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Adobe Systems v. Stargate Software

216 F. Supp. 2d 1051 (2002)

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Adobe Systems v. Stargate Software

United States District Court for the Northern District of California

216 F. Supp. 2d 1051 (2002)

Facts

Adobe Systems, Inc. (Adobe) (plaintiff) made educational versions of its popular software packages available at a discount to students and educators by selling CD-ROMs containing the educational versions through distributors. The distributors were permitted to transfer the packages only to resellers who had signed educational reseller agreements with Adobe. The educational reseller agreements restricted the resellers’ rights to distribute the software in numerous ways, including a requirement that end users provide proof of their status as students, faculty, or educational institutions. The educational reseller agreements also explicitly incorporated Adobe’s end-user license agreement, a shrinkwrap agreement specifying that the customer was granted a nonexclusive license to use the software. Stargate Software, Inc. (Stargate) (defendant) was a discount software distributor. Stargate purchased Adobe educational software and distributed it at below-market prices to retail customers and unauthorized resellers. Adobe filed suit, alleging that Stargate infringed Adobe’s copyrights by acquiring and reselling educational versions of the software without Adobe’s authorization. Stargate argued that it was the rightful owner of copies of the Adobe software products and that its sales of those copies were proper under the first-sale doctrine. Adobe and Stargate filed cross-motions for summary judgment.

Rule of Law

Issue

Holding and Reasoning (Ware, J.)

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