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Autodesk, Inc., A Delaware Corporation v. Guillermo Flores

January 31, 2011

AUTODESK, INC., A DELAWARE CORPORATION, PLAINTIFF,
v.
GUILLERMO FLORES, AN INDIVIDUAL;
GREG FLOWERS, AN INDIVIDUAL;
GREGORIO FLORES, AN INDIVIDUAL; AND DOES 1 THROUGH 10, INCLUSIVE,
DEFENDANTS.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

ORDER GRANTING IN PART MOTION FOR DEFAULT JUDGMENT

Plaintiff Autodesk, Inc., moves for default judgment against Defendants Guillermo Flores, Greg Flowers, and Gregorio Flores. Although Plaintiff initially had some contact with Defendants 20 regarding possible settlement of the case, Defendants did not file an Answer or otherwise appear in 21 this case. The Court has considered the motion and declarations submitted by Plaintiff. Pursuant 22 to Civil Local Rule 7-1(b), the Court finds that this motion is appropriate for determination without 23 oral argument and vacates the motion hearing scheduled for February 3, 2011. For the reasons set 24 forth below, the Court grants Plaintiff's motion for default judgment, permanent injunction, 25 statutory damages, and post-judgment interest. The Court denies Plaintiff's request for costs and 26 attorney's fees without prejudice.

copyrighted software products, including computer aided design programs. First Amended Compl. 4 ("FAC") ¶¶ 11, 16-17. Its copyrights are registered with the Copyright Office and cover products 5 including AutoCAD® 2009 software and AutoCAD® 2010 software, as well as numerous other 6 products. FAC ¶ 16. Autodesk also owns trademarks associated with its products, including the 7 trademarks AutoCAD® and Autodesk®, which are registered with the United States Patent and 8

According to the memorandum and declarations submitted in support of its motion for 10 default judgment, Autodesk began investigating the conduct underlying this action in October 11

LaHaie ("LaHaie Decl.") ¶ 9 & Ex. A. The initial advertisement was titled "AutoCAD 2009 14

AutoCAD 2010" and indicated that the seller was located in San Diego, California. The 15 advertisement offered to sell copies of the two Autodesk products and stated "you're getting a 16

$4,000.00 program for 70 bucks.Please [sic] save the questions like, does it come with the manual 17 and box, etc. It's the full program, it works. You save tons of money." Decl. of Eric A. Handler 18 ("Handler Decl.") ¶ 2 & Ex. A. At the time, the suggested retail price for the Autodesk products 19 was $3,995. LaHaie Decl. ¶ 4. The ad also instructed interested buyers to "Call, text, or email" 20 and provided a telephone number. Handler Decl. ¶ 2 & Ex. A. The person who emailed Autodesk 21 about the ad stated that when he contacted the seller and asked if the products were original, the 22 seller responded with the following email: 23

install prior to payment to show you it works just fine. If not no problem however you won't find this 4,000 dollar program for such a good price. Take care.

- Memo

LaHaie Decl. Ex. A. 27 28

I.Background

Plaintiff Autodesk, Inc., develops, markets, distributes, and licenses a variety of

Trademark Office. FAC ¶19. 9

2009, when it received an email notifying it that advertisements offering illegal copies of Autodesk

products had been posted on the website www.craigslist.org ("Craigslist"). Decl. of Evelyn R. 13

They're backed up from an original bro. I sell several a week and have no complaints about me on craigslist or anything negative for that matter. I can help

posted numerous ads on Craigslist offering various versions of several different Autodesk products, 3 including AutoCAD® software, AutoCAD® Civil 3D® software, Autodesk® Revit® software, and 4

Autodesk® 3ds Max® software. Handler Decl., ¶¶ 6, 7, 10-13, Ex. D. Autodesk's investigator 5 purchased one of the products advertised by Defendants on Craigslist and received by mail a 6 recordable digital videodisc ("DVD") on which was hand-written "AUTOCAD 2010." Id. at 7

Subsequent investigation indicated that Defendant Gregorio Flores, aka Greg Flowers,*fn1 had

¶ 5 & Ex. E. Autodesk subjected the disc to forensic analysis and determined that it contained an 8 unauthorized copy of AutoCAD® 2010 software, as well as software used to circumvent the 9 copyright protection measures built into the AutoCAD® 2010 software. LaHaie Decl. Ex. C. The 10 disc also contained instructions for installing the AutoCAD® software in conjunction with the circumvention software so that the AutoCAD® software could be run without an activation code from Autodesk. Id.

(1) copyright infringement in violation of 17 U.S.C. § 501; (2) violation of the circumvention 16 technology provisions of the Digital Millennium Copyright Act, 17 U.S.C. §§ 1201(a), (b); (3) 17 trademark infringement and counterfeiting, in violation of 15 U.S.C. §§ 1114(1) and 1125(a); and (4) false designation of origin, in violation of 15 U.S.C. § 1125(a). Further investigation revealed 19 that Guillermo Flores was the owner of the telephone number listed on the Craigslist ads and had 20 lived at the return address listed on the package received by Autodesk's investigator. Accordingly, 21 on May 12, 2010, Autodesk filed a First Amended Complaint adding Guillermo as a defendant. 22

Complaint. See Certificate of Service, ECF Nos. 12-14. Around the same time, Autodesk also 24 contacted Defendants to determine whether litigation might be avoided. Id. at ¶ 9. In an initial 25 phone conference, Autodesk was able to confirm that Defendants used the names, addresses, and 26 phone number associated with the ads, and Defendants gave Autodesk access to one PayPal 27

Based on the information from its investigations, Autodesk filed the instant action on May 4, 2010, against Defendants Greg Flowers and Gregorio Flores, asserting the following four claims: 15

Handler Decl. ¶ 7. By June 18, 2010, Autodesk had served all Defendants with the First Amended 23

account apparently owned by Gregorio and used by Guillermo to conduct business. Id. at ¶ 13. 2

However, out-of-court talks eventually broke down, and Autodesk gave Defendants notice that it 3 would seek entry of default if Defendants did not file and serve responses to the First Amended 4

Complaint by August 23, 2010. Id. at 23. Defendants failed to respond to the Autodesk's 5 pleadings, and on September 2, 2010, the clerk entered default. Autodesk now moves for entry of 6 default judgment and issuance of a permanent injunction against all Defendants. Autodesk also 7 seeks an award of attorney's fees incurred in this action. 8

II.Motion for Default Judgment

A.Default Judgment

Under Federal Rule of Civil Procedure 55(b)(2), a party may apply to the court for entry of 11 judgment by default. "The district court's decision whether to enter a default judgment is a 12 discretionary one." Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising 13 discretion to enter default judgment, courts typically consider the following factors: (1) the 14 possibility of prejudice to plaintiff, (2) the merits of plaintiff's substantive claim, (3) the 15 sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a 16 dispute concerning the material facts, (6) whether the default was due to excusable neglect, and (7) 17 the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 18

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 19

1.Merits of Plaintiff's Claims and Sufficiency of the Complaint After entry of default, "well-pled allegations in the complaint regarding liability are deemed 21 true." Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). The Court will 22 therefore consider the merits of Autodesk's claims and the sufficiency of its pleadings together. In 23 addition to the allegations in its FAC, Autodesk has also submitted extensive documentation of 24

Defendants' advertisements on Craiglist and on-line transactions via PayPal, as well as detailed 25 declarations documenting Autodesk's investigation of Defendants' activities. The Court will also 26 consider these submissions in evaluating the merits of Autodesks's substantive claims.

a.Copyright Infringement

Autodesk's first cause of action asserts copyright infringement in violation of 17 U.S.C. § 501. The Copyright Act grants the copyright owner the exclusive right to reproduce a 4 copyrighted work, to distribute copies of the work, and to authorize reproduction or distribution. 5

See 17 U.S.C. § 106(1)-(3). To establish copyright infringement, a plaintiff must prove: (1) 6 ownership of a valid copyright, and (2) that the defendant violated at least one exclusive right 7 granted to plaintiff under 17 U.S.C. § 106. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 8 1013 (9th Cir. 2001). Autodesk has clearly met this standard. As to the first element, the FAC 9 alleges that Autodesk owns copyrights in at least fourteen different Autodesk products, including 10 the AutoCAD® 2010 and AutoCAD® 2009 software explicitly offered in Defendants' Craiglist advertisements. See FAC ¶ 17 & Ex. A; Handler Decl. Exs. A-D. These copyrights are registered with the Copyright Office, and Autodesk has provided a list of the registration numbers, 13 registration dates, and product titles as an exhibit to the FAC. FAC Ex. A. As to the second 14 element of infringement, Autodesk alleges that Defendants copied and distributed copyrighted 15

Autodesk products without authorization. FAC ¶ 22. Autodesk has also submitted declarations 16 stating that forensic analysis of a product purchased from Defendants included an unauthorized 17 copy of AutoCAD® 2010 software. LaHaie Decl. ¶ 11 & Ex. C. These allegations are sufficient to 18 establish a claim for copyright infringement pursuant to 17 U.S.C. § 501.

21 circumvention technology, in violation of the Digital Millennium Copyright Act ("DMCA"), 17 22

Defendants who use such devices may be subject to liability under § 1201(a)(1) whether they infringe or not. Because all defendants who traffic in devices that circumvent rights controls 27 necessarily facilitate infringement, they may be subject to liability under § 1201(b)." Chamberlain Group, 381 F.3d at 1195 (emphasis added). The FAC is focused on allegations that Defendants 28 sold or trafficked in circumvention technology and does not ...


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