Synopsys, Inc. v. Khanh

Background

Synopsys, Inc. alleged that Phan Văn Khánh operated ShareAppsCrack.com and used the website to distribute counterfeit Synopsys software and license keys. Synopsys said its software requires legitimate license keys to operate and that Khánh’s website offered unauthorized downloads and tools that bypassed Synopsys’s access controls. Synopsys also alleged that the website advertised the software using Synopsys’s protected trademarks.

Synopsys filed the case on April 26, 2022, and served Khánh on April 29, 2022. The court issued a temporary restraining order in May 2022 and a preliminary injunction in June 2022. Khánh did not answer, respond to the court’s orders, or otherwise appear. The clerk entered default against him in January 2023, and Synopsys then sought default judgment.

Jurisdiction and service

The court held that it had subject-matter jurisdiction over the copyright and trademark case under 28 U.S.C. § 1338(a). It also held that it had personal jurisdiction over Khánh under Federal Rule of Civil Procedure 4(k)(2), which can allow a federal court to exercise jurisdiction over a foreign defendant when the claims arise under federal law, the defendant is not subject to any state’s general jurisdiction, and jurisdiction complies with due process.

The court found that Khánh had purposefully directed his activities toward the United States. The evidence included the website’s offerings of more than 3,000 software titles, downloads of Synopsys software through servers in the United States, advertising on United States-based social-media platforms, and advertisements targeting the United States market. The court also found that Synopsys adequately served Khánh, including through the Vietnamese Central Authority under the Hague Convention process.

Default judgment

A default judgment is a judgment entered when a defendant fails to defend the case. The court applied the factors used to decide whether default judgment is appropriate, including the strength of the claims, the sufficiency of the complaint, possible prejudice to the plaintiff, the possibility of a factual dispute, whether the failure to respond was excusable, and the preference for decisions on the merits.

For the Digital Millennium Copyright Act claim, the court found that Synopsys had alleged that Khánh offered or trafficked in technology primarily designed to bypass technological controls protecting Synopsys’s copyrighted software. For the Lanham Act false-association claim, the court found that Synopsys had alleged that Khánh used Synopsys’s marks in commerce in a way likely to confuse consumers or misrepresent the source, affiliation, or approval of the goods. The court concluded that the relevant factors favored default judgment on both claims.

Relief

Synopsys requested a permanent injunction and transfer of the ShareCrackApps.com domain name. The court permanently enjoined Khánh, along with officers, agents, employees, and other persons or entities acting with him, from: using words or representations likely to confuse consumers about Synopsys’s affiliation with or approval of Khánh’s goods or services; sharing, hosting, distributing, or trafficking in counterfeit Synopsys software; and making, importing, offering, or trafficking in technology designed to bypass access controls for Synopsys’s copyrighted software, including counterfeit license keys.

The court denied the request to transfer the domain name. It explained that the website hosted more than 3,000 software titles from companies that were not parties to the case, and that the website had already been taken down. The court concluded that the permanent injunction was sufficient to protect Synopsys’s rights. The motion for default judgment was granted in part, and the case was closed.