Stupidity rules in the Ninth Circuit:
"IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
CALIFORNIA ADOBE SYSTEMS INCORPORATED, Plaintiff, v. ANTHONY
KORNRUMPF, a/k/a TONY KORNRUMPF; and HOOPS ENTERPRISE, LLC,
Defendants. / HOOPS ENTERPRISE, LLC, Counter-Claimant, v. ADOBE
SYSTEMS INCORPORATED, Counter-Defendant, and SOFTWARE AND INFORMATION
INDUSTRY ASSOCIATION, Third-Party Defendant. / No. C 10-02769 CW
ORDER GRANTING ADOBE SYSTEMS INCORPORATED AND SOFTWARE& INFORMATION
INDUSTRY ASSOCIATION’S MOTION TO DISMISS HOOPS ENTERPRISE, LLC’S
CLAIMS (Docket No. 34) Plaintiff
....
First Sale Doctrine
A copyright holder has the exclusive right to “distribute copies . .
. of the copyrighted work to the public by sale or other transfer of
ownership, or by rental, lease, or lending.” 17 U.S.C. § 106(3). The
first sale doctrine enables an “‘owner of a particular copy’ of a
copyrighted work to sell or dispose of his copy without the copyright
owner’s authorization.” Vernor v. Autodesk, Inc., 621 F.3d 1102, 1107
(9th Cir. 2010) (quoting 17 U.S.C. § 109(a)). The doctrine “does not
apply to a person who possesses a copy of the copyrighted work
without owning it, such as a licensee.” Vernor, 621 F.3d at 1107
(citing 17 U.S.C. § 109(d)).
“Notwithstanding its distinctive name, the doctrine applies not only
when a copy is first sold, but when a copy is given away or title is
otherwise transferred without the accouterments of a sale.” UMG
Recordings v. Augusto, ___ F.3d ___, 2011 WL 9399, at *3 (9th Cir.)
(citations omitted). However, “not every transfer of possession of a
copy transfers title.” Id. at *4. For instance, in the context of
computer software, “copyright owners may create licensing
arrangements so that users acquire only a license to use the
particular copy of software and do not acquire title that permits
further transfer or sale of that copy without the permission of the
copyright owner.” Id.
In Vernor, a declaratory judgment action, the Ninth Circuit addressed
the resale of copyrighted software on eBay. 621 F.3d at 1103. There,
Vernor sought a declaration that he did not infringe the copyright of
Autodesk, a software company. Id. Vernor had purchased copies of
Autodesk’s software from Cardwell/Thomas& Associates (CTA), one of
Autodesk’s direct customers, and then attempted to resell them on
eBay. Id. CTA had obtained the copies under a software license
agreement, which imposed significant restrictions on their transfer
and use. Id. at 1104. Based on this agreement, the Ninth Circuit
rejected Vernor’s assertion of the first sale doctrine, concluding
that neither he nor CTA were owners of the particular copies. Id. at
1111. The court reasoned that CTA was only a licensee and that
Autodesk retained title to the software. Id.
Here, Hoops does not plead any facts to suggest that it owned any of
the particular copies of Adobe software that it resold or that it
obtained the copies from entities that had owned them. Nor does Hoops
allege that Adobe ever sold, gave away or transferred title to the
particular copies of the software at issue. Hoops avers that it
resold Adobe products it “purchased from third party intermediary
distributors,” Hoops Countercl. ¶ 8, but offers no facts regarding
under what terms these distributors obtained the copies. Although it
maintains that these copies did not infringe “Adobe’s right of
reproduction,” id., Hoops says nothing about Adobe’s right of
distribution, to which the first sale doctrine applies.
In lieu of addressing these defects, Hoops offers an unpersuasive
argument that it has not sold Adobe’s copyrighted work but rather
sold discs containing copies of that work. This attempted distinction
illuminates the flaw in Hoops’s theory. Adobe does not allege that
Hoops unlawfully transferred ownership of Adobe’s copyrighted
software. It alleges that Hoops and Kornrumpf sold copies of Adobe’s
software in violation of Adobe’s exclusive distribution right. To
avail itself of the first sale doctrine, Hoops must demonstrate that
it owned the copies of the Adobe software it resold; it is irrelevant
whether Hoops owned the discs on which the copies were stored. A
copyright attaches to an original work of authorship, not the
particular medium in which it was initially fixed.
Hoops appears to argue that Vernor is distinguishable because that
case involved a license agreement. However, Hoops’s allegations are
not sufficient to determine whether Vernor is analogous; as noted
above, Hoops offers no insight into the circumstances under which it
obtained the copies of Adobe software.
Finally, Hoops alleges that Adobe and SIIA misuse Adobe’s copyrights
because their conduct attempts to hamper competition by eliminating
the secondary market of copies of Adobe software. However, because
Hoops has not established that it, or any other re-seller, sold
copies subject to the first sale doctrine, this allegation is
unavailing. It is not a misuse of copyright to dismantle a market of
allegedly infringing copies of software.
Thus, Hoops fails to allege any facts to suggest Adobe or SIIA
engaged in copyright misuse. For this reason and those stated above,
Hoops’s copyright misuse claims for declaratory relief are dismissed
with leave to amend."