FILED: NEW YORK COUNTY CLERK 05/02/2016 08:22 AM
`NYSCEF DOC. NO. 134
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`INDEX NO. 152356/2015
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`RECEIVED NYSCEF: 05/02/2016
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
`
`United States District Court, N.D. California.
`
`MICROSOFT CORPORATION v. EEE BUSINESS INC
`555 F. Supp.2d 1051 (N.D. Cal. 2008)
`
`MICROSOFT CORPORATION, Plaintiff,
`v.
`EEE
`BUSINESS
`INC.,
`d/b/a
`Ebuszone.com and EBZ EBZ; Ming no
`SHang; Lifeng Wang, a/k/a Alice Wang;
`Nancy Linker; and Does 1-5, Defendants.
`
`No. C 07-01839 JSW.
`
`States District Court, N.D.
`United
`California.
`
`May 5, 2008 *1052
`
`Esha Bandyopadhyay, Perkins Coie LLP, Menlo Park,
`CA, Jeremy E. Roller, Scott T. Wilsdon, Sima F. Sar-
`rafan, Yarmuth Wilsdon Calfo PLLC, Fourth Madi-
`son, Seattle, WA, for Plaintiff.
`
`Jingming James Cai, Judith Pearce, Schein Cai LLP,
`Charles Michael Standard, Santa Jose, CA, Leon Em-
`manuel Jew, Dahyee Law Group, Andree Desam Tay-
`lor, Hayward, CA, for Defendants.
`
`*1053
`
`ORDER GRANTING MOTION
`FOR PARTIAL SUMMARY
`JUDGMENT
`
`JEFFREY WHITE, District Judge
`
`Now before the Court is the motion for partial sum-
`mary judgment filed by Plaintiff Microsoft Corpora-
`tion ("Microsoft") against defendant Lifeng Wang, a/
`
`k/a Alice Wang ("Wang") for dismissal of claims one
`through four of the complaint for damages and in-
`junctive relief. Having carefully considered the parties'
`papers, oral argument, and the relevant legal authori-
`ty, the Court hereby GRANTS Microsoft's motion for
`partial summary judgment.
`BACKGROUND
`Defendant Wang was previously arrested for selling
`counterfeit Microsoft software, conduct which result-
`ed in her prosecution, a sentence of two months in
`prison and an order to pay restitution in the amount
`$93,611. ( See Declaration of Deborah M. Johnson "(D.
`Johnson Decl."), Ex. 1, Wang Tr. Ex. 7.) Wang was
`also civilly sued by Microsoft for copyright infringe-
`ment and defendant settled that action in June 2006
`for a large payment and her agreement to refrain from
`further acts of infringement. ( See id., Wang Tr. Exs. 8,
`9.)
`
`Despite this prior conduct, Microsoft alleges in this
`lawsuit that defendant Wang is again liable for in-
`fringing its copyrighted works by setting up and run-
`ning EEE Business, an on-line business that sold in-
`fringing Microsoft products. ( See id., Wang Tr.
`28:19-29:2, 46:9-25, 60:5-17, 61:11-62:7, 70:21-71:15,
`74:5-17, 76:8-77:15, 112:17-113:11, 114:19-116:10,
`130:17-25, 132:21-133:24; Exs. 18, 36, 38.) *1054
`Wang set up many aspects of the business enterprise,
`including leasing office space, renting a mail box used
`by the business, opening and managing tow Bank of
`America bank accounts for the business, opening and
`running a PayPal account for the business, and apply-
`ing for a credit card merchant account. ( See id., Wang
`Tr. 119:21-120:23, 58:11-60:4, 69:7-70:25, 81:21:82:1,
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
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`63:21-64:14, 112:17-113:11; Exs. 39, 36, 18, 19, 26,
`17.) Wang performed these acts by holding herself out
`as an officer, manager, and majority shareholder of
`EEE Business. ( See id., Wang Tr. 96:15-98:1, 100:5-9,
`112:17-113:11, 115:11-116:10, 119:21-120:9; Exs.
`32-33, 36, 38-29.)
`
`Defendants' infringing activities came to the attention
`of law enforcement and on May 16, 2007, United
`States Probation arrested Wang for multiple viola-
`tions of her supervised release. ( See id., Wang Tr.
`122:20-124:25; Ex. 40.) Law enforcement searched her
`home and seized infringing Microsoft software worth
`$106,145. ( See id., Wang Tr. 125:15-25; Ex. 42.) She
`was returned to prison and faces deportation for her
`trafficking in counterfeit Microsoft products. ( See id.,
`Wang Tr. 123:4-7, 37:7-38:5, 40:23-41:1; Ex. 40.)
`
`Microsoft and its partners distribute software called
`Student Media through special academic programs to
`provide low cost software to students currently en-
`rolled in kindergarten through twelfth grade. (Com-
`plaint at ¶ 14.) Microsoft distributes the program to
`students in the United States and abroad, and imposes
`geographical restrictions on its distribution. ( Id. at
`¶¶ 14, 16.) In addition, only certain resellers who are
`specially trained and authorized may distribute Stu-
`dent Media to qualified education users. ( Id. at ¶ 15.)
`Microsoft also develops, distributes and licenses other
`software packages, including Microsoft Windows XP,
`an operating system, and Microsoft Office 2003, a
`suite of popular Microsoft software programs. ( Id. at
`¶¶ 17-18.)
`
`Microsoft brought this civil action against defendant
`Wang, EEE Business, and a few individuals for unau-
`thorized importation into the United States of Mi-
`crosoft Student Media software that was manufac-
`tured and licensed for use abroad, and distributing
`Student Media to individuals and entities not qualified
`to use the software, without approval or authoriza-
`tion. ( Id. at ¶ 19.) On six separate occasions, inves-
`tigators hired by Microsoft placed orders for various
`
`Microsoft software products and, upon receipt, deter-
`mined that the products were infringing on its exclu-
`sive copyrights.
`
`Microsoft brings this motion for partial summary
`judgment to establish liability by defendant Wang for
`copyright infringement,
`infringing importation of
`copyrighted works, violation of the Digital Millenni-
`um Copyright Act and violation of the Anti-Counter-
`feiting Amendments Act.
`ANALYSIS
`A. Legal Standard for Motions for Summary
`Judgment.
`
`A court may grant summary judgment as to all or a
`part of a party's claims. Fed.R.Civ.P. 56(a). Summary
`judgment is proper when the "pleadings, depositions,
`answers to interrogatories, and admissions on file, to-
`gether 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 judgment as a matter of
`law." Fed.R.Civ.P. 56(c). An issue is "genuine" only if
`there is sufficient evidence for a reasonable fact find-
`er to find for the non-moving party. Anderson v. Lib-
`erty Lobby, Inc., 477 U.S. 242, 248-49, 106 S.Ct. 2505,
`91 L.Ed.2d 202 (1986). A fact is "material" if the fact
`may affect the outcome of the case. Id. at 248, *1055
`106 S.Ct. 2505. "In considering a motion for summary
`judgment, the court may not weigh the evidence or
`make credibility determinations, and is required to
`draw all inferences in a light most favorable to the
`nonmoving party." Freeman v. Arpaio, 125 F.3d 732,
`735 (9th Cir. 1997).
`
`A principal purpose of the summary judgment proce-
`dure is to identify and dispose of factually unsupport-
`ed claims. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24,
`106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The party mov-
`ing for summary judgment bears the initial burden
`of identifying those portions of the pleadings, discov-
`ery, and affidavits which demonstrate the absence of
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
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`a genuine issue of material fact. Id. at 323, 106 S.Ct.
`2548. Where the moving party will have the bur-
`den of proof on an issue at trial, it must affirmatively
`demonstrate that no reasonable trier of fact could find
`other than for the moving party. Id. Once the moving
`party meets this initial burden, the non-moving party
`must go beyond the pleadings and by its own evidence
`"set forth specific facts showing that there is a genuine
`issue for trial." Fed.R.Civ.P. 56(e). The non-moving
`party must "identify with reasonable particularity the
`evidence that precludes summary judgment." Keenan
`v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996) (quoting
`Richards v. Combined Ins. Co., 55 F.3d 247, 251 (7th Cir.
`1995)) (stating that it is not a district court's task to
`"scour the record in search of a genuine issue of tri-
`able fact"). If the non-moving party fails to make this
`showing, the moving party is entitled to judgment as a
`matter of law. Celotex, 477 U.S. at 323, 106 S.Ct. 2548.
`B. Legal Standard for Counts
`Microsoft Moves Upon.
`Pursuant to Federal Rule of Civil Procedure 56, Mi-
`crosoft seeks summary judgment as to defendant
`Wang's liability for (1) copyright infringement pur-
`suant to 17 U.S.C. § 501; (2) unauthorized importation
`of copyrighted works pursuant to 17 U.S.C. § 602(a);
`(3) unauthorized distribution of product keys pur-
`suant to 17 U.S.C. § 1201(a)(2); and (4) trafficking in
`counterfeit volume license key labels pursuant to 18
`U.S.C. § 2318(a).
`
`The Copyright Act grants the copyright owner several
`exclusive rights, including the exclusive right to distri-
`bution. 17 U.S.C. § 106(3). In addition, the Copyright
`Act provides that it is an unlawful infringement of
`a copyright owner's rights to import into the United
`States copyrighted works acquired abroad without the
`copyright owner's authority. 17 U.S.C. § 602(a). To es-
`tablish a claim for copyright infringement, a plaintiff
`need only show that (1) it owns valid copyrights in
`the works at issue, and (2) defendant encroached up-
`on plaintiff's exclusive rights under the Copyright Act.
`
`17 U.S.C. § 501; see also Feist Publications, Inc. v. Rural
`Tel. Service Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113
`L.Ed.2d 358 (1991).
`
`The Copyright Act further protects a copyright own-
`er's exclusive right of distribution by prohibiting the
`importation into the United States of a copyrighted
`work that was acquired outside the United States un-
`less the copyright owner grants specific authority to
`do so. 17 U.S.C. § 602(a) ("Importation into the Unit-
`ed States, without authority of the owner of copyright
`under this title, of copies or phonorecords of a work
`that have been acquired outside the United States is
`an infringement of the exclusive rights to distribute
`copies or phonorecords under section 106, actionable
`under section 501.").
`
`Federal law also prohibits trafficking in "counterfeit
`or illicit" labels affixed or designed to be affixes to
`copies of computer programs. 18 U.S.C. § 2318(a).
`Moreover, the Digital Millennium Copyright Act
`("DCMA") prohibits the distribution *1056 of items
`(a) primarily designed or produced for the purpose of
`circumventing technological measures that effectively
`control access to a copyrighted work, (b) have only a
`limited commercially significant purpose or use oth-
`er than to circumvent such technological measures, or
`(c) are marketed for use in circumventing such tech-
`nological measures. 17 U.S.C. § 1201(a)(2). In con-
`junction,
`these federal statutes provide copyright
`owners protection against unauthorized users or dis-
`tributors who attempt to circumvent security features
`designed to protect access to the copyrighted work.
`See, e.g., 321 Studios v. MGM Studios, Inc., 307 F.Supp.2d
`1085, 1099 (N.D.Cal. 2004) (holding that software
`used to circumvent encryption features used by copy-
`right owner to protect unauthorized access to its
`DVDs key violates 17 U.S.C. § 1201(a)(2)).
`C. Wang's Declaration Does Not
`Establish Liability for Direct
`Infringement.
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
`
`Microsoft contends that Defendant EEE Business,
`Inc.'s distribution of Microsoft Student Media soft-
`ware to other than qualified educational users violates
`Microsoft's exclusive right of distribution under the
`Copyright Act, and that defendant Wang, as an in-
`strumental part of that organization, is similarly liable.
`Microsoft argues that the test purchases of the soft-
`ware from EEE Business establishes that the company
`plainly infringed on Microsoft's copyrights and that
`defendant Wang was actively engaged in and directly
`caused such infringement. Microsoft contends that
`Wang's participation included leasing the Santa Clara
`office space for the company, renting the private mail
`box in Milpitas, opening the PayPal account, opening
`company accounts at Bank of America, applying for
`a credit card merchant account, preparing an applica-
`tion to be a reseller with a company called Micro, pur-
`chasing telephone equipment, and hiring a public ac-
`countant.
`
`On the lease for the office space, Wang identified her-
`self as "President" of EEE Business and provided a per-
`sonal guaranty of the company's rental obligation. (
`See D. Johnson Decl., Ex. 1, Wang Tr. Ex. 39.) Wang
`signed the rental agreement for the mail box on behalf
`of EEE Business and the mail box was used by the
`business in the sales of infringing software to Mi-
`crosoft's investigators. ( See id., Wang Tr. Ex. 14; Exs.
`11, 12; ¶¶ 10-11, 20-21, Wang Exs. 3-4, 8-9; Wang
`Tr. Exs 19, 26.) The PayPal account is in Wang's name
`and lists her personal information, including her res-
`idence, cellular telephone number and credit card
`numbers. ( See id., Wang Tr. Ex. 17.) The PayPal ac-
`count processed $1,400,199.08 in revenues for EEE
`Business. ( See id.) The Bank of America accounts list
`both Wang's private residence and the Milpitas mail
`box as account addresses, Wang had signature author-
`ity over both accounts and signed the checks drawn on
`both accounts. ( See id., Wang Tr. 71:12-15, 72:13-16,
`Ex. 19; Wang Tr. 81-21-82:1, Ex. 26; Wang Tr.
`76:8-77:10, Ex. 18.) On the application for the credit
`card merchant account, Wang lists herself as "Pres-
`ident" of EEE Business and identifies herself as the
`
`majority owner of the company. ( See id., Wang Tr.
`Ex. 36.) On the reseller application form, Wang listed
`herself as "President" of EEE Business and claimed
`to own 90 percent of the company. ( See id., Wang
`Tr. Ex. 38.) On the forms to purchase the telephone
`equipment, Wang again listed herself as "President"
`and "Manager" of EEE Business. ( See id., Wang Tr.
`Ex. 32.) Wang represented herself as "Manager" of
`EEE Business on the engagement letter for a CPA she
`met with for the purpose of preparing tax and other
`financial information for the company. ( See id., Wang
`Tr. 100:5-9, Ex. 33.) In addition, the uncontrovert-
`ed *1057 evidence demonstrates that Wang withdrew
`over $470,000 form the two accounts. ( See id., Wang
`Tr. 87:7-90:23, 91:9-94:7, Exs. 29, 30.) Lastly, Wang
`held herself out as the "C.E.O." of EEE Business on her
`business card. ( See id., Wang Tr. Ex. 4.)
`
`in her declaration in opposition to the
`However,
`pending motion for partial summary judgment, Wang
`states that she was only involved in setting up the in-
`frastructure of the company and the business service
`providers required that she represent that she was ei-
`ther a manager, president or CEO and/or that she had
`a controlling interest in the corporation. ( See Decla-
`ration of Lifeng Wang in opposition to motion for
`partial summary judgment ("Wang Decl."), ¶ 10.) Al-
`though Wang does not dispute that she represented
`herself as the president and manager to various
`providers, she states that she was not actually the
`manager, and that she was "just setting up the infra-
`structure for the corporation to conduct business." (
`Id., ¶ 44.)
`
`Microsoft contends that summary judgment should
`still be granted on the basis that Wang encroached
`upon Microsoft's exclusive and valid copyright rights.
`See 17 U.S.C. § 501. Microsoft argues that this Court
`should consider Wang's declaration to be a "sham af-
`fidavit," that fails to satisfy the admissible evidence
`requirement under Federal Rule of Civil Procedure
`56(e) and should therefore be disregarded. Microsoft
`contends that considering the uncontroverted evi-
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
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`dence that Wang is a convicted seller of counterfeit
`and infringing Microsoft software, that similar soft-
`ware was found in her residence during her super-
`vised release and that she represented multiple times
`that she was a president or manager of the company,
`her affidavit in defense of their motion should be dis-
`regarded as incredible.
`
`Under the Seventh Circuit's holding in Seshadri v. Kas-
`raian, 130 F.3d 798, 802 (7th Cir. 1997), the court held
`that although a court ordinarily does not make cred-
`ibility findings at summary judgment, "testimony can
`and should be rejected without a trial if, in the cir-
`cumstances, no reasonable person would believe it."
`However, under Ninth Circuit authority, this Court is
`bound to accept direct evidence of the central facts in
`dispute at summary judgment, even where the Court
`finds that no reasonable jury would believe it. Leslie v.
`Grupo ICA, 198 F.3d 1152, 1158 (9th Cir. 1999). Al-
`though the Court questions the veracity of the dec-
`laration considering the rest of the evidence in the
`record, Wang explained that she lied to all service
`providers about her status in the company because it
`was only she who could set up the EEE Business ac-
`counts. ( See Wang Decl., ¶¶ 10, 44.) Under prevail-
`ing Ninth Circuit law, the Court is bound to accept
`the truth of Wang's declaration at summary judgment
`and therefore cannot find that she is directly liable for
`copyright infringement on this basis.
`D. Defendant's Admissions
`Establish Liability.
`On November 30, 2007, Microsoft issued its first set
`of Requests for Admission. ( See D. Johnson Decl.,
`Ex. 2.) Although Wang was represented by counsel at
`the time, Wang did not respond to the Admissions.
`In her declaration filed in support of her opposition,
`Wang contends that she never admitted to the admis-
`sions and, although her previous attorney was served
`with the Requests for Admissions, that attorney never
`forwarded the requests to her current attorney. ( See
`Wang Decl., ¶¶ 46-48.) Wang states that her new at-
`
`torney was never informed by Microsoft of the out-
`standing discovery. ( See id., ¶ 49.) However, it is clear
`from Microsoft's submissions on reply that Microsoft
`*1058 repeatedly informed Wang's new attorney of the
`outstanding Requests for Admission and of the dead-
`line to answer. On December 7, 2007, the day after
`Wang's current attorney was retained, Microsoft sent
`counsel a letter outlining the discovery requests that
`had been made to date and specifically notified counsel
`of the impending January 2, 2008 deadline for answers
`for the first set of Requests. ( See Declaration of Scott
`T. Wilsdon, ¶ 2.) On December 27, 2007, Microsoft
`again notified Wang's new counsel of the January 2,
`2008 deadline to answer the pending Requests. ( See
`id., ¶ 4, Ex. 3.) In addition, as of March 10, 2008
`when Microsoft filed its opening brief of the motion
`for partial summary judgment premised, in part, on
`Wang's admissions by failure to respond to the Re-
`quests, Wang has had notice of her failure to answer
`the Requests. Although there is some mention of her
`intention to file a motion to withdraw the admissions
`in the parties' joint case management statement filed
`before this Court and although defendants' counsel
`was queried at oral argument about filing such a mo-
`tion, to date, no such motion has been filed.
`
`Pursuant to Federal Rule of Civil Procedure 36(a)(3), a
`"matter is deemed admitted unless, within 30 days af-
`ter service of the request . . . the party to whom the
`request is directed serves upon the party requesting
`the admission a written answer or objection addressed
`to the matter, signed by the party or by the party's
`attorney." Further, a "matter deemed admitted under
`this rule is conclusively established unless the court,
`on motion, permits the admission to be withdrawn."
`Fed.R.Civ.P. 36(b); see also Conlon v. United States, 474
`F.3d 616, 622 (9th Cir. 2007). Because there is no mo-
`tion to withdraw the admissions, and the determina-
`tion whether to grant such a motion is discretionary,
`the Court deems those matters admitted.
`
`Accordingly, Wang is deemed to have admitted that
`the test purchases from Microsoft's investigators con-
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
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`clusively establish that Wang was responsible for in-
`fringing Microsoft Student Media and Volume Li-
`cense Media software. (Declaration of Tamara John-
`son ("T. Johnson Decl."), ¶¶ 8-10, 15, 20-21.) Defen-
`dants' distribution of Microsoft software to other than
`qualified users violates Microsoft's exclusive right to
`distribution under the Copyright Act. See 17 U.S.C.
`§§ 106(3), 501(a). The evidence from the six test pur-
`chases of Microsoft software establishes that defen-
`dant Wang distributed Student Media versions of Mi-
`crosoft Window XP as well as Microsoft Volume Li-
`cense software and deposited the revenues into the
`EEE Business operating account. ( See T. Johnson De-
`cl., ¶¶ 8-11, 19-21, Exs. 1-4, 8-9; Wang Admissions
`at 4, 5, Nos. 1-6.) This distribution of software with-
`out authorization plainly violates Microsoft's exclu-
`sive right to distribution under 17 U.S.C. § 501. Ac-
`cordingly, the undisputed facts establish that defen-
`dant Wang is liable for infringement of Microsoft's
`copyrights.
`
`Wang's admissions regarding the test purchases fur-
`ther establish that defendants import and/or distrib-
`ute Microsoft software manufactured and licensed for
`distribution abroad. Section 602(a) of the Copyright
`Act provides that "[i]mportation into the United
`States, without the authority of the owner of copy-
`right under this title, of copies . . . of a work that
`have been acquired outside the United States is an in-
`fringement of the exclusive right to distribute copies
`. . . under section 106, actionable under section 501."
`17 U.S.C. § 602(a). The evidence in the record estab-
`lishes that the Student Media software was imported
`and distributed within the United States without Mi-
`crosoft's authority and that defendants were not au-
`thorized *1059 to import or export to the United States
`software that was licensed for distribution abroad. (
`See T. Johnson Decl., ¶ 14.) In addition, the discs were
`clearly marked "Not for Resale." ( See id., ¶¶ 8-11, Exs.
`1-4.) Defendants' importation to the United States of
`software manufactured and licensed for exclusive use
`abroad is a plain violation of 17 U.S.C. § 602(a). Ac-
`cordingly, the undisputed facts establish that defen-
`
`dant Wang is liable for infringing importation of Mi-
`crosoft's copyrighted works.
`
`Lastly, among the works defendant Wang sold to Mi-
`crosoft's outside investigators were software only
`available under a Volume License Agreement. This
`agreement permitted only authorized licensees to in-
`stall software to unlock the media programming to
`enable the user to enter a 25-character alphanumeric
`code — the Volume License Key — which is unique to
`the licensee and required to be kept confidential under
`the terms of the Volume License Agreement. ( See id.,
`¶¶ 17-18.) By distributing a VLK without authoriza-
`tion, Wang effectively circumvented Microsoft's tech-
`nological measure to control access to a copyright-
`ed work in violation of the DCMA. See 17 U.S.C. §
`1201(a)(2). Additionally, the VLK's placement on a
`counterfeit label which accompanied the Volume Li-
`cense versions of the Windows XP and Office 2003
`software that Wang sold to Microsoft's investigators
`constitutes trafficking in counterfeit labels. See 18
`U.S.C. § 2318(a)(1)(B), (b)(1). ( See also T. Johnson De-
`cl., ¶¶ 20-21.)
`
`Accordingly, pursuant to her uncontested admissions,
`Wang is liable for copyright infringement, unautho-
`rized importation of copyrighted works, unauthorized
`distribution of product keys, and trafficking in coun-
`terfeit volume license key labels. Microsoft is entitled
`to summary judgment on counts one through four on
`this basis.
`E. Defendant is Liable for
`Contributory Infringement.
`In addition, even without considering defendant's ad-
`missions from the unanswered Requests for Admis-
`sion, according to the undisputed facts in the record,
`Wang is liable for copyright infringement and the at-
`tendant causes of action because of her conduct con-
`tributing to the infringement. "Contributory infringe-
`ment originates in tort law and stems from the notion
`that one who directly contributes to another's in-
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
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`fringement should be held accountable." Fonovisa, Inc.
`v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996).
`"[O]ne who, with knowledge of the infringing activ-
`ity, induced, causes or materially contributes to the
`infringing conduct of another, may be held liable as
`a `contributory' infringer." Id., quoting Gershwin Pub-
`lishing Corp. v. Columbia Artists Management, Inc., 443
`F.2d 1159, 1162 (2d Cir. 1971). An individual may be
`liable for contributory infringement even where she
`does not have actual knowledge of the infringing ac-
`tivity, but should have reason to know of the infring-
`ing conduct. Cable/Home Comm. Corp. v. Network Prods.,
`Inc., 902 F.2d 829, 845-46 (11th Cir. 1990).
`
`The undisputed facts establish that Wang was aware
`of EEE Business and its infringing activity. ( See D.
`Johnson Decl., Ex. 1, Wang Tr. 22:14-19). Wang does
`not contest that she was instrumental in the procure-
`ment of leasing space of the company, renting a pri-
`vate mail box, opening a PayPal account in her name
`which was used to receive payment for the sale of in-
`fringing Microsoft products, opening Bank of Amer-
`ica accounts for the company, applying for a credit
`card merchant account, registering EEE Business as a
`reseller for a business partner, purchasing telephone
`equipment for the business and hiring a CPA to pre-
`pare tax returns for the company. Given this substan-
`tial contribution to the endeavors of EEE Business,
`*1060 and considering her knowledge of the compa-
`ny's infringing conduct, the Court finds her liable on
`a theory of contributory infringement. Accordingly,
`Microsoft is entitled to partial summary judgment on
`counts one through four on this basis. See, e.g., Mi-
`crosoft Corp. v. Silver Star Micro, Inc., 2008 WL 115006,
`at *8 n. 8 (N.D.Ga. Jan. 9, 2008) (citing Ellison v. Robert-
`son, 357 F.3d 1072, 1076 (9th Cir. 2004)) (holding that
`the court analyzes contributory and vicarious liability
`under the DCMA in the same manner as determining
`personal liability for violations of the Copyright Act.)
`F. Microsoft is Entitled to a
`Permanent Injunction.
`
`Accordingly, pursuant to Federal Rule of Civil Proce-
`dure 56 and 17 U.S.C. § 502(a), 17 U.S.C. § 1203(b)(1)
`and 18 U.S.C. § 2318(f)(2)(A), the Court finds that Mi-
`crosoft is entitled to a permanent injunction as fol-
`lows: The Court ORDERS that defendant Wang,
`along with her agents, servants, employees, represen-
`tatives, successors, assigns, and all those persons act-
`ing at her direction or control, shall be and hereby are
`permanently enjoined and restrained from:
`
`(a) importing to or distributing within the United
`States any Microsoft software programs (including
`but not limited to Student Media), components, end
`user license agreements, or any other items protected
`by Microsoft's copyrights, including, but not limited
`to, the following Certificate Registration Numbers:
`(i) TX 5-407-055 ("Microsoft Windows XP"); (ii) TX
`5-837-617 ("Microsoft Office 2003");
`(iii) TX
`5-872-225 ("Microsoft Access 2003");
`(iv) TX
`5-837-636
`("Microsoft Excel
`2003");
`(v) TX
`5-900-087 ("Microsoft Outlook 2003");
`(vi) TX
`5-852-649 ("Microsoft Power-Point 2003"); (vii) TX
`5-900-088 ("Microsoft Word 2003"); and (viii) Other
`items or works protected by Microsoft's copyrights;
`manufactured abroad and license for exclusive distri-
`bution outside the United States; (b) distributing or
`making any other infringing use of Microsoft Student
`Media software protected by Microsoft's copyrights,
`including, but not limited to the following Certificate
`Registration Numbers: (i) TX 5-407-055 ("Microsoft
`Windows XP"); (ii) TX 5-837-617 ("Microsoft Office
`2003"); (iii) TX 5-872-225 ("Microsoft Access 2003");
`(iv) TX 5-837-636 ("Microsoft Excel 2003"); (v) TX
`5-900-087 ("Microsoft Outlook 2003");
`(vi) TX
`5-852-649 ("Microsoft Power-Point 2003"); (vii) TX
`5-900-088 ("Microsoft Word 2003"); and (viii) Other
`items or works protected by Microsoft's copyrights;
`(d) importing to the United States, offering to the
`public, providing and trafficking in counterfeit and/
`or unauthorized Microsoft product keys, knowing or
`having reason to know that such product keys (i) are
`primarily designed or produced for the purpose of cir-
`cumventing activation and/or validation features of
`
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`MICROSOFT CORPORATION v. EEE BUSINESS INC, 555 F. Supp.2d 1051 (N.D. Cal. 2008)
`
`Microsoft software, (ii) have only limited commercial-
`ly significant purpose or use other than to circum-
`vent Microsoft's activation and/or validation *1061
`features, or (iii) are marketed by defendant Wang or
`persons acting in concert with defendant Wang for
`use in circumventing Microsoft's activation and/or
`validation features; (e) trafficking, distributing or in-
`tending to distribute any counterfeit or illicit Mi-
`crosoft Certificates of Authenticity, VLK labels, other
`product key labels, or any Microsoft documentation
`or packaging; and (F) assisting, aiding, abetting any
`other person or business entity in engaging in or per-
`forming any of the activities referred to in numbered
`paragraphs (a) through (e) above.
`
`In addition, pursuant to Federal Rule of Civil Proce-
`dure 56 and 17 U.S.C. § 503(b), to prevent further
`unauthorized distribution of Microsoft software, the
`Court finds that Microsoft is entitled to an order au-
`thorizing the remedial destruction of the infringing
`Microsoft software seized from defendant Wang by
`the United States Probation Department.
`
`IT IS SO ORDERED. *1013
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