litigation grab bag includes another nail in IIC coffin

EarthCam, Inc. v. OxBlue Corp., 2014 WL 4702200, No. 1:11–cv–02278 (N.D. Ga. Sept. 22, 2014)
Mostly a trade secret case where EarthCam alleged that every scrap of information about it was a trade secret.  The parties compete in the market for high-end web-based camera systems, though OxBlue’s primary client base is the construction industries.  One of EarthCam’s product technicians/camera installers, Hermann, departed to become an independent contractor for OxBlue.  Also, OxBlue’s chief technology officer wrote a script that collected information from EarthCam customers’ webpages.  The script used over 400,000 URL combinations to estimate the current URL combination and location of an EarthCam’s customer’s webpage.  EarthCam alleged that this gathered confidential information, including customer names, camera names, images from customer cameras, the URL to the image for each camera, and the date and time stamped on the last image taken from a camera. The script didn’t involve decrypting a password or otherwise breaking into any secure server.
OxBlue also received a username and password from an EarthCam client, FCR, which gave its login credentials to OxBlue to see if OxBlue could solve certain issues it had encountered with EarthCam’s cameras. FCR first provided a series of screenshots from FCR’s EarthCam, and a screenshot from one of FCR’s cameras, but that wasn’t enough, so it provided its credentials.  OxBlue offered three possible solutions, two of which didn’t involve using OxBlue’s services. FCR continued to do business with EarthCam.  After logging in, OxBlue took screenshots from FCR’s customer webpage; there was no evidence that these shots were used to develop product or market anything.
EarthCam’s EULA didn’t ban customers from sharing their passwords with a third party, and there was no evidence OxBlue knew of any EULA provisions when they logged in. EarthCam also didn’t require customers to make their pages private.  And it had a live demo on its website showing how cameras appear on a customer account.
EarthCam also alleged that Hermann provided OxBlue with detailed information about EarthCam’s cameras, customers, suppliers, and pricing information.
Separately, OxBlue created a construction specification “to assist individuals and organizations in the construction industry to prepare for use of OxBlue’s equipment on construction projects.”  Such specifications provide directions on the methods and materials to be used on a construction project, and OxBlue’s was “modeled” on the Construction Specification Institute’s MasterFormat, 2004 Edition. This is a standardized system of indexing and organizing construction specifications.  
OxBlue applied to register its specification in March 2012, and alleged that EarthCam infringed by copying the numerical code sequence (or title) for the OxBlue specification–013234.01–and by copying portions of the OxBlue specification.  For example, OxBlue’s specification states: “The indoor/outdoor camera system shall consist of a tamper and impact resistant, discreet, fixed [wall] [and][or] [pole] mount enclosure with integrated fixed camera, lens and controller,” while EarthCam’s states “The indoor/outdoor camera system shall consist of a tamper and impact resistant enclosure with integrated camera and heavy-duty robotic pedestal to be mounted as a fixed pole, wall, parapet or nonpenetrating roof mount.”  (The court doesn’t appear to resolve this part of the case on this motion, but given what it says about the other copyright infringement claim at issue I wouldn’t be optimistic.)
Wait, there’s more.  An EarthCam subsidiary bought search engine keywords including “earthcam,” “earth cam,” “webcam” and “oxblue.” Searching for “oxblue” would produce a link to the EarthCam subsidiary’s website in the “Sponsored Links” section, though it did not use the term “OxBlue” on its website, or in the metadata for its website, unless there was a news article that mentioned the subsidiary and OxBlue. Some years previously, OxBlue had bought “earthcam” as a Google keyword for its own ads.  OxBlue nonetheless argued that EarthCam’s subsidiary’s purchase infringed OxBlue trademark.
Also false advertising: OxBlue hired two people to call EarthCam pretending to be customers looking for a camera solution. They secretly recorded their conversations with an EarthCam sales representative. The rep told them that EarthCam’s competitors used experimental server technology, exposed their customers to copyright infringement lawsuits, and that EarthCam has more employees in its customer service department than its competitors have in their entire company.  Also, OxBlue sued over a comparative EarthCam chart, which stated that OxBlue’s cameras didn’t offer, on all camera systems, detailed archived weather data, in-house 24/7 monitoring of cameras and in-house technical support, and professionally designed and integrated surge protection. This was sent to one customer, but there was no evidence about further dissemination of the chart or of statements made in the chart.
OK: EarthCam’s trade secret claims failed because EarthCam failed to show that the matters at issue were trade secrets (for example, customers weren’t required to keep their websites secret), or that OxBlue misappropriated them.  Even the script that scraped the EarthCam site didn’t collect information that derived economic value from being a secret, since the information collected wasn’t a secret nor was it subject to reasonable efforts to protect it.  The court also emphasized that, under the relevant New Jersey law, trade secrets “cannot merely be the facility, skill or experience learned or developed during an employee’s tenure with an employer,” so Hermann’s switch didn’t reveal confidential information.
CFAA claims: The Eleventh Circuit hasn’t addressed whether using someone else’s login credentials can violate the CFAA, but other cases are instructive.  Secureinfo Corp. v. Telos Corp., 387 F. Supp. 2d 593 (E.D. Va. 2005), held that permission from an authorized licensee defeated a CFAA claim even if the defendants were provided with access in violation of a licensing agreement.  State Analysis Inc. v. American Fin. Serv. Assoc., 621 F. Supp. 2d 309 (E.D.Va. 2009), by contrast, allowed a similar claim to proceed where the defendant, who had previous ties to the plaintiff, “was presumably familiar with the terms of [plaintiff’s] agreement and with the scope of authority granted to licensees.”
The situation here differed from State Analysis because the relevant EULA didn’t bar sharing passwords with third parties. Also, there was no evidence OxBlue knew about EarthCam’s licensing terms. “State Analysis applies where the defendant uses subterfuge to gain access to a plaintiff’s website, computers, and servers, or otherwise engages in fraudulent conduct.” There was no evidence of subterfuge or fraud here.  Instead, OxBlue “received an unsolicited request from an EarthCam client that was unsatisfied with EarthCam’s services to provide a business solution, and the OxBlue Defendants accessed FCR’s account with FCR’s permission.”  The CFAA could not apply.
EarthCam alleged that OxBlue infringed its copyright in its software by capturing screenshots of FCR’s customer account.  The court, which seems to have been pretty annoyed by this litigation deathmatch, cited Sony Computer Entertainment America, Inc. v. Bleem, LLC, 214 F.3d 1022 (9th Cir. 2000), a fair use case, for the proposition that a screenshot is “merely an inanimate sliver of the [program] … of little substance to the overall copyrighted work.” Here, the use was de minimis, and EarthCam failed in its burden to show copying significant enough to constitute infringement.
As for OxBlue’s copyright infringement claim against EarthCam, the infringement occurred before the registration; OxBlue’s argument that it was entitled to statutory damages for infringement after the registration was obviously precluded by settled law.
OxBlue also argued that EarthCam infringed the OxBlue trademark through initial interest confusion.  And here this case perhaps justifies its existence, if not to the weary district judge then to us: the Eleventh Circuit doesn’t have any IIC cases, but other circuits have accepted an IIC theory in keyword search engine cases.  Still, the standard they’ve adopted has made liability essentially impossible even if available in theory.  Both the Ninth and Tenth Circuits have held that the labeling and appearance of the ads and the surrounding context of the screen displaying the results page are the most critical considerations.  OxBlue didn’t show any evidence about this, or about any other confusion factor.  Nor was there any record evidence of how often consumers were “lured” to EarthCam’s site when they searched for OxBlue, and under 1-800-Contacts, a low conversion rate shows that confusion is unlikely.  IIC claim dismissed.
False advertising: there was no evidence that EarthCam’s alleged misrepresentations had a material impact on a purchase decision, so EarthCam was entitled to summary judgment.  (Here the much-burdened court is a bit sloppy; actual deception isn’t required if a statement is false or likely to mislead.)  The sales rep’s allegedly false representations were isolated and not sufficiently disseminated to the relevant buying public.  EarthCam’s Vice President testified that he didn’t know how many times reps told potential customers these things.  He agreed with a leading question from counsel that asked “it could be one time, it could be hundreds of time, is that fair?” but that just meant he didn’t know.  The rest was just speculation. Likewise, the comparative chart was only shown to have been sent to one prospective customer. In a particularly small market, one customer might be enough, but OxBlue didn’t show the size of the market for high-end, megapixel construction cameras and webcams.  In the absence of such evidence, distribution to one customer wasn’t commercial advertising or promotion.

This entry was posted in cfaa, copyright, http://schemas.google.com/blogger/2008/kind#post, trade secrets, trademark. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s