Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04255/USCOURTS-cand-3_06-cv-04255-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

CADSOFT CORPORATION, a foreign

corporation,

Plaintiff,

v.

RIVERDEEP, LLC, a Delaware Limited

Liability Company,

Defendant. 

RIVERDEEP, LLC, a Delaware Limited

Liability Company,

Third-Party Plaintiff,

v.

PUNCH SOFTWARE, LLC, a Delaware

corporation,

Third-Party Defendant. ___________________________________

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No. C-06-4255 SC

ORDER GRANTING

PLAINTIFF'S MOTION

FOR SUMMARY

ADJUDICATION AND

DENYING DEFENDANT'S

MOTION TO CONTINUE

I. INTRODUCTION

Presently before the Court are two related motions. The

first is a Motion for Summary Adjudication filed by Plaintiff

Cadsoft Corporation ("Plaintiff" or "Cadsoft"). Pl.'s Mot.,

Docket No. 27. Plaintiff seeks a ruling on its First and Second

Claims for Relief as well as Defendant's Sixth Affirmative

Defense. See id. at 1. The second is a Motion to Continue filed

by Defendant Riverdeep, LLC ("Defendant" or "Riverdeep"). Def.'s

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Mot. to Continue, Docket No. 40. Defendant seeks a continuance in

order to conduct additional discovery in response to Plaintiff's

Motion. See id. at 2. 

For the reasons described herein, Plaintiff's Motion for

Summary Adjudication is GRANTED as to its First and Second Claims

for Relief and Defendant's Sixth Affirmative Defense. Defendant's

Motion to Continue is DENIED.

II. BACKGROUND

On January 7, 2002, Cadsoft entered into a Software

Development and Publishing Agreement (the "Agreement") with

Broderbund Properties. See Def.'s Opp'n at 3. Under the

Agreement, Cadsoft would develop home architecture software and

Broderbund would publish that software under a copyright license

while paying fees and royalties to Cadsoft. See Pl.'s Mot. at 2. 

In February 2003, Broderbund, Riverdeep, and Cadsoft executed an

amendment to the Agreement assigning Broderbund's rights to

Riverdeep. See Piasecki Decl., Ex. A. Cadsoft gave its express

consent to the assignment of the copyright license. See id.

On October 12, 2004, Riverdeep assigned the Agreement to

Punch Software, LLC ("Punch"). See Piasecki Decl., Ex. B. 

Riverdeep did not obtain Cadsoft's express consent for the

assignment. See id. Cadsoft asserts that Riverdeep's failure to

obtain express consent invalidates the assignment under federal

copyright law. See Pl.'s Mot. at 11. By contrast, Riverdeep

asserts that Cadsoft's claims are barred because Cadsoft was aware

of the deal and accepted its benefits. See Def.'s Opp'n at 13.

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III. LEGAL STANDARD

Under Rule 56(c), "[a] summary judgment, interlocutory in

character, may be rendered on the issue of liability alone

although there is a genuine issue as to the amount of damages." 

Fed. R. Civ. P. 56(c). Summary judgment is appropriate only "if

the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact." Celotex

Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue of

fact exists when the non-moving party produces evidence on which a

reasonable trier of fact could find in its favor viewing the

record as a whole in light of the evidentiary burden the law

places on that party. See Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 252-56 (1986). Summary judgment is therefore

appropriate against a party "who fails to make a showing

sufficient to establish the existence of an element essential to

the party's case, and on which that party will bear the burden of

proof at trial." Celotex, 477 U.S. at 322-23. The more

implausible the claim or defense asserted by the opposing party,

the more persuasive its evidence must be to avoid summary

judgment, see Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574, 587 (1986), but "[t]he evidence of the non-moving

party is to be believed, and all justifiable inferences are to be

drawn in its favor." Anderson, 477 U.S. at 255.

IV. DISCUSSION

Cadsoft asserts that it is entitled to summary adjudication

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on the issue of liability because Riverdeep failed to obtain

Cadsoft's express consent before assigning its rights under the

copyright license Agreement to Punch. See Pl.'s Mot. at 1. There

are no material issues of fact regarding the assignment: 

Riverdeep, the licensee, assigned the Agreement to Punch without

Cadsoft's, the licensor's, express consent and has failed to

present any evidence to the contrary. See Piasecki Decl. 

In Gardner v. Nike, the Ninth Circuit resolved the issue in

question. 279 F.3d 779 (9th Cir. 2002). The court held that the

1976 Copyright Act "does not allow a copyright licensee to

transfer its rights under an exclusive license, without the

consent of the original licensor." Id. at 780. Upon a review of

the relevant portions of the Agreement, which were submitted under

seal, it is clear that Riverdeep was granted an exclusive license. 

Thus, Riverdeep was required to obtain Cadsoft's consent before

assigning the Agreement. Riverdeep argues that it had Cadsoft's

consent because "Cadsoft knew of the intended assignment of the

Agreement to Punch months before it was effective, negotiated with

Riverdeep and Punch regarding the implications of the assignment,

and enforced its rights under the Agreement." Def.'s Opp'n at 1-

2. Construing the evidence in the light most favorable to

Riverdeep, Cadsoft's actions in this matter only rise to the level

of implied consent. This is not sufficient under the law, which

requires explicit, or express consent. "[T]here are strong policy

reasons to place the burden on the licensee to get the licensor's

explicit consent either during or after contract negotiations." 

Gardner, 279 F.3d at 781 (emphasis added); see Miller v. Glenn

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Miller Prods., 318 F. Supp. 2d 923, 938 (C.D. Cal. 2004)

("copyright and trademark licensors share a common retained

interest in the ownership of their intellectual property-an

interest that would be severely diminished if a licensee were

allowed to sub-license without the licensor's express

permission"). 

Riverdeep's arguments in opposition to Cadsoft's motion fail

to overcome the bright-line rule requiring explicit consent for a

copyright assignment. First, as discussed earlier, there are no

material issues of fact related to Cadsoft's motion. Second,

Riverdeep's estoppel and waiver defenses fail because Riverdeep

never informed Cadsoft of the terms of the assignment prior to

executing the contract with Punch. See Piasecki Decl. Though

Cadsoft may have suspected that a deal between Riverdeep and Punch

was possible, that suspicion cannot overcome Riverdeep's legal and

contractual duty to obtain explicit consent from Cadsoft before

assignment. The policy implications supporting the express

consent requirement are strong. See Gardner, 279 F.3d at 781

(discussing that original licensors will be concerned with several

issues including the financial strength of the new company and its

intended use of the copyrighted material). Moreover, under the

Agreement any modifications were required to be in writing and

Riverdeep clearly failed to get Cadsoft's written consent to

involve Punch in the license. See Pl.'s Reply at 13. Finally,

Cadsoft has standing to object to the improper assignment of its

copyright and breach of its contract with Riverdeep. In Gardner,

the court stated that the improper sublicensee lacked standing

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because it had no legally cognizable interest in the suit. See

279 F.3d at 777. By contrast, Cadsoft has a legally cognizable

interest in the use of its own copyrighted material.

Before responding to Cadsoft's motion for summary

adjudication, Riverdeep filed a motion to continue in order to

conduct additional discovery in response to Cadsoft's motion. To

succeed on this Rule 56(f) motion, Riverdeep "must show (1) that

they have set forth in affidavit form the specific facts that they

hope to elicit from further discovery, (2) that the facts sought

exist, and (3) that these sought-after facts are 'essential' to

resist the summary judgment motion." State of California v.

Campbell, 138 F.3d 772, 779 (9th Cir. 1998). As previously

discussed, under the law relevant to Cadsoft's summary

adjudication motion, Riverdeep must present facts demonstrating

that Cadsoft expressly consented to the assignment. In its Motion

to Continue, Riverdeep has not asserted that documents

demonstrating Cadsoft's express consent exist. See Def.'s Mot. to

Continue at 5. Riverdeep instead argues that Cadsoft's internal

communications and communications with Punch are likely to

indicate express consent. However, as discussed above, express

consent requires an explicit agreement between Cadsoft and

Riverdeep. If an express consent agreement existed in this case,

both Riverdeep and Cadsoft would possess an executed document. 

Since a consent agreement was never created, see Piasecki Decl., 

additional discovery would be futile. Riverdeep has thus failed

to explain how any additional discovery will reveal the essential 

//

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facts necessary to resist Cadsoft's motion.

V. CONCLUSION

For the reasons discussed herein, Plaintiff's Motion for

Summary Adjudication is GRANTED as to its First and Second Claims

for Relief and Defendant's Sixth Affirmative Defense. Defendant's

Motion to Continue is DENIED.

IT IS SO ORDERED.

Dated: May 18, 2007

 

UNITED STATES DISTRICT JUDGE 

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