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Unauthorized internet reseller of plaintiff’s products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiff’s trademarks in meta tags of website at which plaintiff’s and its competitors’ products are sold, and in...

Ticketmaster, LLC v. RMG Technologies, Inc., et al

507 F.Supp.2d 1096 (C.D. Ca., October 16, 2007)

Tickmaster Likely To Prevail On Copyright Infringement Claims Arising Out Of Use Of Website In Manner Prohibited By Site’s Terms Of Use

This case arises out of the use of automated devices by ticket brokers and others to purchase tickets from plaintiff Ticketmaster, and thereby prevent the public from purchasing those tickets themselves. 

In this case, the Court holds that plaintiff Ticketmaster LLC (“Ticketmaster”) is 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 permits its clients to circumvent Ticketmaster.com’s CAPTCHA access controls, and use Ticketmaster’s  copyrighted website in manners prohibited by the site’s Terms of Use.  Among other things, Ticketmaster prohibits the use of automated devices such as the software application at issue to access Ticketmaster’s site and search for and purchase tickets to events.  Because defendant was likely to be held to have exceeded its license to use Ticketmaster’s copyrighted site, the Court held it was likely to be found guilty of direct copyright infringement, having made unauthorized copies of plaintiff’s site in its computer’s RAM when it viewed the site to create and test its product.

By distributing its software application to third parties, and encouraging them to use it in violation of Ticketmaster’s Terms of Use, the Court held plaintiff was also likely to prevail on claims of contributory copyright infringement.

The Court further held that Ticketmaster was likely to prevail on claims that defendant RMG breached its contract with Ticketmaster by using the site in a manner prohibited by the site’s Terms of Use, which, among other things, prohibited use of the site for commercial purposes, and use of automated devices on the site.  These Terms of Use were likely to be binding on defendant RMG, because it used the site with notice of the Terms, which advised that such use would constitute assent to be bound thereby.

Finally, the Court held that plaintiff Ticketmaster was likely to prevail on claims that defendant, by distributing its software application, violated the Digital Millennium Copyright Act, because it trafficked in a device designed both to circumvent technological measures that control access to, and protect, a copyrighted work – namely plaintiff’s website.

The Court held that defendant’s conduct was likely to cause plaintiff irreparable injury.  Because it constituted infringement of plaintiff’s copyright, such irreparable harm was presumed.  In addition, plaintiff submitted evidence that the use of automated devices on its site by ticket brokers and others was injuring its reputation and good will with the public, who attributed their inability to obtain tickets to events to misdeeds in which plaintiff and its employees were involved.

As a result, the Court issued a preliminary injunction, enjoined defendant from further trafficking in or using its software application. 

Terms Of Use Prohibit Use Of Automated Devices On Website

Plaintiff Ticketmaster sells tickets for entertainment and sports events through a variety of means, including its copyrighted website Ticketmaster.com  Use of this website is governed by the site’s Terms of Use, which provide that use of the site constitutes assent to be bound thereby.  Among other things, the Terms of Use prohibit the use of site via automated devices or for commercial purposes and prohibit interfering with the proper working of the site. 

To prevent the use of such automated devices on the site, Ticketmaster employs a computer security device known as CAPTCHA.  This technology displays to the site’s user a box with stylized random characters partially obscured behind hash marks.  Before a ticket purchase can be made, the user must enter the random characters.  Because most automated programs cannot decipher these characters, this technology assists in preventing third parties from using such automated devices to access the site.

RMG Markets Automated Device To Assist In Purchasing Tickets From Ticketmaster

Defendant RMG Technologies markets a software application known as the “Ticket Broker Acquisition Tool.”  The Court held, on the evidence before it, that this was likely to be found to be an automated device that assists its user in obtaining tickets from, among other sources, Ticketmaster.com   This finding was supported by evidence before the Court that several of defendant’s customers, from IP addresses assigned to defendant, had purchased large quantities of tickets, and had made large numbers of requests of tickets, in short time spans.  Indeed, plaintiff submitted evidence that defendant advertised its products as “letting you do the work of a dozen people at once.  Just enter the event information … and the moment the event goes on sale, Purchasemaster goes into action.” 

In describing its product for this lawsuit, defendant stated it was a device ‘geared for the purchase of tickets from a variety of websites  including … ticketmaster.com.’  In addition, defendant advertised its product as having ‘stealth technology [that] lets you hide your IP address, so you never get blocked by Ticketmaster.’

Ticketmaster claimed that defendant’s product enabled ticket brokers and others to purchase tickets to events from plaintiff Ticketmaster, and thereby prevented the public from purchasing those tickets.  To stop this from occurring, Ticketmaster commenced suit, charging defendant RMG, inter alia, with direct and contributory copyright infringement, violations of the Digital Millennium Copyright Act, and breach of the site’s Terms of Use.  Finding plaintiff likely to prevail on these claims, the Court issued a preliminary injunction, enjoining defendant from further marketing or using the challenged software applications.

Defendant Likely Infringes Ticketmaster’s Copyright In Website

The Court held that plaintiff was likely to prevail on claims of direct copyright infringement against defendant RMG as a result of its creation of copies of plaintiff’s copyrighted website in the RAM of its computers when it viewed plaintiff site.  Because such use was in excess of that authorized by the license granted by the site’s Terms of Use, and in a manner prohibited thereby, it was held likely to constitute copyright infringement.

The Court held that a website can be protected by applicable copyright laws.  Said the Court:

a website may constitute a work of authorship fixed in a tangible medium of expression …  Copyright protection for a website may extend to both the screen displays and the computer code for the website.

The Court further held that by viewing Ticketmaster’s site on a computer,  defendant RMG had created a copy of that copyrighted work.  Said the Court: 

Defendant does not contest that, as a technological question, whenever a webpage is viewed on a computer, a copy of the viewed page is made and stored on the viewer’s computer. … The copies of webpages stored automatically in a computer’s cache or random access memory (“RAM”) upon a viewing of the webpage fall within the Copyright Act’s definition of ‘copy.’

Defendant’s Use Exceeds License

Because such copying was done in connection with uses of the site prohibited by the site’s Terms of Use, it was likely to constitute copyright infringement.  The court held that the site’s Terms of Use constituted a license governing the permissible use of the copyrighted work in question – namely the Ticketmaster.com site.  These terms prohibit use of the site via an automated device, or for commercial purposes.  They further prohibit conduct, such as bypassing the CAPTCHA technology, that interferes with the proper working of the site.  By using the site in a manner that exceeds this license, the Court held defendant was likely to be found guilty of direct copyright infringement.  Said the Court:

When a licensee exceeds the scope of the license granted by the copyright holder, the licensee is liable for infringement. … Because the Court finds that Plaintiff has a strong likelihood of proving that Defendant violated ticketmaster.com’s Terms of Use by using automated devices, making excessive requests, and interfering with the proper working of the website when it used and/or designed applications that access ticketmaster.com, the Court finds plaintiff has a strong likelihood of succeeding on the merits of its claim for direct copyright infringement.

Defendant Likely Guilty Of Contributory Copyright Infringement

The Court further held that plaintiff was likely to prevail on claims that defendant, by marketing its software applications, was guilty of contributory copyright infringement, as the software application could be used by third parties to infringe the copyright held by plaintiff in its website.  “One infringes contributory by intentionally inducing or encouraging direct infringement …”.  “One who distributes a device which the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”  Plaintiff was likely to establish that such was the case here, particularly given the fact that defendant had marketed its product as “stealth technology [that] lets you hide your IP address, so you can never get blocked by Ticketmaster.”

Violations Of The Digital Millennium Copyright Act

The Court further held that plaintiff was likely to prevail on its claims that defendant RMG, by marketing its software applications, was violating the Digital Millennium Copyright Act.  The DMCA prohibits trafficking in devices designed to circumvent technological measures that effectively control access to a copyrighted work, 17 U.S.C. Section 1201(a)(2), and which protect the rights of a copyright owner under the Copyright Act, Section 1201(b)(1).  The Court held plaintiff likely to prevail on its claims that, by marketing a product that enabled users to defeat the site’s CAPTCHA technology, the defendant ran afoul of these provisions of the DMCA.  In reaching this result, the Court rejected defendant’s argument that the CAPTCHA was designed to regulate ticket sales, and not access to a copyrighted work.  Because the user could not get to a copyrighted work – the ticket purchase webpage – without entering the characters as required by the CAPTCHA, the CAPTCHA protects access to a copyrighted work within the meaning of the DMCA.

Terms Of Use Form Valid Browse-wrap Agreement

The Court further held that Ticketmaster was likely to prevail on its breach of contract claims.  The site gave defendant notice that its use of the site would constitute acceptance of the site’s Terms of Use.  By using the site with such notice, defendant agreed to be bound by the site’s Terms of Use.  Said the Court:

[T]he ticketmaster.com homepage displays the following warning:  ‘use of this website is subject to express Terms of Use which prohibit commercial use of this site.  By continuing past this page, you agree to abide by these terms.”  The underlined phrase ‘Terms of Use’ is a hyperlink to the full Terms of Use; the same phrase appears on almost every page of ticketmaster.com. … Having determined that plaintiff is highly likely to succeed in showing that defendants viewed and navigated through ticketmaster.com, the Court further concludes that Plaintiff is highly likely to succeed in showing that Defendant received notice of the Terms of Use and assented to them by actually using the website.

As stated above, the Court held that Ticketmaster was likely to establish that defendant RMG breached these terms of use, by, inter alia, using an automated device to operate the site, using the site for commercial purposes, and interfering with the proper operation of the site by bypassing the CAPTCHA.  As a result, the Court held that plaintiff was likely to prevail on its claim that defendant breached the Terms of Use.

Court Enjoins Further Distribution Of Defendant’s Software Application

The Court held that plaintiff had established that it would sustain irreparable injury if defendant was allowed to continue to market the software at issue.  Where a copyright holder has a strong likelihood of success on the merits, irreparable injury is presumed.

In addition, plaintiff demonstrated that use of automated devices such as that at issue had injured its reputation and good will. The use of such devices permit ticket brokers, at the expense of the public, to obtain tickets to events.   Plaintiff submitted evidence that consumers, upset with their inability to obtain tickets, believed that Ticketmaster and/or its employees were engaged in inappropriate conduct, and potentially colluding with ticket brokers to deny consumers tickets.  Because defendant’s conduct likely contributed to this loss of goodwill, the Court held plaintiff had made the necessary showing of irreparable injury to obtain injunctive relief.

As a result, the Court issued a preliminary injunction, enjoining defendant RMG from further marketing or using the software applications at issue. 

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