Designer Skin LLC v. S & L Vitamins, Inc., et al.
Ticketmaster Corp. v. Tickets.com, Inc.
2000 U.S. Dist. Lexis 4553 (C.D. Ca., March 27, 2000)
Plaintiffs Ticketmaster Corporation and Ticketmaster Online-CitySearch, Inc. (collectively "Ticketmaster") operate a web site at which they offer for sale tickets to various entertainment events. The home page of Ticketmaster's web site contains instructions for use of the site and a directory of events for which tickets can be purchased. Links take the user from the home page to event pages, which contain information about a specific event, including a short description of the event, the date, time, location and price of tickets, as well as instructions for purchasing tickets to that event.
At the time the action was commenced, Terms and Conditions ("Terms and Conditions") which purported to govern use of the site were contained at the bottom of the site's home page. A user neither has to view the Terms and Conditions, nor click an "I Agree" button, agreeing to be bound by them, to use the site. The Terms and Conditions provide that use of the site constitutes assent to be bound by the Terms and Conditions, which, among other things, prohibits both deep linking and use of the contents of the site for commercial purposes.
Defendant Tickets.com operates a web site on which it makes available for sale tickets to various events. The site also provides information as to where a user can purchase tickets to events for which Tickets.com does not sell tickets. This information includes deep links that take a user to that event page of the Ticketmaster web site at which a user can purchase tickets to a specified event. The deep link is generally accompanied by text that apprises the user that "these tickets are sold by another ticketing company. Although we can't sell them to you, the link above will take you directly to the other company's web site where you can purchase them."
Tickets.com also provides certain information about entertainment events, which information it allegedly obtained from Ticketmaster's web site.
Plaintiffs commenced suit, charging that defendant had breached the contract embodied in the Terms and Conditions, and infringed the copyright held by plaintiffs in its web site. Plaintiffs' complaint also charged defendant with unfair competition, unjust enrichment and interference with business advantage, among other things.
Defendant moved to dismiss the complaint. As indicated more fully below, the court granted this motion in part, while giving plaintiffs leave to replead certain of their claims.
Most significantly, the court granted defendant's motion to dismiss plaintiffs' breach of contract claim, while granting plaintiffs leave to replead it. The court held that a contract is not created simply by use of a web site on which is posted at the bottom of the site's home page terms and conditions that provide that such use constitutes the user's assent to be bound by the site's Terms and Conditions. The court left open the possibility, however, that use of a web site, coupled with knowledge of Terms and Conditions which declare such use evidence of assent to be bound thereby, could create a binding contract. Said the court:
In defending this claim, Ticketmaster makes reference to the "shrink-wrap license" cases, where the packing on the outside of the CD stated that opening the package constitutes adherence to the license agreement (restricting republication) contained therein. This has been held to be enforceable. That is not the same as this case because the "shrink-wrap license agreement" is open and obvious and in fact hard to miss. Many web sites make you click on "agree" to the terms and conditions before going on, but Ticketmaster does not. Further the terms and conditions are set forth so that the customer needs to scroll down the home page to find and read them. Many customers instead are likely to proceed to the event page of interest rather than reading the "small print". It cannot be said that merely putting the terms and conditions in this fashion necessarily creates a contract with anyone using the web site. The motion is granted with leave to amend in case there are facts showing [defendant] Tickets' knowledge of them plus facts showing implied agreement to them.
The court further made several interesting rulings concerning the propriety of deep linking. First, the court held that "hyperlinking [without framing] does not itself involve a violation of the Copyright Act ... since no copying is involved." Instead, said the court, "the customer is automatically transferred to the particular genuine web page of the original author. There is no deception in what is happening. This is analogous to using a library's card index to get reference to particular items, albeit faster and more efficiently."
The court further held that "deep linking by itself (i.e. without confusion of source) does not necessarily involve unfair competition."
The court refused at this stage of the case, however, to dismiss plaintiffs' claim that defendant, by deep linking, was tortuously interfering with plaintiffs' prospective business advantage, by depriving them of advertising revenue that might otherwise be achieved if the user were forced first to go to the site's home page (with the necessary increase in traffic that would generate) before he could proceed to an event page.
The last major area addressed by the court was plaintiffs' claim that defendant had infringed plaintiffs' copyright in their site by extracting data concerning events from plaintiffs' events pages and presenting it in its own format. The court held that such use did not constitute copyright infringement. Said the court:
[T]he court rejects Ticketmaster's basic contention that it is copyright infringement to take basic facts from its publicly available web pages and use those facts (if the expression and method of presentation is not copied).
The court further held that plaintiffs could not attempt to recast such a claim into either state law misappropriation, trespass, unfair business practice or unjust enrichment claims, as those claims, to the extent they prohibited conduct permitted under the copyright act, were preempted thereby.