Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_15-cv-01443/USCOURTS-cand-5_15-cv-01443-4/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 15:1114 Trademark Infringement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

ADOBE SYSTEMS INCORPORATED,

Plaintiff,

v.

SHAMCY ALGHAZZY,

Defendant.

Case No. 15-cv-01443-BLF 

ORDER DENYING DEFENDANT'S 

MOTION FOR PARTIAL DISMISSAL

[Re: ECF 19]

Before the Court is Defendant’s Motion to Dismiss with prejudice Plaintiff’s claim of

unfair competition in violation of California Business and Professions Code § 17200 et seq (“UCL

Claim”). ECF 19. Defendant argues that the UCL Claim should be dismissed under Federal Rule 

of Civil Procedure 12(b)(6) because it seeks only relief that is not available under § 17200. Id. 

Plaintiff responds that the relief it seeks is available under § 17200. ECF 26. For the reasons 

below, the Court DENIES Defendant’s partial motion to dismiss.

I. BACKGROUND

Plaintiff is a Delaware corporation that develops and distributes Adobe-Branded software. 

Compl., ECF 1 ¶¶ 1, 12. Plaintiff alleges that Defendant is an individual who, through eBay,

“offer[s] for sale various software products, including altered, unauthorized and/or counterfeit 

Adobe-Branded Software products.” Id. ¶¶ 2, 25. 

Specifically, Plaintiff alleges that Defendant violates Plaintiff’s exclusive copyrights by 

“press[ing] unauthorized copies of Plaintiff’s Adobe-Branded Software,” which “come to bear 

spurious and counterfeit trademarks.” Id. ¶ 30. In addition, Plaintiff alleges that Defendant resells 

Plaintiff’s software in violation of Plaintiff’s exclusive distribution rights, and splits Plaintiff’s 

software serial number keys from the software products without authorization. Id. ¶¶ 30, 33. 

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Plaintiff also alleges that Defendant alters and resells software that is designed exclusively for 

bundled distribution and purchases copies of Plaintiff’s software intended for distribution abroad,

imports them to the United States, and resells them here. Id. ¶ 31-32.

Based on those allegations, Plaintiff asserts six causes of action. The fifth cause of action, 

brought under California’s Unfair Competition Law, alleges that Defendant “engaged in unfair 

competition including unlawful, unfair and fraudulent business practices.” Id. ¶¶ 74-82. As 

remedies, Plaintiff seeks restitution, “including an order granting [Defendant’s] profits stemming 

from [his] infringing activity,” compensatory damages, injunctive relief, and “an asset freeze or 

constructive trust . . . over all monies in [Defendant’s] possession that rightfully belong to 

Plaintiff.” Id. ¶¶ 80-82.

On August 11, 2015, Defendant brought this Partial Motion to Dismiss. On August 25,

2015, Plaintiff opposed and Defendant replied on September 1, 2015. ECF 32. On November 17, 

2015, the Court deemed this Motion suitable for submission without oral argument. ECF 44.

II. LEGAL STANDARD

“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 

claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 

Force v. Salazar, 646 F.3d 1240, 1241-42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 

729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts as 

true all well-pled factual allegations and construes them in the light most favorable to the plaintiff. 

Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court 

need not “accept as true allegations that contradict matters properly subject to judicial notice” or 

“allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable 

inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (internal quotation 

marks and citations omitted). While a complaint need not contain detailed factual allegations, it 

“must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible 

on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 

U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the court to draw the 

reasonable inference that the defendant is liable for the misconduct alleged.” Id.

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 III. DISCUSSION

Defendant attacks Plaintiff’s UCL Claim solely on the basis of the remedies it seeks.

“[U]nder the UCL, ‘prevailing plaintiffs are generally limited to injunctive relief and restitution.’” 

Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (2003) (quoting citing CelTech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 179 (1999)); see also Cal. 

Bus. & Prof. Code § 17203.

Defendant argues that Plaintiff’s UCL Claim seeks neither of the available remedies, and

instead requests damages and disgorgement, which are unavailable under § 17200. Mot at 11. To 

support this argument, Defendant relies on Korea Supply, which held that “disgorgement of profits 

allegedly obtained by means of an unfair business practice . . . where these profits are neither 

money taken from a plaintiff nor funds in which the plaintiff has an ownership interest . . . is not 

an authorized remedy in an individual action under the UCL.” Korea Supply, 29 Cal. 4th at 1140.

In Korea Supply, the plaintiff, the representative of an applicant for a bid to manufacture 

military equipment for the Korean government, sued defendant, the winner of the contract, for 

violation of § 17200 after learning that the defendant won the contract through bribes and sexual 

favors. Id. at 1140. The plaintiff sought defendant’s profits from its unlawful and unfair conduct. 

Though the plaintiff characterized this request as one for restitution, the court concluded that 

“plaintiff's claim is properly characterized as a claim for nonrestitutionary disgorgement of 

profits.” Id. at 1150. Defendant asks the Court to do the same here. 

Plaintiff responds that Korea Supply is inapplicable because Plaintiff seeks profits in which 

it has an ownership interest—one of the exceptions to Korea Supply’s holding. Opp. at 10.

Plaintiff requests “profits stemming from [Defendant’s] infringing activity.” Compl. ¶ 80. 

The Court agrees with Plaintiff that Korea Supply does not preclude the relief requested 

under § 17200. Plaintiff’s factual allegations support its request for restitution and injunctive relief 

insofar as Plaintiff’s claim for restitution is based on recovery of Defendant’s ill-gotten gains 

related to Defendant’s alleged sale of products that infringe Plaintiff’s trademark rights.

In a case similar to this case, this court has previously allowed a § 17200 claim to proceed. 

In Innovation Ventures, LLC v. Pittsburg Wholesale Grocers, Inc., the court denied a motion to 

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dismiss a § 17200 claim by the owner of the 5-hour Energy trademark, copyright, and trade dress 

against defendants who had schemed to manufacture and sell counterfeit 5-hour Energy drinks. 

No. C 12-05523 WHA, 2013 WL 1007666, at *1 (N.D. Cal. Mar. 13, 2013). The court held that

the plaintiff had alleged a vested interest in the products the defendants sold because the claim 

essentially alleged that the defendant was selling the plaintiff’s property. Id. at *8. The court 

explained that while, “[t]ypically, profits earned from unfair business practices do not constitute 

money taken directly from the plaintiff, nor money in which a plaintiff has a vested interest, [h]ere 

. . . each challenged sale involved a product allegedly embodying plaintiffs' intellectual property.”

Id. at *8. The same holds true here: each challenged sale involved a product allegedly embodying 

Plaintiff’s trademark and other intellectual property. As a result, the Court agrees with Plaintiff 

that it seeks restitution, not disgorgement, and has therefore stated a claim under § 17200.

Furthermore, even if the Court were to find that Plaintiff seeks disgorgement, the UCL 

Claim would survive because Plaintiff also seeks injunctive relief. See Compl. ¶ 81. Defendant 

concedes that “the UCL affords injunctive relief as an available remedy.” Reply at 3.1

Accordingly, Defendant’s Partial Motion to Dismiss is DENIED.

IT IS SO ORDERED.

Dated: December 29, 2015

______________________________________

BETH LABSON FREEMAN

United States District Judge

 

1 Because the Court finds that Plaintiff appropriately seeks both restitution and an injunction, the 

Court reaches neither Defendant’s argument regarding the redundancy of Plaintiff’s UCL Claim 

nor his request that the Court limit Plaintiff’s potential damages at this early stage. Furthermore, 

the Court notes that Defendant raised both of these arguments for the first time in his Reply and 

additionally refuses to consider the arguments on that ground. See Zamani v. Carnes, 491 F.3d 

990, 997 (9th Cir. 2007). 

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