The case Softman Products Company LLC., versus Adobe Systems Incorporated presents numerous complex issues in regards to contract law. Softman, a reseller of computer software, has been selling Adobe products that Adobe believes should be distributed as part of a set if they are to be distributed at all. As a result of Softman’s actions, Adobe files a counterclaim because they believe that Softman has infringed on its trademark. Adobe feels that it reputation is at stake because they believe that the products that Softman has been selling have been altered and consumers may have a difficult time receiving the proper technical support if they experienced problems with the software, which could cause consumers not to trust the Adobe name. Softman Products Company believes that they have committed no wrong doing since they do not have a contract with Adobe Systems Incorporated. There are various questions that the court must answer in regards to this case. First of all, what right(s) does Adobe have as owner of the intellectual property? What does Adobe actually own? Does the First Sale Doctrine apply in regards to this case?
Adobe contends that it products are not to be sold, but distributed through licensing agreements, and the end user obtains a license to use the products; however, the end user does not own any of the copyrighted information. The end users agreement allows for the sale or transfer of the software, provided that the person or entity transfers all of the products and surrender all of their rights to use the software (Palma Decl., Ex. 1.). Softman’s case relies on the First Sale Doctrine, which was first reviewed by the United States Supreme Court in 1908, and states, “the owner of a particular copy…lawfully made under this title… is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy.” (Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 28 S. Ct. 722, 52 L.Ed. 1086 (1908). Softman legally purchased the software, and because of the company’s intent to resale the merchandise, they technically were not the end users of the product, so should they be subject to the end users agreement?
Rule of Law and Application:
There are two precedents that Adobe relies on to support their case. The first is Microsoft Corp. v. Harmony Computers and Electronics, Inc., 846 F. Supp. 208, 212 (E.D.N.Y. 1994), and this is a case where the court upholds Microsoft’s claim that Harmony was in violation of a licensing agreement by selling counterfeit products. While Adobe acknowledges that Softman was not selling counterfeit products, they were altering the original collection and selling the products in a manner that Adobe never intended its products to be sold. If a publishing company sold half of a novel or excerpts from a novel without the consent from the author then that would be grounds for copyright infringement. In the above mentioned case, Harmony Computers and Electronics, Incorporated was never a Microsoft licensee and therefore they were never authorized to sell Microsoft products.
Secondly, in the case of Adobe Systems Incorporated verses One Stop Micro Incorporated, which was another case in which Adobe’s products were being altered and the resold, the court stated that, “while One Stop is not a signatory to an Adobe licensing agreement, it is nevertheless subject to the restrictions of those agreements” (Adobe Sys. Inc. v. One Stop Micro, Inc., 84 F. Supp. 2d 1086, 1093 (N.D. Cal. 2000). Softman was not a signatory to an Adobe licensing agreement either, but still should have been subject to the terms and conditions that were set forth by Adobe. Lastly, the court upheld that One Stop could not use the First Sale Doctrine as a defense because the end user was not the actual owner of the product, they only bought a license to use the product.
In Conclusion, Adobe Systems Incorporated must be allowed to have some control over the way their copyrighted products are distributed. While Softman was not altering the physical software or willingly peeling off stickers to deceive the public like Harmony Computers and Electronics and One Stop Micro were doing, Softman was still guilty of unbundling products that were meant to be distributed together as a bundle, and they should have been held accountable to the restrictions of the licensing agreement, just as One Stop Micro Incorporated was held accountable for their actions. Secondly, the consumers that purchased software from Softman received only a license to use the software, therefore the First Sale Doctrine defense should be null and void just as it was in the One Stop Computers Case.