## Facts

- Adobe developed and distributed software, including multi-program boxed bundles sold as “Adobe Collections.”
- Each program included an end user license agreement (EULA) presented during installation and purporting to restrict transfer and use.
- SoftMan operated an online software resale business and acquired Adobe products through intermediaries, not directly from Adobe.
- SoftMan “unbundled” Adobe Collections by separating the component programs and reselling them individually.
- SoftMan resold copies without installing them and therefore did not click through or otherwise manifest assent to the EULA terms.
- Some resold items lacked registration materials or information associated with access to Adobe’s support services.
- Adobe sought a preliminary injunction to stop SoftMan from reselling unbundled Collection components and certain discounted/educational versions, asserting copyright and trademark theories.

## Issues

1. Whether Adobe’s distribution transactions functioned as sales of particular copies or licenses, for purposes of the first-sale doctrine under 17 U.S.C. § 109(a).
2. Whether a reseller that does not install the software is bound by EULA terms presented only during installation.
3. Whether unbundling and reselling Collection components and certain versions likely constituted copyright infringement or trademark/false designation, warranting preliminary injunctive relief.

## Decision

- The court denied Adobe’s application for a preliminary injunction and vacated an earlier injunction.
- The court treated Adobe’s distribution of copies as a sale in substance, making the first-sale doctrine applicable to downstream resale of lawfully acquired copies.
- The court held SoftMan was not bound by the EULA because SoftMan never installed the software and never assented to the on-screen terms.
- Because first sale and non-assent substantially weakened Adobe’s infringement theories, Adobe did not show a likelihood of success on the merits of its copyright claims.
- Adobe also failed to show a clear likelihood of success on trademark/false designation claims because factual disputes remained as to whether the goods sold were materially different from genuine Adobe goods.

## Legal Principles

- For first-sale analysis, courts examine the substance of a software distribution transaction rather than labels; a transaction that transfers possession for a one-time fee without return requirements may be treated as a sale of copies.
- Under 17 U.S.C. § 109(a), the owner of a lawfully made particular copy may resell that copy without the copyright owner’s permission.
- Shrinkwrap/clickwrap obligations generally require manifested assent; terms presented only during installation do not bind a reseller who never installs and never indicates agreement.
- In trademark “genuine goods” disputes, resale may be actionable if the goods are materially different from the trademark owner’s authorized goods; unresolved factual disputes on materiality can defeat preliminary relief.
- A preliminary injunction requires, at minimum, a strong showing of likely success on the merits; failure on that element can warrant denial of the extraordinary remedy.

## Conclusion

The court refused to enjoin SoftMan’s resale practices at the preliminary stage because Adobe was unlikely to prove that downstream transfers were restricted by license rather than protected by first sale, and because SoftMan had not assented to installation-based EULA terms; factual disputes also prevented a showing of likely success on Adobe’s trademark theories.


SoftMan Prods. Co. v. Adobe Sys. Inc., 171 F. Supp. 2d 1075 (C.D. Cal. 2001)