Deep Link Court Decision: Ticketmaster v. Tickets.com
United States District Court,
Central District of California
Decided August 10, 2000
This motion was argued and
submitted 7/31/00, at which time the court took it under submission to consider
certain of the points made in oral argument. It is now decided as follows. The
tentative ruling previously issued should be disregarded.
The motion of Ticketmaster
Corporation and Ticketmaster Online-Search, Inc. (hereafter collectively
Ticketmaster or TM) for preliminary injunction against Tickets.Com, Inc. (hereafter
T.Com) is denied.
This matter has taken some
significant turns since the matter was last here on the motion to dismiss on
March 27, 2000. Some of those differences affect consideration of the motion for
preliminary injunction. One significant difference is that since the motion to
dismiss, TM devised technical methods of blocking direct access by "deep
hyperlinking" to TM interior pages. Thus, at the present time, when T.Com
hyperlinks to TM, the references is to the TM home page, where the public
accessing TM by internet normally starts. However, this may soon change, as
discussed below, because TM has now lost the technical means of preventing deep
hyperlinking directly to the event web pages. A second major change is a legal
development in the form of decision by Judge Whyte of the Northern District in eBay
Inc. v. Builder's Edge NDCA'00 100 FSupp2d 1058. This has caused a revamping
of the TM trespass theory to attempt to meet the circumstances which led Judge
Whyte to issue a preliminary injunction in the eBay case. A third change
which the court considers irrelevant to the items to be considered on this
motion for preliminary injunction is the filing of an anti-trust counterclaim by
T.Com, accompanied by a flurry of documents (mostly press releases) apparently
designed to show that TM has been gobbling up competitors and has generally been
giving T.Com a competitive hard time in operating at a profit. While these may
become important issues at the anti-trust phase of the case, they do not affect
the copyright, Lanham Act, or unfair competition issues presented on this
injunction motion.
The facts governing this
preliminary injunction motion have partly been stated in the minute order of
March 27 and will not all be repeated here. (In this respect, the court does
not intend this to be a published opinion, but rather a minute order
announcing a result, and as a result has not written for publication with the
usual citation of excess authorities and other attention to grammatical or
literary detail. In addition, no pronouncements of legal significance are
intended; those come from the Court of Appeals. While the court cannot prevent
publication, such is not done with the permission or desire of the court -- and
also with the hope that any typos are corrected.) [Editor's note: boldface type
added by GigaLaw.com.]
The essential facts are that TM
operates the largest ticket brokerage business in the country. It has exclusive
arrangements to sell the tickets for many of the largest entertainment and
athletic events in the country. It sells these tickets through a network of
about 2900 retail ticket windows, over the telephone, and through the internet.
The internet business is the focus of this case. TM maintains a "home"
page (www.ticketmaster.Com) and has a separate "event" page for each
separate event. The typical internet customer accesses the home page and is
directed by a series of directories to the particular event page which lists in
standardized fashion the basic information about the event (time, place, date,
price, seating choices if relevant, and directions on how to order tickets by
telephone or directly by interactive internet, presumably using credit cards and
how to take delivery -- UPS, will-call, etc.). The internet business is an
increasingly large portion of TM business; the latest figures show about
3,000,000 "hits" a day on the TM home page. TM has a large number of
interior event pages which change with additions or modifications of about
35,000 pages per day. This is managed by a set of computers which assign each
interior web page a unique electronic address (called a URL) which facilitates
the user to reach the precise page for the event in which the user is interested.
Aside from the revenue in selling tickets, TM also receives revenue from
advertisers who pay based on the number of hits on the page where the
advertisement is carried (this is apparently true both of the home page and the
event page, since the examples attached show advertisements on both types of
pages). The home and event pages carry TM logos, so that the customer cannot be
confused by the business entity with which he or she is dealing. The home page
contains a statement that the user agrees to the "terms and conditions"
of use. One can scroll down to the terms and conditions, which provide, among
other things, that use binds one to the terms and conditions, that any use is
for the person use of the user, and that no commercial use can be made of the
information provided. However, unlike certain other interactive internet
programs (see eBay for an example), the user is not required to check an
"I agree" box before proceeding to the interior web page wherein is
located the information about the particular event in which he or she is
interested.
T.Com operates in very different
fashion. They do, indeed, have certain events in which the directly sell tickets,
although very small in number compared to TM. However, their main business
appears to operate as a clearing house to provide information as to where
tickets to any event may be obtained. Thus, T.Com collects information on as
many events as it can, providing its "customer" information on where
the tickets may be purchased, whether from T.Com or another source. Where T.Com
can sell the tickets itself, it does in a manner similar to TM (phone or
internet). However, is also provides information on other sources from which
tickets may be purchased. It maintains its own form of event page for each event,
listing the basic information (price, date, time, etc.). For the vast number of
TM events that it lists, it has a statements that tickets may only be purchased
from another ticket broker (not naming TM), and provides a box to check which at
the present time will take the user directly by hyperlink to the TM home page.
(At the time of the motion to dismiss, the hyperlink took the user directly to
the interior web page of TM for the event in question. In the interim, TM found
the technical means of preventing this, so the user is now referred directly to
the TM home page where he may start wending his way through the directories to
the proper interior web page. However at oral argument, counsel inform the court
that the technical method of blocking deep hyperlink reference directly to the
TM event page is no longer applicable. T.com states that it may soon again start
referring users directly to the TM event page by the use of deep hyperlinking.)
Any ticket sale is made by TM. The proceeds are not shared by T.Com. T.Com also
provides references and a telephone number or hyperlink to brokers who sell the
tickets, some of which are auction sellers and some of which are "premium"
ticket brokers, pejoratively known as "scalpers." T.Com makes money
from advertisers, both on its home page and event page and from whatever ticket
business in has of its own. The record does not reveal if it also makes a
commission on sales by brokers to whom it refers customers, but not, of course,
from TM.
The vast amount of information
provided by T.Com on TM events comes from TM's computers, monitored by T.Com's
computers. Since TM's computer information is open to the public, it is also
available to T.Com. However, T.Com does not obtain the information in the same
way as does the public (that is, by opening up an interior web page and reading
the information off the screen), but rather by a sophisticated computer method
of monitoring the thousands of interior TM web pages electronically by the use
of a mysterious (to the court) devices known as a "webcrawlers" or
"spiders"). The T.Com computers enter the TM computers electronically
through the home page and make note of the URL's (electronic addresses) of the
interior web pages. They then methodically extract the electronic information
from the event page (containing the URL (electronic address of the event web
page) price, time, date, place, etc.) and copy it temporarily (for 10-15 seconds)
on its own computers. The T.Com programs then extract the purely factual
information in the T.Com format on its own web pages. Except for the URL (discussed
below), the copied TM web page (or, rather, the electronic signals which, if
projected on the screen, would make up what the viewer sees on the screen) are
then discarded and not used or retained for any other purpose. Thus, the viewer
of the T.Com event web page sees only the T.Com version of the facts. The source
of the facts are, of course, the TM event web pages.
Now, to approach analysis of
these facts from the standpoint of a preliminary injunction: The primary star in
the copyright sky for this case is that purely factual information may not be
copyrighted. (Feist Publications '91 499 US 340, 113 Led2d 358.) Thus,
the time, place, venue, price, etc., of public events are not protected by
copyright even if great are and expense is expended in gathering the information
(see the possibility of the "hot news" exception discussed below).
Thus, unfair as it may seem to TM, the basic facts that it gathers and publishes
cannot be protected from copying. To be sure, the manner of expression and
format of presenting those facts is protectable, but T.Com has taken great care
not to use the TM format and expression in publishing the facts that it takes
from TM. This all goes back to a fundamental concept of copyright law that ideas
and knowledge may not become the property of any one person even when that
person has developed the idea or knowledge. What is protectable is the manner in
which the idea or knowledge is expressed. Thus, Longfellow was free to take the
famous facts of the ride of Paul Revere and tell the story in his own
incomparable words -- no one can copy the words, but anyone may tell the story
in his own words (if not as well). The major difficulty with many of plaintiff's
theories and concepts is that it is attempting to find a way to protect its
expensively developed basic information what it considers a competitor and it
cannot do so.
In the court's opinion, there
are two of TM's theories which demand serious consideration on this motion for
preliminary injunction and which may well prove decisive at trial although the
court does not now consider them sufficient for a preliminary injunction. They
are copyright and the trespass theories.
As to copyright, there is
undeniably copying of the electronic bits which make up the TM event pages when
projected on the screen. Except for the URL, the copying is transitory and
temporary and is not used directly in competition with TM, but it is copying and
it would violate the Copyright Act if not justified. The fact that irreparable
injury is hard to see even with a magnifying glass would not prevent an
injunction because of the doctrine that irreparable injury is presumed if there
is copying. The copying is intentional and done for commercial purposes even if
the copied material is not sold as that of the copier. The copying, as
summarized above, takes place as a part of the process of taking the (unprotectable)
facts from TM's web sites so as to turn those facts into facts published by
T.Com in its own format. At oral argument, counsel explained that by the nature
of the way computers work, it is necessary to copy the electronic signals
temporarily on the copying computer's RAM in order to extract the factual data
present thereon. It is, therefore, a necessary part of the process by which
T.Com efficiently takes basic facts from the TM websites, retains the electronic
signals from TM on its own computer for a few second, during which T.Com's own
computer program strips the signals of the basic facts, and then discards the
copied electronic signals of TM as of no further use (except for the URL,
discussed below). What prevents the issuance of a preliminary injunction on
these facts is the "fair use" doctrine as recognized by the Ninth
Circuit in Connectix Corp. 9Cir'00 203 F3d 596 and certain prior cases. Connectix
holds that copying for reverse engineering to obtain non-protectable information
is permitted by the fair use doctrine in certain circumstances (see also Acuff-Rose
Music, Inc. 510 US 569, 127 Led2d 500). Reverse engineering to get at
unprotected functional elements is not the same process as used here but the
analogy seems to apply. The copy is not used competitively. It is destroyed
after its limited function is done. It is used only to facilitate obtaining
non-protectable data -- here the basic factual data. It may not be the only way
of obtaining that data (i.e., a thousand scriveners with pencil and paper could
do the job given time), but it is the most efficient way, not held to be an
impediment in Connectix. TM makes the point that copying the URL (the electronic
address to the web pages) which is not destroyed, but retained and used, is
copying protected material. The court doubts that the material is protectable
because the URL appears to contain functional and factual elements only and not
original material. It appears likely to the court that plaintiff's odds on
prevailing on the fair use doctrine at trial are sufficiently low that a
preliminary injunction should not be granted even with the presumption of
irreparable injury which goes with copyright infringement.
The other point dealing with
copyright is the so-called "hot new" exception. As a basic exception
to the rule that factual information is not protectable, an exception developed
in the case of competing news organizations selling news to customers (newspapers)
in competition with one another. Certain protections were allowed to prevent
wholesale thievery of news by one organization from another. Here, it is
suggested that at least some of the event news is "hot" -- that is,
the event is sold out within hours or minutes of the tickets becoming available.
This exception is not made out here. Even if such a hot event occurs (the court
is informally informed that this is not rare) in a TM controlled event, the
reference for ticket sales will be to TM, who sells the tickets in any event.
Second, there is no showing that this situation occurs often enough to be of
commercial significance. Accordingly, a preliminary injunction will not be
issued on the copyright aspects of the case. There could be a difference at
trial, and the difference could depend on the necessity of downloading the
electronic signals onto the T.Com computers for purposes of extracting the
unprotected factual information.
The trespass aspects of the case
have taken on new significance in the light of Judge Whyte's opinion in eBay
on May 24, which was immediately followed by a deluge of additional papers in
this court. It must be said that the trespass question presented and decided in eBay
bore no resemblance to the trespass questions considered by this court on the
motion to dismiss last March. What this court decided (at least, what it thought
it decided) was that the taking of factual information from a public source was
not a trespass, and if taking the information from a publically available
computer was a state law trespass, it fell afoul of the presumption aspects of
the Copyright Act. However, no question of invasion of the computer by spiders,
and possible consequent damage to the computer was presented to this court -- at
least no such question was decided. So, defendant's argument that it has already
been decided and is law of the case and plaintiff's argument that the court can
always reconsider a wrong decision have no place -- it is a new one to this
court. The court is impressed by the original and resourceful thinking of Judge
Whyte; it is always difficult to attempt to apply established law to brand new
facts with other established policies tugging and pulling one in various
directions. Not only that, the court agrees with much of what Judge Whyte says.
The computer is a piece of tangible personal property. It is operated by
mysterious electronic impulses which did not exist when the law of trespass to
chattels was developed, but the principles should not be too different. If the
electronic impulses can do damage to the computer or to its function in a
comparable way to taking a hammer to a piece of machinery, then it is no stretch
to recognize that damage as trespass to chattels and provide a legal remedy for
it. Judge Whyte in eBay found the damage in the occupation of a portion
of the capacity of the computer to handle routine business and conjectured that
approval of that use would bring many more parasitic like copies of the
defendant feeding that computer to a clogged level upon the information
expensively developed by eBay, the net result likely being severe damage
to the function of the computer and thus the business of eBay. Thus, the
injunction was issued to prevent the use of the spiders by the defendant in that
case. It is noted that the harm to the equipment was foreseen to its intended
function, not the physical characteristics of the computer. A basic element of
trespass to chattels must be physical harm to the chattel (not present here) or
some obstruction of its basic function (in the court's opinion not sufficiently
shown here). TM has presented statistics showing an estimate of the number of
hits by T.Com spiders in its own computers and has presented rough comparison
with the total use of the computers by all users of the computers. The
comparative use by T.Com appears very small and there is no showing that the use
interferes to any extent with the regular business of TM. If it did, an
injunction might well issue, but should not with a showing of lack of harm or
foreseeable harm. Nor here is the specture of dozens or more parasites joining
the fray, the cumulative total of which could affect the operation of TM's
business. Further, the showing here is that the effect of T.Com's taking of
factual data from TM is not to operate in direct competition with TM -- it is
not selling the data or the tickets. While TM sees some detriment in T.Com's
operation (possibly in the loss of advertising revenue), there is also a
beneficial effect in the referral of customers looking for tickets to TM events
directly to TM. (In fact, other companies, who presumably pay a fee, are allowed
to refer customers directly to the internal web pages of TM, presumably leading
to sale of TM tickets despite hypothetical loss of advertising revenue by not
going through the TM home web page.) Accordingly, while the trespass theory has
some merit, there is insufficient proof of its elements in this case to justify
a preliminary injunction. Further, there appears to be a lack of irreparable
injury (required for this theory).
The remaining contentions may be
disposed of with fewer words.
The contract theory lacks
sufficient proof of agreement by defendant to be taken seriously as a ground for
preliminary injunction. Besides, a preliminary injunction to prevent a breach of
contract is an almost unheard of thing, being the equivalent of specific
enforcement by preliminary injunction. There is insufficient irreparable injury
to even consider such a proposition.
The various Lanham Act theories
lack sufficient facts to support them. T.Com does not pass itself off as TM. In
fact, it carefully says that it cannot sell the tickets but will refer the buyer
to another broker (here, read TM) who can. The customer ends up on the TM home
web page filed with TM logos. The customer is unlikely to be misled. Neither is
there evidence of reverse palming off. T.Com in no way pretends that it is TM or
acting for it. The false advertising claim is supported by a few mistakes in
phone numbers, etc., which appear to be stray errors. This is not worth an
injunction.
The other claims appear to have
no basis worthy of an injunction. Preliminary injunction denied.
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