Dassault Systemes SolidWorks Corporation v. Blissera Corp.

Background

Dassault Systèmes Solidworks Corporation sued Blissera Corporation and Suren Alexanian, identified in the opinion as Blissera’s CEO, alleging copyright infringement, circumvention of technological measures under the Digital Millennium Copyright Act, and breach of contract. The complaint alleged that Alexanian and Blissera employees downloaded, installed, and used SolidWorks software without purchasing the required licenses and used a program called SolidSquad crack to bypass license protections.

Defendants were served but did not respond within the time required by the Federal Rules of Civil Procedure. The clerk entered default on September 29, 2023. Dassault then moved for default judgment. Three days before the hearing on that motion, Defendants opposed default judgment and moved to set aside the clerk’s entry of default. Defendants said they had been engaged in settlement negotiations, believed the case was on hold, and lacked funds for a full defense earlier in the litigation.

Default Judgment

The court denied Dassault’s motion for default judgment as to all claims. It first found that service on Blissera and Alexanian was adequate and that the court had subject-matter and personal jurisdiction.

The court applied the seven factors used to decide whether default judgment is appropriate. It found that entering default judgment would not prevent prejudice to Dassault because Defendants had appeared and indicated that they intended to litigate. The court also found that Dassault had adequately pleaded and was likely to succeed on its direct copyright-infringement, circumvention, and breach-of-contract claims. However, the court found that the complaint did not adequately plead Blissera’s direct financial benefit, which was required for Dassault’s vicarious copyright-infringement theory.

Other factors weighed against default judgment. The requested total of $1,590,603.40 was substantial; Defendants disputed material facts; there was some evidence that their failure to respond resulted from settlement negotiations and other circumstances rather than intentional misconduct; and the Federal Rules favor deciding cases on their merits. The court therefore denied default judgment without deciding the ultimate truth of the allegations or awarding damages.

Setting Aside the Default

Under Federal Rule of Civil Procedure 55(c), an entry of default may be set aside for good cause. The court considered whether Defendants’ conduct was culpable, whether they had a meritorious defense, and whether setting aside default would prejudice Dassault.

The court found that Defendants’ failure to respond was not deliberate, willful, devious, or in bad faith. Although Defendants knew about the lawsuit by August 16, 2023, they offered a plausible explanation that they were engaged in settlement negotiations and did not know Dassault would continue pursuing the case.

The court also found that Defendants had shown a meritorious defense, meaning they alleged facts that, if true, could provide a defense. Defendants claimed that they had not used unlicensed copies of SolidWorks, that Alexanian had received free licenses through a SolidWorks startup program, and that Dassault’s monitoring technology had mistakenly identified the software use as unlicensed. The court expressly did not decide whether those assertions were true.

Finally, the court found no prejudice to Dassault beyond the need to litigate the claims on their merits. It found no evidence that delay had caused loss of evidence, increased discovery difficulties, or a greater risk of fraud or collusion.

Disposition

The court granted Defendants’ motion to set aside the clerk’s entry of default and denied Dassault’s motion for default judgment as to all claims. The underlying copyright, technological-measures, and contract claims were not finally decided in this order.