Microsoft Corp. v. Buy More, Inc.

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 27 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT

MICROSOFT CORPORATION, a No. 15-56544
Washington corporation,
D.C. No.
Plaintiff-Appellee, 2:14-cv-09697-R-PLA

v.
MEMORANDUM *
BUY MORE, INC., a California
corporation; MOJDEH ALAM, AKA Moji
Alam, DBA AVERAPC; LAPTOP
OUTLET CENTER, INC., a California
corporation; MARYAM SAJJAD, DBA
Side Micro, Inc., an individual; VEHID
ABDULLAHI, AKA Victor Alleni, an
individual; SHAHRAM SHIRAZI, AKA
Shawn Shiraz, an individual,

Defendants-Appellants.

Appeal from the United States District Court
for the Central District of California
Manuel L. Real, District Judge, Presiding

Argued and Submitted April 5, 2017
Pasadena, California

Before: M. SMITH and N.R. SMITH, Circuit Judges, and FEINERMAN, District
Judge. **

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Gary Feinerman for the Northern District of Illinois,
 Buy More, Inc., Mojdeh Alam, Laptop Outlet Center, Inc., Maryam Sajjad,

Vehid Abdullahi, and Shahram Shirazi (collectively, Defendants) appeal the

district court’s grant of summary judgment in favor of Microsoft Corporation

(Microsoft) on five causes of action and the resulting judgment entered against

them for $1,950,000 in statutory damages. We review de novo a district court’s

grant of summary judgment. Curley v. City of N. Las Vegas, 772 F.3d 629, 631

(9th Cir. 2014). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

1. To establish a claim of direct copyright infringement, a plaintiff must

show: (1) “ownership of the allegedly infringed material” and (2) “that the alleged

infringers violate[d] at least one exclusive right granted to copyright holders under

17 U.S.C. § 106.” Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159 (9th

Cir. 2007) (quoting A&M Records, Inc. v. Napster, Inc., 239 F.3d 1003, 1013 (9th

Cir. 2001)).

The undisputed evidence demonstrates that Defendants sold 60 units of

software, each of which included a counterfeit copy of Windows 7 or Microsoft

Office 2007. Microsoft possesses a total of five copyright registrations for

Windows 7 and Microsoft Office 2007, which establishes a presumption of

Microsoft’s ownership of the copyrights in the software. Micro Star v. Formgen

Inc., 154 F.3d 1107, 1110 (9th Cir. 1998). Distribution by sale is an exclusive

sitting by designation.

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right granted by copyright protection, which Defendants violated by selling

counterfeit Windows 7 and Microsoft Office 2007 software. 17 U.S.C. § 106(3).

Defendants do not contest Microsoft’s ownership of the copyrights in

Windows 7 and Microsoft Office 2007 or that the 60 software units contained

counterfeit software. Instead, Defendants argue that a genuine dispute of material

fact exists as to whether Defendants personally committed the acts of infringement.

Defendants claim that (1) all acts of infringement were committed by their

business partner Moshen Ravanbaksh, (2) evidentiary objections render the

declaration of Microsoft’s expert witness Helen Ventura, who analyzed the 60

units of software, inadmissible, and (3) Microsoft has produced insufficient

evidence establishing that the 60 units of software were purchased from

Defendants.

None of Defendants’ arguments is sufficient to defeat summary judgment.

First, in attributing all acts of infringement to Ravanbaksh, Defendants ignore the

overwhelming evidence in the record of each individual defendant’s personal

involvement in the sale of the 60 units of counterfeit software and fail to identify

any evidence implicating Ravanbaksh beyond the declarations of Abdullahi and

Alam. But “[c]onclusory, self-serving affidavit[s], lacking detailed facts and any

supporting evidence, are insufficient to create a genuine issue of material fact.”

Hexcel Corp. v. Ineos Polymers, Inc., 681 F.3d 1055, 1063 (9th Cir. 2012) (internal

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quotation marks omitted) (quoting FTC v. Publ’g Clearing House, Inc., 104 F.3d

1158, 1171 (9th Cir. 1997)). Second, Ventura’s declaration is admissible. “At the

summary judgment stage, we do not focus on the admissibility of the evidence’s

form. We instead focus on the admissibility of its contents.” Fraser v. Goodale,

342 F.3d 1032, 1036 (9th Cir. 2003). None of Defendants’ evidentiary objections

raise a valid reason for finding the contents of Ventura’s declaration to be

inadmissible. Third, Microsoft provided uncontroverted evidence that the 60

software units analyzed by Ventura were in fact purchased from Defendants:

Microsoft produced declarations from the individuals who made the purchases and

customer submissions that included Defendants’ invoices and photographic

documentation of the purchased software units. Accordingly, Defendants have not

identified any genuine disputes of fact as to either element of Microsoft’s

copyright infringement claim, and the district court properly granted summary

judgment to Microsoft.

2. To establish a claim of direct trademark infringement, a plaintiff must

show “(1) it has a valid, protectable trademark, and (2) that [the defendant’s] use of

the marks [in commerce] is likely to cause confusion.” Applied Info. Scis. Corp. v.

eBay, Inc., 511 F.3d 966, 969 (9th Cir. 2007).

Microsoft’s expert witness found nine counterfeit trademarks present

throughout the 60 units of software. Microsoft has valid registrations for all nine

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trademarks at issue, which “constitutes prima facie evidence of the validity of the

registered mark[s].” Id. at 970 (quoting Brookfield Commc’ns, Inc. v. W. Coast

Entm’t Corp., 174 F.3d 1036, 1047 (9th Cir. 1999)). Microsoft has also created a

presumption of the likelihood of confusion because Defendants used counterfeit

trademarks with an intent to confuse, which can be inferred from Defendants’

marketing of the counterfeit software as authentic Microsoft software. See Louis

Vuitton Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936, 945 (9th Cir. 2011).

Defendants offer no evidence to rebut the validity of Microsoft’s trademarks

or the presumption of a likelihood of confusion and instead rely on the same

arguments that we rejected with respect to Microsoft’s copyright infringement

claim. Defendants therefore have not identified any genuine disputes of material

fact as to either element of Microsoft’s trademark infringement claim, and the

district court properly granted summary judgment to Microsoft.

3. Claims for false designation of origin under the Lanham Act and unfair

competition under California common law both share a single test: likelihood of

confusion. Walter v. Mattel, Inc., 210 F.3d 1108, 1111 (9th Cir. 2000). The

analysis for these claims is therefore identical to the analysis for Microsoft’s

trademark infringement claim. Dreamwerks Prod. Grp., Inc. v. SKG Studio, 142

F.3d 1127, 1129 n.2 (9th Cir. 1998). For the reasons explained above, Defendants

have not demonstrated a genuine dispute of material fact as to the element of

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likelihood of confusion. The district court properly granted summary judgment to

Microsoft on these claims.

4. The Anti-Counterfeiting Amendments Act of 2004 criminalizes the

knowing trafficking of counterfeit or illicit labels affixed to, enclosing, or

accompanying a copy of a computer program. 18 U.S.C. § 2318(a)(1)(A)(ii). This

statute provides a civil remedy for any copyright owner injured by a violation. 18

U.S.C. § 2318(e)(1). Where, as here, the computer programs in question were

copyrighted, a civil claim under this statute requires the plaintiff to show: (1)

ownership of the copyrights for the works at issue and that the defendant (2)

knowingly (3) trafficked in illicit or counterfeit labels that were affixed to,

enclosed, or accompanied, or were designed to be affixed to, enclosed, or

accompany the works at issue. See generally 18 U.S.C. § 2318.

First, as discussed above, Microsoft possesses five valid copyright

registrations for Windows 7 and Microsoft Office 2007, which establishes a

presumption of ownership of these copyrights. Second, the 60 units of software

sold by Defendants contained illicit Certificates of Authority (COA), because the

COAs were distributed with counterfeit copies of Microsoft software in violation

of the terms of Microsoft’s Registered Refurbisher Program (RRP). 18 U.S.C. §

2318(b)(4)(B)(i). Third, Defendants were aware that RRP COAs were only to be

paired with approved software, as participation in the RRP was conditioned on

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signing an agreement which memorialized the program’s terms. By pairing COAs

with non-approved software, it can be inferred that Defendants had knowledge that

the COA labels were illicit.

Defendants do not raise any challenges specific to this claim and rest on the

same arguments that we have now rejected with respect to the preceding four

causes of action. Defendants therefore have not identified any genuine disputes of

fact with respect to any element of Microsoft’s Anti-Counterfeiting Amendments

Act of 2004 claim, and the district court properly granted summary judgment to

Microsoft.

5. Defendants contend that Shirazi and Sajjad received insufficient service

of process, because both are residents of Iran and neither was served there. We

need not address this issue with respect to Shirazi, as he waived this objection by

failing to raise it by motion or include it in a responsive pleading. Fed. R. Civ. P.

12(h)(1)(B).

Sajjad was properly served the complaint and summons pursuant to Federal

Rule of Civil Procedure 4(f)(3). Rule 4(f)(3) permits the service of any individual

in a foreign country “by other means not prohibited by international agreement, as

the court orders.” We have “commit[ted] to the sound discretion of the district

court the task of determining when the particularities and necessities of a given

case require alternate service of process under Rule 4(f)(3).” Rio Props. Inc. v.

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Rio Int’l Interlink, 284 F.3d 1007, 1016 (9th Cir. 2002). Due process requires that

the selected means of alternative service of process be “reasonably calculated,

under all the circumstances, to apprise interested parties of the pendency of the

action and afford them an opportunity to present their objections.” Id. at 1016

(quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950)).

The district court did not abuse its discretion in granting Microsoft’s motion

to serve Sajjad by alternative means. Microsoft presented the district court with

evidence that it diligently attempted to serve Sajjad in the United States before

filing the motion for alternative service: Microsoft attempted service at Sajjad’s

last known home addresses in the United States, Sajjad’s counsel and Abdullahi

both declined to accept service on her behalf, and Microsoft did not have an

address for her in Iran. The district court’s determination that alternative service

was necessary was both reasonable and supported by the record.

Furthermore, the authorized means of alternative service were reasonably

calculated to provide notice to Sajjad. The district court permitted Microsoft to

serve Sajjad through email at admin@sidemicro.com and by service on her

counsel. Sajjad had access to that email account, as Side Micro, Inc.’s RRP

account information identified Sajjad as the user associated with that email

account. Sajjad was also in contact with her counsel prior to Microsoft’s request

for alternative service, as evidenced by her counsel’s filing of a motion to dismiss

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with a supporting declaration from Sajjad that predated Microsoft’s request. Sajjad

was therefore validly served pursuant to Rule 4(f)(3).

6. Defendants raise two arguments for the first time on appeal: (1) that the

statutory damages award is excessive pursuant to BMW of North America, Inc. v.

Gore, 517 U.S. 559 (1996), and (2) that the district judge was biased in favor of

Microsoft and should have sua sponte recused himself. We conclude that they are

waived and decline to address them. Yamada v. Nobel Biocare Holding AG, 825

F.3d 536, 543 (9th Cir. 2016) (“Generally, an appellate court will not hear an issue

raised for the first time on appeal.”).

AFFIRMED.

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