Adobe Systems Inc. v. A & S Electronics, Inc.

153 F. Supp. 3d 1136, 2015 U.S. Dist. LEXIS 173176, 2015 WL 9478236
CourtDistrict Court, N.D. California
DecidedDecember 29, 2015
DocketCase No: C 15-2288 SBA
StatusPublished
Cited by8 cases

This text of 153 F. Supp. 3d 1136 (Adobe Systems Inc. v. A & S Electronics, 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 Systems Inc. v. A & S Electronics, Inc., 153 F. Supp. 3d 1136, 2015 U.S. Dist. LEXIS 173176, 2015 WL 9478236 (N.D. Cal. 2015).

Opinion

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS ALL CLAIMS; DENYING ALTERNATIVE MOTION FOR A MORE DEFINITE STATEMENT

SAUNDRA BROWN ARMSTRONG, United States District Judge

Plaintiff Adobe Systems Inc. (“Plaintiff’ or “Adobe”) brings the instant action against A&S Electronics,. Inc. (“A&S”), and its owner, Alan Z. Lin (“Lin”). The First Amended Complaint (“FAC”) alleges claims for trademark infringement, false designation of origin and trademark dilution under the Lanham Act; copyright infringement; and breach of contract. The parties are presently before the Court on Defendants’ Motion to Dismiss All Claims, and in the Alternative, for A More Definite Statement. Dkt. 53. Having read and considered the papers filed in connection with these matters and being fully informed, the Court hereby GRANTS IN PART and DENIES IN PART the motion to dismiss, and DENIES the alternative motion for a more definite statement. The Court GRANTS Adobe leave to amend to file a Second Amended Complaint. The Court, in its discretion, finds this matter suitable for resolution without oral argument. See Fed. R. Civ. P. 78(b); N.D. Cal. Civ. L.R. 7-1(b).

I. BACKGROUND

A. Factual Summary

Adobe is a software company that produces and distributes Adobe Acrobat-branded software. FAC ¶¶ 21-23, Dkt. 41. The ADOBE® and ACROBAT® marks are registered with the Patent and Trademark Office (“PTO”). Id. ¶¶ 21-22, 38. Defendant A&S is a corporation doing business as TRUSTprice, which sells various software products, including Adobe-branded products, through its website, www. [1140]*1140TRUSTprice.com. Id. ¶ 30. Defendant Lin owns A&S and is alleged to be its alter ego. Id. ¶¶ 4-5.

On or about April 17, 2014, A&S and Adobe entered into an Adobe Partner Connection Program Reseller Agreement (“Reseller Agreement”), pursuant to which A&S became an authorized distributor of Adobe software products. Id. ¶ 32 & Ex. C. Under the agreement, A&S is permitted to sell Original Equipment Manufacturer (“OEM”) versions of Adobe software, provided that it is distributed as a bundle with approved hardware components. Id. ¶ 33. OEM software may not be unbundled and distributed separately from the specific hardware components for which they were intended. Id. OEM software is not the same as full retail versions of the same type of Adobe branded software, as it “usually” has “less functionality and no technical support.” Id. According to Adobe, A&S secured the Reseller Agreement for the purpose of leading consumers to believe that it is a “legitimate” reseller, despite the fact that its conduct violated such agreement. Id. ¶ 41. On information and belief, Adobe claims that A&S purchased copies of Adobe-branded software from “unauthorized sources” to resell the same in the United States. Id. ¶ 42.

Adobe regularly conducts investigations to identify sales of unauthorized, pirated and counterfeit versions of its software. Id. ¶ 30. On May 28, 2014, Adobe’s investigator purchased a copy of Adobe Acrobat X Standard v.10 for Windows — 1 User / 2 PCs (License Key Card only — No media) (“Adobe Acrobat X Standard”) from the TRUSTprice website. Id ¶ 37. The shipment from TRUSTprice included a card displaying a serial number license key (“serial license key”), which is necessary to unlock and operate the software. Id. ¶ 38. The card bore the ADOBE® mark. Id. However, the card “did not originate with [Adobe]” and appears to be “counterfeit.” Id. Adobe claims that the serial license key corresponded to an OEM product which was not authorized for resale separate from physical media. Id.

B. Procedural History

On April 21, 2015, Adobe filed the in: stant action against A&S and Lin. The original Complaint alleged seven claims, styled as follows: (1) Federal Trademark Infringeinent, 15 U.S.C. § 1114; (2) False Designation of Origin/False or Misleading Advertising /Unfair Competition, 15 U.S.C. § 1125(a); (3) Trademark Dilution, 15 U.S.C. § 1125(c); (4) Federal Copyright Infringement, 17 U.S.C. § 501(a); (5) Unlawful/Unfair /Fraudulent Business Practices, Cal. Bus. & Prof. Code § 17200; (6) Breach of Contract; and (7) Digital Millennium Copyright Act (“DMCA”) Violation, 17 U.S.C. § 1201. In response to the Complaint, Defendants filed a motion to dismiss all claims, along with a motion to strike Exhibits A and B to the Complaint. Those exhibits purported to list hundreds of trademark and copyright registrations issued to ADOBE by the Patent and Trademark Office which were potentially violated by Defendants.

On August 19, 2015, the Court partially granted Defendants’ motion, dismissing: (1) the claims for trademark infringement, false designation of origin, trademark dilution, and violation of the UCL, with leave to amend; and (2) the DMCA claim without leave to amend. The Court denied the motion to dismiss as to Plaintiffs claims for copyright infringement and breach of contract. The Court denied Defendants’ motion to strike, but ordered Adobe to file an amended complaint listing the trademarks and copyrights it has a good faith basis for claiming that Defendants infringed.

On September 2, 2015, Adobe filed its First Amended Complaint (“FAC”), which [1141]*1141alleges the following five claims: (1) Federal Trademark Infringement, 15 U.S.C. § 1114; (2) False Designation of Origin/False or Misleading Advertising /Unfair Competition, 15 U.S.C. § 1125(a); (3) Trademark Dilution, 15 U.S.C. § 1125(c); (4) Federal Copyright Infringement, 17 U.S.C. § 501(a); and (5) Breach of Contract. Dkt. 41; In response to the FAC, Defendants have filed a motion to dismiss all claims for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), or alternatively, for a more definite statement under Rule 12(e). Dkt. 53. The matter has been fully briefed and is ripe for adjudication.

II. LEGAL STANDARD

Rule 12(b)(6) “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir.2001). “Dismissal under Rule 12(b)(6) is proper when the complaint either (1) lacks a cognizable legal theory or (2) fails to allege sufficient facts to support a cognizable legal theory.” Somers v. Apple, Inc., 729 F.3d 953, 959 (9th Cir.2013).

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153 F. Supp. 3d 1136, 2015 U.S. Dist. LEXIS 173176, 2015 WL 9478236, Counsel Stack Legal Research, https://law.counselstack.com/opinion/adobe-systems-inc-v-a-s-electronics-inc-cand-2015.