Free Answer to Complaint - District Court of California - California

Case 4:08-cv-02321-CW

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John C. Gorman, #91515 Charles J. Stiegler, #245973 GORMAN & MILLER, P.C. 210 North Fourth Street Suite 200 San Jose, CA. 95112 (408) 297-2222 (phone) (408) 297-2224 (fax) Of Counsel: John T. Mitchell, D.C. Bar #418413 INTERACTION LAW 1629 K Street NW, Suite 300 Washington D.C., 20006 (202) 415-9213 (phone) Attorneys for Defendants A & S ELECTRONICS, INC., d/b/a TRUSTPRICE.COM, and ALAN Z. LIN

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA Case No. C08 02321 BZ ANSWER DEMAND FOR JURY TRIAL

15 MICROSOFT CORPORATION, a Washington corporation; 16 Plaintiff, 17 v. 18 19 A&S ELECTRONICS, INC., a California corporation, d/b/a 20 TRUSTPRICE.COM; ALAN Z. LIN, an individual; and JOHN DOES 21 1-5; 22 23 24 25 26 27 28 1. Defendants.

Defendants A & S Electronics, Inc., dba TrustPrice.com ("A&S Electronics"), and Alan Z. Lin hereby answer the complaint of Microsoft Corporation ("Microsoft") as follows: INTRODUCTION The allegations of this paragraph state legal conclusions

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Answer, Case No. C08 02321 BZ

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1 as to which no answer is required. 2 2. Defendants admit that Microsoft is a corporation and that Defendants lack

3 it is engaged in the software business.

4 information or belief sufficient to respond to the allegations of 5 this paragraph. 6 3. Admit that A&S Electronics, Inc., dba TrustPrice.com, is

7 a California corporation with its principal place of business in 8 Milpitas, California. Admit that A&S Electronics distributes

9 computer software and components through the web site 10 www.trustprice.com. Deny that Microsoft has suffered damages or

11 other harm as a direct and proximate result of any alleged wrongful 12 conduct by A&S Electronics. 13 4. Admit that Alan Z. Lin resides in Fremont, California, Deny

14 and that he is the registered agent for A & S Electronics.

15 that Lin personally participated in or supervised, directed, or 16 controlled any wrongful conduct. Deny that Lin derived direct

17 financial benefit from or that he may be held personally liable for 18 any alleged wrongful conduct by A&S Electronic. Deny that

19 Microsoft has suffered damages or other harm as a result of any 20 alleged wrongful conduct by Lin. 21 5. Defendants lack information or belief sufficient to admit

22 or deny the allegations of the first sentence of this paragraph. 23 Defendants deny the allegations of the second and third sentences 24 of this paragraph. 25 6. The allegations of this paragraph state legal conclusions

26 as to which no answer is required. 27 7. The allegations of this paragraph state legal conclusions

28 as to which no answer is required. 2
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8.

The allegations of this paragraph state legal conclusions

2 as to which no answer is required. 3 4 9. INTRADISTRICT ASSIGNMENT The allegations of this paragraph state a legal

5 conclusion to which no response is required. 6 7 10. FACTS COMMON TO ALL CLAIMS Admit that Microsoft develops computer software programs.

8 Defendants lack information or belief sufficient to admit or deny 9 the remaining allegations of this paragraph and puts Microsoft to 10 strict proof thereof. 11 11. Defendants lack information or belief sufficient to admit

12 or deny the allegations of this paragraph and put Microsoft to 13 strict proof thereof 14 12. The reference to Microsoft's "partners" is so vague and In addition, defendants lack

15 ambiguous as to preclude a response.

16 information or belief sufficient to admit or deny the allegations 17 of this paragraph and put Microsoft to strict proof thereof. 18 13. Defendants lack information or belief sufficient to admit

19 or deny the allegations of this paragraph and put Microsoft to 20 strict proof thereof. 21 14. Defendants lack information or belief sufficient to admit

22 or deny the allegations of this paragraph and put Microsoft to 23 strict proof thereof. Defendants nevertheless contend and admit

24 that Microsoft attempts to suppress geographic competition beyond 25 the scope of its copyrights and to impose extra-copyright 26 restrictions on the non-infringing use and enjoyment of its works. 27 15. Defendants lack information or belief sufficient to admit

28 or deny the allegations of this paragraph and put Microsoft to 3
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1 strict proof thereof. 2 16. Admit that Microsoft has developed a software program Defendants lack information or

3 known as "Microsoft Windows 98."

4 belief sufficient to admit or deny the remaining allegations of 5 this paragraph and put Microsoft to strict proof thereof. 6 17. Admit that Microsoft has developed an operating system Defendants

7 software known as "Microsoft Windows XP Professional."

8 lack information or belief sufficient to admit or deny the 9 remaining allegations of this paragraph and put Microsoft to strict 10 proof thereof. 11 18. Admit that Microsoft has developed software known as Defendants lack information or

12 "Microsoft Office Ultimate 2007."

13 belief sufficient to admit or deny the remaining allegations of 14 this paragraph and put Microsoft to strict proof thereof. 15 16 17 19. 20. Deny. Admit that A&S Electronics advertises and sells software, DEFENDANTS' UNLAWFUL CONDUCT

18 including Microsoft software, in interstate commerce through the 19 website www.trustprice.com. 20 "infringing." 21 denied. 22 21. Defendants lack information or belief sufficient to admit Deny that this software is

The remaining allegations of this paragraph are

23 or deny the allegations of this paragraph and put Microsoft to 24 strict proof thereof. 25 26 22. 23. Admit. Defendants lack information or belief sufficient to admit

27 or deny the allegations of the first and second sentences of this 28 paragraph and put Microsoft to strict proof thereof. 4
Answer, Case No. C08 02321 BZ

Defendants

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1 deny the allegations of the third sentence of this paragraph. 2 24. Admit that Microsoft sent a letter to A & S. The letter

3 in question, if provided and authenticated, speaks for itself and 4 defendants deny all characterizations of the contents of the letter 5 by Microsoft inconsistent therewith. 6 25. Defendants lack information or belief sufficient to admit

7 or deny the allegations of this paragraph and put Microsoft to 8 strict proof thereof. 9 software. 10 26. Defendants lack information or belief sufficient to admit Defendants deny that they sold infringing

11 or deny the allegations of this paragraph and put Microsoft to 12 strict proof thereof. 13 27. Defendants lack information or belief sufficient to admit

14 or deny the allegations of this paragraph and put Microsoft to 15 strict proof thereof. 16 software. 17 28. Defendants lack information or belief sufficient to admit Defendants deny that they sold infringing

18 or deny the allegations of this paragraph and put Microsoft to 19 strict proof thereof. 20 software. 21 29. Defendants lack information or belief sufficient to admit Defendants deny that they sold infringing

22 or deny the allegations of this paragraph and put Microsoft to 23 strict proof thereof. 24 software. 25 30. Defendants lack information or belief sufficient to admit Defendants deny that they sold infringing

26 or deny the allegations of this paragraph and put Microsoft to 27 strict proof thereof. 28 software. 5
Answer, Case No. C08 02321 BZ

Defendants deny that they sold infringing

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31.

Defendants deny the allegations of this paragraph,

2 including any allegation that Microsoft is entitled to the 3 requested relief. Defendants further state that the third sentence

4 of this paragraph states legal conclusions as to which no response 5 is required. 6 7 8 32. CLAIM I (Copyright Infringement, 17 U.S.C. § 501, et seq.) Defendants repeat and reallege their responses to

9 paragraphs 1 through 31. 10 33. Defendants lack information or belief sufficient to admit

11 or deny the allegations of this paragraph and put Microsoft to 12 strict proof thereof. 13 14 15 16 17 18 19 20 21 22 40. 34. 35. 36. 37. 38. 39. Deny. Deny. Deny. Deny. Deny. Deny. CLAIM II (Infringing Importation of Copyrighted Works, 17 U.S.C. § 602) Defendants repeat and reallege their responses to

23 paragraphs 1 through 39. 24 41. Defendants lack information or belief sufficient to admit

25 or deny the allegations of this paragraph and put Microsoft to 26 strict proof thereof. 27 28 42. 43. Deny. Deny. 6
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44. 45. 46. 47.

Deny. Deny. Deny. Deny. CLAIM III

(Digital Millennium Copyright Act, 17 U.S.C. § 1201(a)(2)) 48. Defendants repeat and reallege their responses to

8 paragraphs 1 through 47. 9 10 11 12 13 14 15 16 49. 50. 51. 52. 53. Deny. Deny. Deny. Deny. Deny. AFFIRMATIVE DEFENSES First Affirmative Defense The complaint fails to state a claim for which relief may be

17 granted. 18 19 Second Affirmative Defense On information and belief, Microsoft is estopped from

20 asserting any claim that the software is counterfeit or otherwise 21 infringing. 22 23 24 25 Third Affirmative Defense Plaintiff's claims are barred by the first sale doctrine. Fourth Affirmative Defense Plaintiff's claims are barred by the defendants' statutory

26 entitlement, under Section 109 of the Copyright Act, to 27 redistribute non-infringing copies of Microsoft's works without the 28 consent of Microsoft. 7
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Fifth Affirmative Defense Some or all of Microsoft's claims are barred by the doctrine

3 of fair use. 4 5 Sixth Affirmative Defense On information and belief, the defendants' conduct is legally

6 privileged. 7 8 Seventh Affirmative Defense Defendants deny that they have sold infringing copies of

9 software. 10 11 Eighth Affirmative Defense On information and belief, some or all of Microsoft's claims

12 are barred by the doctrine of unclean hands, including Microsoft's 13 effort to bootstrap its limited copyrights into a tool for 14 enforcing price discrimination and the elimination of the very 15 price competition that the first sale doctrine and Section 109 of 16 the Copyright Act encourage. 17 18 Ninth Affirmative Defense On information and belief, some or all of plaintiff's claims

19 are barred by the applicable statute of limitations. 20 21 Tenth Affirmative Defense On information and belief, some or all of plaintiff's claims

22 are barred by the doctrine of laches. 23 24 Eleventh Affirmative Defense Microsoft has failed to take reasonable steps to mitigate its

25 alleged damages. 26 27 Twelfth Affirmative Defense On information and belief, Microsoft has failed to join

28 necessary or indispensable parties. 8
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Thirteenth Affirmative Defense No privity of contract exists between plaintiff Microsoft and

3 these defendants. 4 5 6 7 Fourteenth Affirmative Defense Microsoft's claims are contrary to public policy. Fifteenth Affirmative Defense Microsoft's claims, in furtherance of its methods of

8 controlling uses of its work beyond the scope of its copyrights, 9 seek to suppress speech that is un-restricted by copyright and is, 10 therefore, fully protected by the First Amendment, thereby placing 11 beyond the aid of a United States court of law Microsoft's efforts 12 to suppress it. 13 14 Sixteenth Affirmative Defense Microsoft's method of controlling distribution, as outlined in

15 its claims, reaches beyond the scope of its authority under the 16 Copyright Act, attempts to deny owners of lawfully made copies the 17 rights Congress vested in them and denied to the copyright holder, 18 and attempts to nullify the limitations on copyrights set forth in 19 the Copyright Act, thereby constituting copyright misuse and 20 rendering Microsoft's copyrights unenforceable so long as such 21 misuse continues. 22 23 The defendants reserve the right to amend and supplement

24 these affirmative defenses as further proceedings may warrant. 25 26 27 PRAYER FOR RELIEF WHEREFORE, defendants A & S Electronics, Inc., dba

28 TrustPrice.com, and Alan Z. Lin, pray that plaintiff Microsoft 9
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1 Corporation take nothing on its complaint, for an award of costs 2 and attorneys' fees as permitted by law (including under § 505 of 3 the Copyright Act), and for such other relief as may be 4 appropriate. 5 6 7 8 By: 9 10 11 12 13 14 15 DEMAND FOR JURY TRIAL 16 Pursuant to Fed. R. Civ. P. 38(b), defendants hereby demand 17 trial by jury. 18 19 GORMAN & MILLER, P.C. 20 21 22 23 24 25 26 27 28 10
Answer, Case No. C08 02321 BZ

GORMAN & MILLER, P.C. /s/ JOHN C. GORMAN Attorneys for Defendants A&S Electronics, Inc., dba Trustprice.com, and Alan Z. Lin

By:

/s/ JOHN C. GORMAN Attorneys for Defendants A&S Electronics, Inc., dba Trustprice.com, and Alan Z. Lin