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UNITED STATES DISTRICT COURT NORTHERN DISTRICT of TEXAS DALLAS DIVISION ZENIMAX MEDIA INC. and ID SOFTWARE LLC, Plaintiffs, V. O

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UNITED STATES DISTRICT COURT NORTHERN DISTRICT of TEXAS DALLAS DIVISION ZENIMAX MEDIA INC. and ID SOFTWARE LLC, Plaintiffs, V. O Case 3:14-cv-01849-K Document 1012 Filed 05/05/17 Page 1 of 35 PageID 49652 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION ZENIMAX MEDIA INC. and ID SOFTWARE LLC, Case No.: 3:14-cv-01849-K Plaintiffs, Hon. Ed Kinkeade v. OCULUS VR, LLC, PALMER LUCKEY, FACEBOOK, INC., BRENDAN IRIBE and JOHN CARMACK, Defendants. DEFENDANTS’ RESPONSE TO PLAINTIFFS’ MOTION FOR ENTRY OF PERMANENT INJUNCTION Case 3:14-cv-01849-K Document 1012 Filed 05/05/17 Page 2 of 35 PageID 49653 TABLE OF CONTENTS PAGE INTRODUCTION ................................................................................................................................ 1 ARGUMENT ...................................................................................................................................... 2 I. ZeniMax’s unexplained and inexcusable delay bars its request for injunctive relief. ................................................................................................................................... 2 II. ZeniMax cannot satisfy any of the four injunction factors. ................................................ 5 A. ZeniMax’s claimed injuries are not irreparable. ..................................................... 5 1. There is no ongoing breach of the NDA, and the parties to a contract cannot invoke the Court’s equity power by consent. .................... 6 2. ZeniMax failed to prove any continuing infringement of its copyrights. ................................................................................................... 7 3. ZeniMax has suffered no injury at all that is cognizable under the Lanham Act, much less an injury that is ongoing and irreparable. ........... 11 B. Money damages are an adequate remedy for the injuries ZeniMax alleges. ........ 12 1. Damages would be adequate if the NDA had been breached (which it has not) and ZeniMax had suffered any loss (which it did not). ........... 14 2. Damages would be adequate under the Copyright Act. ............................ 15 3. Damages would be adequate under the Lanham Act. ............................... 17 C. The balance of hardships weighs against an injunction. ....................................... 17 D. An injunction would not serve—indeed, it would greatly disserve—the public interest. ....................................................................................................... 19 III. ZeniMax’s requested injunction is impermissibly vague and overbroad ......................... 21 IV. ZeniMax did not establish the predicates for an ongoing royalty. .................................... 23 CONCLUSION .................................................................................................................................. 25 i Case 3:14-cv-01849-K Document 1012 Filed 05/05/17 Page 3 of 35 PageID 49654 TABLE OF AUTHORITIES PAGE(S) CASES ActiveVideo Networks, Inc. v. Verizon Commc’ns, Inc., 694 F.3d 1312 (Fed. Cir. 2012)................................................................................................13 ADT, LLC v. Capital Connect, Inc., 145 F. Supp. 3d 671 (N.D. Tex. 2015) ....................................................................................17 Alcatel USA, Inc. v. DGI Techs., Inc., 166 F.3d 772 (5th Cir. 1999) .....................................................................................................9 Am. Beverage Corp. v. Diageo N. Am., Inc., 936 F. Supp. 2d 555 (W.D. Pa. 2013) ......................................................................................18 Aransas Project v. Shaw, 775 F.3d 641 (5th Cir. 2014) .....................................................................................................6 Aspen Tech., Inc. v. M3 Tech., Inc., 569 F. App’x 259 (5th Cir. 2014) ......................................................................................16, 22 Barton v. Huerta, 613 F. App’x 426 (5th Cir. 2015) ..............................................................................................5 Bianco v. Globus Med., Inc., 2014 WL 1049067 (E.D. Tex. Mar. 17, 2014) ................................................13, 15, 16, 17, 20 Bikram’s Yoga Coll. of India, L.P. v. Evolation Yoga, LLC, 803 F.3d 1032 (9th Cir. 2015) .................................................................................................24 Boyd v. State Farm Ins. Cos., 158 F.3d 326 (5th Cir. 1998) ...................................................................................................10 Bridgmon v. Array Sys. Corp., 325 F.3d 572 (5th Cir. 2003) ...................................................................................................10 In re C.F. Bean L.L.C., 841 F.3d 365 (5th Cir. 2016) .....................................................................................................9 City of Los Angeles v. Lyons, 461 U.S. 95 (1983) .....................................................................................................................6 Conan Properties, Inc. v. Conans Pizza, Inc., 752 F.2d 145 (5th Cir. 1985) .....................................................................................................5 ii i Case 3:14-cv-01849-K Document 1012 Filed 05/05/17 Page 4 of 35 PageID 49655 TABLE OF AUTHORITIES (continued) PAGE(S) Covidien LP v. Esch, 2017 WL 111918 (D. Mass. Jan. 11, 2017) .............................................................................15 Dickey’s Barbecue Restaurants v. GEM Inv. Grp., 2012 WL 1344352 (N.D. Tex. Apr. 18, 2012) ..........................................................................7 Dun v. Lumbermen’s Credit Ass’n, 209 U.S. 20 (1908) .....................................................................................................................4 eBay v. MercExchange, 547 U.S. 388 (2006) .....................................................................................................1, 5, 7, 16 Feist Publ’ns, Inc. v. Rural Tele. Serv. Co., Inc., 499 U.S. 340 (1991) .................................................................................................................22 Ferring Pharm. Inc. v. Watson Pharm., Inc., 765 F.3d 205 (3d Cir. 2014).....................................................................................................12 Flowserve Corp. v. Hallmark Pump Co., 98 U.S.P.Q.2d 1979 (S.D. Tex. 2011) .....................................................................................18 Fractus, S.A. v. Samsung Elecs. Co., 876 F. Supp. 2d 802 (E.D. Tex. 2012) .........................................................................13, 15, 20 Garretson v. Clark, 111 U.S. 120 (1884) .................................................................................................................25 Gen. Elec. Co. v. Joiner, 522 U.S. 136 (1997) ...................................................................................................................9 Gonannies, Inc. v. Goupair.com, Inc., 464 F. Supp. 2d 603 (N.D. Tex. 2006) ......................................................................................3 Gruma Corp. v. Mex. Restaurants, Inc., 2013 WL 12134147 (E.D. Tex. Sept. 27, 2013) ......................................................................18 Guile v. United States, 422 F.3d 221 (5th Cir. 2005) ...................................................................................................10 Haas v. Leo Feist, Inc., 234 F. 105 (S.D.N.Y. 1916) .......................................................................................................3 Harolds Stores, Inc. v. Dillard Dep’t Stores, Inc., 82 F.3d 1533 (10th Cir. 1996)), cert. denied, 1 37 S. Ct. 622 (2017) ........................................9 iii Case 3:14-cv-01849-K Document 1012 Filed 05/05/17 Page 5 of 35 PageID 49656 TABLE OF AUTHORITIES (continued) PAGE(S) Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., 736 F.3d 1239 (9th Cir. 2013) .................................................................................................12 High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551 (Fed. Cir. 1995)........................................................................................3, 13, 16 Hoop Culture, Inc. v. GAP Inc., 648 F. App’x 981 (11th Cir. 2016) ..........................................................................................11 Hosp. Staffing Sols., LLC v. Reyes, 736 F. Supp. 2d 192 (D.D.C. 2010) .........................................................................................15 i4i Ltd. P’ship v. Microsoft Corp., 598 F.3d 831 (Fed. Cir. 2010), aff’d, 564 U.S. 91 (2011) .......................................................19 Int’l Jensen, Inc. v. Metrosound USA, Inc., 4 F.3d 819 (9th Cir. 1993) .......................................................................................................18 Jane Doe No. 1 v. Backpage.com, LLC, 817 F.3d 12 (1st Cir. 2016) ........................................................................................................9 Kepner-Tregoe, Inc. v. Leadership Software, Inc., 12 F.3d 527 (5th Cir. 1994) .................................................................................................9, 22 King v. Ames, 179 F.3d 370 (5th Cir. 1999) ...................................................................................................10 Lacassagne v. Chapuis, 144 U.S. 119 (1892) ...................................................................................................................6 Lauf v. E.G. Shinner & Co., 303 U.S. 323 (1938) .................................................................................................................22
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