Adobe Sys. Inc. v. Christenson

• Decision Date: 10 September 2012
• Docket Number: No. 2:10–CV–00422–LRH–GWF.,2:10–CV–00422–LRH–GWF.
• Citation: 891 F.Supp.2d 1194
• Parties: ADOBE SYSTEMS INCORPORATED, Plaintiff, v. Joshua CHRISTENSON, an individual and d/b/a www. software surplus. com; Software Surplus Inc.; and Does 1–10, inclusive, Defendants. And Related Claims.
• Court: U.S. District Court — District of Nevada

891 F.Supp.2d 1194

ADOBE SYSTEMS INCORPORATED, Plaintiff,

v. Joshua CHRISTENSON, an individual and d/b/a www. software surplus. com; Software Surplus Inc.; and Does 1–10, inclusive, Defendants.And Related Claims.

No. 2:10–CV–00422–LRH–GWF.

United States District Court, D. Nevada.

Sept. 10, 2012.

Annie S. Wang, J. Andrew Coombs, J. Andrew Coombs, A Professional Corporation, Glendale, CA, Bryce K. Earl, Santoro, Driggs, Walch, Kearney, Johnson & Thompson, James D. Boyle, Kimberly J. Cooper, Cotton, Driggs, Walch, Holley, Woloson & Thompson, Las Vegas, NV, for Plaintiff.

Lisa A. Rasmussen, Law Office of Lisa Rasmussen, Las Vegas, NV, J. Andrew Coombs, J. Andrew Coombs, A P.C., Glendale, CA, for Defendants.

ORDER

LARRY R. HICKS, District Judge.

This matter is before the court on cross-motions for summary adjudication and summary judgment and a related motion to strike.

First, Plaintiff and Counter–Defendant Adobe Systems Incorporated (“Adobe”) and Third–Party Defendant Software Publishers Association d/b/a Software Information Industry Association (“SIIA”) filed a Motion for Partial Summary Judgment on Plaintiff's Claims and for Summary Judgment on Defendants' Counterclaims and Third–Party Claims (# 87 ¹). Defendants Joshua Christenson and Software Surplus, Inc. (collectively, “Defendants”) filed an opposition (# 113), and Adobe and SIIA replied (# 129).

Second, Defendants filed a Motion for Summary Judgment (# 88) on Plaintiff's claims. Adobe filed an opposition (# 98), and Defendants replied (# 124).

Finally, Defendants filed a Motion to Strike Precluded Documents and Related Factual Assertions and Argument (# 150). Adobe and SIIA filed a joint opposition (# 151), and Defendants replied (# 153).

I. Facts and Procedural History

This is an action for copyright and trademark infringement involving resales of so-called “grey market” computer software. Plaintiff Adobe Systems Incorporated is a prominent developer and distributor of computer software, including such titles as Acrobat, Creative Suite, Dreamweaver, Flash, Illustrator, PageMaker, Photoshop, and Shockwave. (Complaint (# 32–2), ¶ 8.) Adobe alleges that it owns exclusive rights under the Copyright Act to reproduce and distribute copies of its software in the United States. ( Id.) Adobe further alleges that the software products it manufactures and sells bear registered trademarks, including ADOBE, ACROBAT, CREATIVE SUITE, DREAMWEAVER, FLASH, ILLUSTRATOR, MACROMEDIA, PAGEMAKER, PHOTOSHOP, POSTSCRIPT, READER, and SHOCKWAVE. ( Id. at ¶ 9.)

Defendants are Joshua Christenson and his now-defunct corporation, Software Surplus, Inc., which was in the business of selling software products over the Internet through its eponymous website www.software surplus.com. Neither defendant is an authorized distributor of Adobe software. Instead, Software Surplus purchased Adobe software from third parties and advertised and sold it through its website without Adobe's permission.

On October 30, 2009, Adobe filed this action alleging two causes of action for copyright and trademark infringement under the Copyright Act of 1976, 17 U.S.C. §§ 101, et seq., and the Lanham Act, 15 U.S.C. § 1051, et seq. (Complaint (# 32–2).) ² Adobe alleges that Defendants have made and distributed copies of Adobe's software without authorization or license, in violation of Adobe's exclusive copyrights of reproduction and distribution. ( Id. at ¶ 16.) Adobe further alleges that Defendants' use of Adobe's trademarks in advertising and selling Adobe software has “confused and deceived ... the consuming public concerning the source and sponsorship of the unauthorized copies of the Adobe Software offered, sold and distributed by Defendants.” ( Id. at ¶ 18; see also id. ¶¶ 25–26.)

On May 4, 2010, Defendants filed an Answer, Counterclaim, and Third–Party Complaint (# 39), alleging counterclaims and third-party claims against Adobe and third-party defendant Software Publishers Association d/b/a Software & Information Industry Association (“SIIA”), the self-described “principal trade association for the software and digital content industry” (# 87–6, p. 9). Defendants' claims include (1) defamation and defamation per se, (2) false light, (3) business disparagement, (4) aiding and abetting, (5) civil conspiracy, and (6) alter ego or instrumentality. The claims are based on a press-release issued by SIIA on November 12, 2009. Among other allegedly defamatory statements, the press release announced the filing of six “software piracy” lawsuits on Adobe's behalf against various online sellers of Adobe software, including Joshua Christensen and Softwaresurplus.com, and accused them of being “Software Pirates” and “Fraudulent Online Venders” who “swindled both consumers and Adobe by illegally copying or selling” Adobe's software and “knowingly engag[ed] in copyright infringement through the fraudulent sales of Adobe software.” (Doc. # 87–6, p. 8.)

Following discovery, on February 28, 2011, the parties simultaneously filed the instant cross-motions for summary adjudication and summary judgment. Adobe and SIIA jointly move for partial summary judgment as to liability (but not damages) on Adobe's copyright and trademark claims against Defendants and for summary judgment on all of Defendants' counterclaims and third-party claims (# 87). Defendants move for summary judgment on Adobe's copyright and trademark claims, but not on their counterclaims and third-party claims (# 88).

After the summary judgment motions were fully briefed, the Magistrate Judge entered two orders significantly impacting the evidentiary record. On May 31, 2011, the Magistrate Judge entered an order (# 144) granting Defendants' Motion to Preclude Adobe or SIIA's Use of or Reliance on Contracts, Licenses or Agreements (# 127). Finding that Adobe had “failed to identify contracts or license agreements in its Rule 26(a) disclosures,” the court ordered that Adobe “is precluded from using or introducing license agreements in support of its motion for summary judgment or at trial” but “is not, however, precluded from using contracts, license agreements or other documents produced by Defendants in Defendants' disclosures or responses to discovery requests.” (Order (# 144), pp. 1–2.) Then, on August 16, 2011, 2011 WL 3585953, the Magistrate Judge entered a second order (# 149) denying Adobe's motion for clarification or reconsideration (# 147). Rejecting Adobe's attempts to blunt the impact of the court's discovery sanction, the Magistrate Judge clarified, “The ability of Plaintiff to use Defendants' documents is limited to those documents it actually produced. The Court never intended to permit Plaintiff to use other documents that are ‘identified’ or ‘referenced’ in Defendants' disclosures but were not actually produced.” (Order (# 149), p. 4.) The Magistrate Judge also rebuffed Adobe's arguments regarding the limited use of precluded documents for illustrative purposes, finding it “unnecessary to include language in the order instructing the district judge on the parameters of his discretion regarding the use of precluded documents for illustrative as opposed to evidentiary purposes.” ( Id. at 3.)

Following the Magistrate Judge's orders, on August 23, 2011, Defendants filed the instant Motion to Strike Precluded Documents and Related Factual Assertions and Argument (# 150). As the motion to strike is targeted at Adobe and SIIA's summary judgment briefs and exhibits, the court will address that motion before proceeding to the parties' cross-motions for summary judgment.

II. Defendants' Motion to Strike

It is well-established that a district court's inherent power to control its docket and to enforce its rules “includes the power to strike items from the docket as a sanction for litigation conduct.” Ready Transp., Inc. v. AAR Mfg., Inc., 627 F.3d 402, 404 (9th Cir.2010). Such power is indispensable to the court's ability to enforce its orders, manage its docket, and regulate insubordinate attorney conduct. See Mazzeo v. Gibbons, 2010 WL 3910072, *3 (D.Nev.2010).

In seeking to enforce the Magistrate Judge's order that Adobe “is precluded from using or introducing license agreements in support of its motion for summary judgment or at trial,” Defendants move to strike from Adobe and SIIA's summary judgment briefs and exhibits all documents covered by the order, as well as all factual assertions, references and arguments that relate to Adobe's licensing agreements with its distributors and users. The specific documents and passages sought to be stricken are identified in detail in Defendants' motion and reproduced in an exhibit to their reply brief. ( See Motion (# 150), pp. 6–7; Reply (# 153), Rasmussen Decl.)

Adobe and SIIA's opposition does not specifically address any of the documents or passages identified in Defendants' motion. Instead, they argue generally that the Magistrate Judge's discovery orders did not preclude testimony from their declarants, who were identified in disclosures and may testify as competent witnesses based on their personal knowledge. SeeFed.R.Evid. 601–602. It is also argued that even if the precluded licenses may not be used to establish the truth of their contents, the documents may be used for limited or illustrative purposes, including as exemplars to illustrate the testimony of witnesses concerning Adobe's licensing agreements.

The court finds that Adobe and SIIA's arguments miss the mark. As will be seen, whether and on what terms Adobe licenses and restricts the distribution and use of its software products is central to the parties' summary judgment motions. And under the best evidence rule, which Adobe and SIIA fail to address, the licenses themselves are required to prove their terms and, by extension, their legal effect. SeeFed.R.Evid. 1002. It is therefore besidethe point that exhibits omitted from pretrial disclosures might be admissible at trial, not to establish the truth of their contents, but...