adobe’s asserted failure to identify the relevant trademarks and copyrights
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`are DENIED.
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`2.
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`Breach of the Agreement is Adequately Alleged
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`Defendants argue that Claims 5-6, for violation of California’s UCL and breach of
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`contract, respectively, “fail[] to define the nature of the breach giving rise to the purported unfair
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`business practices in which Defendant allegedly engaged.” Mot. at 4, ECF 24-1. As an initial
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`matter, it is unclear why Defendants believe that a failure to allege breach of contract would be
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`dispositive of Adobe’s UCL claim. In order to state a claim for relief under the UCL, Adobe must
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`allege facts showing that Defendants engaged in an “unlawful, unfair or fraudulent business act or
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`practice.” Cal. Bus. & Prof. Code § 17200. “Because the statute is written in the disjunctive, it is
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`violated where a defendant’s act or practice violates any of the foregoing prongs.” Davis v. HSBC
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`Bank Nevada, N.A., 691 F.3d 1152, 1168 (9th Cir. 2012). Adobe adequately has alleged claims of
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`unlawful conduct under the Lanham Act and the Copyright Act, as discussed above, and thus it
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`has alleged a violation of the UCL. Moreover, although the FAC does not identify the specific
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`sections of the Agreement breached by Defendants’ conduct, the FAC identifies that conduct with
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`specificity. See FAC ¶¶ 35-48. Even a cursory review of the Agreement makes clear that
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`Defendants’ alleged piracy and otherwise unauthorized distribution of Adobe’s software
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`constitutes breach. Defendants’ contentions that they cannot understand the nature of Adobe’s
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`contract claim is not persuasive.
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`Accordingly, Defendants’ motion to dismiss and alternative motion for a more definite
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`statement based upon Adobe’s asserted failure to identify the nature of the alleged breach of
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`contract are DENIED.
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`3.
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`Allegations of Alter Ego are Sufficient
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`Defendants argue that the FAC “fails to offer any facts to establish personal liability for the
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`Individual Defendants, Nathan Mumme and Daniel Parker.” Mot. at 7, ECF 24-1. While the FAC
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`does not use the phrase “alter ego,” that clearly is the basis upon which Adobe asserts liability
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`against Mumme and Parker. Under California law,4 alter ego liability is recognized “where two
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`conditions are met: First, where there is such a unity of interest and ownership that the
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`individuality, or separateness, of the said person and corporation has ceased; and, second, where
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`adherence to the fiction of the separate existence of the corporation would . . . sanction a fraud or
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`promote injustice.” In re Schwarzkopf, 626 F.3d 1032, 1038 (9th Cir. 2010) (internal quotation
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`marks and citation omitted). “A member of a limited liability company shall be subject to liability
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`under the common law governing alter ego liability.” Cal. Corp. Code § 17703.04(b). The FAC
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`alleges that Mumme and Parker are part-owners and officers of My Choice, and that they
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`personally directed the software piracy alleged in this case. FAC ¶¶ 7, 9, 43, 49. The FAC also
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`alleges that My Choice is undercapitalized, does not have sufficient funding to meet its liabilities,
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`and “has failed to observe corporate formalities required by law.”5 Id. ¶¶ 3-5. While these
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`allegations certainly could be more robust, they give fair notice to Mumme and Parker with
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`respect to Adobe’s theory of liability against them.
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`Defendants’ motion to dismiss the claims against Mumme and Parker is DENIED.
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`4 “In determining whether alter ego liability applies, we apply the law of the forum state.” In re
`Schwarzkopf, 626 F.3d 1032, 1037 (9th Cir. 2010).
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` The Court construes Adobe’s allegation that My Choice has not observed “corporate” formalities
`to be an allegation that My Choice has not observed the legal formalities attendant upon its
`formation as a limited liability company.
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` III. MOTION FOR TRANSFER
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`Defendants request that the Court transfer this action to the Central District of California.
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`“For the convenience of parties and witnesses, in the interest of justice, a district court may
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`transfer any civil action to any other district or division where it might have been brought or to
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`any district or division to which all parties have consented.” 28 U.S.C. § 1404(a). The action
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`could have been brought in the Central District, because My Choice’s headquarters are located
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`there, meaning that the alleged pirating of Adobe’s software presumably occurred there. See 28
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`U.S.C. § 1391(b)(2) (providing that a civil action may be brought in “a judicial district in which a
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`substantial part of the events or omissions giving rise to the claim occurred”).
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`“A motion to transfer venue under § 1404(a) requires the court to weigh multiple factors in
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`its determination whether transfer is appropriate in a particular case.” Jones v. GNC Franchising,
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`Inc., 211 F.3d 495, 498 (9th Cir. 2000). “For example, the court may consider: (1) the location
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`where the relevant agreements were negotiated and executed, (2) the state that is most familiar
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`with the governing law, (3) the plaintiff’s choice of forum, (4) the respective parties’ contacts with
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`the forum, (5) the contacts relating to the plaintiff’s cause of action in the chosen forum, (6) the
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`differences in the costs of litigation in the two forums, (7) the availability of compulsory process
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`to compel attendance of unwilling non-party witnesses, and (8) the ease of access to sources of
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`proof.” Id. at 498-99. Of particular note here, “the presence of a forum selection clause is a
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`‘significant factor’ in the court’s § 1404(a) analysis.” Id. at 499. The public policy of the forum
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`state, if any, also is a significant factor. Id.
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`In the present case, the Agreement between Adobe and My Choice contains a forum
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`selection clause specifying state or federal courts located in Santa Clara County. That clause must
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`be given significant weight. Mumme and Parker argue that they were not signatories to the
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`Agreement, and thus cannot be bound by the forum selection clause. However, if Mumme and
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`Parker indeed are alter egos of My Choice, they properly are bound by the forum selection clause.
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`Even putting aside the forum selection clause, Defendants have not made the necessary
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`“strong showing of inconvenience to warrant upsetting the plaintiff’s choice of forum.” Decker
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`Coal Co. v. Commonwealth Edison Co., 805 F.2d 834, 843 (9th Cir. 1986). While Defendants
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`assert in their briefs that the Central District would be more convenient for them and “witnesses,”
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`they have not submitted any declarations identifying said witnesses or otherwise supporting their
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`conclusory assertion. Moreover, Defendants’ motion ignores the fact that Adobe’s chosen forum
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`is only a short flight or drive away from the proposed forum. Defendants assert that key evidence
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`is located in the Central District but, again, they do not submit a declaration in support of that
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`assertion. Given Defendants’ failure to demonstrate why the Court should not honor the forum
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`selection clause and Adobe’s choice of forum, the Court need not address the remaining Jones
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`factors. The Court notes, however, that Defendants have not demonstrated that any of those
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`factors favor transfer.
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`Accordingly, the motion to transfer venue is DENIED.
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` IV. ORDER
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`For the foregoing reasons, IT IS HEREBY ORDERED that:
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`(1)
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`The motion to dismiss is DENIED;
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`(2)
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`The alternative motion for more definite statement is DENIED; and
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`(3)
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`The motion to transfer is DENIED;
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`Dated: November 14, 2014
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`______________________________________
`BETH LABSON FREEMAN
`United States District Judge
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