FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ADOBE SYSTEMS INC., No. 12-17371
Plaintiff-Counter-
Defendant–Appellant, D.C. No.
2:10-cv-00422-
v. LRH-GWF
JOSHUA CHRISTENSON, an
individual, DBA OPINION
www.softwaresurplus.com;
SOFTWARE SURPLUS, INC.,
Defendants-Counter-
Claimants–Appellees,
v.
SOFTWARE PUBLISHERS
ASSOCIATION, DBA Software
Information Industry Association,
Third-Party-Defendant.
Appeal from the United States District Court
for the District of Nevada
Larry R. Hicks, District Judge, Presiding
Argued and Submitted
January 29, 2015—University of Arizona, Rogers College
of Law, Tucson, Arizona
2 ADOBE SYSTEMS, INC. V. CHRISTENSON
Filed December 30, 2015
Before: A. Wallace Tashima, M. Margaret McKeown,
and Marsha S. Berzon, Circuit Judges.
Opinion by Judge McKeown
SUMMARY*
Copyright
Affirming the district court’s summary judgment in a
copyright infringement case, the panel held that, while the
copyright holder bears the ultimate burden of establishing
infringement, the party raising a first sale defense bears an
initial burden with respect to the defense.
The first sale doctrine provides that, once a copy of a
work is lawfully sold or transferred, the new owner has the
right to sell or otherwise dispose of that copy without the
copyright owner’s permission. Adobe Systems, Inc., claimed
infringement of its software. The panel held that Adobe
established its registered copyrights in the software, and the
defendant carried his burden of showing that he lawfully
acquired genuine copies. Adobe, however, failed to produce
license agreements or other evidence to show that it retained
title to the software when the copies were first transferred.
The panel held that the district court did not abuse its
discretion in excluding evidence purporting to document the
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
ADOBE SYSTEMS, INC. V. CHRISTENSON 3
licenses, and general testimony and generic licensing
templates were insufficient to meet Adobe’s burden.
The panel held that the nominative fair use defense barred
Adobe’s trademark infringement claim.
COUNSEL
J. Andrew Coombs (argued) and Annie S. Wang, Glendale,
California, for Plaintiff-Counter-Defendant–Appellant.
Lisa A. Rasmussen (argued), Las Vegas, Nevada, for
Defendants-Counter-Claimants–Appellees.
OPINION
McKEOWN, Circuit Judge:
This appeal, which arises in the context of software
licenses, requires us to address the burden of proof applicable
to the first sale defense to a copyright infringement claim.
Although a copyright holder enjoys broad privileges
protecting the exclusive right to distribute a work, the first
sale doctrine serves as an important exception to that right.
Under this doctrine, once a copy of a work is lawfully sold or
transferred, the new owner has the right “to sell or otherwise
dispose of” that copy without the copyright owner’s
permission. 17 U.S.C. § 109(a). Of course, the defense is
4 ADOBE SYSTEMS, INC. V. CHRISTENSON
contingent on rightful ownership. The old adage “possession
is nine-tenths of the law” has no traction under § 109(a).1
This appeal stems from a messy copyright dispute
between Adobe Systems, Inc. and Joshua Christenson and his
software company, Software Surplus, Inc. (“SSI” or
“Software Surplus”).2 In the district court, litigation of this
case was punctuated by discovery disputes, sanctions, and
multiple rulings on the admissibility and exclusion of
evidence. The importance of these factors, which the parties
emphasize on appeal, is diminished by the central issue—who
bears the burden of proving the first sale defense in a
software licensing dispute. While the copyright holder bears
the ultimate burden of establishing copyright infringement,
the party raising a first sale defense bears an initial burden
with respect to the defense. At the summary judgment stage,
this burden is discharged by producing evidence sufficient for
a jury to find that the alleged infringer lawfully acquired
ownership of genuine copies of the copyrighted software.
Once this initial burden is satisfied, the burden shifts back to
the copyright owner to establish the absence of a first sale,
because of a licensing or other non-ownership-transferring
arrangement when the copy first changed hands.
The district court correctly held that Adobe established its
registered copyrights in the disputed software and that
1
The origin of the adage, sometimes stated as “possession is nine points
of the law,” is in some dispute, but it can be traced to Thomas Draxe’s
1616 Bibliotheca Scholastica Instructissima. See Oxford Dictionary of
Proverbs 245 (Jennifer Speake ed., 2003).
2
Software Surplus, Inc. is now defunct, so we use “Christenson” to refer
collectively to the defendants–appellees.
ADOBE SYSTEMS, INC. V. CHRISTENSON 5
Christenson carried his burden of showing that he lawfully
acquired genuine copies of Adobe’s software, but that Adobe
failed to produce the purported license agreements or other
evidence to document that it retained title to the software
when the copies were first transferred. We affirm the district
court’s dismissal of both the copyright and trademark claims.
BACKGROUND
In October 2009, Adobe filed this lawsuit against
Christenson. The factual basis for Adobe’s claims was
simple: on his website, Christenson sold Adobe software—
which he purchased from a third-party distributor—without
Adobe’s authorization, allegedly infringing Adobe’s
copyrights and trademarks in the process. Christenson
asserted numerous defenses, including the first sale defense
to the copyright claim. He also filed a counterclaim against
Adobe and a third-party complaint against the Software
Information Industry Association (“SIIA”) for defamation,
disparagement, and more, on the basis that SIIA issued a
press release about this case stating that Christenson and his
company “sold infringing copies, including counterfeit
versions” and “swindled” consumers.
The following chronology helps explain why neither party
completely closed the loop on proof. The case began as many
do: The district court referred the case to a magistrate judge
to set discovery and dispositive motions deadlines. A
protracted series of discovery exchanges and disputes
eventually overlapped with briefing on cross-motions for
summary judgment, and the case then departed somewhat
from the expected course.
6 ADOBE SYSTEMS, INC. V. CHRISTENSON
Adobe, with SIIA, moved for partial summary judgment
on liability for the copyright and trademark claims and for
summary judgment on the counterclaims and third-party
claims pertaining to the press release. On the copyright
claim, Adobe argued that the first sale defense did not apply
because Adobe only licenses and does not sell its software.
For support, Adobe relied on a declaration to that effect by its
Anti-Piracy Enforcement Manager, Chris Stickle. Stickle
generally described different ways that Adobe licenses
software, such as by limiting copies to academic users or
distributing copies bundled with hardware under restrictive
terms, the latter being known as Original Equipment
Manufacturer (“OEM”) products. Other evidence submitted
by Adobe included a list of specific copyrights, a list of
Adobe product licenses that had been produced by
Christenson, excerpts of Christenson’s deposition in which he
acknowledged that he sold academic and OEM software,
screenshots of the Software Surplus website stating that it
sold academic and OEM software, and customer returns and
complaints in which customers complained that they had
received software licensed for academic use from Christenson
despite having understood that they had purchased software
appropriate for non-academic users. Regarding the trademark
claim, Adobe also argued that Christenson should be liable
for false advertising, although as the district court later
pointed out, Adobe’s complaint did not include this claim.
Christenson, in turn, moved for summary judgment on the
copyright and trademark claims. In response to the copyright
claim, Christenson argued that only Adobe had access to the
terms of its contracts with the original recipients of the copies
at issue; Christenson, as a downstream distributor, did not
have this information. He thus urged the court to place the
burden on Adobe “to disprove the first sale doctrine.” With
ADOBE SYSTEMS, INC. V. CHRISTENSON 7
this burden in mind, Christenson asserted that Adobe could
not disprove that a first sale occurred because Adobe was
unable to point to the terms of any actual contract.
Christenson also offered evidence of his purchase of copies
of Adobe software from third parties. Christenson raised a
nominative fair use defense to the trademark claim, arguing
that he used Adobe’s trademark only to refer to Adobe’s
genuine goods.
The scope of what the court could consider in deciding
the cross-motions for summary judgment proved a persistent
point of dispute between the parties. After the parties filed
their summary judgment motions, Christenson filed a motion
to preclude Adobe from relying on contracts, licenses, or
agreements that Adobe failed to disclose under Rule 26(a).
Fed. R. Civ. P. 26(a). The magistrate judge granted this
request and precluded Adobe from using or introducing such
documents—except for those that had been produced by
Christenson. Christenson then asked the district court to
strike any excluded documents and related assertions from
Adobe’s already ripe motion for summary judgment.
The district court decided the motion to strike and
motions for summary judgment in one order. Ruling for
Christenson on the copyright claim, the court stated that it
was “uncontroverted that Defendants lawfully purchased
genuine copies of Adobe software from third-party suppliers
before reselling those copies.” Reasoning that the burden
shifted to Adobe to produce evidence that “it merely licenses
and does not sell” the relevant software, the court noted that
Adobe would be unable to do so because it was precluded
from offering any licenses—the actual terms of which were
central to summary judgment.
8 ADOBE SYSTEMS, INC. V. CHRISTENSON
The court granted Christenson’s motion to strike a license
template because the document had not been disclosed by
Adobe or produced by Christenson. Other evidence was
precluded because the court determined that an actual
contract was required to prove whether Adobe’s transactions
resulted in a license as opposed to a sale. “[I]n the absence of
those writings,” the court foreclosed Adobe’s declarants from
testifying “to prove the terms and legal effect of Adobe’s
licensing agreements.”
Christenson also prevailed on the trademark claim. The
court credited his nominative fair use defense because he
used the trademarks to refer to the trademarked goods
themselves. The court rejected Adobe’s false advertising
theory because it was not included in the complaint.
Finally, the court denied Adobe’s motion for summary
judgment on the counterclaims related to the press release.
The court then stayed the surviving counterclaims and entered
judgment in Christenson’s favor on the copyright and
trademark infringement claims pursuant to Federal Rule of
Civil Procedure 54(b), resulting in a final, appealable order.
ANALYSIS
I. COPYRIGHT CLAIM
A. PRIMA FACIE CASE OF COPYRIGHT INFRINGEMENT
To prevail on a claim of copyright infringement, Adobe
must prove ownership of a valid copyright and violation by
Christenson, the alleged infringer, of at least one of the
exclusive rights conferred by the Copyright Act. UMG
ADOBE SYSTEMS, INC. V. CHRISTENSON 9
Recordings, Inc. v. Augusto, 628 F.3d 1175, 1178 (9th Cir.
2011).
Adobe claims that it holds copyrights in a long list of
different versions of familiar software titles, such as “Adobe
Photoshop CS3 for Windows and Macintosh,” “Adobe
Photoshop CS3 Extended for Windows and Macintosh,”
“Adobe Photoshop CS4,” and “Adobe Photoshop CS4
Extended.” Each new version reflects the result of revisions
and additions to the underlying source code of the initial
program. As proof of ownership, Adobe submitted the
certificates of registration and the registration numbers for
each listed title. Christenson does not dispute that the Adobe
products he bought and sold are on Adobe’s list or that the
listed titles are subject to copyright protection. Adobe thus
established ownership of valid copyrights of a long list of
computer software. See 17 U.S.C. § 410(c) (“[T]he
certificate of a registration made before or within five years
after first publication of the work shall constitute prima facie
evidence of the validity of the copyright and of the facts
stated in the certificate.”).
The Copyright Act confers several exclusive rights on
copyright owners, including the right of distribution.
17 U.S.C. § 106(3) (granting a right “to distribute copies . . .
of the copyrighted work to the public by sale or other transfer
of ownership, or by rental, lease, or lending”). No factual
dispute exists that, through the Software Surplus website,
Christenson sold copies of Adobe’s copyrighted works
without authorization from Adobe. Christenson did not
establish any difference between the software titles listed by
Adobe, shown in screenshots of the Software Surplus
website, and those that he sold. Adobe easily established a
prima facie case of copyright infringement.
10 ADOBE SYSTEMS, INC. V. CHRISTENSON
B. THE FIRST SALE DEFENSE
In the face of an otherwise slam dunk copyright violation,
Christenson asserts that his conduct fell within an exception
to Adobe’s distribution rights under § 106—the first sale
doctrine. Under the Copyright Act, this affirmative defense
provides that “the owner of a particular copy . . . lawfully
made under this title, or any person authorized by such
owner, is entitled, without the authority of the copyright
owner, to sell or otherwise dispose of the possession of that
copy . . . .” 17 U.S.C. § 109(a). The practical effect of this
language is to significantly circumscribe a copyright owner’s
exclusive distribution right “only to the first sale of the
copyrighted work” because “once the copyright owner places
a copyrighted item in the stream of commerce by selling it, he
has exhausted his exclusive statutory right to control its
distribution.” Quality King Distribs., Inc. v. L’anza Research
Int’l, Inc., 523 U.S. 135, 141, 152 (1998); see also Vernor v.
Autodesk, Inc., 621 F.3d 1102, 1107 (9th Cir. 2010) (“[A]
copyright owner’s exclusive distribution right is exhausted
after the owner’s first sale of a particular copy of the
copyrighted work.”). Before answering the question left open
in Augusto of who bears the burden of proof as to this
defense, it is important to understand the contours of the term
“sale.”3 See Augusto, 628 F.3d at 1178.
3
Augusto arose from a dispute over the distribution of compact discs
which ultimately ended up on eBay. In addressing an infringement claim
against the eBay seller, the court wrote: “While it is an open question as
to whether the plaintiff or defendant bears the burden of proving the
applicability of the first sale defense . . . we need not reach the issue in
this case.” Augusto, 628 F.3d at 1175, 1178.
ADOBE SYSTEMS, INC. V. CHRISTENSON 11
In digital copyright cases, the distinction between a “sale”
and a “license” has become central. But this distinction did
not arise with the advent of computer software. As early as
1908, the Supreme Court recognized that a sale creates a
defense to a copyright claim while a license does not. See
Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 350 (1908).4
Bobbs-Merrill held the copyright to the novel The Castaway
and sued Macy & Company for copyright infringement. Each
copy of the book had a notice on the title page that the retail
price was one dollar and “a sale at a less price will be treated
as an infringement of the copyright.” Id. at 341. Macy
purchased copies of the book at a discount and intended to
sell them for less than a dollar. The Court held that Bobbs-
Merrill did not have a right to control future sales of Macy’s
copies because a copyright owner “who has sold a
copyrighted article, without restriction, has parted with all
right to control the sale of it.” Id. at 350 (emphasis added).
Shortly after the Bobbs-Merrill decision, Congress
codified the first sale doctrine in the Copyright Act of 1909.
In this initial statutory iteration, the first sale rule did not
explicitly require the defendant to own the copy at issue:
That the copyright is distinct from the
property in the material object copyrighted,
and the sale or conveyance, by gift or
otherwise, of the material object shall not of
4
Although the Supreme Court initially discussed the first sale doctrine
in 1908, the doctrine can be traced to Pope v. Curll, an eighteenth-century
English case. (1741) 2 Atk. 342. Pope centered on a dispute over letters
written by Alexander Pope. The decision distinguished between
ownership of the paper on which the letters were written and Pope’s
exclusive right of publication.
12 ADOBE SYSTEMS, INC. V. CHRISTENSON
itself constitute a transfer of the copyright, nor
shall the assignment of the copyright
constitute a transfer of the title to the material
object; but nothing in this Act shall be deemed
to forbid, prevent, or restrict the transfer of
any copy of a copyrighted work the
possession of which has been lawfully
obtained.
17 U.S.C. § 41 (1909).
Congress amended the Copyright Act in 1976 and revised
the first sale defense. 17 U.S.C. § 109(a). Unlike its
predecessor, the amended statute explicitly required that a
defendant raising a first sale defense own the copy at issue.
Id. (limiting the first sale defense to “the owner of a particular
copy” (emphasis added)). The first sale defense did “not . . .
extend to any person who has acquired possession of the copy
. . . from the copyright owner, by rental, lease, loan, or
otherwise, without acquiring ownership of it.” Id. at
§ 109(d). The legislative history confirms that Congress
intended to “restate[] and confirm[] the principle that, where
the copyright owner has transferred ownership of a particular
copy . . . of a work, the person to whom the copy . . . is
transferred is entitled to dispose of it by sale, rental, or any
other means.” H.R. Rep. No. 94-1476, at 79 (1976) (emphasis
added), reprinted in 1976 U.S.C.C.A.N. 5659, 5693.
The Supreme Court first analyzed § 109(a) in Quality
King. Distinguishing between the owner of a copy and a non-
owner, such as a licensee, the Court emphasized that
“because the protection afforded by § 109(a) is available only
to the ‘owner’ of a lawfully made copy (or someone
authorized by the owner), the first sale doctrine would not
ADOBE SYSTEMS, INC. V. CHRISTENSON 13
provide a defense to . . . any nonowner such as a bailee, a
licensee, a consignee, or one whose possession of the copy
was unlawful.” 523 U.S. at 146–47. In other words, to claim
the benefits of the first sale defense, the holder of the copy
must actually hold title.
Section 109(a)’s focus on ownership takes on a special
significance in the digital context. In a world where licensing
agreements are “ubiquitous,” “license agreements, rather than
sales, have become the predominate form of the transfer of
rights to use copyrighted software material.” Apple, Inc. v.
Psystar Corp., 658 F.3d 1150, 1155 (9th Cir. 2011). In
practice, because “the first sale doctrine does not apply to a
licensee,” id., licensing arrangements enable software
companies to restrict initial licensees of software from selling
their licensed copies of the software to downstream users.
Broadly construed, the licensing exception in the software
context could swallow the statutory first sale defense. We
have recognized, however, that some purported software
licensing agreements may actually create a sale. See Vernor,
621 F.3d at 1111; Augusto, 628 F.3d at 1180. To determine
whether there is a legitimate license, we examine whether
“the copyright owner (1) specifies that the user is granted a
license; (2) significantly restricts the user’s ability to transfer
the software; and (3) imposes notable use restrictions.”
Vernor, 621 F.3d at 1111. Where these factors aren’t
satisfied, the upshot is that the copyright holder has sold its
software to the user, and the user can assert the first sale
defense. See Augusto, 628 F.3d at 1180–81.
In the software copyright context, a dispute about the first
sale defense raises several questions: First, which party—the
copyright holder or the party asserting the defense—bears the
14 ADOBE SYSTEMS, INC. V. CHRISTENSON
initial burden of showing ownership through lawful
acquisition? Second, what does it take to discharge that
burden? And finally, which party bears the burden of proving
or disproving a license versus a sale? General principles of
evidence, coupled with the statute and the legislative history,
provide the answer.
The burden of proof for an affirmative defense to a civil
claim generally falls on the party asserting the defense. This
same principle holds true in copyright. See 3 Melville B.
Nimmer & David Nimmer, Nimmer on Copyright § 12.11[F]
(2009) (“[A]s a matter of definition, the defendant bears the
burden of proof as to all affirmative defenses . . . .”). For
example, in claiming the fair use defense to copyright
infringement, it is the proponent’s burden to come forward
with favorable evidence about relevant markets to establish
“the effect of the [challenged] use upon the potential market
for or value of the copyrighted work.” Campbell v.
Acuff-Rose Music, Inc., 510 U.S. 569, 590–94 & n.20 (1994).
Another key example is found in the Digital Millenium
Copyright Act, also referred to as the DMCA, 17 U.S.C.
§ 512. The DMCA’s safe harbor provisions exempt Internet
service providers from copyright liability under discrete
statutory provisions; proponents who seek the safe harbor
bear “the burden of establishing that [they] meet[] the
statutory requirements.” Columbia Pictures Indus., Inc. v.
Fung, 710 F.3d 1020, 1039 (9th Cir. 2013) (citing Balvage v.
Ryderwood Improvement & Serv. Ass’n, Inc., 642 F.3d 765,
776 (9th Cir. 2011)).
The rule is no different for the first sale defense. Under
§ 109(a), the party asserting the first sale defense bears the
initial burden of satisfying the statutory requirements. Thus,
that party must show ownership through lawful acquisition.
ADOBE SYSTEMS, INC. V. CHRISTENSON 15
What does this mean in practical terms? In the context of
a summary judgment motion in a software case, it simply
means that the party asserting a first sale defense must come
forward with evidence sufficient for a jury to find lawful
acquisition of title, through purchase or otherwise, to genuine
copies of the copyrighted software. To the extent that the
copyright holder claims that the alleged infringer could not
acquire title or ownership because the software was never
sold, only licensed, the burden shifts back to the copyright
holder to establish such a license or the absence of a sale.
This burden-shifting construct makes sense. The
copyright holder is in a superior position to produce
documentation of any license and, without the burden shift,
the first sale defense would require a proponent to prove a
negative, i.e., that the software was not licensed. See 3
Nimmer § 12.11(E) (“It is submitted that in a civil action . . .
the burden of proving the absence of a first sale should be on
the plaintiff . . . . [T]he result . . . appears justified in that it
involves ‘a matter uniquely within the knowledge of the
plaintiff.’” (citing Bell v. Combined Registry Co., 397 F.
Supp. 1241 (N.D. Ill. 1975))).
This approach accords with the legislative history and
with our general precedent that fairness dictates that a litigant
ought not have the burden of proof with respect to facts
particularly within the knowledge of the opposing party. Just
as it would be unfair for a copyright holder to be burdened
with proving that a downstream holder of a copy did not
acquire the copy lawfully, so too it would be unfair to impose
the burden of proving the lack of a sale on the proponent of
the first sale defense. As the House Report acknowledges, it
is an “established legal principle that the burden of proof
should not be placed upon a litigant to establish facts
16 ADOBE SYSTEMS, INC. V. CHRISTENSON
particularly within the knowledge of his adversary.” H.R.
Rep. 94-1476, at 81; see United States v. N.Y., New Haven &
Hartford R.R. Co., 355 U.S. 253, 256 n.5 (1957) (“The
ordinary rule, based on considerations of fairness, does not
place the burden upon a litigant of establishing facts
peculiarly within the knowledge of his adversary.”);
2 McCormick on Evid. § 337 (7th ed.) (2013) (“A doctrine
often repeated by the courts is that where the facts with
regard to an issue lie peculiarly in the knowledge of a party,
that party has the burden of proving the issue.”). Finally, we
note that a downstream possessor, who may be many times
removed from any initial claimed license, is hardly in a
position to prove either a negative—the absence of a
license—or the unknown—the terms of the multiple transfers
of the software.
With this framework in mind, we turn to the specifics of
this case. As the district court held, it was uncontroverted
that Christenson “lawfully purchased genuine copies of
Adobe software from third-party suppliers before reselling
those copies.” Christenson offered invoices to document his
purchases of legitimate Adobe software from various
suppliers. Nothing on those invoices suggests that he was
other than a legitimate purchaser of the software. According
to Christenson’s sworn statement, “[n]either [he] nor SSI
have a contract with any of the suppliers that supplied SSI
with software. . . . SSI asked them if they could supply SSI
with a product at an acceptable price, and if they could,
payment was negotiated.” This claim is consistent with
Christenson’s inability to produce something more than
invoices from his suppliers: He cannot produce records that
do not exist. Christenson discharged his burden with respect
to the first sale defense.
ADOBE SYSTEMS, INC. V. CHRISTENSON 17
Adobe, of course, argues that Christenson could not have
legitimately purchased the software because Adobe always
licenses, and does not sell, copies of its software. On this
point, the burden shifts back to Adobe to prove the existence
and terms of a license. In an ordinary case, Adobe would
produce specific license agreements and we would
benchmark those agreements against the Vernor factors to
determine whether there was a legitimate license at the outset,
as well as whether downstream customers were “bound by a
restrictive license agreement” such that they are “not entitled
to the first sale doctrine.” Vernor, 621 F.3d at 1113.
Asking Adobe to produce the license agreements, which
would include any terms or restrictions, is not a difficult
burden—Adobe is the original source of the software, claims
to control distribution of the software, and holds the
copyrights to the software. As Adobe noted in the district
court: “Adobe and Adobe alone knows the parties with whom
it contracts.” That categorical statement says it all—the
license/ contract information is uniquely within Adobe’s
knowledge.
Adobe’s problem is that it did not produce those licenses
or document the terms of contracts with specific parties.
Because of the state of discovery at the time of the summary
judgment motions, the district court excluded virtually all of
Adobe’s late-offered evidence of licenses. Adobe challenges
this ruling in its appeal. The district court and magistrate
judge had a long history with the parties and their discovery
efforts. After a careful examination of the rather tortured
discovery process, we conclude that the district court did not
abuse its discretion in granting Christenson’s motion to strike
and excluding evidence purporting to document the licenses.
See Wilkerson v. Wheeler, 772 F.3d 834, 838 (9th Cir. 2014)
18 ADOBE SYSTEMS, INC. V. CHRISTENSON
(“Evidentiary rulings are reviewed for abuse of discretion.”);
El Pollo Loco, Inc. v. Hashim, 316 F.3d 1032, 1038 (9th Cir.
2003) (“We review the district court’s ruling on a motion to
strike for an abuse of discretion.”).
Adobe’s effort to substitute general testimony and generic
licensing templates in lieu of the actual licensing agreements
does not withstand scrutiny under Vernor. Under Vernor, the
precise terms of any agreement matter as to whether it is an
agreement to license or to sell; the title of the agreement is
not dispositive. And here, in the end, there is no admissible
evidence that Adobe “significantly restrict[ed] the user’s
ability to transfer the software” at issue here. Vernor,
621 F.3d at 1111. We thus affirm the district court’s order
granting summary judgment in favor of Christenson and
against Adobe on the copyright claim.5
II. TRADEMARK CLAIM
Adobe’s primary problem on the trademark claim is that
it confuses the claim that it made—trademark
infringement—with the claim it wishes it had made—unfair
competition, or false advertising. Although in summary
judgment pleadings Adobe belatedly cast its infringement
claim as one for false advertising under § 43(a) of the
Lanham Act, 60 Stat. 441, as amended, 15 U.S.C. § 1125, the
district court rejected the argument because Adobe failed to
plead such a false advertising claim in its complaint. The
5
Adobe also originally argued that the first sale defense does not apply
to copies made abroad. This distinction is no longer relevant because the
Supreme Court has since held that the first sale doctrine applies with equal
force to goods made and sold abroad. See Kirtsaeng v. John Wiley &
Sons, Inc., 133 S. Ct. 1351, 1358 (2013).
ADOBE SYSTEMS, INC. V. CHRISTENSON 19
district court properly analyzed this claim under the
nominative fair use defense to a trademark infringement
claim instead of under the unfair competition rubric.
To prove trademark infringement, “a trademark holder
must show that the defendant’s use of its trademark ‘is likely
to cause confusion, or to cause mistake, or to deceive.’”
Fortune Dynamic, Inc. v. Victoria’s Secret Stores Brand
Mgmt., Inc., 618 F.3d 1025, 1030 (9th Cir. 2010) (quoting
15 U.S.C. § 1125(a)(1)). The “core element of trademark
infringement” is “[p]rotecting against a likelihood of
confusion,” which helps to “ensur[e] that owners of
trademarks can benefit from the goodwill associated with
their marks” and “that consumers can distinguish among
competing producers.” Id. (quoting Brookfield Commc’ns v.
W. Coast Entm’t Corp., 174 F.3d 1036, 1053 (9th Cir. 1999);
Thane Int’l, Inc. v. Trek Bicycle Corp., 305 F.3d 894, 901
(9th Cir. 2002)).
We have long recognized that nominative fair use is a
defense to a trademark claim. See New Kids on the Block v.
News Am. Pub., Inc., 971 F.2d 302, 306–08 (9th Cir. 1992).
The doctrine protects a defendant “where the use of the
trademark does not attempt to capitalize on consumer
confusion or to appropriate the cachet of one product for a
different one.” Id. at 308. The defense may be invoked
“where a defendant uses the mark to refer to the trademarked
good itself.” Toyota Motor Sales, U.S.A., Inc. v. Tabari,
610 F.3d 1171, 1175 (9th Cir. 2010). This principle
recognizes the proposition that “[t]rademark law generally
does not reach the sale of genuine goods bearing a true mark
even though such sale is without the mark owner’s consent.”
Am. Circuit Breaker Corp. v. Oregon Breakers Inc., 406 F.3d
20 ADOBE SYSTEMS, INC. V. CHRISTENSON
577, 585 (9th Cir. 2005) (quoting NEC Elecs. v. CAL Circuit
Abco, 810 F.2d 1506, 1510 (9th Cir. 1987)).
In a nominative fair use case, the concern is avoiding
confusion over whether the speaker is endorsed or sponsored
by the trademark holder. To that end, the Toyota test replaces
the usual Sleekcraft test as the proper measure of consumer
confusion when a defendant uses the mark to refer to the
trademarked good itself. Toyota Motor Sales, 610 F.3d at
1182 (citing Cairns v. Franklin Mint Co., 292 F.3d 1139,
1151 (9th Cir. 2002)); AMF Inc. v. Sleekcraft Boats, 599 F.2d
341 (9th Cir. 1979). Under the Toyota test, we ask “whether
(1) the product was ‘readily identifiable’ without use of the
mark; (2) defendant used more of the mark than necessary; or
(3) defendant falsely suggested he was sponsored or endorsed
by the trademark holder.” Toyota Motor Sales, 610 F.3d at
1175–76 (quoting Playboy Enters., Inc. v. Welles, 279 F.3d
796, 801 (9th Cir. 2002)).
Rather than argue the Toyota factors, Adobe presses the
argument that Christenson engaged in a “bait and switch”
tactic of selling Adobe products licensed as academic or
OEM products by describing them as “full” or “retail”
versions, misleading consumers as to which version they
would receive. Here lies the confusion: this theory maps to
a claim for false advertising or unfair competition under § 43
of the Lanham Act, not trademark infringement under
15 U.S.C. § 1114. Adobe does not argue that the marks did
not truthfully label genuine Adobe products as such. Nor
does it assert that “Adobe Acrobat Pro” and the same product
when under an academic or OEM license, correspond to
different marks than Christenson used on the Software
Surplus website, to render Christenson’s use untruthful.
Adobe’s major gripe was with the sales themselves, which it
ADOBE SYSTEMS, INC. V. CHRISTENSON 21
attacked via its copyright claim. The bottom line is that
Christenson’s nominal use of the marks was to identify the
products themselves and not to “inspire a mistaken belief on
the part of consumers that the speaker is sponsored or
endorsed by the trademark holder.” Toyota Motor Sales,
610 F.3d at 1176. We therefore affirm as to this claim.
AFFIRMED.