Sunday, January 10, 2016

How Did Adobe Systems Lose A "Slam Dunk" Copyright Infringement/Software Licensing Case? The Ninth Circuit Clarifies Burdens Of Proof On The First Sale Doctrine

Adobe Sys. Inc. v. Christenson, No. 12-17371, 2015 WL 9487887 (9th Cir. Dec. 30, 2015)

Software giant Adobe Systems recently lost this appeal before the Ninth Circuit Court of Appeals after having established what the Ninth Circuit called a "slam dunk" copyright infringement case. In this case, the Ninth Circuit clarified how burdens of proof shift in copyright infringement case in which the "first sale doctrine" is raised as an affirmative defense. Adobe established ownership of copyrights and that defendant was in possession of copies of its software bundles. As a copyright owner, Adobe is entitled to the exclusive right of distribution of copyrighted works under Section 106 of the Copyright Act. The Ninth Circuit found that Adobe had thus satisfied its "prima facie" case of copyright infringement. The burden of proof then shifted to Christenson, because, like "fair use" or DMCA safe harbors, the "first sale doctrine" is an affirmative defense. Section 109(a) of the Copyright Act specifies that the restrictions of Section 106 do not apply where a copyright owner has transferred ownership of a lawful copy of the work. Affirmative defenses must be pleaded and proven by the defendant. Christenson then proved through invoices that that he had purchased copies of the software and demonstrated this through invoices documenting his purchases. The Ninth Circuit found that because Christenson had established that he paid for copies of the software, that was sufficient to shift the burden of proof back to Adobe to show that the software copies were unlawful.
Adobe countered that Adobe never sells its software and always licenses it and that any resale by its distributors is unlawful. The Ninth Circuit affirmed the District Court’s finding that Adobe had failed to timely produce evidence in discovery and that Adobe’s evidence was stricken, leaving a record favorable to Christenson. The Ninth Circuit clarified that a software copyright owner must be prepared to evidence its claims with respect to the specific copies at issue if it wishes to establish copyright infringement in the first sale context. This case is a cautionary tale for attorneys representing software owners about the need to carefully document the relationships with distributors and to be ready willing and able to prove those relationships in the event of a copyright infringement action.
For more on the first sale doctrine and litigation related to software and other copyright licensing agreements, please see Copyright Litigation Handbook Chapter 8 Copyright Ownership and Licensing Litigation. The full table of contents of Copyright Litigation Handbook may be found here.
 Copyright law, fine art and navigating the courts. All practice, no theory.Copyright Litigation Handbook (Thomson Reuters Westlaw 2014-2015) by Raymond J. Dowd
 Copyright Litigation Handbook on Westlaw

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