United States District Court, W.D. Texas, Austin Division
ADOBE SYSTEMS INCORPORATED, AUTODESK, INC., and CNC SOFTWARE, INC., Plaintiffs,
SKH SYSTEMS, INC. and CHORNG JACK HWANG, individually and d/b/a JACK'S LAPTOPS, Defendants.
SPARKS, UNITED STATES DISTRICT JUDGE
REMEMBERED on this day the Court reviewed the file in the
above-styled cause, and specifically Plaintiffs Adobe Systems
Incorporated (Adobe), Autodesk Inc. (Autodesk), and CNC
Software, Inc. (CNC) (collectively, Plaintiffs)' Motion
for Summary Judgment [#29], Defendant Chorng "Jack"
Hwang (Hwang)'s Response and Motion to Exclude Evidence
[#32], and Plaintiffs' Reply [#33] in support. Having
reviewed the documents, the governing law, and the file as a
whole, the Court now enters the following opinion and orders.
Plaintiffs produce an assortment of software products for use
in a variety of technology, including computers. Compl. [#1]
¶ 11. Plaintiffs have obtained copyright registrations
for each of their software products and market, distribute,
and license their products under federally registered
trademarks (the Marks). Id. ¶ 12; Mot. Summ. J.
[#29] Ex. A (Registrations).
use a product activation system to protect their software
from piracy. Id. ¶ 39. This system requires
customers to enter a key or serial number to activate
Plaintiffs' software on their computers. Id.
Alternatively, customers can contact Plaintiffs'
activation servers via the internet to have the key or serial
number transmitted directly to the computer. Id.
Each copy of Plaintiffs' software has a unique key or
serial code, and customers must purchase a license from
Plaintiffs to receive the key or serial code to activate the
software. Id. ¶ 41.
is the director and president of Defendant SKH Systems, Inc.,
a corporation registered in Texas to sell computers and
software. Compl. [#1] ¶ 42. Doing business under the
name "Jack's Laptops, " Hwang sells refurbished
laptops, USB drives, and hard drives preloaded with software.
Id. ¶42. Hwang markets the refurbished
technology using platforms such as Craigslist and Facebook.
the Business Software Alliance (BSA),  Plaintiffs
learned Hwang was allegedly advertising, selling, and
activating unlicensed versions of Plaintiffs' software
since at least August 2014. Mot. Summ. J.[#29] at 3.
Plaintiffs hired a private investigator, Paul Brick, to learn
more. Mot. Summ. J. [#29] at 3-4; id. [#29-16] Ex. D
a series of recorded phone calls and meetings, Mr. Brick
confirmed Hwang was selling and activating unauthorized
copies of Plaintiffs' software. See generally
Brick Decl. Mr. Brick first called Hwang on June 3, 2016
using the number listed on Facebook for Jack's Laptops.
¶ 3. In the initial call, Mr. Brick indicated he was
"not looking to buy just one laptop with a couple pieces
of software." Brick Decl. Ex. 1 (June 3, 2016 Tr.) at
9:18-10:19. Rather Mr. Brick stated he had access to a
large quantity of computers and needed to "get stuff
like CS 6, AutoCAD, some science programs, . . . design type
stuff for these online gaming companies in Austin."
Id. Hwang responded "when 1 sell stuff like
that. . . you're not buying a license. You're buying
an activator. . . . And that's what 1 tell people."
Id. at 11:7-11. In addition, Hwang repeatedly
represented he possessed, could install, and could activate
unlicensed software. See generally Id. He also noted
that "[a] lot of people who buy my stuff are students .
. . [o]r, you know, single contractors" who cannot
afford expensive software. Id. at 13:1-11.
Additionally, Hwang explained "the caveat is right up
front, [customers have] got to know that they're buying
unlicensed software; and 1 never build programs without
telling people that." Id. at 14:18-21.
the end of first conversation, Mr. Brick proposed a
relationship where he would develop connections with
companies seeking to buy computers loaded with software and
Hwang would work in a customer service capacity. See
Id. at 13:14-14:21. The two men discussed how such a
relationship would function. See Id. at 15:22-23:25.
Hwang indicated "1 sell a lot of laptops to small
companies like that. Guys buy five laptops."
Id. at 29:20-22. However, Hwang expressly warned Mr.
Brick companies needed to be told they were buying unlicensed
software. Id. at 30:1-4. Hwang conditioned working
with Mr. Brick on companies knowingly assuming the risk of
using unlicensed software. Id. at 30:6-17. In
response, Mr. Brick indicated he would check with his
potential clients and perhaps Hwang could start with one
computer. Id. at 30:20-22.
subsequent conversations, Hwang quoted Mr. Brick prices for
installing and activating various unlicensed software
programs. Brick Decl. ¶¶ 4-5. On June 8, 2016,
Hwang and Mr. Brick met at a coffee shop where Hwang sold,
installed, and activated a series of unlicensed software on
Mr. Brick's laptop computer for $290. Id.
¶¶ 9-10. Mr. Brick observed Hwang using a computer
program to bypass the software's product activation
system. Id. ¶ 12.
the meeting, Mr. Brick returned to the idea of continuing
relationship-a partnership where Mr. Brick would furnish the
laptops and customers and Hwang would install and activate
unlicensed software, answer customer service questions, and
keep the software running. Id. Hwang repeated that
customers must be informed the software was unlicensed but
agreed to move forward with such a partnership. Brick Decl.
Ex. 7 (June 8, 2016 1:31 p.m. Tr.) at 83:3-19; 87:4-23.
Plaintiffs filed this suit on January 9, 2017, against Hwang
and SKH Systems, Inc.(collectively, Defendants) alleging
trademark infringement and counterfeiting violating 15 U.S.C.
§ 1114, unfair competition violating 15 U.S.C. §
1125(a), copyright infringement violating 17 U.S.C. §
501, and circumvention of copyright protections violating 17
U.S.C. § 1201(a). See Compl. [#1]. Hwang filed
an answer pro se on January 26, 2017. See
days after Hwang answered the lawsuit, Mr. Brick sent Hwang
text messages asking follow-up questions about the unlicensed
software Mr. Brick purchased from Hwang on June 8, 2016.
Brick Decl. ¶ 13. Mr. Brick also inquired whether Hwang
could "do another machine" and Hwang responded
affirmatively. Id.; Brick Decl. Ex. 8 (Text
April 2017, Plaintiffs and Hwang agreed to entry of a
preliminary injunction prohibiting Hwang "and any person
or entity acting in concert with, or at his direction"
from (1) "selling or offering for sale any computers
loaded with Plaintiffs' software; (2) installing or
activating [Plaintiffs'] software products by using
counterfeit product key codes or serial numbers, and (3)
destroying or deleting any evidence relevant to
Plaintiffs' claims of copyright and trademark
infringement." Agreed Prelim. Inj. [#23] at 1-2.
response to each of Plaintiffs' discovery requests, Hwang
asserted "his right under the Fifth Amendment of the
U.S. Constitution not to answer this question, on the grounds
that he may incriminate himself." Mot. Summ. J. [#29-17]
Ex. E (Def's Discovery Resps.).
now move for summary judgment, which is ripe for review.
Legal Standard-Summary Judgment
judgment shall be rendered when the pleadings, the discovery
and disclosure materials on file, and any affidavits show
that there is no genuine dispute as to any material fact and
that the moving party is entitled to judgment as a matter of
law. Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett,
477 U.S. 317, 323-25 (1986); Washburn v. Harvey, 504
F.3d 505, 508 (5th Cir. 2007). A dispute regarding a material
fact is "genuine" if the evidence is such that a
reasonable jury could return a verdict in favor of the
nonmoving party. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 248 (1986). When ruling on a motion for summary
judgment, the court is required to view all inferences drawn
from the factual record in the light most favorable to the
nonmoving party. Matsushita Elec. Indus. Co. v. Zenith
Radio, 475 U.S. 574, 587 (1986); Washburn, 504
F.3d at 508. Further, a court "may not make credibility
determinations or weigh the evidence" in ruling on a
motion for summary judgment. Reeves v. Sanderson Plumbing
Prods., Inc., 530 U.S. 133, 150 (2000);
Anderson, 477 U.S. at 254-55.
the moving party makes an initial showing that there is no
evidence to support the nonmoving party's case, the party
opposing the motion must come forward with competent summary
judgment evidence of the existence of a genuine fact issue.
Matsushita, 475 U.S. at 586. Mere conclusory
allegations are not competent summary judgment evidence, and
thus are insufficient to defeat a motion for summary
judgment. Turner v. Baylor Richardson Med. Or., 476
F.3d 337, 343 (5th Cir. 2007). Unsubstantiated assertions,
improbable inferences, and unsupported speculation are not
competent summary judgment evidence. Id. The party
opposing summary judgment is required to identify specific
evidence in the record and to articulate the precise manner
in which that evidence supports his claim. Adams v.
Travelers Indent. Co. of Conn., 465 F.3d 156, 164 (5th
Cir. 2006). Rule 56 does not impose a duty on the court to
"sift through the record in search of evidence" to
support the nonmovant's opposition to the motion for
summary judgment. Id.
disputes over facts that might affect the outcome of the suit
under the governing laws will properly preclude the entry of
summary judgment." Anderson, 477 U.S. at 248.
Disputed fact issues that are "irrelevant and
unnecessary" will not be considered by a court in ruling
on a summary judgment motion. Id. If the nonmoving
party fails to make a showing sufficient to establish the
existence of an element essential to its case and on which ...