You're viewing Docket Item 184 from the case Adobe Systems Incorporated v. Christenson et al. View the full docket and case details.

Download this document:




Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 1 of 7



UNITED STATES DISTRICT COURT

DISTRICT OF NEVADA

ADOBE SYSTEMS INCORPORATED,

Plaintiff,

v.

JOSHUA CHRISTENSON, an individual and
d/b/a www.softwaresurplus.com; SOFTWARE
SURPLUS INC.; and Does 1-10, inclusive,

Defendants.


AND RELATED CLAIMS.


* * *
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

2:10-CV-00422-LRH-GWF

AMENDED ORDER

It having come to the court’s attention that in its prior order (doc. #175) upon Adobe’s

Motion to Certify and Stay the incorrect document number was cited in the court’s order on page 7,

line 7; it therefore now files this order to correct that document number from #168 to #167.

Before the court is plaintiff Adobe Systems Incorporated’s (“Adobe”) Motion to Enter final

Judgment or To Certify Order for Interlocutory Appeal and for Order Staying Action Pending

Appeal (“Motion to Certify and Stay”, #167 ). Defendants Joshua Christenson and Software

1

Surplus, Inc. have responded (#170) and Adobe has replied (#174).2

1

Refers to court’s docket number.

2

In their Response, Defendants have also moved the court to grant them attorney’s fees and to
require Adobe and a third-party defendant to retain separate counsel. In light of the disposition below,

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 2 of 7

I.

Facts and Procedural History

On September 10, 2012, the court granted summary judgment in favor of Defendants on

Adobe’s copyright and trademark infringement claims. Adobe alleges that Defendants have made

3

and distributed copies of Adobe’s software without authorization or license, in violation of Adobe’s

exclusive copyrights of reproduction and distribution. (Complaint (32-2) 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.)

Defendants counterclaimed against Adobe and a third-party defendant alleging (1)

4

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 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.” (#87-6, p. 8.)

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

these requests are denied as moot.

3

These are Adobe’s only properly pleaded claims.

4

The third-party defendant is 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). SIIA issued the press release on which Defendants base all their
claims.


2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 3 of 7

(#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, 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.)

These orders impacted the court’s determination of claims at summary judgment. In

particular, the court granted summary judgment to Defendants based largely on Adobe’s inability to

produce non-precluded evidence relating to its ownership of the relevant copyrights. (Order of

September 10, 2012 (#166), p. 10.) Adobe now seeks partial judgment under Rule 54(b) in order to

appeal the adverse evidentiary rulings. 5

II.

Legal Standard

Federal Rule of Civil Procedure 54(b) provides

When an action presents more than one claim for relief–whether as a claim, counterclaim,

5

Adobe advances many questions of law it intends to put before the appellate court, but it is
clear that the adverse evidentiary rulings form the backbone of Adobe’s appeal. (See Motion to Certify
and Stay (#167) at pp. 2:20-26, 3:12-14, 4:15-16, 6 n. 2.)


3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 4 of 7

crossclaim, or third-party claim–or when multiple parties are involved, the court may direct
entry of a final judgment as to one or more, but fewer than all, claims or parties only if the
court expressly determines that there is no just reason for delay.

Partial judgment under Rule 54(b) is appropriate where there are distinct and severable claims and

where immediate review of the adjudicated claims will not result in later duplicative proceedings at

the trial or appellate level. Wood v. GCC Bend, LLC, 422 F.3d 873, 878-89 (9th Cir. 2005). On the

other hand, partial judgment under Rule 54(b) is inappropriate in routine cases where the risk of

“multiplying the number of proceedings and of overcrowding the appellate docket” outweighs

“pressing needs . . . for an early judgment.” Morrison-Knudsen Co., Inc. v. Archer, 655 F.2d 962,

695 (9th Cir. 1981). These needs may include an “expeditious decision of the case.” See Core-Vent

Corp. v. Nobel Industries AB, 11 F.3d 1482, 1484 (9th Cir. 1993) (quotation marks and citations

omitted). Finally, where the Rule 54(b) claims overlap with non-adjudicated claims, courts have

upheld partial judgment when an “important and controlling legal issue . . . cuts across” both types

of claims. See Wood, 422 F.3d at 881; see also id. at n. 5 (collecting cases).6

III.

Discussion

Here, the claims on which Adobe seeks Rule 54(b) judgment overlap with the remaining

claims. However, “sound judicial administration” weighs in favor of entering final judgment on

Adobe’s copyright and trademark infringement claims. See Wood, 422 F.3d at 879. First, the

exclusion of Adobe’s licensing evidence “cuts across” both Adobe’s claims (which rely on this

evidence) and Defendants’ counterclaims (which rely on the exclusion to establish falsity). (Order

7

of September 10, 2012 (#166) at p. 5 (“[W]hether and on what terms Adobe licenses and restricts

6

While Adobe also moves the court to certify an interlocutory appeal under 28 U.S.C. §
1292(b), the claims Adobe wishes to appeal have reached the end of the line in this court. Therefore,
appeal following partial final judgment under Rule 54(b) is more appropriate. See James v. Price Stern
Sloan, Inc., 283 F.3d 1064, 1068 n. 6 (9th Cir. 2002) (distinguishing between Rule 54(b) and §
1292(b)).

7

The counterclaims that involve falsity are Defendants’ defamation, false light, and business

disparagement claims.


4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 5 of 7

the distribution and use of its software products is central to the parties’ summary judgment

motions.”).) Therefore, appellate review of this exclusion will aid “expeditious decision” of this

case by staving off a possible second trial on a host of related claims. See Texaco, 939 F.2d at 798. 8

Second, this is not a routine case. In Wood, the Ninth Circuit disapproved of Rule 54(b)

judgment in an age discrimination case where the “only legal right asserted [on appeal following

judgment under Rule 54(b)] is the right not to be discriminated against on account of age.” 422

F.3d at 882. Thus, the gravamen of the plaintiff’s case was the same as the basis for her Rule 54(b)

appeal. This made (or helped make) the appeal “routine.” Id. Here, however, the gravamen of

Adobe’s claims and the basis for its Rule 54(b) appeal are dissimilar: the claims assert copyright

and trademark infringement, but one basis of its Rule 54(b) appeal will be an evidentiary

exclusion. Another basis is the unsettled issue (in this Circuit) of who bears the burden of proof on

9

the first sale doctrine in civil actions for copyright infringement. (See Order of September 10, 2012

(#166) at p. 9.) Under this doctrine, a party may defend against a copyright infringement claim by

showing that he lawfully owned the copy he sold. See 17 U.S.C. § 109(a). The court placed the

burden of proving “whether a particular copy was lawfully made or acquired” on Defendants; it

placed the burden of proving that Adobe licenses but does not sell copies of the software

Defendants acquired on Adobe. (Id. at p. 9-10.) This unsettled legal issue–potentially dispositive on

Adobe’s copyright claim–takes this case out of the mine run.

///

8

Notably, the Wood court also considered Rule 54(b) judgment more appropriate where a
plaintiff’s claims had all been resolved at summary judgment (such that the only remaining claims were
counterclaims). See 422 F.3d at 882. That is the situation here.

9

Adobe’s trademark infringement claim fails even if the evidentiary determination is
overturned. (See Order of September 10, 2012 at p. 13 (deciding the trademark infringement claim
against Adobe even assuming it had provided valid trademark evidence).) However, efficiency weighs
in favor of allowing Adobe to appeal this claim alongside its copyright claim because this reduces the
likelihood of piecemeal appeals.


5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 6 of 7

Third, the Curtiss-Wright factors support Rule 54(b) judgment. In Curtiss-Wright Corp. v.

General Electric Co., 446 U.S. 1 (1980), the Supreme Court approved of the district court’s

consideration of a number of factors in certifying a Rule 54(b) judgment. 446 U.S. at 5-6. These

factors included “whether review of the adjudicated claims would be mooted by any future

developments in the case [and] whether an appellate court would have to decide the same issues

more than once even if there were subsequent appeals.” Wood, 422 F.3d at 878 n. 2 (discussing

Curtiss-Wright). Here, future developments would not moot a settled evidentiary determination,

and it is unlikely that an appellate court would revisit its decision on the evidentiary issue upon

subsequent appeal. Therefore, Rule 54(b) judgment is appropriate on Adobe’s claims.

10



Finally, a stay is appropriate pending Adobe’s appeal. In this Circuit, the standard for

granting a stay pending appeal is similar to the standard governing preliminary injunctions: the

court considers (1) the likelihood of success on the merits, (2) the likely irreparable injury to the

moving party if the stay is not granted, (3) a balance of hardships favoring the moving party, and

(4) advancement of the public interest. United States v. Lee, Goddard & Duffy, LLP, 553 F. Supp.

2d 1164, 1166-67 (C.D. Cal. 2008). This standard is a continuum, where, for example, a greater

advancement of the public interest can compensate for a relatively low likelihood of success.

CytoSport, Inc. v. Vital Pharmaceuticals, Inc., 617 F. Supp. 2d 1051, 1084 (E.D. Cal. 2009); see

also Winter v. Natural Resources Defense Council, 555 U.S. 7, 23 (2008) (balancing plaintiffs’

irreparable injury against the public interest). Here, while Adobe’s likelihood of success is low, the

possibility of injury, the balance of hardships, and the public interest in efficient disposition of

litigation favor granting a stay. As noted, Defendants’ counterclaims rely heavily on the evidentiary

ruling that Adobe seeks to appeal. Adobe’s chances of defending against these counterclaims on the

10

Defendants rely on Sure-Safe Industries, Inc. v. C & R Pier Manufacturing, 851 F. Supp.
1469 (S.D. Cal. 1993) for the proposition that Adobe must demonstrate immediate hardship to justify
a Rule 54(b) judgment. (Defendants’ Opposition (#170) at p. 5.) However, hardship is not a required
showing under Rule 54(b). See Texaco, 939 F.2d at 798 (rejecting an “overly restrictive” view of Rule
54(b) judgment.)


6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

Case 2:10-cv-00422-LRH -GWF Document 184 Filed 11/09/12 Page 7 of 7

existing record are vanishingly small. In addition, given the similar evidentiary dependence of

Adobe’s adjudicated claims and the remaining non-adjudicated counterclaims, an appellate

decision will avoid the unnecessary duplication of efforts. For instance, in the event the appellate

court affirms this court’s decision, the chances of settlement are high. A stay will therefore prevent

a trial that should never have happened. In the event the appellate court reverses this court’s

decision, a stay will prevent two trials with possibly inconsistent outcomes (thereby spawning

duplicative appeals). Finally, as an out-of-state claimant, Adobe more heavily bears the increased

costs associated with two trials.

11



IV.

Conclusion

IT IS THEREFORE ORDERED that Adobe’s Motion to Certify and Stay (#167) is

GRANTED. The court hereby directs the Clerk to enter final judgment as to Adobe’s copyright

infringement claim and as to Adobe’s trademark infringement claim in accordance with the court’s

September 10, 2012 Order. Pursuant to Rule 54(b), the court finds no just reason for delaying entry

of judgment on these claims.

IT IS FURTHER ORDERED that these proceedings are STAYED pending appeal.

IT IS SO ORDERED.

DATED this 9th day of November, 2012.

__________________________________
LARRY R. HICKS
UNITED STATES DISTRICT JUDGE

11

A supersedeas bond pending appeal is not required here. See Fed. R. Civ. P. 62(e). These
bonds protect appellee judgment creditors, but Adobe is not entitled to any monetary judgment. See
Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir. 1992); see also Exxon Valdez v. Exxon Mobil, 568
F.3d 1077, 1085 (9th Cir.2009).


7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26