Facebook, Inc. v. Power Ventures, Inc.

When a court considers a motion to dismiss, it must take the allegations in the Plaintiff's complaint as true and construe the Complaint in a manner that is favorable to the Plaintiff. Thus, for a motion to dismiss to succeed, the complaint must lack either a cognizable legal theory or sufficient facts to support the legal theory.[6]

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.[4]

The First Amended Complaint ("FAC") alleged that Power Ventures accessed Facebook's website and made unauthorized "cache" copies of it or created derivative works derived from the Facebook website. However, Power Ventures contended that Facebook's copyright allegations are deficient because it is unclear which portions of Facebook's website are alleged to have been copied. Facebook argued that it need not define the exact contours of the protected material because copyright claims do not require particularized allegations. Since 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), Power Ventures only has to access and copy one page to commit copyright infringement.[4]

Facebook conceded that it did not have any proprietary rights in its users' information. Power Ventures users, who own the rights to the information sought, have expressly given them permission to gather this information.[4][5]

Judge Fogel reasoned that MAI Systems Corp. v. Peak Computer, Inc. and Ticketmaster LLC v. RMG Techs. Inc. indicated that the scraping of a webpage inherently involves the copying of that webpage into a computer's memory in order to extract the underlying information contained therein. Even though this "copying" is ephemeral and momentary, that it is enough to constitute a "copy" under § 106 of the Copyright Act and therefore infringement.[7] 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.[5]

In the MAI case, the Court granted summary judgment in favor of MAI on its claims of copyright infringement and issued a permanent injunction against Peak. The alleged copyright violations included:

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.[8]

In this particular case, the Court held that 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 permitted its clients to circumvent Ticketmaster.com's CAPTCHA access controls, and use Ticketmaster's copyrighted website in a manner that violated the site's Terms of Use. The Court held that RMG was likely to be found guilty of direct copyright infringement because when RMG viewed the site to create and test its product, it made unauthorized copies of Ticketmaster's site in its computer's RAM.[9]

In the instant case, the Court followed Ticketmaster to determine that Power Ventures' 'scraping' made an actionable "cache" copy of a Facebook profile page each time it accessed a user's profile page.[4]

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
   1. Designed or produced primarily for circumvention;
   2. Made available despite only limited commercial significance other than circumvention; or
   3. Marketed for use in circumvention of the controlling technological measure.[4]

Power Ventures argued that Facebook's DMCA claim was insufficient using the same arguments listed above. They also argued that the unauthorized use requirement was not met because the users are controlling the access (via Power Ventures site) to their own content on the Facebook website. However, the Terms of Use negate this argument because users are barred from using automated programs to access the Facebook website. While users may have the copyright rights in their own content, Facebook placed conditions on that access. After Power Ventures informed Facebook that it intended to continue their service without using Facebook Connect, Facebook implemented specific technical measures to block Power Ventures' access. Power Ventures then attempted to circumvent those technological measures. As all of the elements of a DMCA claim had been correctly pleaded and supported in the FAC, the motion to dismiss the DMCA claim was denied.[4]

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.[4][10]

Facebook stated that they were the registered owner of the FACEBOOK mark since 2004. Furthermore, they alleged that Power Ventures used the mark in connection with Power Ventures business. Facebook never authorized or consented to Power Ventures' use of the mark. Facebook also stated that Power Ventures' unauthorized use of the mark was likely to "confuse recipients and lead to the false impression that Facebook is affiliated with, endorses, or sponsors" Power Ventures. Power Ventures countered that Facebook was required to provide concise information in the Complaint with respect to the trademark infringement allegations, including information about each instance of such use. However, since particularized pleading is not required for trademark infringement claims, Facebook's allegations were sufficient to survive Power Ventures' motion to dismiss the trademark infringement claim.[4]

To state a claim of trademark infringement under California common law, a plaintiff need only allege

1. Their prior use of the trademark and
2. The likelihood of the infringing mark being confused with their mark.[4]

For the same reasons listed above, the Court also denied Power Ventures' motion to dismiss the state trademark claim.

California's UCL jurisprudence had previously found Lanham Act claims to be substantially congruent to UCL claims. However, it was unclear as to whether Facebook was relying on it trade dress claims or if it also intended to incorporate other portions of the FAC, such as those dealing with the CAN-SPAM and CFAA claims. In order to promote an efficient docket, the Court granted Power Ventures' motion for a more definite statement.[4]