Copyright Law | Expert Legal Commentary
July 20, 2009
Facebook v. Power Ventures Inc.
Tom Zuber and Ryan Smith of Zuber Lawler & Del Duca
Facebook developed and operates one of the most popular social networking sites. Facebook users can create profiles, join networks, and become “friends” with other users. All Facebook users must register before using the site
Power Ventures operates Power.com, a website that enables its users to aggregate data about themselves that is otherwise spread across various social networking sites and messaging services, including LinkedIn, twitter, Myspace, AOL or Yahoo instant messaging, and others – its motto: “all your friends in just one place.” The idea: Power clients could see all of their friends, view their status updates, profile pages, even send messages to multiple friends on multiple sites, all from one site. Power intended and planned to enable its users to access and include their Facebook profile data on the site.
Power.com and Facebook tried unsuccessfully to work out a deal that allowed Power to access Facebook’s site. Facebook wanted Power to use its authorized developer channels (“Facebook Connect”) to access the data – Facebook Connect (used by more than 10,000 other Web sites) provides less than full unfettered access than direct user access—but Power claims that it could not meet Facebook’s deadlines for doing so. Power let Facebook know that it intended to go forward without using Facebook Connect. Power subsequently signed up for its own Facebook account, agreeing to Facebook’s terms of service, then asked its members who were Facebook users to provide their username and password for the limited purpose of gaining access to their profile information and “scraping” its users’ profile data off Facebook. Power used the scraped information, among other things, to solicit other Facebook users to join Power. While Facebook has copyright claims to its proprietary content and design, it does not own a copyright in its users’ profile data.
Shortly after Power launched its site in December 2008, Facebook sued Power in the Northern District of California for, among other things: direct and indirect copyright and trademark infringement; unfair competition; violations of the CAN-SPAM Act, the Copyright Act, the Digital Millennium Copyright Act (“DMCA”), and the Computer Fraud and Abuse Act; and other claims. Among the damages alleged by Facebook, it claims that the password/log-in information of its users is exposed to Power.com’s allegedly less secure website.
Power moved to dismiss Counts 4 through 8 of Facebook’s complaint – the copyright infringement, DMCA, Trademark infringement, and UCL claims. The District Court denied the motion to dismiss, but granted in part Power’s motion for a more definite statement on its UCL claims. Facebook v. Power Ventures Inc., ____ F. Supp. ____, 2009 WL 1299698 (May 11, 2009, N.D. Cal.) The portion of the order regarding the copyright violation has sparked the most interest among practitioners.
Virtually any “scraping” may constitute a copyright violation
Under Federal law, a plaintiff generally does not have to be terribly specific about the facts that underlie the claims in a lawsuit, so long as the complaint contains sufficient facts to give the defendant “fair notice” of the nature of the claim and its basis. 2009 WL 1299698, at *2-3. As the Facebook court noted, motions to dismiss are not favored by the court, so perhaps it is not particularly surprising that the court denied Power’s motion to dismiss.
Power argued that users, who authorized Power, had the right to download their own content and therefore Power’s accessing of that information could not constitute copyright infringement, as Facebook had no copyright claim on that information. But Facebook argued that Power’s scraper copied the entire Facebook page on which the user data was located, including all elements of the page that to which Facebook claims a proprietary interest. Court agreed that if Power had to “make a copy of a user’s entire Facebook profile page in order to collect that user content, such action may violate Facebook’s proprietary rights.” 2009 WL 1299698, at *4. Taking Facebook’s allegations in the complaint (that this is in fact how the scraper operated) as true, the Court found that the complaint sufficiently stated a claim for direct copyright infringement and denied the motion to dismiss this claim.
Proceedings since this Order was entered
Some commentators believed that Power’s inability to get significant portions of the complaint dismissed would lead to a negotiated settlement between the parties. But Power surprised a lot of folks when, on July 10, 2009, it responded by filing a countersuit against Facebook in the same case.
In the counterclaims, Power accuses Facebook of unfair competition, restraint of trade, and creating a monopoly. It asks that Facebook be permanently enjoined from “anti-competitive practices” and sought unspecified damages and costs. Power claims that the entry of usernames and passwords to access a website through a third party is common in the industry, and that Facebook itself uses this practice on its own site to allow Facebook users to access personal data and contact information from sites like Yahoo!, AOL, Hotmail, and Gmail. The start-up asserts that Facebook is trying to stifle competition and the development of new technology that enables users to more freely access their own data and use it in a portable manner.
Of the countersuit, Power.com CEO Steve Vachani says, “Although users’ ownership of their own data seems self evident, Facebook has historically been criticized for not respecting its users’ rights regarding their own content.”
Second, under the Court’s ruling, only a “scraping” mechanism that could cull out and copy non-copyrighted data without copying any proprietary information could arguably be lawful. Similarly, this ruling suggests that even intermediate or temporary copying of Facebook content for the sole purpose of extracting non-proprietary content may violate Facebook’s rights. Compare that holding with two previous Ninth Circuit cases holding that intermediate copying or another’s copyrighted works for the purpose of extracting non-proprietary information is fair use. See Sega v. Accolade, 977 F.2d 1510 (9th Cir. 1992); Sony v. Connectix, 203 F.3d 596 (9th Cir. 2000) (both cases find that because the ultimate end product of the copying did not infringe on copyrights and because the purpose was pro-competitive, the copying constituted fair use). The end result: networks will find it difficult to access third party networks through channels other than those established by the third party.
The case is a bit confusing to many in the industry because the operators of most websites (such as all of the others aggregated on Power.com) likely consider Power’s service as free advertising and a way to boost their own numbers. Some sites might see Power’s effort as posing a competitive threat, but the damages articulated by Facebook in its lawsuit might ultimately be relatively small compared to the cost of the litigation. It’s difficult to look at the facts and the claims of this lawsuit and wonder whether it really is based on Facebook’s effort to stifle a perceived competitive threat.
At the same time, it’s difficult to find a lot of sympathy for Power, which deliberately rejected Facebook’s established third-party access channels and instead got its users to provide their sign-on information so Power could circumvent Facebook’s established chain and obtain unfettered access.
In the end, even if Power’s lawsuit proves unsuccessful, such claims are likely to force Facebook to find ways to make its user data more portable and accessible if Facebook wants to retain a dominant market position. Otherwise, users may shift their business to other, more accessible social networks.
LawUpdates.com will follow the developments in this case and file updates as warranted.
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