Opinion
Civil Action No. 02-6950 (PBT).
June 7, 2004
ORDER
AND NOW, this ____ day of June, 2004, upon consideration of Plaintiffs' Motion for Contempt and Supplement to Motion for Default Judgment (Doc. 74), Defendant Jim Chang and Nuvisoft/Amica China, Inc.'s Response in Opposition (Doc. 75), the parties respective Proposed Findings of Fact and Conclusions of Law (Docs. 83, 84), and the contempt hearing held in this matter on January 16 and 19, 2004, IT IS HEREBY ORDERED that the motion is DENIED. Based on the following, the Court finds that Plaintiffs have failed to demonstrate by clear and convincing evidence that Defendants Jim Chang and Nuvisoft/Amica China, Inc. ("Nuvisoft") violated the Preliminary Injunction Order (Doc. 62) entered in this matter on December 23, 2002, to support a finding of civil contempt:
1. Defendant Jim Chang has submitted letters evidencing compliance with the Preliminary Injunction Order to recall copies of ColorPRINT and ColorPRINT derivatives, and requesting the return of passwords and keys. See Leonard A. Busby, Esq. Letter of January 27, 2004, and attachments. For purposes of contempt, Defendants cannot be held liable for the failure and/or refusal of its customers to comply with the recall request.
2. The mere existence of the Nuvisoft FTP site, under the circumstances, is not clear and convincing evidence of Defendants "aiding and abetting other parties in violating the Preliminary Injunction" as Plaintiffs urge. Pls. Prop. Findings at 39. The vulnerabilities of Microsoft Word are well documented. As Plaintiffs note, it is very easy to backdate files and it is often difficult to determine whether a file has, in fact, been back-dated. Pls. Prop. Findings at 23, ¶ 14. In addition, as Jim Chang testified, it is documented that the mere act of copying a Microsoft Word file will change the file's "creation" date (as opposed to the "modified" date). Accordingly, the evidence presented by Plaintiffs do not support a finding that Nuvisoft has been providing technical support to vendors for contempt purposes.
3. Plaintiffs have presented no admissible evidence to prove that Jim Chang or Nuvisoft has engaged in the active or indirect promotion of ColorPRINT or its derivatives. In particular, Plaintiffs have presented no evidence to show that the advertisements for ColorPRINT derivatives appearing in Korean magazines were placed at the direction of Jim Chang or Nuvisoft. Further, the injunction currently in place does not prohibit Jim Chang from attending industry trade shows, save the exception set forth in paragraph 10 of the Preliminary Injunction Order. Therefore, his mere presence at such shows, without more, may not be the basis for a finding of contempt.
4. Plaintiffs' evidence, at best, is ambiguous on the question of whether Jim Chang or Nuvisoft violated the Preliminary Injunction in this case. As "[t]he resolution of ambiguities ought to favor the party charged with contempt," Plaintiffs may not rely on this evidence to meet their burden. Harris v. City of Philadelphia, 47 F.3d 1311, 1326 (3d Cir. 1995).
Plaintiffs are not without remedy for the alleged continued use of ColorPRINT by Nuvisoft customers or others. Plaintiffs may separately sue these entities and individuals.
Microsoft has acknowledged this occurrence. See Microsoft Knowledge Base Article — 292602, "Creation and Modified Date Are Reset When Files Are Added to the Workspace," available at http://support.microsoft.com/default.aspx?scid=kb;en-us;29260 2 (last visited Jun. 1, 2004).
Likewise, the presence of PhotoPR INT 4 on the Nuvisoft FTP site is not evidence that Defendants "are still using Scanvec Amiable's PhotoPRINT Software to unfairly compete with Scanvec Amiable." Pls. Prop. Findings at 39. Rather, the record suggests that Scanvec may have incorporated elements of ColorPRINT which improved upon the previous versions of PhotoPRINT into PhotoPRINT 4. Wang Decl. ¶ 25 attached at Defs. Prop. Findings, Ex. A. "Sanctions for civil contempt serve two purposes: `to coerce the defendant into compliance with the court's order and to compensate for losses sustained by the disobedience.' Compensatory awards seek to ensure that the innocent party receives the benefit of the injunction[.]" Robin Woods, Inc. v. Woods, 28 F.3d 396, 400 (3d Cir. 1994) (quoting McDonald's Corp. v. Victory Investments, 727 F.2d 82, 87 (3d Cir. 1984). It is not at all clear, based on the evidence presented, the harm suffered by Plaintiffs as a result of any alleged violation of the Preliminary Injunction by Defendants. See, e.g., Defs. Prop. Findings at 8, ¶¶ 14-15. Further, it app ears Plaintiffs seek damages for cond uct occurring prior to the entry of the December 23, 2002 Preliminary Injunction. See Meron Decl. ¶¶ 5-9 attached at Pls. Prop. Find ings, Ex. 1.