Addressing the appropriate allocation of the burden of proof related to the “first sale” defense to copyright infringement, the U.S. Court of Appeals for the Ninth Circuit confirmed that the initial burden of proof falls on the party raising the defense and affirmed a district court’s grant of summary judgment in favor of a software reseller defendant. Adobe Systems Inc. v. Christenson et al., Case No. 12-17371 (9th Cir., Dec. 30, 2015) (McKeown, J.).

Adobe Systems (Adobe) sued the defendant Joshua Christenson, for copyright infringement based on its unauthorized sale of Adobe software on the defendant’s website. The defendant asserted the “first sale” doctrine as a defense, which provides that a party who lawfully purchases or acquires title to a genuine copy of a work may “sell or otherwise dispose of” the copy without permission from the copyright holder. The defendant argued that he lawfully purchased genuine copies of the Adobe software from third-party distributors. Adobe challenged the first sale defense on the grounds that Adobe solely licenses, and does not sell, its software. In response, the defendant requested that the court place the burden of disproving the first sale defense on Adobe, as the defendant did not have access to the terms of Adobe’s contracts. The district court granted summary judgment in favor of the defendant on the copyright claim, finding that it was “uncontroverted” that the defendant lawfully purchased authentic copies of the Adobe software resold on his site. The burden then shifted to Adobe to prove the absence of a first sale. However, Adobe was unable to do so as the court barred the production of key evidence related to Adobe’s licensing practices because Adobe failed to timely identify or produce such documents during discovery. Adobe appealed.

The 9th Circuit acknowledged that Adobe “easily” established a prima facie case of copyright infringement. Adobe owned valid copyrights to the software in question, and the defendant sold copies of the software without Adobe’s authorization. Turning to the defendant’s first sale defense, the appeals court stated that, similar to civil claims, the burden of proof for an affirmative defense in a copyright action rests on the party asserting the defense. Thus, the party asserting the first sale doctrine as a defense to infringement has the initial burden to show it lawfully acquired title to the copy of the work. In the context of a software infringement case, the party raising the first sale defense satisfies its initial burden of proof by producing evidence sufficient for a jury to find that the infringer lawfully purchased or otherwise acquired title to genuine copies of the copyrighted software. Once the initial burden is satisfied, the burden of proof then shifts to the copyright holder to refute the defense, for example, on the grounds that a first sale did not occur because the software was granted by license. According to the 9th Circuit, this burden-shifting structure is consistent with the legislative history of § 109 of the Copyright Act and principles of fairness.

Ultimately, the Court agreed with the district court that the defendant met its initial burden of proof under the first sale defense by producing legitimate invoices from third-party suppliers evidencing lawful purchases of the Adobe software. Further, the 9th Circuit found that the district court did not abuse its discretion in excluding Adobe’s evidence of licenses, which led to Adobe being unable to meet its burden of proving the absence of a first sale. The appellate court thus affirmed the district court’s summary judgment in favor of the defendant on the copyright infringement claim.