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Facebook, Inc v. Power Ventures, Inc involves Power.com, a third-party platform, allegedly collecting user information from Facebook and displaying it onto their own website. Facebook claims violation of the CAN-SPAM Act, the Computer Fraud and Abuse Act (“CFAA”), and California Penal Code § 502. According to Facebook, Power.com made copies of Facebook’s website during the process of extracting user information, which they say is direct and indirect copyright infringement. In addition, Facebook alleged the way Power.com accessed Facebook's site constitutes a violation of the Digital Millennium Copyright Act (“DMCA”).

Power.com filed a motion to dismiss the case, but Judge Fogel sided with Facebook and refused to do so based on prior precedent. In a counter-claim, Power.com alleged that Facebook engaged in monopolistic and anti-competitive behavior by placing restraints on Power.com’s ability to manipulate users’ Facebook data even when their consent was given

Background

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.

Facebook allows third parties to create applications that interact with Facebook’s network, as long as these applications follow a standardized set of protocols and procedures. The third-party developers must agree to Facebook’s Developer Terms of Service, the Terms of Use, and any other applicable policies. Also, if third party websites use the Facebook Connect service, which enables users to “connect” their Facebook identity, friends and privacy to those third-party websites, they are allowed exchange of proprietary data with third party websites.

The Facebook, Inc. v Power Ventures, Inc. lawsuit involves Power.com, a third-party platform allegedly “scraping” content for and from users on different social network sites into a single user interface. Facebook sued Power, claiming violations of copyright, anti-circumvention regulations, CAN-SPAM, and the Computer Fraud and Abuse Act.

Power.com and Facebook tried unsuccessfully to work out a deal that allowed Power to access Facebook’s site, through Facebook Connect. In late December 2008 Power.com informed Facebook that it would continue to operate without using Facebook Connect. They allegedly continued to "scrape" Facebook’s website, despite technological security measures to block such access. Power.com 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 allegedly used the scraped information 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.

Opinion of the Court

Facebook Inc. sued Power Ventures Inc. in the Northern District of California. The court's ruling addressed the copyright-related claims and the trademark claim.

Copyright Infringement

To state a claim for copyright infringement, a plaintiff need only allege (1) ownership of a valid copyright and (2) copying of original elements of the work.

The First Amended Complaint ("FAC") alleged that Power.com accessed the Facebook website and made unauthorized copies of the website or created derivative works derived from the Facebook website. Power.com contend that Facebook’s copyright allegations are deficient because it is unclear which portions of the Facebook website are alleged to have been copied. Facebook argues that it need not define the exact contours of the protected material because copyright claims do not require particularized allegations. Facebook owns the copyright to any page within its system, including the material located on those pages besides user content, such as graphics, video and sound files. Defendants need only access and copy one page to commit copyright infringement.

Facebook claims a violation of its copyrights to access user information on its website, but concedes that they have no proprietary rights in user information. Power.com users, who do own whatever rights exist to the information sought, have expressly given power permission to gather this info.

Judge Fogel’s reasoning, under the cases of MAI Systems Corp. v. Peak Computer, Inc. and Ticketmaster LLC v. RMG Techs. Inc., is that any scraping of a webpage involves copying that webpage into a computer’s memory in order to extract the underlying information contained therein. Even though this “copying” is ephemeral and momentary, he held that it is enough to constitute a “copy” under Section 106 of the Copyright Act and therefore it is a case of infringement. Since Facebook’s Terms of Service prohibit scraping (and thus, Facebook has not given any license to third parties or users to do so), the copying happens without permission.

MAI Systems Corp. v. Peak Computer, Inc.

The court denied motion to dismiss the case by following the precedent case of MAI Systems Corp. v. Peak Computer, Inc. In this particular case the district court granted summary judgment in favor of MAI on its claims of copyright infringement and issued a permanent injunction against Peak on these claims. The alleged copyright violations include: (1) Peak's running of MAI software licensed to Peak customers; (2) Peak's use of unlicensed software at its headquarters; and, (3) Peak's loaning of MAI computers and software to its customers.

Ticketmaster LLC v. RMG Techs. Inc.

In this particular case, the Court held that plaintiff Ticketmaster LLC (“Ticketmaster”) was likely to prevail on claims of direct and contributory copyright infringement as a result of defendant RMG Technologies Inc. (“RMG”) distribution of a software application that permits its clients to circumvent Ticketmaster.com’s CAPTCHA access controls, and use Ticketmaster’s copyrighted website in manners prohibited by the site’s Terms of Use. The Court held RMG was likely to be found guilty of direct copyright infringement, having made unauthorized copies of Ticketmaster’s site in its computer’s RAM when it viewed the site to create and test its product.

The court followed this case to determine that Power.com's 'scraping' made an actionable "cache" copy of the user's profile page each time it accessed a Facebook profile page.

Digital Millennium Copyright Act

The elements necessary to state a claim under the DMCA are (1) ownership of a valid copyright; (2) circumvention of a technological measure designed to protect the copyrighted material; (3) unauthorized access by third parties; (4) infringement because of the circumvention; and (5) the circumvention was achieved through software that the defendant either (i) designed or produced primarily for circumvention; (ii) made available despite only limited commercial significance other than circumvention; or (iii) marketed for use in circumvention of the controlling technological measure.

Power.com argued that Facebook’s DMCA claim was insufficient, but they also argue that the unauthorized use requirement is not met because it is users who are controlling access (via Power.com) to their own content on the Facebook website. However, this argument relies on an assumption that Facebook users are authorized to use Power.com or similar services to access their user accounts. The Terms of Use negate this argument. Any user is barred from using automated programs to access the Facebook website. Users may have the right to access their own content, but conditions have been placed on that access. The FAC alleged that Facebook implemented specific technical measures to block access by Power.com after Defendants informed Facebook that they intended to continue their service without using Facebook Connect, and that Defendants then attempted to circumvent those technological measures. Accordingly, the motion to dismiss the DMCA claim was denied.

Trademark Infringement

The Lanham Act imposes liability upon any person who (1) uses an infringing mark in interstate commerce, (2) in connection with the sale or advertising of goods or services, and (3) such use is likely to cause confusion or mislead consumers.

“To state a claim of trademark infringement under California common law, a plaintiff need allege only 1) their prior use of the trademark and 2) the likelihood of the infringing mark being confused with their mark.”

The FAC stated that Facebook has been the registered owner of the FACEBOOK mark since 2004. The FAC further alleged that Power.com used the mark in connection with their business. At no time has Facebook authorized or consented to Power.com's use of the mark. Power.com argued that the FAC did not provide sufficient detail and that Facebook is required to provide concise information with respect to the trademark infringement allegations, including information about “each instance of such use.” However, particularized pleading is not required for a trademark infringement claim. The FAC also stated that Power.com's unauthorized use of the Facebook mark was likely to “confuse recipients and lead to the false impression that Facebook is affiliated with, endorses, or sponsors” Power.com. These allegations were sufficient to state a claim for trademark infringement.

Criticism

"The court has found that Power.com made unauthorized copies of the Facebook Web site. What about the fact that Facebook does not own the copyright in its users' profile data? Facebook surmounted this hurdle by arguing that the content of the Facebook page that surrounded the user's data is copyrightable and is owned by Facebook. According to Facebook, the Power.com scraper operated in a manner that required it to copy the entire Web page in order to extract the user's profile data".

"The court observes that antitrust claims require a heightened standard of pleading, and throws in a reference to Twombly for good measure. The court also strikes Power.com's affirmative defenses (of misuse and estoppel) as unsupported by "any factual allegations." Although the court grants Power.com leave to amend its counterclaims and affirmative defenses, I would guess Power.com will think twice about filing amended counterclaims unless these claims have solid factual backup".

"The court’s refusal to dismiss Facebook’s claims demonstrates that careful drafting of a Web site terms of use is essential to obtaining legal redress for unauthorized access, particularly unauthorized access by competitors and others for commercial purposes. Access that violates the clear proscriptions of a ToU can form the basis for a multiplicity of legal claims, thereby maximizing the chances of a successful challenge to unwanted access".

"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".

See also

• Copyright Infringement
• CAN-SPAM
• Computer-Fraud and Abuse Act
• DMCA
• Trademark Infringement