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Adobe Loses Copyright Infringement Case to Software Surplus

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By Jonathan R. Tung, Esq. on January 04, 2016 3:00 PM

If you buy a software program and sell that software program to a third person, is that a copyright violation? According to Adobe it is.

But not according to the Court of Appeals in the Ninth Circuit. The circuit court held that Adobe did not meet the shifted burden it held to prove that Joshua Christensen and his company Software Surplus had violated alleged copyright and trademark rights held by the Adobe.

The Case of Software Surplus

In the case at bar, Joshua Christensen bought Adobe developed software which he purchased from a third party vendor. He sold the very same software on his website for his business, Software Surplus. Adobe sued him for copyright and trademark infringement, alleging that he did not acquire permission to do so.

The "First Sale" Doctrine

Christensen defended on grounds of the first sale doctrine -- the copyright doctrine that allows the purchaser of a copyrighted work to sell copies of that work to buyers without first seeking the copyright owner's permission. The district judge agreed with Christensen and ruled for him on both the copyright and trademark claims, noting that Adobe failed to prove that its software was really a license, and not a sale. Had merely a license to use the software existed, then a sale of the software would technically be a form of intellectual property trespass, and therefore unlawful.

Swimming Upstream

The circuit affirmed the lower court's ruling and remarked that "in the face of a slam-dunk copyright violation," Christensen successfully shifted the burden onto Adobe's shoulders to prove that the sale was not a license.

In these modern times, unbeknownst to many customers, the "purchase" of programs is legally couched as a "license" to use that software. Since a license is not a form of ownership, no copyright shield under the first sale doctrine applies. In the opinion of Judge McGowan, software licensing agreements stand poised dangerously to swallow up the first sale doctrine.

Here, the court opined that Adobe, as the copyright holder, was in a better position to prove that Christensen had a license (or did not) than Christensen was in any position to prove that he did have a license -- which could not have existed. The task, the circuit opined, should not be difficult for a company like Adobe.

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