Microsoft Corp. v. Big Boy Distribution LLC, et al., 07-80296-CIV, 2008 WL 5100849 (S.D. Fla Dec 3, 2008).

Via their Ireland affiliate, Microsoft distributed software in Jordan through Educational Solutions and Technological Development, Inc (“EdSol”).  The Kingdom of Jordan’s Ministry of Education acquired a license from EdSol to use Microsoft’s Student Media software for its faculty, staff and students.  According to the Ministry’s license, it was not authorized to transfer its license to other users except under limited circumstances, and only with Microsoft’s written consent.

The Court found that, according to non-contradicted evidence presented by Microsoft in support of its motion for summary judgment, Big Boy imported approximately 10,000 units of Student Media software, obtained from the Kingdom of Jordan’s Minister of Education, and then sold the copies to non-student end users in the United States.

In this suit, Microsoft alleged that Big Boy LLC was (Count 1) liable for infringement of Microsoft’s distribution right for the resale of Microsoft software in the U.S.; and (Count 2) liable for infringement of Microsoft’s distribution right for the importation of Microsoft’s software under 17 U.S.C. 602(a).  The Court granted summary judgment in Microsoft’s favor on both claims.

In regards to Count 1, Big Boy LLC asserted the first sale doctrine as a defense, “which holds that once a copyright owner consents to the sale of particular copy of his work, he may not thereafter interfere with subsequent sales or distribution of that particular copy.”   Microsoft contended that § 109(a) didn’t apply because, although the Student Media software at issue was copyrighted in the United States, the software was manufactured and first distributed overseas.

The Court found that the first sale doctrine only acts a defense to copyright claims that involve domestically made copies of U.S. copyrighted works, and not works that are manufactured overseas.  Explained the Court:

The rationale here is that the first sale doctrine protects only resales of works lawfully made “under this title,” a phrase which is generally interpreted to mean works legally made in the United States. That is, the first sale doctrine has no application to copyrighted works manufactured abroad because such works are not made “under this title.” See Parfums Givenchy, Inc. v. Drug Emporium, Inc., 38 F.3d 477, 481-92 (9th Cir.1993); Swatch SA v.. New City, Inc., 454 F.Supp.2d 1245 (S.D.Fla.2006) (Huck, J.) (because Swatch watches were manufactured and first sold abroad, defendant’s importation of watches violated Swatch’s right to prevent importation under 602(a).

Big Boy LLC further asserted that they they were not bound by the terms of Microsoft’s distribution license, because the Jordanian Ministry of Education never entered Microsoft’s licensing agreement.  The Court conducted an evaluation of the contract, finding that Big Boy was bound by the terms of the agreement.  (Somewhat surprisingly, the Court used U.S. law to evaluate the contractual defense.  I’m curious if there were choice of law provision in Microsoft’s licensing agreement with the Kingdom of Jordan.)

The Court also granted summary judgment for Microsoft in regards to their second claim, finding that the importation of the software, as an act in and of itself, infringed Microsoft’s 106(3) right via 17 U.S.C. § 602(a).

Documents:

• Microsoft Corp. v. Big Boy Distribution LLC, et al., 07-80296-CIV, 2008 WL 5100849 (S.D. Fla Dec 3, 2008) (opinion).
• Microsoft Corp. v. Big Boy Distribution LLC, et al., 07-80296-CIV, 2008 WL 5100849 (S.D. Fla. Dec 3, 2008) (defendants motion for partial summary judgment)
• Microsoft Corp. v. Big Boy Distribution LLC, et al., 07-80296-CIV, 2008 WL 5100849 (S.D. Fla. Dec 3, 2008) (response in opposition to plaintiffs motion for partial summary judgment)