Adobe System Inc. v. Blue Source Group, Inc.

125 F. Supp. 3d 945, 2015 U.S. Dist. LEXIS 115686, 2015 WL 5118509
CourtDistrict Court, N.D. California
DecidedAugust 31, 2015
DocketCase No. 14-CV-02147-LHK
StatusPublished
Cited by62 cases

This text of 125 F. Supp. 3d 945 (Adobe System Inc. v. Blue Source Group, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Adobe System Inc. v. Blue Source Group, Inc., 125 F. Supp. 3d 945, 2015 U.S. Dist. LEXIS 115686, 2015 WL 5118509 (N.D. Cal. 2015).

Opinion

ORDER DENYING MOTION TO DISMISS

LUCY H. KOH, United States District Judge

Plaintiff Adobe Systems Inc. (“Adobe”) brings the instant lawsuit against Defendant Blue Source Group, Inc. (“Blue Source”), alleging causes of action for trademark infringement under 15 U.S.C. § 1114; false designation of origin, false or misleading advertising, and unfair eompetition, all in violation of 15 U.S.C. § 1125(a); trademark dilution in violation of 15 U.S.C. § 1125(c); copyright infringement under 17 U.S.C. § 501(a); and violation of the unlawful, unfair, and fraudulent prongs of California’s Unfair Competition Law, Business and Professions Code § 17200 et seq. (“UCL”). Second Amended Complaint, ECF No. 42-1 (“SAC”), at 1. Before the Court is Blue Source’s motion to dismiss Adobe’s Second Amended Complaint in its entirety. ECF No. 64 (“Motion”). Adobe opposes the Motion. ECF No. 65 (“Opposition”). Pursuant to Civil Local Rule 7-l(b), the Court finds this matter appropriate for resolution without oral argument, and hereby VACATES the hearing on this matter currently scheduled for September 17, 2015, at 1:30 p.m. The case management conference also scheduled for September 17, 2015 at 1:30 p.m. remains as set. Having considered the parties’ submissions, the relevant law, and the record in this case, the Court DENIES Blue Source’s Motion, for the reasons stated below.

I. BACKGROUND

A. Factual Background

1. The Parties and Adobe’s Trademarks and Copyrights

Adobe is a Delaware corporation with its principal place of business in San Jose, California, and is a maker of computer software. SAC ¶ 1. According to the Second Amended Complaint, Blue Source is a corporation organized under the laws of Maryland, with its principal place of business in Olney, Maryland.1 Id. ¶ 10.

[954]*954According to the Second Amended Complaint, Adobe is “a. global leader in developing and distributing innovative computer software,” and Adobe-branded software is well-known to consumers, distributors, and other purchasers. Id ¶¶ 23-25. Adobe has secured trademark registrations from the U.S. Patent and Trademark Office for various marks, including Adobe, Acrobat, Adobe Premiere, After Effects, Captivate, Creative Suite, Dreamweaver, Fireworks, Flash, Flash Builder, Flash Catalyst, Illustrator, Indesign, Lightroom, and Photoshop (collectively,, “Adobe-Branded Software”). Id ¶ 28. Adobe has also secured copyright registrations from the U.S. Copyright Office for various copyrights, including for versions of Adobe-Branded Software. Id ¶ 29. Adobe has expended “substantial time, money and effort” to build and develop consumer recognition, awareness, and goodwill .in Adobe-Branded, Software. Id ¶24. . As a result of Adobe’s efforts, the widespread use of Adobe’s software, and the quality of Adobe’s products, “[cjonsumers, purchasers and members of the public have become familiar with [Adobe’s] software and other products and services and have come to recognize Adobe-Branded Software and the associated marks thereto and associate them exclusively with [Adobe].” Id ¶ 26.

Adobe imposes restrictions on the distribution of all its software, including Adobe-Branded Software. Id ¶ 30. According to Adobe, “[e]very piece of 'Adobe-Branded Software is licensed” pursuant to a Software License Agreement (“SLA”), and every piece of Adobe-Branded Software is subject to restrictions on use, location of distribution, transfer, and in some circumstances who is qualified to obtain the product. Id For instance, Original Equipment Manufacturer (“OEM”) versions of Adobe-Branded Software are intended to be distributed only, with approved hardware components as a bundle, and OEM software may not be unbundled or resold without violating the SLA. Id ¶ 31. Likewise, Adobe-Branded Software intended for academic or educational use (“EDU Software” or “EDU”) is intended only for buyers associated with educational institutions. Id ¶ 32. Therefore, EDÜ Software may only be distributed by certain distributors to customers who provide proof of qualification, and EDU Software may not be resold without violating the SLA. Id Adobe also alleges that it distributes versions of its software via Electronic Software Download (“ESD”). Id ¶ 34. A reseller must be specifically authorized by Adobe to sell ESD versions of Adobe’s software, or else such distribution violates the SLA. Id

2. Prior Litigation

The instant litigation stems from a distribution contract entered into between Adobe and former Defendants SoftwareMedia.com, Inc., a company with its principal place of business in Salt Lake City, Utah, and Adam Childers, the president of SoftwareMedia.com, Inc. (collectively, “SoftwareMedia Defendants”). Id ¶¶ 2; 7, 36. At some point prior to the instant litigation, Adobe and the SoftwareMedia Defendants entered into an Adobe Partner Connection Program Reseller Agreement (“APCPRA”). Id ¶ 36.

On August 13, 2010, Adobe filed a lawsuit against the SoftwareMedia Defendants in the Northern District of California before U.S. District Judge Jeffrey White, Adobe System Inc. v. Childers et al., Case No. 3:10-CV-03571-JSW (“Adobe [955]*955I ”). Id. ¶ 38. In Adobe I, Adobe alleged that the SoftwareMedia Defendants breached the APCPRA by “offering for sale, selling, importing and distributing unauthorized foreign-made and/or EDU copes of Adobe-Branded Software.” Id. On July 29, 2011, Adobe and the SoftwareMedia Defendants entered into a release and settlement agreement (“Adobe I Settlement”), which was signed on October 6, 2011. Id. ¶ 39. Pursuant to the Adobe I Settlement, the SoftwareMedia Defendants agreed not to infringe Adobe’s trademarks and copyrights. Id. ¶ 40. Adobe and the SoftwareMedia Defendants also stipulated to a permanent injunction that restrained and enjoined the SoftwareMedia Defendants from infringing Adobe’s trademarks and copyrights, including via distribution of OEM, EDU, or foreign-made Adobe-Branded Software outside of the scope of Adobe’s licensing restrictions. Id. On October 14, 2011, Judge White dismissed Adobe I with prejudice. Id.

B. Procedural Background

1. Adobe Files the Instant Litigation, and the SoftwareMedia Defendants File a Third-Party Complaint Against, Among Others, Blue Source

On May 9, 2014, Adobe filed the instant litigation against the SoftwareMedia Defendants only. See ECF No.- 1 (“Compl.”). In the original Complaint, Adobe alleged that the SoftwareMedia Defendants again breached the terms of the APCPRA by “ordering] Adobe Creative Suite software products from unauthorized distributors” and “offering for sale, selling, and distributing, licenses for counterfeit and/or unauthorized education software to non-education end users.” Id. ¶31. Adobe alleged causes of action for trademark infringement; false designation of origin, false or misleading advertising, and unfair competition; trademark dilution; copyright infringement; violation of the UCL; and breach of contract. Id.

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125 F. Supp. 3d 945, 2015 U.S. Dist. LEXIS 115686, 2015 WL 5118509, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adobe-system-inc-v-blue-source-group-inc-cand-2015.