Intellectual Property Law

Microsoft Wins Trademark Counterfeiting Case on Summary Judgment

By Michael Atkins

In the Northern District of California case of Microsoft Corp. v. E&M Internet Bookstore, Microsoft brought suit against a company doing business as emeshop.net, and its alleged owner Chien-Wei Chen, for selling counterfeit Microsoft software on eBay.

Plaintiff and defendants reached a preliminary settlement in which defendants agreed to pay plaintiff $35,000. The parties did not finalize the agreement, however, because Mr. Chen stopped communicating with his attorneys. As a consequence, defendants’ counsel moved to withdraw from the case. The court then ordered defendants to appear in person and show cause as to why they should not be deemed to be in default. Defendants failed to appear.

Microsoft then moved for summary judgment. Defendants’ attorneys submitted a response stating they had not received any communication from Mr. Chen and that, as a result, they would not submit an opposition on defendants’ behalf. Defendants did not appear at the hearing despite being notified when the hearing would take place.

Not surprisingly, the court granted Microsoft’s motion. It summarized the facts as follows:

From April 17 until June 13, 2006, eBay sent defendants approximately 65 auction ‘takedown’ notices concerning Microsoft products that defendants had attempted to sell on eBay. On May 2, an investigator for Microsoft purchased two products from defendants — one unit of Windows XP Professional SP2 and one unit of Office 2003 Professional — that were later analyzed and determined to be counterfeit. Plaintiff also contends it received two complaints from customers regarding counterfeit products sold to them by defendants. In an e-mail to defendant Chen on May 26, a representative from Microsoft warned: ‘we have received samples of counterfeit software distributed through your eBay auctions so it is especially important to verify the legitimacy of your supplier(s).’ In a subsequent e-mail, the Microsoft representative cautioned defendant Chen against continued purchases of software from unauthorized distributors.”

The court found: “The record supports a finding of trademark infringement. Plaintiff has established that it held properly-registered trademarks and that defendants sold two counterfeit products over the internet on May 2, 2006. A reasonable consumer would likely be confused about the authenticity of a counterfeit product bearing the ‘Microsoft’ trademark. Indeed, Microsoft received calls from confused customers who had unknowingly bought counterfeit products from defendants. Defendants have submitted no evidence showing that a genuine issue of fact remains for trial. Plaintiff’s motion for summary judgment with respect to its trademark claim is therefore Granted.”

The court imposed a permanent injunction against the defendants enjoining them from selling counterfeit Microsoft software and from advertising such software on Internet auction sites. For damages, the court awarded Microsoft’s requested sum of $45,000 for trademark and copyright infringement, as well as $5,000 in attorney’s fees and costs.

The case cite is Microsoft Corp. v. E&M Internet Bookstore, Inc., 2008 WL 191346, No. 06-06707 (N.D. Calif., Jan. 22, 2008).

Full post as published by Seattle Trademark Lawyer on January 27, 2008 (boomark / email).