Adobe Systems Incorporated v. Kornrumpf

Filing 230

ORDER by Judge Claudia Wilken GRANTING PARTIAL SUMMARY JUDGMENT (ndr, COURT STAFF) (Filed on 6/15/2012)

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 ADOBE SYSTEMS INCORPORATED, 5 6 7 8 9 United States District Court For the Northern District of California 10 11 12 No. C 10-2769 CW Plaintiff, ORDER GRANTING PARTIAL SUMMARY JUDGMENT v. HOOPS ENTERPRISE LLC; and ANTHONY KORNRUMPF, Defendants. ________________________________/ AND ALL RELATED CLAIMS ________________________________/ On June 1, 2012, the Court converted Plaintiff Adobe Systems 13 Incorporated’s first motion in limine, addressing the defense 14 raised by Defendants Anthony Kornrumpf and Hoops Enterprise LLC 15 that the prior settlement agreement between the parties granted 16 Defendants permission to sell OEM software outside of the license 17 terms, into a motion for partial summary judgment under Federal 18 Rule of Civil Procedure 56. 19 parties an opportunity to submit additional briefs and evidence 20 addressing the motion for partial summary judgment. 21 subsequently filed a supplemental opposition to Adobe’s motion. 22 Having considered the papers filed by the parties, the Court 23 GRANTS Adobe’s motion. 24 25 At that time, the Court allowed the Defendants BACKGROUND Adobe distributes its software products pursuant to different 26 types of licenses. 27 educational product (‘EDU’ product),” which “is priced 28 One type of such software is “academic or 1 considerably lower than retail for those who are students or 2 otherwise affiliated with educational institutions.” 3 in Supp. of First Mot. for Partial Summ. J. ¶ 2, Ex. A (Stickle 4 Decl.) ¶ 6. 5 is Original Equipment Manufacturer (OEM) products, which are 6 distributed in a bundle with approved hardware components. 7 ¶ 7; see also Kornrumpf Decl. in Supp. of Defs.’ Mot. for 8 Preliminary Inj. ¶ 2 (acknowledging that “OEM software is intended 9 to be included with a hardware component”). Coombs Decl. Another type of restricted software licensed by Adobe Id. at The bundles are United States District Court For the Northern District of California 10 product-specific and Adobe’s product may not be unbundled and sold 11 separately or re-bundled with products not previously approved by 12 Adobe. 13 Stickle Decl. ¶ 7. In an earlier related case, Adobe Systems LLC v. Kornrumpf, 14 Case No. 08-5513 CW (N.D. Cal.), Adobe brought claims for 15 copyright and trademark infringement against Defendant Anthony 16 Kornrumpf alleging that he distributed unauthorized copies of 17 Adobe’s software. 18 agreement between the parties, and the Court entered a stipulated 19 permanent injunction. That action was resolved by way of a settlement See Case No. 08-5513, Docket No. 27. 20 The settlement agreement, which was executed on July 10, 21 2009, stated that the parties entered into it to settle the action 22 amicably and avoid the risk and expense of future litigation. 23 Settlement Agreement, 1.1 24 stipulated judgment holding Kornrumpf liable for one million 25 dollars if, among other things, he breached his promise not to It provided that Adobe could file a 26 27 28 1 Because the settlement agreement was filed under seal, the Court describes its content in general terms in this Order. 2 1 infringe Adobe’s copyrights and trademarks as stated in the 2 settlement agreement. 3 advertise, offer for sale, sell or distribute any piratical, 4 counterfeit or Academic or Educational products of Adobe. 5 ¶ 4. 6 only, doing these actions with Adobe’s software that is not 7 piratical, counterfeit, Academic or Educational would not 8 constitute a breach of the injunction and would not be grounds for 9 filing of the stipulated judgment. Id. at ¶ 3. In it, Kornrumpf agreed not to Id. at The agreement provided that, for purposes of the agreement Id. It also stated, “The United States District Court For the Northern District of California 10 Agreement is without prejudice to any other valid rights of the 11 Parties.” 12 Id. In the agreement, Adobe and the Software & Information 13 Industry Association (SIIA) made certain warranties and 14 representations, including that they were not aware of any other 15 infringement by Kornrumpf involving counterfeit or Academic or 16 Educational products and that they intended no further legal 17 action or threats thereof against Kornrumpf for such infringement 18 if he abided by the terms of the agreement. Id. at ¶ 8. 19 The agreement released all claims specifically or generally 20 referred to in the agreement and complaint, including those that 21 could have been brought in the complaint, but excluding any act 22 taking place after the agreement’s effective date. 23 The agreement also contained an integration clause, stating that 24 it was the entire agreement and understanding between the parties 25 and superseded and replaced all prior negotiations and proposed 26 agreements, written or oral. 27 representations and warranties made in the agreement, no party 28 relied on any statement, representation or promise of any other Id. at ¶ 9. It also stated that, except for the 3 1 party in entering into the agreement. 2 agreement also provided that it was not transferable or 3 assignable, except to the extent that Adobe’s and SIIA’s rights 4 and responsibilities could be transferred to their successors in 5 the event of a merger or acquisition. 6 7 Id. at ¶ 18. this Court, similarly provided, b) Defendant specifically agrees that he will not now, nor at any time in the future, advertise, offer to sell, sell or distribute any Academic or Educational versions of Plaintiff’s software. 9 10 United States District Court For the Northern District of California Finally, the The stipulated permanent injunction, which was entered by 8 c) This Injunction is without prejudice to any other valid rights of the Plaintiff or Defendant. 11 12 Id. at ¶ 16. Case No. 08-5513, Docket No. 27, ¶ 4. 13 During the settlement negotiations between the parties 14 preceding their execution of the agreement, Kornrumpf’s attorney 15 in the earlier action, Michael Miretsky, an attorney at McCurdy & 16 Leibl, LLP, the same firm which currently represents Defendants, 17 communicated to Adobe’s counsel that Kornrumpf would only agree to 18 a settlement if he were allowed to continue selling OEM versions 19 of Adobe software products. 20 testifies that early versions of the settlement agreement and 21 injunction “included a blanket injunction against Mr. Kornrumpf 22 selling any ‘unauthorized products’ which were merely defined as 23 any version of Adobe’s products not authorized to be sold,” but 24 that this was replaced with a list in the final version. 25 ¶ 7. 26 Miretsky Suppl. Decl. ¶ 5. Miretsky Id. at On June 12, 2009, during the negotiations between the 27 parties’ attorneys prior to the execution of the settlement 28 agreement, Miretsky sent Adobe’s counsel, Annie Wang, an email 4 1 expressing his client’s concern about triggering the stipulated 2 judgment, and stating in part 3 All our client wants to do is to be able to sell authentic software on his auction site. We are not looking for a license to do that. We are not even looking for a concession that we are permitted to do that under the first sale doctrine. All we want to do is make sure that doing so is not going to violate the injunction and trigger the stipulated judgment. I would propose the following amendment to paragraph 4c: 4 5 6 7 “Nothing herein shall prevent Defendant from otherwise advertising, selling, offering for sale or distributing Plaintiff’s software. For purposes of this Agreement only, advertising, selling, offering for sale or distributing Plaintiff’s software on any auction site, shall not constitute a breach of this injunction and shall not be grounds for filing of the Stipulated Judgment. For purposes of this Agreement only advertising, selling, offering for sale or distributing OEM versions of Plaintiff’s software shall not constitute a breach of this injunction and shall not be grounds for filing of the Stipulated Judgment so long as Defendant distributes the software together with hardware or peripheral equipment authorized by any valid license or distribution agreement.” 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 Wang Decl. ¶ 3, Ex. B. incorporated in the injunction or settlement agreement. On June 17, 2009, Wang emailed an Early Neutral Evaluation 18 19 20 21 22 This particular language was not statement to the parties’ neutral evaluator and copied Miretsky on the email. Wang Suppl. Decl. ¶ 8, Ex. D.2 The document stated in part, Adobe also received inquiries from Defendant’s customers regarding the legitimacy of Defendant’s eBay sales of 23 2 24 25 26 27 28 Defendants object to the admissibility of the statement, arguing that it is hearsay and irrelevant, because the ENE never took place and the email was sent only two days before the execution of the settlement agreement. The Court overrules this objection. First, the email shows that it was sent several weeks before the agreement was signed. Regardless, it is relevant to show what Adobe had communicated to Kornrumpf. It is not hearsay, because it is not offered to prove the truth of the matters stated. 5 OEM software that appeared to have been sold with items such as photo paper. While Plaintiff has not yet had an opportunity to fully explore the OEM issues and the origin of those products, it believes Defendant is not operating under any valid distribution agreement or license with Plaintiff or any of its authorized distributors and these OEM sales are also unlawful and in violation of the Copyright Act. 1 2 3 4 5 6 Id. After the settlement agreement was executed, Kornrumpf 7 returned, to Adobe, software valued at approximately $21,000. 8 Kornrumpf Suppl. Decl. in Opp. to Adobe’s Second Motion for 9 Partial Summ. J. (Kornrumpf Suppl. Decl.) ¶ 3. United States District Court For the Northern District of California 10 11 He retained Adobe OEM software and began relisting it for sale on eBay. Id. Several months after the settlement agreement was executed, 12 in October and November 2009, Adobe, through the SIIA, used eBay’s 13 notice and takedown procedures to remove several of Kornrumpf’s 14 listings of Adobe OEM software. 15 Wang Suppl. Decl. ¶ 11. 16 eBay, stating that he had the right to distribute this software. 17 Kornrumpf Decl. ¶ 4. 18 Digital Millennium Copyright Act, 17 U.S.C. § 512, eBay was 19 required to reinstate Kornrumpf’s listings upon receipt of his 20 counter-notices, unless Adobe filed suit. 21 § 512(g)(2)(C). Kornrumpf Decl. ¶¶ 2-3; see also Kornrumpf filed counter-notices with Pursuant to the procedures set forth in the See 17 U.S.C. 22 Defendants’ counsel, Reagan Boyce, another attorney at 23 McCurdy & Leibl, LLP, contacted Wang to ask why Adobe had filed 24 takedown notices against Kornrumpf’s eBay account. 25 2009, Boyce emailed Wang and stated that she was asking about an 26 auction that was removed on October 29, 2009 for “commercially 27 licensed versions” of a piece of software, “No academic or 28 educational versions.” Boyce Suppl. Decl., Ex. B. 6 On November 5, Wang responded 1 on the same day, stating, “‘Commercially licensed versions’ is too 2 vague for us to make a determination,” and asking for additional 3 information “about the product (e.g., OEM, full retail, etc.)?” 4 Id. 5 OEM. 6 Kornrumpf’s auction reinstated and/or informing eBay that it was 7 removed in error.” 8 responded, “I am following up with the client re your questions.” 9 Id. The next day, Boyce responded, in part, “The software was Can you please let me know what is the status of getting Mr. Id. Less than a half hour later, Wang In her declaration, Wang explains that she asked Boyce United States District Court For the Northern District of California 10 “multiple times for details about what Kornrumpf was selling as 11 the prior Settlement Agreement did not prevent Defendant Kornrumpf 12 from distributing retail versions or even OEM versions if 13 correctly distributed with the original hardware pursuant to 14 Adobe’s licensing restrictions.” 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Wang Suppl. Decl. ¶ 12.3 On November 17, 2009, Boyce also sent a letter to eBay, with a carbon copy to Wang. The letter stated, in part, Mr. Kornrumpf entered into an agreement with Adobe on June 19, 2009, regarding the sale of Adobe software products by Mr. Kornrumpf. Mr. Kornrumpf agreed that he would not advertise, offer for sale, sell or distribute any piratical, counterfeit, academic or educational versions of Adobe software. Under the agreement, Mr. Kornrumpf’s right to sell any other versions of Adobe software, including commercially licensed OEM software, was preserved. On Thursday, October 29, 2009, at the request of SIIA acting on behalf of Adobe, an auction posted by Mr. 3 Defendants object to this paragraph of Wang’s declaration as “improper argument” and under the best evidence rule, stating that Wang failed to attach the email exchange that would show the communications. However, Wang’s statement is not argument and instead explains her reasons for her own actions. She does not purport to describe the contents of the email exchange, which Defendants had already offered into evidence. Accordingly, the Court overrules Defendants’ objection. 7 1 2 3 Kornrumpf was removed by eBay. This auction was one of many auctions for the same title of software that SIIA requested be removed. The product offered by Mr. Kornrumpf was not educational, academic, counterfeit or piratical in nature or origin and therefore should not have been removed. . . . 4 Boyce Decl. ¶ 5, Ex. B. 5 not respond to this letter, or attempt “to ‘correct’ any 6 misunderstanding.” 7 Defendants state that Adobe’s counsel did Boyce Decl. ¶¶ 5-6. For months thereafter, Kornrumpf did not hear anything more 8 about the removal of the listings and assumed that this confirmed 9 his belief that the listing had been taken down in error. United States District Court For the Northern District of California 10 11 Kornrumpf Decl. ¶ 5. Adobe initiated the instant lawsuit on June 24, 2010. 12 LEGAL STANDARD 13 Summary judgment is properly granted when no genuine and 14 disputed issues of material fact remain, and when, viewing the 15 evidence most favorably to the non-moving party, the movant is 16 clearly entitled to prevail as a matter of law. 17 P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); 18 Eisenberg v. Ins. Co. of N. Am., 815 F.2d 1285, 1288-89 (9th Cir. 19 1987). 20 Fed. R. Civ. The moving party bears the burden of showing that there is no 21 material factual dispute. 22 true the opposing party’s evidence, if supported by affidavits or 23 other evidentiary material. 24 815 F.2d at 1289. 25 in favor of the party against whom summary judgment is sought. 26 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 27 587 (1986); Intel Corp. v. Hartford Accident & Indem. Co., 952 28 F.2d 1551, 1558 (9th Cir. 1991). Therefore, the court must regard as Celotex, 477 U.S. at 324; Eisenberg, The court must draw all reasonable inferences 8 1 Material facts which would preclude entry of summary judgment 2 are those which, under applicable substantive law, may affect the 3 outcome of the case. The substantive law will identify which 4 facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 5 242, 248 (1986). 6 Where the moving party does not bear the burden of proof on 7 an issue at trial, the moving party may discharge its burden of 8 production by either of two methods: 9 United States District Court For the Northern District of California 10 11 12 The moving party may produce evidence negating an essential element of the nonmoving party’s case, or, after suitable discovery, the moving party may show that the nonmoving party does not have enough evidence of an essential element of its claim or defense to carry its ultimate burden of persuasion at trial. Nissan Fire & Marine Ins. Co., Ltd., v. Fritz Cos., Inc., 210 F.3d 13 1099, 1106 (9th Cir. 2000). 14 If the moving party discharges its burden by showing an 15 absence of evidence to support an essential element of a claim or 16 defense, it is not required to produce evidence showing the 17 absence of a material fact on such issues, or to support its 18 motion with evidence negating the non-moving party’s claim. Id.; 19 see also Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 885 (1990); 20 Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). If 21 the moving party shows an absence of evidence to support the 22 non-moving party’s case, the burden then shifts to the non-moving 23 party to produce “specific evidence, through affidavits or 24 admissible discovery material, to show that the dispute exists.” 25 Bhan, 929 F.2d at 1409. 26 If the moving party discharges its burden by negating an 27 essential element of the non-moving party’s claim or defense, it 28 9 1 must produce affirmative evidence of such negation. 2 F.3d at 1105. 3 burden then shifts to the non-moving party to produce specific 4 evidence to show that a dispute of material fact exists. 5 Nissan, 210 If the moving party produces such evidence, the Id. If the moving party does not meet its initial burden of 6 production by either method, the non-moving party is under no 7 obligation to offer any evidence in support of its opposition. 8 Id. 9 ultimate burden of persuasion at trial. This is true even though the non-moving party bears the United States District Court For the Northern District of California 10 11 Id. at 1107. DISCUSSION Adobe asks that the Court rule that, as a matter of law, the 12 settlement agreement does not provide an express or implied “carve 13 out” authorizing Defendants to sell OEM software outside of OEM 14 licensing restrictions, as Defendants contend. 15 that, in the agreement, it released claims that could have been 16 brought in the first lawsuit, including past sales of unlicensed 17 OEM software. 18 before the execution of the settlement agreement. Adobe acknowledges Adobe thus does not seek damages for such sales 19 Defendants oppose Adobe’s motion, arguing that, while the 20 settlement agreement does not provide an express authorization, it 21 “implicitly grants Defendants affirmative rights” to sell 22 unbundled OEM software. 23 specifically identifying four types of software to be enjoined” in 24 the settlement agreement and proposed permanent injunction, 25 “plaintiff crated [sic] the inference that any software not 26 enjoined Defendant would be permitted to sell,” thereby giving 27 Defendants “informal permission” to sell unbundled OEM software. 28 Defs.’ Suppl. Brief at 2-3. Opp. at 5. 10 Defendants reason that, “by 1 Adobe argues, and Defendants do not dispute, that Hoops 2 Enterprise LLC cannot raise this defense, because it was not a 3 party to the underlying agreement. 4 there were an express or implied grant of rights in the agreement, 5 this would not extend to Hoops Enterprise LLC, because it did not 6 exist at the time of the agreement was executed, see Defs.’ Mots. 7 in Limine 5, 8, and was not a party to the agreement. 8 Settlement Agreement ¶ 18. 9 As Adobe points out, even if See Further, this Court finds that there is no material dispute United States District Court For the Northern District of California 10 of fact that the settlement agreement and permanent injunction in 11 the prior case did not give Defendants authorization to distribute 12 OEM software outside of the licensing terms. 13 Under California law, if contract terms are disputed, even 14 where the contract terms appear to the court to be unambiguous, 15 “‘the trial court must provisionally receive any proffered 16 extrinsic evidence which is relevant to show whether the contract 17 is reasonably susceptible of a particular meaning.’” 18 Mortg. Co. v. Fed. Realty Inv. Trust, 631 F.3d 1058, 1067 (9th 19 Cir. 2011) (quoting Morey v. Vannucci, 64 Cal. App. 4th 904, 912 20 (1998)). 21 extrinsic evidence to establish an ambiguity in the parties' 22 intent independent from the terms of the contract; instead, it can 23 only be used to expose or resolve a latent ambiguity in the 24 language of the agreement itself.” 25 Inc., 578 F.3d 1201, 1210 (10th Cir. 2009). 26 evidence reveals a latent ambiguity and that the contract is 27 reasonably susceptible of the proffering party’s interpretation, 28 that evidence must then be admitted to assist in the First Nat’l However, “California law does not permit the use of 11 SCO Group, Inc. v. Novell, If the extrinsic 1 interpretation of the contract. 2 1067; see also Winet v. Price, 4 Cal. App. 4th 1159, 1165 (1992). 3 If conflicting extrinsic evidence supports different 4 interpretations of ambiguous contractual language, this poses a 5 question of fact not amenable to summary judgment. 6 Nat’l, 631 F.3d at 1067. 7 See First Nat’l, 631 F.3d at See First On its face, the settlement agreement appears unambiguous. 8 Kornrumpf agreed that he would not distribute any “piratical, 9 counterfeit or Academic or Educational products” of Adobe. If he United States District Court For the Northern District of California 10 did, Adobe could file a stipulated judgment holding him liable for 11 one million dollars. 12 software that was not piratical, counterfeit, Academic or 13 Educational versions of Adobe’s software, that activity would not 14 constitute a breach of the injunction and would not be grounds for 15 Adobe to file the stipulated judgment. 16 not affect “any other valid rights of the Parties,” neither party 17 gained or relinquished any rights that were not specifically 18 enumerated in the agreement. 19 violated Adobe’s separate rights in products not covered by the 20 agreement, such as by distributing OEM software outside of its 21 licensing restrictions, Adobe did not relinquish its right to hold 22 Kornrumpf liable through means other than filing the stipulated 23 judgment, such as by initiating a new court action. 24 Conversely, if Kornrumpf distributed Because this agreement did Thus, if Kornrumpf otherwise Defendants’ proffered extrinsic evidence does not establish 25 that the settlement agreement is ambiguous. 26 is not reasonably susceptible to the interpretation that they 27 urge. 28 OEM software after the execution of the agreement and thus, by Even if it were, it Defendants argue that Adobe knew that Defendants would sell 12 1 failing to include a specific prohibition of this conduct, 2 implicitly allowed Defendants to do so. 3 distinction between selling OEM software bundled with its original 4 hardware, and selling OEM software without its original hardware. 5 The settlement agreement did not affect Kornrumpf’s rights to 6 distribute OEM software in compliance with its licensing terms, 7 but neither did it grant him the right to do so outside of those 8 terms. 9 actions were a violation of Adobe’s rights because Defendants sold Defendants ignore the Adobe has consistently taken the position that Defendants’ United States District Court For the Northern District of California 10 OEM software out of compliance with the licensing restrictions, 11 which required that the OEM software be distributed with specific 12 hardware components, and not simply because they distributed OEM 13 software at all. 14 proposed language, Defendants clearly understood and acknowledged 15 this distinction. 16 Further, as demonstrated by their attorney’s Defendants offer as evidence a declaration from Miretsky that 17 attests to his interpretation of the agreement as including an 18 affirmative “carve-out” allowing Defendants to sell unbundled OEM 19 software. 20 21 22 23 24 25 26 27 28 In his declaration, he states, The purpose of the carve out provision in the settlement agreement and injunction was to permit Mr. Kornrumpf to sell OEM versions of the Adobe software products. It was the intent of the parties that continued sales of OEM software would not violate Adobe’s intellectual property rights. If there was no understanding and agreement by Adobe that Mr. Kornrumpf would continue to sell OEM versions, and only OEM versions, for the Adobe software products, the carve out provision would have been unnecessary. Miretsky Decl. ¶ 8; see also Miretsky Suppl. Decl. ¶ 8. However, this declaration impermissibly consists of argument and conclusions, and is not limited to facts within his knowledge. 13 1 Miretsky purports to state “the intent of the parties” and “the 2 purpose of the carve out provision” without offering any 3 foundation for his statement of Adobe’s beliefs and purposes. 4 Accordingly, the Court sustains Adobe’s objections to this 5 paragraph. 6 Contrary to his contention, the references to “piratical, 7 counterfeit, Academic or Educational versions” are not rendered 8 superfluous by Adobe’s interpretation of the agreement and 9 injunction. Id. Further, Miretsky’s arguments are not persuasive. As explained above, these terms limit the activities United States District Court For the Northern District of California 10 that would trigger the filing, without a trial, of the stipulated 11 judgment and accompanying one million dollar liability for 12 Kornrumpf, to only the enumerated types of software, so that Adobe 13 could not use the stipulated judgment to get a judgment 14 automatically against Kornrumpf for misuse of other software 15 types. 16 June 12, 2009 email. 17 Miretsky himself recognized the importance of this in his Defendants further argue that “evidence regarding the months 18 of negotiation and the back and forth discussions between the 19 parties as to what was acceptable, what was agreed upon and how 20 best to achieve the goals of both parties, i.e., the true intent 21 of the parties” supports their construction. 22 evidence does not support their proposed construction. 23 parties discussed OEM software during their negotiations, the 24 parties chose in their final agreement not to make specific 25 reference to OEM software. 26 agreement was “without prejudice to any other valid rights of the 27 Parties.” 28 parties any rights that they did not already have, and Kornrumpf However, this While the Instead, they stated that the Settlement Agreement ¶ 4. 14 Again, this did not give the 1 did not have a right to sell unlicensed OEM software either before 2 or after executing the settlement agreement. 3 language that Kornrumpf’s attorney himself proposed for inclusion 4 in the agreement demonstrates that the parties understood that any 5 permissible distribution of OEM software would have to be 6 “together with hardware or peripheral equipment authorized by any 7 valid license or distribution agreement.” 8 9 Further, the Wang Decl. ¶ 3, Ex. B. Defendants next assert that the parties’ conduct supports that their interpretation is reasonable. “A party’s conduct United States District Court For the Northern District of California 10 occurring between execution of the contract and a dispute about 11 the meaning of the contract’s terms may reveal what the parties 12 understood and intended those terms to mean. 13 evidence of such conduct, including concealment of certain 14 information, is admissible to resolve ambiguities in the 15 contract’s language.” 16 Inc., 43 Cal. 4th 375, 393 (2008). 17 that Adobe unreasonably delayed in bringing this suit or in 18 informing Defendants that the agreement did not give Kornrumpf 19 permission to sell unbundled OEM software. 20 permit an inference that Adobe’s conduct suggested that the 21 language in the contract was ambiguous, or reasonably susceptible 22 to Defendants’ proposed interpretation. 23 non-judicial procedures, specifically submitting takedown notices 24 to eBay, to address Defendants’ actions. 25 neutral evaluation statement, Adobe explained to Kornrumpf the 26 distinction between distributing unbundled OEM software and 27 distributing it in compliance with a valid distribution agreement 28 or license. For this reason, City of Hope Nat’l Med. Ctr. v. Genentech, Defendants appear to suggest The evidence does not Adobe utilized Further, in the early Kornrumpf, through his attorneys as demonstrated by 15 1 their emails, evidenced a clear understanding of this difference. 2 Adobe took the time to investigate whether Kornrumpf’s 3 distribution of OEM software was bundled properly in compliance 4 with the relevant distribution and licensing agreements. 5 Finally, Defendants contend that the differences between the 6 injunction entered in the prior case between the parties and 7 injunctions from other litigation involving Adobe demonstrate the 8 parties’ intent to grant Kornrumpf the right to sell unbundled OEM 9 software. The only difference between the injunction entered by United States District Court For the Northern District of California 10 the Court here and the injunctions entered by other courts is the 11 inclusion of paragraphs 4(b) and (c). 12 Court used in these paragraphs does not state or imply that 13 Kornrumpf was granted the right to sell unbundled OEM software; 14 instead, the Court’s language expressly states, and means, that 15 the parties both retained any “valid rights” as to anything not 16 specifically enumerated. 17 Auto., Aero. & Agric. Implement Workers, Local No. 1093, 154 F.3d 18 1136, 1147 (10th Cir. 1998) (“The district judge’s interpretation 19 of his own order is, of course, the most authoritative.”). 20 Kornrumpf did not already have a valid right to sell unbundled OEM 21 software, this Court did not grant it to him through those 22 provisions. 23 statement in the Court’s injunction. 24 The language that this See Lampkin v. Int’l Union, United If Defendants’ interpretation contradicts the clear Thus, the Court finds that the extrinsic evidence proffered 25 does not disclose any latent ambiguity in the settlement 26 agreement. 27 evidence does not show that it is reasonably susceptible to 28 Defendants’ interpretation. If the agreement were somehow ambiguous, the extrinsic If it were susceptible to Defendants’ 16 1 interpretation, and the extrinsic evidence was admitted to show 2 the intent of the parties, it does not raise a material dispute of 3 fact that the parties intended the settlement agreement in the 4 prior case to give Defendants authorization to distribute OEM 5 software outside of the licensing terms. 6 finds that its permanent injunction unambiguously did not do so. Furthermore, the Court 7 CONCLUSION 8 For the reasons set forth above, the Court GRANTS Adobe’s 9 United States District Court For the Northern District of California 10 11 first motion in limine, which was converted to a motion for partial summary judgment (Docket Nos. 181 and 204). IT IS SO ORDERED. 12 13 14 Dated: 6/15/2012 CLAUDIA WILKEN United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17

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