Court Opinion

ID: 165390
Source: CourtListenerOpinion
Date Created: 2010-08-14 08:50:04+00
Date Added: 2024-06-11T17:24:47.307057
License: Public Domain

F I L E D
                                                                  United States Court of Appeals
                                                                          Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                         DEC 29 2004
                                   TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                              Clerk

 MICROSOFT, a Washington
 corporation,

          Plaintiff-Appellee,
 v.                                                     No. 04-4017
 MBC ENTERPRISES, a Utah limited               (D.C. No. 2:00-CV-217-PGC)
 liability company; JAMES D.                             (D. Utah)
 CRAGHEAD; STEVE BLACKBURN;
 MARIANNE BLACKBURN,

          Defendants-Appellants.

                                ORDER AND JUDGMENT      *

Before KELLY , BALDOCK , and BRISCOE , Circuit Judges.

      Defendants MBC Enterprises, James D. Craghead, Steve Blackburn, and

Marianne Blackburn appeal the district court’s grant of summary judgment in

favor of plaintiff Microsoft on its claims for trademark infringement and

copyright infringement arising out of defendants’ distribution of allegedly

      *
       This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
counterfeit Microsoft software programs. Defendants also appeal the award of

attorney fees to Microsoft, as well as the permanent injunction prohibiting

defendants from engaging in certain types of business activities. We exercise

jurisdiction pursuant to 28 U.S.C. § 1291, reverse the grant of summary judgment,

vacate the statutory damages award, the fee award, and the permanent injunction,

and remand for further proceedings.

                                         I.

      Microsoft is a developer and licensor of computer software, including

Windows, Office, and NT software, and owns valid trademarks and copyrights in

connection with these products. MBC is a Utah limited liability company with its

principal place of business in Salt Lake City. Marianne Blackburn, a 99% owner

and managing member of MBC, is primarily responsible for MBC’s financial

functions, including ensuring the company’s accounts are balanced and

sufficiently funded. James Craghead, who is married to Marianne Blackburn, is a

1% owner and member of MBC and is responsible for managing MBC’s

operations, including acquisition, inspection, and distribution of software. Steve

Blackburn, the brother of Marianne Blackburn, works for MBC as an independent

contractor.

      MBC is engaged in the wholesale distribution of computer software and

paraphernalia, and its primary customer base is allegedly comprised of small

                                         2
manufacturers of personal computers. According to MBC, the majority of its

purchases and sales have been of Microsoft original equipment manufacturer

(OEM) software, i.e., Microsoft software initially distributed by Microsoft to

major manufacturers of computer hardware and then resold by those

manufacturers in the open market. MBC is not licensed or authorized by

Microsoft to distribute Microsoft software, and it does not check to see if the

dealers or brokers to whom it sells software are licensed by Microsoft. Nor does

MBC typically purchase software from Microsoft-licensed vendors.

      Defendants allege, however, that each piece of Microsoft software sold by

MBC is authentic. Craghead personally authorizes each purchase of software by

MBC and takes certain steps to verify the authenticity of the Microsoft software.

Craghead visits Microsoft’s piracy web site and news web sites on a daily basis to

check for new guidelines to verify the authenticity of Microsoft software.

Utilizing those guidelines, he inspects each piece of Microsoft software purchased

by, among other things, (a) examining the hologram on the CD or its inner ring,

(b) inspecting the heat-sensitive strip woven into the fabric of each software

manual or COA, (c) inspecting the holographic thread woven into each manual or

COA, and (c) inspecting manuals, COA’s and licenses for appropriate

watermarks. Craghead allegedly has personally inspected thousands of copies of

Microsoft software to determine if they possess all of Microsoft’s published

                                          3
security protections. According to Craghead, MBC receives counterfeit software

once or twice a week. When a piece of counterfeit software is received, MBC

returns it to the seller with a label expressly indicating it is counterfeit. Craghead

also regularly sends e-mail messages to Microsoft regarding what he believes are

counterfeit software products. Based upon his experience in the industry,

including his reading and research of Microsoft’s published articles regarding

counterfeit software, he alleges “that neither [he] nor MBC . . . violated any

copyright or trademark of Microsoft.” App. at 2548.

      Microsoft filed this action, alleging, in pertinent part, that defendants had

(a) purchased counterfeit Microsoft Windows 98 and Office software from

Bantech, a Texas company, and resold it, and (b) sold counterfeit Microsoft NT

Server software to Mr. Software, a Michigan company. Based upon this alleged

misconduct, Microsoft asserted a variety of federal and state claims, including

copyright and federal trademark infringement.

      Following discovery, the parties filed cross-motions for summary judgment

on Microsoft’s claims. The district court, after hearing oral argument on the

motions, granted summary judgment in favor of Microsoft on its copyright and

federal trademark infringement claims and awarded Microsoft statutory damages,

fees and costs. The district court also issued a permanent injunction prohibiting

defendants from engaging in a wide variety of business activities related to

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Microsoft products.

                                         II.

                      District court’s summary judgment ruling

      In granting summary judgment in favor of Microsoft on its copyright and

federal trademark infringement claims, the district court concluded “[t]he

undisputed facts . . . indicate[d] that MBC repeatedly distributed counterfeit

Microsoft products in the marketplace, including Windows 98, Windows NT, and

Microsoft Office products . . . .” App. at 1038. The court’s summary of relevant

facts pointed to what it suggested was uncontroverted evidence regarding MBC’s

software transactions with Bantech and Mr. Software. On appeal, defendants

contend the court’s conclusion was erroneous because it was the result of

improper fact-finding by the district court regarding (1) whether MBC purchased

counterfeit software from Bantech and resold it; (2) whether MBC sold

counterfeit Windows NT to Mr. Software; and (3) the level of willfulness of the

acts allegedly committed by MBC. Defendants contend they submitted sufficient

evidence to create genuine issues of material facts on all three issues and that, as

a consequence, the district court erred in granting summary judgment in favor of

Microsoft.

      We review the district court’s summary judgment ruling de novo, applying

the same standard as the district court. See Alexander v. Oklahoma, 382 F.3d

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1206, 1215 (10th Cir. 2004). Summary judgment is appropriate “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 and

that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ.

P. 56(c). We “view the evidence, and draw reasonable inferences therefrom, in

the light most favorable to the nonmoving party.” Combs v.

PriceWaterhouseCoopers LLP, 382 F.3d 1196, 1199 (10th Cir. 2004).

      Bantech – In its summary judgment order, the district court summarized

what it concluded were the relevant facts regarding MBC’s relationship with

Bantech. The district court noted (a) between 1998 and early 2000, MBC

purchased thousands of units of purported Microsoft software from Bantech, (b)

the FBI’s examination of Bantech’s records, following a February 28, 2000 search

of its offices, indicated the prices MBC was paying Bantech for the units of

software were drastically lower than the suggested retail prices for those units, (c)

the FBI’s examination of Bantech’s records indicated that Bantech, in turn,

obtained the purported Microsoft software exclusively from Singapore at prices

that were again drastically lower than suggested retail prices, and (d) several

hundred units of counterfeit Microsoft software were found during the search of

Bantech’s offices, including 300 units of counterfeit Windows software that were

packaged and labeled for FedEx shipment to MBC’s address.

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      Although these stated facts are, for the most part, verified by the record, we

conclude there are genuine issues of material fact that preclude the entry of

summary judgment. There is a genuine issue of material fact concerning whether

Bantech in fact obtained all of the software it sold to MBC from Singapore. On

this point, defendants have submitted evidence (i.e., invoices addressed to

Bantech) suggesting that, during the relevant time period, Bantech regularly

purchased Microsoft software from dealers in the United States. Although

Microsoft contends all of these invoices could not account for the large number of

software units sold by Bantech to MBC, it nevertheless raises an issue of fact

concerning the source of software ultimately purchased by MBC, and, in turn, the

number, if any, of counterfeit units of software sold by MBC.

      Even assuming Bantech did obtain all of the software it sold to MBC from

Singapore, we conclude there is a genuine issue of material fact regarding

whether any of those units were indeed counterfeit. On this issue, Microsoft

points to two pieces of circumstantial evidence: (1) the fact that several hundred

counterfeit cd’s were found at Bantech’s office, including approximately 300

packaged for shipment to MBC; and (2) the large disparity between the prices

paid by Bantech, and in turn MBC, for the software and the normal retail prices

for the software. Although we agree that a jury reasonably could infer from this

evidence that all of the software at issue was counterfeit, defendants have

                                          7
produced evidence that counters that inference and from which a jury reasonably

could conclude that MBC purchased only authentic Microsoft software. In

particular, Craghead stated in declarations that (a) he personally inspected every

piece of software purchased by MBC to ensure it was authentic, (b) at no time did

MBC purchase any counterfeit Microsoft software from Bantech, (c) the normal

wholesale market prices for authentic Microsoft software were substantially lower

than the normal retail prices cited by Microsoft and the FBI, and (d) he learned,

through Bantech’s counsel, that United States Customs had withheld a shipment

of Windows software from Bantech’s Singapore inspector, and that Microsoft was

allowed to inspect approximately 30-50 units and determined they were authentic.

Moreover, it is uncontroverted that no counterfeit units of software were found

during a search of MBC’s offices, and there is no evidence of counterfeit software

being obtained from any of MBC’s customers (other than Mr. Software, and that

evidence will be discussed below).

      Assuming Bantech shipped counterfeit units of software to MBC, Microsoft

points to no specific evidence that MBC actually resold that software. Microsoft

instead relies on inferences to be drawn from the discovery of counterfeit

software in Bantech’s offices. In light of the evidence produced by defendants

and outlined above, we conclude there is a genuine issue of material fact

concerning whether MBC resold any counterfeit software received from Bantech,

                                          8
or whether, instead, any such software was returned by MBC to Bantech.

      Mr. Software – The district court also concluded the uncontroverted

evidence established that MBC sold two units of counterfeit Microsoft software,

and possibly more, to Mr. Software. Defendants assert the evidence on this issue

was controverted and that the court essentially engaged in improper fact-finding.

      Although it is uncontroverted that two counterfeit units of Windows NT

Server software were found in the possession of Mr. Software, the critical issue is

whether they were purchased from MBC or another source. To support its

assertion that the counterfeit software came from MBC, Microsoft relied heavily

on the deposition testimony of Peter Swift, a representative of Mr. Software.

During direct examination by Microsoft’s counsel, Swift was asked whether Mr.

Software had “any Microsoft Windows NT software and components from any

source other than MBC in its possession on or about June 15th of 2000,” i.e.,

when the two units of counterfeit software were discovered. App. at 2063. Swift

responded: “I would say no.” Id. Swift further testified that he was assured by an

MBC representative named “Joey” that the Microsoft NT Server software was

genuine. Id. at 2064. During cross-examination by defendants’ counsel, Swift

again indicated he purchased the counterfeit units from a person named “Joey,”

but this time acknowledged that Joey worked for a company named Jalco. Id. at

2643-44. Further, Swift testified: “I don’t believe that we ever did get any

                                         9
counterfeit [software] from MBC.” Id. at 2640. During redirect, Swift again

testified that “Joey” worked for Jalco, but stated he thought that “Jalco went out

of business probably in the ‘98, ‘99 era, if I remember right,” and that he

therefore acquired the counterfeit software from MBC. Id. at 3825.

      To counter the damaging portions of Swift’s deposition testimony,

defendants not only pointed to Swift’s own internally inconsistent statements

(outlined above), but also to declarations from Craghead. In particular, Craghead

denied that MBC sold the two confirmed pieces of counterfeit software to Mr.

Software and asserted that MBC’s invoices to Mr. Software supported this

conclusion. Craghead further alleged the two counterfeit pieces of software were

likely purchased by Mr. Software from Jalco. According to Craghead, MBC was

aware that Jalco was dealing in counterfeit software.

      Finally, there appears to be some disparity between at least one, and

possibly both, of the two units of counterfeit software and the MBC invoice

allegedly related (in Microsoft’s view) to the sale of the two units. According to

Microsoft, one of the units of counterfeit software was a so-called full version of

Windows NT Server software intended for five users. Id. at 1601, 2042. The

MBC invoice cited by Microsoft, however, indicates the software sold by MBC to

Mr. Software was something other than a full version (“CD only media”) and was

intended for ten users rather than five. Id. at 2645. In addition, there appears to

                                          10
be some question whether the other unit of counterfeit software, which was

intended for ten users, accurately matched the description listed on MBC’s

invoice. Id. at 2642 (deposition testimony of Swift indicating counterfeit unit did

not say “NFR,” as indicated on MBC’s invoice).

      Viewing this evidence in the light most favorable to defendants, we

conclude a genuine issue of material fact exists regarding whether the two units

of counterfeit software came from MBC or Jalco. Although a jury reasonably

could conclude, based on Swift’s testimony, that the units came from MBC, not

only would the jury have to disregard the inconsistent portions of his deposition

testimony, it would also have to reject Craghead’s declarations. Thus, the court

erred in concluding the uncontroverted evidence established that the two

counterfeit units came from MBC.

      Defendants’ level of willfulness – The district court concluded defendants

engaged in “knowing infringement” of Microsoft’s copyrights and trademarks.

Based upon this conclusion, the court assessed a total of $990,000 in damages:

“$430,000 in statutory damages for copyright and trademark infringement related

to the Windows 98 software (damages on one copyright and four trademarks);

$330,000 for infringement related to the Microsoft Office product (damages on

one copyright and three trademarks); and $230,000 in statutory damages for

infringement related to Windows NT (damages on one copyright and two

                                         11
trademarks) . . . .” App. at 1040.

       On appeal, defendants contend the evidence relating to their intent was

controverted and that the district court improperly found facts. We agree. As

outlined in detail above, we conclude there are genuine issues of material fact

concerning whether MBC actually sold any units of counterfeit Microsoft

software. Moreover, we note that defendants submitted substantial evidence

(primarily through Craghead’s declarations) indicating MBC had in place a

careful system for determining whether software it was considering buying was

authentic, and that any counterfeit software detected by Craghead was returned to

the potential seller.

       We conclude the district court erred in granting summary judgment in favor

of Microsoft on its copyright and federal trademark infringement claims. 1

                Statutory damages/fee award/permanent Injunction

       Having concluded the district court erred in granting summary judgment in

       1
         Our conclusion that the district court erred in granting summary judgment
in favor of Microsoft renders moot the following issues raised by defendants on
appeal: (1) whether the court erred in considering alleged hearsay evidence
submitted by Microsoft; and (2) whether the court violated defendants’ right to a
jury trial by awarding statutory damages to Microsoft under the Copyright Act and
the Lanham Act. In the event the case proceeds to trial on remand, however, we
note with respect to the damages award under the Copyright Act, 17 U.S.C. § 504,
and the Lanham Act, 15 U.S.C. § 1117, the Supreme Court has held the right to a
jury trial under the Seventh Amendment attaches. See Feltner v. Columbia
Pictures Television, Inc., 523 U.S. 340, 353-55 (1998) (copyright); Dairy Queen
v. Wood, 369 U.S. 469, 477-79 (1962) (trademark).

                                         12
favor of Microsoft, we must also vacate the district court’s award of statutory

damages under the Copyright Act and Lanham Act, the district court’s award of

costs and attorney fees under § 505 of the Copyright Act, and the permanent

injunction prohibiting defendants from engaging in various conduct related to

Microsoft software.

                         Modification of discovery order

      The final matter we must consider is whether the district court erred in

resolving a discovery dispute between the parties. Prior to the entry of summary

judgment, the magistrate judge, acting pursuant to defendants’ motion to compel,

“ordered Microsoft to provide [to defendants] all methods and manners Microsoft

employ[ed] to detect counterfeit software.” Aplt. Br. at 14. More specifically,

the magistrate judge ordered Microsoft to respond to defendants’ interrogatories

asking it to “[i]dentify all published and unpublished security features, procedures

and measures used by [it] in the production and identification of [its licensed]

software,” as well as “all tools that [it] use[d] to determine whether or not an item

claimed to be a Microsoft product . . . [wa]s genuine or counterfeit.” App. at 597;

see id. at 749. The magistrate judge also ordered Microsoft to “provide a

privilege log of documents constituting the information [it] made available to

[the] United States Customs Office for the inspection of Microsoft products

including its policies and procedures” for detecting counterfeit software. Id. at

                                         13
752.

       Microsoft objected to the magistrate judge’s order, arguing the “covert

security features and various tools” it used to detect counterfeit software were

“highly sensitive” and if they were revealed to defendants they could “eventually

find [their] way into the market place, and harm Microsoft.” Id. at 874. Thus,

Microsoft suggested it be required to reveal only “the reasons why the particular

software units at issue in this case [we]re counterfeit.” Id. As for any security

information it had provided to the United States Customs Office, Microsoft

asserted as follows: “While Microsoft’s anti-piracy team does occasionally

provide training or product identification information to U.S. Customs in order to

better educate those officials on the identification of counterfeit software,

Microsoft does not keep a particular archive or record of information which has

been given to U.S. Customs historically.” Id. at 873-74.

       During a hearing on Microsoft’s objections, Microsoft asserted it had

provided defendants with an expert report from Microsoft employee Greta Climer

explaining “the reasons why the two software titles [Windows 98 and a Windows

NT product] that [we]re at issue in th[e] case” were considered to be counterfeit.

Id. at 4270. More specifically, Microsoft asserted Climer’s expert report

“provide[d] detail as to three or four [security] points or five [security] points on

each piece of software.” Id. at 4272. Microsoft argued it was “going to live or

                                          14
die by what [it] put in Ms. Clim[]er’s expert report,” and thus the disclosure of

any other unrelated security features was irrelevant and unnecessary. Id. at 4276.

The district court suggested that Microsoft stipulate that its software contained a

variety of security features, but that the alleged counterfeit software failed to

match a few of those security features. Ultimately, the court stated:

      On the security feature issue, we’ve now come up with a Microsoft
      stipulation. I’m going to conclude there that stipulation resolves the
      need to have Microsoft disclose additional security features; also
      disclosed the expert report of Greta Clim[]er. So I don’t think it is a
      question of affirming or denying [the magistrate judge’s] ruling. I
      think events have moved beyond his ruling. And I think we now
      have an understanding that in light of the stipulation, information is
      so dubious relevance and burden on Microsoft far outweigh any
      probative value at trial. So I think the security features issue will be
      resolved along those lines of the stipulation that I have outlined
      today.

Id. at 4288-89.

      With respect to the customs-related information, the district court asked

Microsoft’s counsel “what information is out there, and can we look at a privilege

log?” Id. at 4290. Microsoft’s counsel responded that “Microsoft’s investigators

and legal department work quite closely with Customs agents, probably on a day-

to-day basis on . . . on-going criminal investigations,” and thus “it would be an

incredibly burdensome task” “in order to provide a privilege log of [such]

communications.” Id. The court then asked if there was “a current company

policy about how Microsoft interacts with Customs?” Id. at 4291. Microsoft’s

                                          15
counsel responded there was “nothing in writing,” id., and there was simply “a

large anti-piracy team at Microsoft who provide[d] assistance and work[ed] with

Customs on ongoing matters.” Id. at 4292. Lastly, the court asked Microsoft’s

counsel if there was “somebody at Microsoft that [defendants] could depose to get

information about how [Microsoft] interact[s] with Customs?” Id. Microsoft’s

counsel responded that two Microsoft employees, Greta Climer and Pat Mueller,

would have such information and could be deposed by defendants. Based upon

these representations from Microsoft’s counsel, the district court concluded:

             What I’m going to do is [the magistrate judge’s] ruling, as I
      understood it, was to make sure if there [wa]s any company policy,
      that Microsoft turn it over. And [Microsoft’s counsel] represented as
      an officer of the Court there [wa]s no written company policy. There
      has been a good faith investigation to try to comply with [the
      magistrate judge’s] order and I think that takes care of the need to
      provide Customs information in written form.
             There is, however, going to be a deposition of a Mr. Pat
      Mu[ell]er who will be able to answer question about all of that. And
      I understand what [defendants’ counsel] is saying about wanting to
      go into that deposition prepared, but if there is, it would seem to me
      virtually impossible for Microsoft to disclose some of the things that
      [defendants’ counsel] thinks [the magistrate judge] was ordering to
      be produced, the interactions with Customs agents, there must be
      hundreds of border stations around the country that would be not
      feasible. So I think that the deposition of Mr. Mu[ell]er would be
      and I guess Ms. Clim[]er would be sufficient to give the defendants
      the information that they need.

Id. at 4299.

      The district court issued a two-page written order modifying the magistrate

judge’s order in the following relevant respects:

                                         16
             Regarding the requested disclosure of software security
      features, Microsoft will stipulate to the effect that: “Microsoft
      software contains a variety of different features, including some that
      are specifically designed for security. Microsoft stipulates that
      MBC’s products matched all those features, except those specifically
      identified in Ms. Cl[i]mer’s report or deposition.” In light of such a
      stipulation, Microsoft need not disclose information on other security
      features.
             Regarding customs information, Microsoft will search Mr.
      Mueller’s [a Microsoft investigator’s] correspondence file to see if
      there is anything that might be viewed as a company policy with
      regard to interactions with the U.S. Customs Service and will
      produce such documents. No further documentation is required. Mr.
      Mueller may be deposed on these issues, but he is not required to
      disclose specific information that might harm on-going criminal
      investigations.

Id. at 898.

      On appeal, defendants contend the district court erred in modifying the

magistrate judge’s discovery order. According to defendants, information about

the security features employed by Microsoft is necessary to allow them to fully

defend against the copyright and trademark infringement claims. For example,

they note it would be relevant for a finder of fact to know if there were

unpublished security features not known by an informed customer (and thus not

detectable even using reasonable and thorough detection methods). Defendants

also assert that revelation of the security-related information is necessary to

enable them to retain an expert to actually examine the alleged counterfeit

software at issue and opine whether it was, in fact, counterfeit. As for the

customs-related information, defendants argue full disclosure was important

                                          17
because they “had possession of a document from U.S. Customs which resulted in

the release of Bantech software from Singapore after review by Microsoft,” and

“[w]ithout th[e requested] information,” they “were unable to utilize the Customs

report . . . at the deposition of Microsoft.” Aplt. Br. at 39.

      Generally speaking, a district court must defer to a magistrate judge’s

discovery order unless it is determined to be clearly erroneous or contrary to law.

See Fed. R. Civ. P. 72(a); 28 U.S.C. § 636(b)(1)(A); but see 12 Charles Alan

Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure §

3069 (2d ed. 1997) (noting that discovery disputes “might better be characterized

as suitable for an abuse-of-discretion analysis”). Under this standard, the district

court must affirm the order of the magistrate judge unless, in light of all the

evidence, the district judge is left with the definite and firm conviction that a

mistake has been committed. See Ocelot Oil Corp. v. Sparrow Indus., 847 F.2d

1458, 1461-62 (10th Cir. 1988). We in turn review a district court’s discovery-

related rulings for abuse of discretion. Ahrens v. Ford Motor Co., 340 F.3d 1142,

1145 (10th Cir. 2003); GWN Petroleum Corp. v. OK-Tex Oil & Gas, Inc., 998

F.2d 853, 858 (10th Cir. 1993).

      Although we have some concern whether the district court afforded the

proper degree of deference to the magistrate judge’s discovery order, we

ultimately conclude, given the events that transpired during the hearing on

                                           18
Microsoft’s objections, that the district court did not abuse its discretion in

modifying the discovery order. In particular, we agree with the district court that

Microsoft’s stipulation during the hearing, i.e., that the software units at issue

failed to match only a few designated security features, rendered the disclosure of

any other unrelated security features unnecessary. As for the customs-related

information, we conclude Microsoft adequately demonstrated during the hearing

that it attempted in good faith to comply with the magistrate judge’s discovery

order and that such efforts obviated the need to provide customs-related

information in written form. Thus, we conclude the district court rationally

limited the scope of that discovery to documents and information in the

possession of Microsoft investigator Pat Mueller. Although defendants now

assert they were unable to effectively depose Mueller without access to all

customs-related information they originally requested, they fail to explain

precisely how the district court’s limitations produced this result. Moreover, they

fail to explain why they could not have deposed a representative from the

Customs Service to testify about these matters generally, or in particular about

any shipments of software from Singapore to Bantech that may have been seized

and examined for authenticity.

      The decision of the district court granting summary judgment in favor of

Microsoft is REVERSED, the award of statutory damages, costs, and fees, and the

                                          19
permanent injunction issued by the district court are VACATED, and the case is

REMANDED for further proceedings.

                                            Entered for the Court

                                            Mary Beck Briscoe
                                            Circuit Judge

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