SoftMan Products Company v. Adobe Systems Inc.

Adobe Systems Inc. (Adobe) (defendant) sold software programs bundled together, called Adobe Collections. Each program in the Adobe Collections was accompanied by an End User License Agreement (EULA), which prohibited each end user from distributing any of the individual software within the Adobe Collections. The EULA only permitted each end user to distribute the entire Collections bundle to another in conjunction with the EULA. Adobe required each customer to agree to the EULA during the software installation process. SoftMan Products Company (SoftMan) (plaintiff), a software-products distributor, purchased the Adobe Collections software from Adobe. SoftMan then broke apart the bundle and sold individual pieces of Adobe Collections software to customers as single products. In litigation, Adobe filed a motion for preliminary injunction on its counterclaim against SoftMan for copyright infringement, contending that SoftMan’s business practices exceeded the scope of rights permitted by the EULA. SoftMan opposed, contending that the first-sale doctrine of 17 U.S.C. § 109(a) allowed it to resell the software that it had purchased from Adobe. Adobe replied that the first-sale doctrine did not apply because the Adobe–SoftMan transaction was a license, not a sale, and that in any event, SoftMan had assented to the terms of the EULA. It was undisputed, however, that SoftMan did not install any of the pieces of the Adobe Collections software before selling them.