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Microsoft Corp. v. Academic Software Hq Inc.

United States District Court, S.D. California

May 30, 2017

MICROSOFT CORPORATION, a Washington corporation, Plaintiff,
v.
ACADEMIC SOFTWARE HQ INC., a Nevada corporation, Defendant.

          ORDER DISCHARGING ORDER TO SHOW CAUSE [ECF NO. 12]

          Barry Ted Moskowitz, Chief judge United States District Court

         Plaintiff Microsoft Corporation, a Washington corporation (“Microsoft”), has sued defendant Academic Software HQ Inc., a Nevada corporation (“Academic Software”), for copyright and trademark infringement based on its allegedly infringing advertisement and sale of Microsoft Software on its internet website, academicsoftwarehq.com. On April 7, 2017, the Court issued an order to show cause (“OSC”) requiring Microsoft to show Academic Software is subject to in personam jurisdiction in California, and that service of process on Academic Software was effective. (ECF No. 12.) Microsoft has filed a timely response to the OSC. (ECF No. 13.) For the reasons discussed below, the Court finds Microsoft has shown valid service of process and has demonstrated sufficient contacts to establish a prima facie case that Academic Software is subject to general personal jurisdiction in California. The Court will therefore discharge the OSC.

         I. BACKGROUND

         The Court previously discussed Microsoft's claims in detail in the OSC, and accordingly revisits only those aspects relevant to the present issues regarding personal jurisdiction over Academic Software.

         Microsoft claims Academic Software infringed on Microsoft software, associated trademarks and service marks, by advertising and selling unlicensed Microsoft software through its website, academicsoftwarehq.com. Compl. ¶¶ 10-11. In support of its claims, Microsoft identified two incidents in October and November 2015 in which infringing Microsoft Office 2010 and Office Professional Plus 2010 software suites were purchased and distributed to an investigator. Id. ¶¶ 12-14.

         On August 3, 2016, Microsoft filed a proof of service showing that on July 14, 2016, Academic Software was served the summons and complaint by personal delivery to Patty Linden, “authorized to accept service at U.S. Corp., registered agents, ” at an address in Las Vegas. (ECF No. 6.) After no response to the complaint was filed, Microsoft requested entry of default, and on August 15, 2016, the clerk entered the default of Academic Software. (ECF Nos. 8.)

         Microsoft thereafter filed a motion for entry of default judgment. (ECF No. 9.) In evaluating the motion, the Court sua sponte considered whether it had acquired personal jurisdiction over Academic Software. It noted that the complaint alleged Academic Software “is or was” a Nevada corporation, which called into question whether delivery of the summons and complaint to its registered agents was effective service given it was a potentially defunct corporation. The Court also was unable to confirm that Academic Software was subject to general or specific jurisdiction in California, since it was apparently domiciled in Nevada, its website did not appear to target residents of California, and the investigator who made the purchases of infringing software appeared to have done so from Pennsylvania. The Court thus denied the motion for default judgment and issued the OSC in order to require Microsoft to demonstrate the validity of its service of the summons and complaint, and to show Academic Software was subject to general or specific personal jurisdiction in this forum.

         On April 27, 2017, Microsoft filed a timely response to the OSC. (ECF No. 13). Microsoft presents evidence that Academic Software's Nevada corporate status was revoked effective July 1, 2016, but that service on U.S. Corp., its former agent for service of process, was valid under a Nevada statute that provides a three-year grace period following revocation during which a corporation can be validly served through its registered agent.

         With regard to whether Academic Software is subject to in personam jurisdiction in this forum, Microsoft submits evidence that the shipping document attached to a shipment of disks of infringing software shows the package was sent to the investigator from an address in San Diego.[1] Microsoft also submits evidence that Shawn Green, Academic Software's sole officer, has formed two California limited liability companies with offices at the same San Diego street address as the one identified in the Academic Software shipping document. Microsoft contends this evidence shows Academic Software had sufficient contacts with California to support subjecting it to personal jurisdiction here.

         II. DISCUSSION

         A. Validity of Service The Court first addresses Microsoft's contention that it has shown valid service on Academic Software.

         A corporation may be served “in the manner prescribed by Rule 4(e)(1), ” that is, “by … following state law for serving a summons in an action brought in courts of general jurisdiction where the district court is located or where service is made….” See Fed.R.Civ.P. 4(h)(1)(A).

         Microsoft contends the service at issue here was made in Nevada, pursuant to the following provision:

All legal process and any demand or notice authorized by law to be served upon the corporation… may be served upon the registered agent listed as the registered agent of the entity in the records of the Secretary of State, personally or by leaving a true copy thereof with a person of suitable age and discretion at the most recent street address of the registered agent shown on the information filed with the Secretary of State pursuant to chapter 77 of NRS. Service of legal process or any demand or notice pursuant to this subsection is valid regardless of whether the status of the entity in the records of the Secretary of State is in default or is revoked and ...

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