Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 1 of 21
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`UNITED STATES DISTRICT COURT
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`DISTRICT OF NEVADA
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`2:10-CV-00422-LRH-GWF
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`ORDER
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`* * *
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`)))))))))))))))
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`ADOBE SYSTEMS INCORPORATED,
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`Plaintiff,
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` v.
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`JOSHUA CHRISTENSON, an individual and
`d/b/a www.softwaresurplus.com; SOFTWARE
`SURPLUS INC.; and Does 1-10, inclusive,
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`Defendants.
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`AND RELATED CLAIMS.
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`This matter is before the court on cross-motions for summary adjudication and summary
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`judgment and a related motion to strike.
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`First, Plaintiff and Counter-Defendant Adobe Systems Incorporated (“Adobe”) and Third-
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`Party Defendant Software Publishers Association d/b/a Software Information Industry Association
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`(“SIIA”) filed a Motion for Partial Summary Judgment on Plaintiff’s Claims and for Summary
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`Judgment on Defendants’ Counterclaims and Third-Party Claims (#87 ). Defendants Joshua
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`Christenson and Software Surplus, Inc. (collectively, “Defendants”) filed an opposition (#113), and
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`Adobe and SIIA replied (#129).
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 2 of 21
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`Second, Defendants filed a Motion for Summary Judgment (#88) on Plaintiff’s claims.
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`Adobe filed an opposition (#98), and Defendants replied (#124).
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`Finally, Defendants filed a Motion to Strike Precluded Documents and Related Factual
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`Assertions and Argument (#150). Adobe and SIIA filed a joint opposition (#151), and Defendants
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`replied (#153).
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`I.
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`Facts and Procedural History
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`This is an action for copyright and trademark infringement involving resales of so-called
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`“grey market” computer software. Plaintiff Adobe Systems Incorporated is a prominent developer
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`and distributor of computer software, including such titles as Acrobat, Creative Suite,
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`Dreamweaver, Flash, Illustrator, PageMaker, Photoshop, and Shockwave. (Complaint (#32-2),
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`¶ 8.) Adobe alleges that it owns exclusive rights under the Copyright Act to reproduce and
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`distribute copies of its software in the United States. (Id.) Adobe further alleges that the software
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`products it manufactures and sells bear registered trademarks, including ADOBE, ACROBAT,
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`CREATIVE SUITE, DREAMWEAVER, FLASH, ILLUSTRATOR, MACROMEDIA,
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`PAGEMAKER, PHOTOSHOP, POSTSCRIPT, READER, and SHOCKWAVE. (Id. at ¶ 9.)
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`Defendants are Joshua Christenson and his now-defunct corporation, Software Surplus,
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`Inc., which was in the business of selling software products over the Internet through its
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`eponymous website www.softwaresurplus.com. Neither defendant is an authorized distributor of
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`Adobe software. Instead, Software Surplus purchased Adobe software from third parties and
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`advertised and sold it through its website without Adobe’s permission.
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`On October 30, 2009, Adobe filed this action alleging two causes of action for copyright
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`and trademark infringement under the Copyright Act of 1976, 17 U.S.C. §§ 101, et seq., and the
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`Lanham Act, 15 U.S.C. § 1051, et seq. (Complaint (#32-2).) Adobe alleges that Defendants have
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`Adobe originally filed the action in the United States District Court for the Northen District
`of California. On Defendants’ motion to transfer venue, the case was transferred to this district on
`March 8, 2010 (#33).
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 3 of 21
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`made and distributed copies of Adobe’s software without authorization or license, in violation of
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`Adobe’s exclusive copyrights of reproduction and distribution. (Id. at ¶ 16.) Adobe further alleges
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`that Defendants’ use of Adobe’s trademarks in advertising and selling Adobe software has
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`“confused and deceived . . . the consuming public concerning the source and sponsorship of the
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`unauthorized copies of the Adobe Software offered, sold and distributed by Defendants.” (Id. at
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`¶ 18; see also id. ¶¶ 25-26.)
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`On May 4, 2010, Defendants filed an Answer, Counterclaim, and Third-Party Complaint
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`(#39), alleging counterclaims and third-party claims against Adobe and third-party defendant
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`Software Publishers Association d/b/a Software & Information Industry Association (“SIIA”), the
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`self-described “principal trade association for the software and digital content industry” (#87-6, p.
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`9). Defendants’ claims include (1) defamation and defamation per se, (2) false light, (3) business
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`disparagement, (4) aiding and abetting, (5) civil conspiracy, and (6) alter ego or instrumentality.
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`The claims are based on a press-release issued by SIIA on November 12, 2009. Among other
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`allegedly defamatory statements, the press release announced the filing of six “software piracy”
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`lawsuits on Adobe’s behalf against various online sellers of Adobe software, including Joshua
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`Christensen and Softwaresurplus.com, and accused them of being “Software Pirates” and
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`“Fraudulent Online Venders” who “swindled both consumers and Adobe by illegally copying or
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`selling” Adobe’s software and “knowingly engag[ed] in copyright infringement through the
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`fraudulent sales of Adobe software.” (Doc. #87-6, p. 8.)
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`Following discovery, on February 28, 2011, the parties simultaneously filed the instant
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`cross-motions for summary adjudication and summary judgment. Adobe and SIIA jointly move for
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`partial summary judgment as to liability (but not damages) on Adobe’s copyright and trademark
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`claims against Defendants and for summary judgment on all of Defendants’ counterclaims and
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`third-party claims (#87). Defendants move for summary judgment on Adobe’s copyright and
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`trademark claims, but not on their counterclaims and third-party claims (#88).
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 4 of 21
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`After the summary judgment motions were fully briefed, the Magistrate Judge entered two
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`orders significantly impacting the evidentiary record. On May 31, 2011, the Magistrate Judge
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`entered an order (#144) granting Defendants’ Motion to Preclude Adobe or SIIA’s Use of or
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`Reliance on Contracts, Licenses or Agreements (#127). Finding that Adobe had “failed to identify
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`contracts or license agreements in its Rule 26(a) disclosures,” the court ordered that Adobe “is
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`precluded from using or introducing license agreements in support of its motion for summary
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`judgment or at trial” but “is not, however, precluded from using contracts, license agreements or
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`other documents produced by Defendants in Defendants’ disclosures or responses to discovery
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`requests.” (Order (#144), pp. 1-2.) Then, on August 16, 2011, the Magistrate Judge entered a
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`second order (#149) denying Adobe’s motion for clarification or reconsideration (#147). Rejecting
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`Adobe’s attempts to blunt the impact of the court’s discovery sanction, the Magistrate Judge
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`clarified, “The ability of Plaintiff to use Defendants’ documents is limited to those documents it
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`actually produced. The Court never intended to permit Plaintiff to use other documents that are
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`‘identified’ or ‘referenced’ in Defendants’ disclosures but were not actually produced.” (Order
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`(#149), p. 4.) The Magistrate Judge also rebuffed Adobe’s arguments regarding the limited use of
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`precluded documents for illustrative purposes, finding it “unnecessary to include language in the
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`order instructing the district judge on the parameters of his discretion regarding the use of
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`precluded documents for illustrative as opposed to evidentiary purposes.” (Id. at 3.)
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`Following the Magistrate Judge’s orders, on August 23, 2011, Defendants filed the instant
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`Motion to Strike Precluded Documents and Related Factual Assertions and Argument (#150). As
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`the motion to strike is targeted at Adobe and SIIA’s summary judgment briefs and exhibits, the
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`court will address that motion before proceeding to the parties’ cross-motions for summary
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`judgment.
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`II.
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`Defendants’ Motion to Strike
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`It is well-established that a district court’s inherent power to control its docket and to
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`enforce its rules “includes the power to strike items from the docket as a sanction for litigation
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 5 of 21
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`conduct.” Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402, 404 (9th Cir. 2010). Such power is
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`indispensable to the court’s ability to enforce its orders, manage its docket, and regulate
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`insubordinate attorney conduct. See Mazzeo v. Gibbons, 2010 WL 3910072, *3 (D. Nev. 2010).
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`In seeking to enforce the Magistrate Judge’s order that Adobe “is precluded from using or
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`introducing license agreements in support of its motion for summary judgment or at trial,”
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`Defendants move to strike from Adobe and SIIA’s summary judgment briefs and exhibits all
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`documents covered by the order, as well as all factual assertions, references and arguments that
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`relate to Adobe’s licensing agreements with its distributors and users. The specific documents and
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`passages sought to be stricken are identified in detail in Defendants’ motion and reproduced in an
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`exhibit to their reply brief. (See Motion (#150), pp. 6-7; Reply (#153), Rasmussen Decl.)
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`Adobe and SIIA’s opposition does not specifically address any of the documents or
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`passages identified in Defendants’ motion. Instead, they argue generally that the Magistrate
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`Judge’s discovery orders did not preclude testimony from their declarants, who were identified in
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`disclosures and may testify as competent witnesses based on their personal knowledge. See Fed. R.
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`Evid. 601-602. It is also argued that even if the precluded licenses may not be used to establish the
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`truth of their contents, the documents may be used for limited or illustrative purposes, including as
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`exemplars to illustrate the testimony of witnesses concerning Adobe’s licensing agreements.
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`The court finds that Adobe and SIIA’s arguments miss the mark. As will be seen, whether
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`and on what terms Adobe licenses and restricts the distribution and use of its software products is
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`central to the parties’ summary judgment motions. And under the best evidence rule, which Adobe
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`and SIIA fail to address, the licenses themselves are required to prove their terms and, by extension,
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`their legal effect. See Fed. R. Evid. 1002. It is therefore beside the point that exhibits omitted from
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`pretrial disclosures might be admissible at trial, not to establish the truth of their contents, but for
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`demonstrative or illustrative purposes in the court’s discretion. And it is beside the point that
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`Adobe and SIIA’s declarants are, as a general matter, competent witnesses. Defendants’ motion
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`does not seek to entirely bar the testimony of the declarants, but only those portions of their
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 6 of 21
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`declarations that are offered to prove the terms and legal effect of Adobe’s licensing
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`agreements—testimony which is inadmissible in the absence of those writings.
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`The court finds that the documentary and testimonial evidence identified in Defendants’
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`motion to strike is offered by Adobe and SIIA on the parties’ cross-motions in order to prove the
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`terms and legal effect of Adobe’s licensing agreements yet is inadmissible for that purpose under
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`the Magistrate Judge’s discovery orders and the rules of evidence. Defendants’ motion to strike
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`shall therefore be granted, and the court will disregard the stricken materials for purposes of
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`resolving the parties’ cross-motions for summary judgment.
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`III.
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`Cross-Motions for Summary Judgment
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`A. Copyright Infringement
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`Adobe moves for summary adjudication as to liability on its claim for copyright
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`infringement, while reserving the issue of damages for jury resolution. Adobe contends that it
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`owns valid copyrights in the software distributed by Defendants, that Defendants violated Adobe’s
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`exclusive right of distribution by engaging in online sales of Adobe software without authorization
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`or license from Adobe. Adobe further contends that the first sale doctrine is inapplicable because
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`Adobe maintains exclusive distribution rights by only licensing and not selling its products, and
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`because some of the products at issue were manufactured outside the United States and not meant
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`for domestic distribution. Adobe also contends that Defendants bear the burden of proof to
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`establish the applicability of the first sale doctrine as an affirmative defense.
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`Adobe alleges in its complaint that, in addition to distributing Adobe software, Defendants also
`“made” unauthorized copies in violation of Adobe’s exclusive right of reproduction. (Complaint (#1).
`¶¶ 3, 8, 16.) Adobe does not address this aspect of its copyright infringement claim in its motion, nor
`does Adobe provide any evidence to support such a claim in opposition to Defendants’ motion for
`summary judgment. The court therefore finds that Adobe has abandoned the claim and will grant
`Defendants’ motion for summary judgment as to Adobe’s claim of copyright infringement based on
`reproduction. The court accordingly analyzes Adobe’s copyright infringement claim solely as a
`distribution claim. See 17 U.S.C. § 106(1), (3) (separately providing for the rights of reproduction and
`distribution).
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`Defendants cross-move for summary judgment. Defendants do not contest that they
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`distributed Adobe software without Adobe’s authorization, but they dispute Adobe’s contentions as
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`to copyright ownership and the first sale doctrine. Defendants contend that Adobe has failed to
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`produce any admissible evidence to establish ownership of valid copyrights because they failed to
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`timely produce any copyright certificates during discovery. Defendants also contend that the first
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`sale doctrine applies to Defendants’ purchases and resales of Adobe software because, given the
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`court’s orders precluding Adobe from introducing its licensing agreements, Adobe cannot prove
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`that it licenses and does not sell its software products, and because Adobe has not established that
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`any of the Adobe software that Defendants sold was made outside the United States. Defendants
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`contend that it is Adobe, not Defendants, that should bear the burden of proof, or at least the burden
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`of production, on the issues of licensing and origin and that Adobe has failed to carry that burden.
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`“Plaintiffs must satisfy two requirements to present a prima facie case of direct
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`infringement: (1) they must show ownership of the allegedly infringed material and (2) they must
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`demonstrate that the alleged infringers violated at least one exclusive right granted to copyright
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`holders under 17 U.S.C. § 106.” A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.
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`2001). The exclusive rights granted to copyright holders include the right of distribution. See 17
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`U.S.C. § 106(3) (“to distribute copies or phonorecords of the copyrighted work to the public by sale
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`or other transfer of ownership, or by rental, lease or lending”). Even if these requirements are
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`satisfied, however, the defendant may avoid liability if its allegedly infringing activities fall within
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`an exception to § 106, including the first sale doctrine of § 109(a).
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`Section 109(a) codifies the first sale doctrine by providing, in pertinent part:
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`“Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord
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`lawfully made under this title, or any person authorized by such owner, is entitled, without the
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`authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or
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`phonorecord.” 17 U.S.C. § 109(a). The first sale doctrine thus significantly limits the exclusive
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`distribution right of the copyright owner “only to the first sale of the copyrighted work.” Quality
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`King Distributors, Inc. v. L’Anza Research Int’l, Inc., 523 U.S. 135, 141 (1998) (citing Bobbs-
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`Merrill Co. v. Struas, 210 U.S. 339, 349-50 (1908)). “[O]nce the copyright owner places a
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`copyrighted item into the stream of commerce by selling it, he has exhausted his exclusive statutory
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`right to control its distribution.” Id. at 152.
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`The first sale doctrine has two important limitations, however. First, the doctrine applies
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`only to the owner of a particular copy, not to a mere licensee authorized only to possess and use the
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`copy. See 17 U.S.C. § 109(d); Vernor v. Autodesk, Inc., 621 F.3d 1102, 1107 (9th Cir. 2010).
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`Whether a transferee obtains ownership or only a license is an issue of law. See Krause v.
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`Titleserv, Inc., 402 F.3d 119, 124 (2d Cir. 2005). “[W]here a transferee receives a particular copy
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`of a copyrighted work pursuant to a written agreement, we consider all of the provisions of the
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`agreement to determine whether the transferee became an owner of the copy or received a license.”
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`Vernor, 621 F.3d at 1109. “[A] software user is a licensee rather than an owner of a copy where the
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`copyright owner (1) specifies that the user is granted a license; (2) significantly restricts the user’s
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`ability to transfer the software; and (3) imposes notable use restrictions.” Id. at 1111.
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`The second limitation is that the first sale doctrine applies only to copies that were lawfully
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`made or sold in the United States, not to foreign-made copies not authorized for sale within the
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`United States. See Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982, 985-86 (9th Cir. 2008).
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`Thus, the first sale doctrine protects domestic resales of U.S.-made copies, regardless of any
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`restrictions on domestic distribution—e.g., even if the goods were authorized only for foreign
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`distribution, sold abroad, and re-imported without permission. See id. at 987 (discussing Quality
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`King’s application of the doctrine to unauthorized “round trip” importation). And the first sale
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`doctrine protects resales of copies that were not made in the United States but subject to a voluntary
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`or authorized domestic first sale. See id. at 986 (citing Parfums Givenchy, Inc. v. Drug Emporium,
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`Inc., 38 F.3d 477, 481 (9th Cir. 1994), and Denbicare U.S.A. Inc. v. Toys “R” Us, Inc., 84 F.3d
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`1143, 1149-50 (9th Cir. 1996)). The doctrine does not apply to foreign-made copies that are
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`authorized only for sale abroad and imported without permission. See id. at 985-86, 989-90 (citing
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`BMG Music v. Perez, 952 F.2d 318, 319 (9th Cir. 1991)).
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`The Ninth Circuit has not expressly addressed the issue of who bears the burden of proof
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`regarding the first sale doctrine in civil actions for copyright infringement. The legislative history
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`suggests that the defendant bears the burden of at least proving “whether a particular copy was
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`lawfully made or acquired.” H.R. Rep. No. 94-1476, at 81 (1976), reprinted in 1976 U.S.C.C.A.N.
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`5659, 5695 (“Historical Note to § 109"), cited in Am. Int’l Pictures, Inc. v. Foreman, 576 F.2d 661,
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`663 n.1 (5th Cir. 1978), and Microsoft Corp. v. Harmony Computers & Elecs., Inc., 846 F. Supp.
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`208, 212 (E.D.N.Y. 1994). This is based on “the established legal principle that the burden of
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`proof should not be placed upon a litigant to establish facts particularly within the knowledge of his
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`adversary.” Historical Note to § 109. Accordingly, because the defendant “clearly has the
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`particular knowledge of how possession of the particular copy was acquired,” he “should have the
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`burden of providing this evidence to the court.” Id. Nonetheless, a defendant’s production of
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`evidence that the plaintiff made first sales of the copies in question, or that the defendant acquired
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`his copies from a legitimate source, can shift the burden of production to the plaintiff to trace title
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`backward to an illegitimate acquisition. Foreman, 576 F.2d at 665.
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`Here, it is uncontroverted that Defendants lawfully purchased genuine copies of Adobe
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`software from third-party suppliers before reselling those copies. This case is therefore unlike
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`Foreman, in which the defendant failed to produce any evidence as to how its particular copies
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`were made or acquired. 576 F.2d at 664. Here, Defendants have identified their suppliers and
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`Adobe makes no contention that Defendants’ acquisition of any copies of Adobe software was
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`unlawful or that the copies were anything other than genuine Adobe-manufactured products. Thus,
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`the uncontroverted evidence before the court is that the particular copies at issue were lawfully
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`“made [and] acquired.” Historical Note § 109. The only issue before the court is whether
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`Defendants’ distribution of the particular copies of Adobe software that it lawfully purchased was
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`not protected by the first sale doctrine under either the licensing or origin exceptions.
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`///
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`Adobe principally contends that none of the copies that Defendants sold are protected by the
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`first sale doctrine because it only licenses and does not sell copies of its software. As Defendants
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`contend, however, there is no admissible evidence in the record to support Adobe’s argument. Any
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`such restrictions on alienation would be set forth in a written licensing agreement, yet Adobe is
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`precluded in this litigation from introducing such agreements due to its failure to produce them in
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`discovery. The production of the licenses is necessary for this court to determine whether Adobe as
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`the copyright holder has included the requisite specifications and restrictions on transfer and use
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`such that the transferee has been granted only a license. In the absence of those licenses, the
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`analysis required by Vernor—considering “all the provisions of the agreement” to determine
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`whether the copyright owner has specified that the user is only granted a license and imposed
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`significant restrictions on transfer and use—is impossible. See Vernor, 621 F.3d at 1109, 1111; see
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`also id. at 1113 (holding “that a software customer bound by a restrictive license agreement may be
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`a licensee of a copy not entitled to the first sale doctrine”) (emphasis added).
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`The burden is properly placed on Adobe to produce evidence that it merely licenses and
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`does not sell the genuine software products that Defendants lawfully acquired and resold. The
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`Vernor requirements are all phrased in the affirmative. A transferee is a mere licensee rather than
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`an owner only if the copyright holder affirmatively “(1) specifies that the user is granted a license;
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`(2) significantly restricts the user’s ability to transfer the software; and (3) imposes notable use
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`restrictions.” Id. at 1111 (emphasis added); see also id. at 1112 (concluding that transferees were
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`licensees rather than owners “because Autodesk reserved title . . . and imposed significant transfer
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`and use restrictions”). Furthermore, just as the burden may be properly placed upon the defendant
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`regarding the lawfulness of its acquisition of a copyrighted work because how it acquired
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`possession is particularly within the defendant’s knowledge, see Historical Note to § 109, the
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`copyright holder should bear the burden of producing evidence to establish that it retains title in and
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`only licenses the copies it sells because any restrictions on ownership, transfer and use
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`affirmatively imposed by the copyright holder in its dealings with its distributors are particularly
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 11 of 21
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`within the copyright holder’s knowledge. Indeed, Adobe agrees that “‘Adobe and Adobe alone
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`knows the parties with whom it contracts, and . . . the terms of those contracts.’” (Adobe’s Reply
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`(#129), p. 6:21-22 (quoting Defendants’ Opposition (#113), p. 17:12-13).) It therefore should bear
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`the burden of producing evidence that its sales to distributors and users were governed by
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`restrictive licensing agreements making them and subsequent transferees mere licensees rather than
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`owners.
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`Adobe also invokes the second limitation on the first sale doctrine, contending that the
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`doctrine is inapplicable because “[a]t least some of Defendants [sic] products were not made in the
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`United States and were never meant for the United States market.” (Adobe’s Motion (#87), pp. 10-
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`11.) The court rejects this argument as well. The argument as presented by Adobe is expressly
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`limited in application to only “some” of the copies sold by Defendants. (Id.) And Adobe fails to
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`specify which copies of its software that Defendants sold were not made in the United States and
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`not authorized for import. “In copyright law, . . . each copyrighted item is unique[,]” and “for
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`purposes of the first sale doctrine, each copy is unique.” Foreman, 576 F.2d at 666. Only a single
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`copy sold by the Defendants is specifically addressed—a copy sold to one Shelley Bernd. But as to
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`that copy, Adobe’s evidence addresses only where the software was authorized for distribution, not
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`where it was made. Such evidence is insufficient to defeat application of the first sale doctrine,
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`which applies even to unauthorized “round trip” imports. See Omega, 541 F.3d at 987.
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`For these reasons, the court finds that on this evidentiary record there is no genuine issue of
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`material fact on the applicability of the first sale doctrine to Defendants’ resales of Adobe software
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`for purposes of Adobe’s claim of copyright infringement. Defendants are therefore entitled to
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`summary judgment on that claim.
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`B. Trademark Infringement
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`Adobe also moves for summary adjudication as to liability on its claim for trademark
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`infringement. Adobe contends that it owns valid, registered trademarks and that Defendants’ use of
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`Adobe’s trademarks in the course of advertising and selling Adobe software has caused actual
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 12 of 21
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`confusion, or at least a likelihood of confusion under the Sleekcraft balancing test. See 15 U.S.C.
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`4
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`§ 1114(1); AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-54 (9th Cir. 1979).
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`Defendants cross-move for summary judgment. Defendants contend that Adobe has failed
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`to produce any admissible evidence to establish trademark ownership because they failed to timely
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`produce valid trademark certificates. Defendants also contend that the nominative fair use doctrine
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`applies here because any Adobe trademarks were used only to refer to the trademarked goods and
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`Adobe cannot show consumer confusion under the New Kids three-factor test. New Kids on the
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`Block v. News Am. Publishing, Inc., 971 F.2d 302, 308 (9th Cir. 1992).
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`Section 32 of the Lanham Act prohibits any person, without the consent of the registered
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`owner of a trademark, from using “any reproduction, counterfeit, copy, or colorable imitation of a
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`registered mark in connection with the sale, offering for sale, distribution, or advertising of any
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`goods or services” in such a way that “is likely to cause confusion, or to cause mistake, or to
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`deceive.” 15 U.S.C. § 1114. To prevail on such a trademark infringement claim, the registrant
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`must show (1) ownership of a valid, protectable trademark, and (2) that the defendant’s use of the
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`mark is likely to cause confusion. See Applied Information Sciences Corp. v. eBay, Inc., 511 F.3d
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`966, 969 (9th Cir. 2007).
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`Although likelihood of confusion is ordinarily assessed under the Sleekcraft eight-factor
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`balancing test, “the Sleekcraft analysis doesn’t apply where a defendant uses the mark to refer to
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`Adobe also moves for summary adjudication on a claim of false advertising under
`section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). The court summarily rejects this argument,
`however, because the claim appears nowhere in the complaint. Adobe’s complaint makes no mention
`of false advertising. Nor do its allegations suggest such a claim. In Adobe’s motion for summary
`judgment, the claim is predicated on Defendants’ alleged misrepresentations regarding the features or
`versions of Adobe software. (See Motion (#87), pp. 16-17.) Adobe included no such allegations in
`the complaint, instead predicating its trademark infringement claim solely upon Defendants’ alleged
`“use [of] images confusingly similar or identical to Adobe’s Trademarks” and upon alleged confusion
`or deception “concerning . . . source and sponsorship” or “affiliation, sponsorship, endorsement or
`approval.” (Complaint (#32-2), ¶¶ 17-18, 25.) Adobe’s motion for summary adjudication shall
`therefore be denied as to this non-existent claim.
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 13 of 21
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`the trademarked good itself.” Toyota Motor Sales, U.S.A., Inc. v. Tabari, 610 F.3d 1171, 1175 (9th
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`Cir. 2010). “[S]uch use of the trademark is . . . nominative fair use,” which is “by definition, not
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`infringement.” Id. In nominative fair use cases, the court applies a different test to evaluate the
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`likelihood of confusion, which “replaces” the Sleekraft analysis. Id. at 1175-76, 1182. The court
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`asks whether (1) the product in question is “readily identifiable without use of the trademark,” (2)
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`the defendant used more of the mark than is “reasonably necessary” to identify the product, and (3)
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`the defendant falsely suggested sponsorship or endorsement by the trademark holder. New Kids,
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`971 F.2d at 308. In performing this analysis, the court’s focus is on the “reasonably prudent
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`consumer in the marketplace,” which in this case is “a reasonably prudent consumer accustomed to
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`shopping online.” Toyota, 610 F.3d at 1176 (internal quotation marks and citation omitted).
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`A defendant asserting nominative fair use as a defense “need only show that it used the
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`mark to refer to the trademarked good” in order to shift the burden to the plaintiff to show a
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`likelihood of confusion. Id. at 1183. Then, the trademark holder “must bear the burden of
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`establishing that the [defendant’s] use of [its] mark was not nominative fair use.” Id. at 1182. This
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`is because “[a] finding of nominative fair use is a finding that the plaintiff has failed to show a
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`likelihood of confusion as to sponsorship or endorsement,” and the burden of proving likelihood of
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`infringement is always on the party charging infringement. Id. at 1182-83 (citing KP Permanent
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`Make-Up, Inc. v. Lasting Impression I, Inc., 543 U.S. 111, 118 (2004)).
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`Here, even assuming arguendo that Adobe has produced admissible evidence of valid
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`trademarks, the court finds that Adobe has failed to produce evidence creating a genuine issue of
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`material fact as to nominative fair use. The uncontroverted evidence is that Defendants used
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`Adobe’s marks to refer to the Adobe software that it advertised and sold on the website
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`softwaresurplus.com, thus placing the burden on Adobe to establish likelihood of confusion by
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`negating nominative fair use, which it has failed to do.
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`Adobe’s contention that Defendants could have identified the product using only some of its
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`marks and without using others is unavailing. The use of a trademark need not be absolutely
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`Case 2:10-cv-00422-LRH-GWF Document 166 Filed 09/10/12 Page 14 of 21
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`necessary. Toyota, 610 F.3d at 1180 (declining to adopt a “draconian definition of necessity”). It is
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`sufficient that the defendants “needed to communicate” that they were offering Adobe software for
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`sale and that using Adobe’s marks accomplished this goal. Toyota, 610 F.3d at 1180. Nor