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eBay Case Recognizes New IP Theory

by Robert W. Clarida, November 2000

In Ebay, Inc. v. Bidder's Edge, Inc., No. C-99-21200 RMW (N.D. Cal. May 24, 2000)(slip op.), the Northern District of California recently recognized a novel theory for protecting online information against use by competitors: the ancient doctrine of trespass to chattels. Defined as intentional and unauthorized interference with plaintiff's "possessory interest" in personal property, here the eBay computer system accessible through the World Wide Web, the trespass theory was the basis of a preliminary injunction against defendant's use of "robot" web-searching technology to retrieve information from the popular eBay auction website.

Defendant's automated search program repeatedly visited the eBay site, and various other auction sites, to permit potential bidders to locate items without having to visit each site. Defendant's program visited the eBay site approximately 100,000 times per day, and continued doing so even after eBay terminated a temporary license arrangement and demanded that defendant stop using search robots. Further, eBay installed "robot exclusion headers" in its site to deter robot searching, and had a mandatory "click-through" agreement for all visitors which precluded commercial use of information from the site. The defendant ignored these measures, and took steps to evade detection after being asked to desist.

Unclear Legal Standard

Discussing the likelihood of success on the merits, the court said eBay could probably not show "substantial interference" with its possessory interest in the site, but held that such a showing was not necessary. While a claim for conversion requires a "substantial interference,"  a mere "intermeddling" by defendant is sufficient to support the claim for trespass to chattel, according to California law.  As to what constitutes an "intemeddling," however, the court was not entirely clear:  "Although the court admits some uncertainty as to the precise level of possessory interference required to constitute an intermeddling, there does not appear to be any dispute that eBay can show that BE's conduct amounts to use of eBay's computer systems. Accordingly, eBay has made a strong showing that it is likely to prevail on the merits of its assertion that [defendant's] use of eBay's computer system was an unauthorized and intentional interference with eBay's possessory interest."(emphasis added).

Given the novel factual setting, the lack of clarity in the court's formulation of the legal standard is unfortunate. In any event, the use at issue was significant enough for the court to perceive a real threat of irreparable harm. Defendant's 100,000 visits per day, comprising 1.1% to 1.5% of eBay's total load, "is appropriating eBay's property by using valuable bandwidth and capacity, and necessarily compromising eBay's ability to use that capacity for its own purposes." Thus, defendant's activities "diminished the quality or value of eBay's computer system" even though there was no physical damage to the site.

The court also rejected the defendant's argument that the eBay site was "public," saying that it is instead eBay's personal property and only accessible to invitees under specific terms of use, which defendant violated. Under California law, the court noted, trespass exists where a defendant exceeds the scope of consent given by the owner, so even though the court did not decide the matter on contract grounds -- and in its order, refused to bar the defendant from using information gathered manually from the eBay site --  the violation of eBay's terms of use established a necessary element of the trespass claim, namely exceeding the scope of consent given to the invitee.

California Split on Preemption

Finally, the Court rejected defendant's argument that the trespass claim was preempted by the Copyright Act. "[Plaintiff] asserts a right not to have [defendant] use its computer system without authorization. The right to exclude others from using physical personal property is not equivalent to any rights protected by copyright and therefore constitutes an extra element that makes trespass qualitatively different from a copyright infringement claim." As to preemption, however, the court noted by citation that another California district court had recently reached a contrary result in Ticketmaster Corp. v. Tickets.com, Inc., 54 U.S.P.Q.2d 1344 (C.D. Cal. 2000)(finding website operator's trespass claim preempted by Copyright Act).

The future of the trespass theory as a means of protecting websites against unauthorized browsing may well depend on whether and how these inconsistent preemption holdings are resolved by the Ninth Circuit.  Until then, San Francisco plaintiffs have a new state-law weapon in the battle to protect their websites from unwelcome uses.  It is ironic that the ethereal realm of cyberspace may find its most effective protection in an ancient remedy designed to protect the "right to exclude others from using physical personal property." The case is on appeal to the Ninth Circuit.

© 2000  Cowan, Liebowitz & Latman, P.C.

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This the information provided in this article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult with a lawyer concerning your own situation and any specific legal questions you may have.