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Consortium of Services Innovation v. Microsoft Corp.

United States District Court, W.D. Washington, Seattle

October 30, 2019

CONSORTIUM OF SERVICES INNOVATION A/K/A/ CSI, Plaintiff,
v.
MICROSOFT CORPORATION, Defendant.

          ORDER

          JOHN C. COUGHENOUR UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on Defendant's motion to dismiss (Dkt. No. 21) Plaintiff's amended complaint (Dkt. No. 20). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion for the reasons explained herein.

         I. BACKGROUND

         The following factual allegations are taken from Plaintiff's first amended complaint and the many exhibits attached thereto.[1] Plaintiff is a foreign corporation chartered and headquartered in Riyadh, Saudi Arabia. (Id. at 2.) Plaintiff is a privately-owned, diversified company; it is not an educational institution or government agency. (Id. at 3.) In 2013, Plaintiff sought to provide training services for Microsoft Office Specialist (“MOS”) and Microsoft Technology Associate (“MTA”) certificates in Saudi Arabia. (Id.) The MOS and MTA certificates consist of a limited license to use the programs and a testing service and certification examination process. (See Dkt. Nos. 20-3 at 3, 20-6 at 6-8.)

         In February 2013, Microsoft Arabia Co., Ltd., a wholly-owned subsidiary of Defendant, named Plaintiff its exclusive authorized partner in Saudi Arabia. (See Dkt. No. 20 at 3.) Microsoft Arabia sent the Technical and Vocational Training Corporation (“TVTC”) of Saudi Arabia a letter that stated Plaintiff was “the only authorized partner of Microsoft Arabia Co. Ltd. in Kingdom of Saudi Arabia in . . . Management, Marketing, organization and operation of . . . [MOS and MTA]” for a five-year period beginning on January 1, 2013. (See Dkt. No. 20-1 at 2- 3.) In March 2013, Certiport, a business of NCS Pearson, Inc. that owns the MOS delivery and testing service, sent a letter to TVTC stating that Plaintiff had been named as the provider of MOS and MTA exams for Saudi Arabia. (Dkt. Nos. 20 at 3, 20-2 at 4.)

         On June 22, 2013, Plaintiff met with Samir Noman, the President of Microsoft Arabia, Ayman Al-Takrori, and Ahmad Issa. (See Dkt. Nos. 20 at 5; 20-6 at 6, 8-9.) The parties agreed that TVTC governed all professional certifications in Saudi Arabia, that Plaintiff was the “Exclusive Microsoft Academy Service Partner, ” and that Plaintiff was asked to place “a minimum order of 1, 000 Volume Licenses.” (Dkt. No. 20 at 5; see Dkt. No. 20-6.) On June 24, Plaintiff sent an application and agreement of sale on credit to ALFalak Electronic Equipment and Supplies Company. (Dkt. Nos. 20 at 4, 20-4 at 1.) On the same day, Plaintiff submitted an order to Al Falak for 1, 000 MOS CertSitePack volume licenses, with payment due by the end of April 2014 and with “Delivery within One Week.” (Dkt. Nos. 20 at 4, 20-5 at 2.)[2] Defendant was not involved in the discussions between Plaintiff and Al Falak, (see Dkt. No. 20-23 at 6), and Plaintiff ultimately purchased the licenses from Al Falak, (see Dkt. Nos. 20-4, 20-5, 20-12).

         On June 25, 2013, Microsoft Ireland Operations Limited sent an email to TVTC and Plaintiff regarding the order for 1, 000 volume licenses. (See Dkt. No. 20-7.) The details of the confirmation listed TVTC as the customer and Plaintiff as a channel partner. (Id. at 7.) Plaintiff subsequently sent an email to Issa stating that “the deal should be done with the eLearning Dept not with the IT, ” and Issa responded that the change would be made. (Id. at 6.)

         Plaintiff asserts that the confirmation used “fake or invalid email addresses to manipulate the ordering process and defraud” Plaintiff and listed TVTC as the customer to circumvent Defendant's internal policy of selling volume licenses only to governments or academic institutions. (See Dkt. No. 20 at 6.) Plaintiff further asserts that it was told that the volume licenses would be sent to Plaintiff “according to the agreement with Microsoft appointed [sic] distributor, Al Falak.” (Id.)

         On December 24, 2013, Microsoft Arabia signed a cooperation agreement with TVTC, which stated that Microsoft Arabia “represents Global Microsoft in” Saudi Arabia. (Dkt. No. 20-8 at 2.) Microsoft Arabia and TVTC agreed that TVTC would authorize Plaintiff to handle matters pertaining to the MOS certification process. (Id. at 3.) Plaintiff asserts that the cooperation agreement precluded it from delivering or selling MOS exams in Saudi Arabia during the six months following its purchase of the volume licenses. (See Dkt. No. 20 at 6-7.)

         On the same day, TVTC and Plaintiff entered into an operation and marketing agreement which stated that Plaintiff was in charge of “physical, organizational, and operational obligations resulting from execution of this agreement . . . as required for executing the” cooperation agreement between Microsoft Arabia and TVTC. (Dkt. No. 20-9 at 3.) The operation and marketing agreement set forth TVTC's obligation to manage certificate training centers and Plaintiff's obligations to provide TVTC with certificate tests, up-to-date software, and other marketing and logistical support. (See id. at 3-5.)

         In February 2014, Plaintiff presented TVTC with “free MOS vouchers” Plaintiff obtained through Certiport. (Dkt. No. 20 at 7.) The vouchers were used for examinations held during an education exhibition, and many applicants failed. (See Dkt. No. 20-10 at 3.) TVTC was dissatisfied by the low pass rate, noted that the certification program's launch had been significantly delayed due to “the non-availability of the product, ” and identified several other issues with Plaintiff's handling of the launch. (Dkt. No. 20-10 at 3-4.) TVTC requested that Plaintiff conduct trainings on a newer version of Microsoft Office, provide additional instructional content, secure effective training tests, and provide TVTC with launch and marketing plans within 10 business days. (See id. at 4.)

         On March 2, 2014, Al Falak asked Plaintiff to confirm its outstanding balance. (See Dkt. Nos. 20 at 8, 20-11 at 10.) Plaintiff disputed the balance because it had been told that the certification tests were not ready. (See Dkt. No. 20-11 at 8-9.) In September 2014, Plaintiff conditionally confirmed its outstanding balance with Al Falak, stating that it was subject to receiving its order “with a validity date not less than 12 months from the date of receiving . . . .” (Dkt. Nos. 20 at 8, 20-12 at 1.)

         In December 2014, Microsoft Deutschland GmbH held a call with Plaintiff and Certiport. (See Dkt. Nos. 20 at 8-9, 20-13.) The parties agreed that “the relaunch of the Arabic exams” would occur on December 18, 2014, that the “CIC exam” would be launched mid-February, that Plaintiff was in the process of “localizing the practice tests, ” and that “[n]o stakeholder feels there are pending risks to our deployment / launch date.” (See Dkt. No. 20-13 at 3-4.) The email was the “official sign-off on the remaining items prior to the launch with TVTC.” (Id. at 3.)

         In February 2015, Certiport emailed Plaintiff “to confirm that [Plaintiff] is ensured access to the VL portal 1000 MOS site licenses that includes 500, 000 MOS exams available for use for TVTC . . . . [T]hese site licenses were available in the portal since the 26th of June 2013.” (Dkt. Nos. 20 at 9, 20-14 at 5.) Certiport attached a description of the order which listed TVTC as the customer and an order date of June 26, 2013. (See Dkt. No. 20-14 at 5.) Plaintiff asserts that the order date ...


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