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Designer Skin LLC v. S & L Vitamins, Inc., et al.
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...

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Trespass To Chattels

Trespass To Chattels - Updated April 02, 2008

This section of the Internet Law Library contains court decisions analyzing when a party's contact of another's computer, or a server on which a web site is hosted, via a robot or otherwise, will constitute an impermissible trespass to chattels, which can be stopped by the complaining party.

Civ. Act. No. 07-0293 (E.D. Va., March 11, 2008)

Court holds that minors entered into valid ‘click wrap’ agreement with defendant IParadigms LLC (“IParadigms”) by clicking an “I agree” icon which appeared directly below an online Usage Agreement, and indicated their assent to be bound thereby.  Plaintiffs were high school students that were directed by the schools they attended to submit class work to defendant IParadigm’s “Turnitin” website to check for plagiarism.  As part of this submission process, plaintiffs were obligated to assent to the site’s Usage Agreement.  Because the Usage Agreement contained a limitation of liability clause precluding liability to plaintiffs as a result of their use of the Turnitin site, the Court rejected plaintiffs’ copyright infringement claims, which arose out of defendant’s storage of plaintiffs’ class work in a database used to check student homework for plagiarism.

In reaching this result, the Court rejected plaintiffs’ claims that, as minors, they were not bound by the terms of the site’s Usage Agreement.  Because they had accepted the benefits of the agreement – the ability to submit their class work for grade to their respective schools was dependent upon their use of the site – they could not escape the contractual conditions upon which such benefits were rendered.

The Court further held that plaintiffs’ copyright infringement claims failed because defendant had made a permissible fair use of their works.  In reaching this result, the Court relied on the fact that Turnitin’s use of plaintiffs’ school work was highly transformative of the original works, in that it added plaintiffs’ school work to a non-publicly available database used only to check for plagiarism by students.  The Court also rested its holding of fair use on the fact that defendant’s use did not impact the market for plaintiffs’ works, as the copies Turnitin made thereof were not available to the public, but rather maintained in a non-public database.

The Court rejected the counterclaims advanced by defendant iParadigms, including a claim for indemnification as a result of the commencement of this action.  This claim was based on a separate “Usage Policy” found on the Turnitin site.  The Court held that plaintiffs were not bound by this policy, which was not linked or otherwise referenced in the Usage Agreement to which plaintiffs were in fact bound.  There was no evidence that plaintiffs were aware of this separate “usage policy,” which was contained in a link on each page of the Turnitin site.  As a result, and because the parties’ contract stated that it constituted the full agreement between the parties, the plaintiffs’ use of the site was held not to create a valid browse wrap agreement, and the claim for indemnification, predicated on the Usage Policy, was dismissed.

The remaining counterclaims advanced by iParadigms arose out of the use of the site by one of the plaintiffs to submit class work to an institution he did not attend.  These claims for trespass to chattels, and violations of both the Computer Fraud and Abuse Act and Virginia Computer Crimes Act, failed due to the absence of the requisite damage.

24 F.Supp.2d 548 (E.D.Va., October 29, 1998)

Court awards AOL summary judgment against a spammer, finding that the sending of over 60 million pieces of unauthorized junk e-mail to AOL subscribers after receipt of cease and desist letters constituted an actionable trespass to AOL's computer network. In reaching this conclusion, the court relied on Compuserve Inc. v. Cyber Promotions, 962 F. Supp. 1015 (S.D. Ohio 1997). The court further held that by including forged headers in much of this e-mail which indicated the e-mail came from an "aol.com" member account, defendants had both diluted plaintiff's famous mark and used it to falsely designate the e-mails' origin in violation of the Lanham Act. Implicit in the court's decision is a holding that a famous mark is tarnished when associated with the sending of spam.

100 F. Supp. 2d 1058 (N.D. Cal., May 24, 2000)

Court issued a preliminary injunction, enjoining Bidder's Edge Inc. ("BE") from using a software robot or other automated query program to access without permission eBay's computer systems for the purpose of obtaining information concerning ongoing auctions at eBay, on the grounds that such activity is likely to constitute a prohibited trespass to chattels.

C98-20064 (N.D. Ca., April 20, 1998)

Court enjoined defendants both from sending spam which falsely stated it came from plaintiff's e-mail service, and from using Hotmail accounts as mailboxes for "spam" reply. Court held that such conduct violated plaintiff's Term's of Service, which prohibited the use of Hotmail accounts to facilitate the transmission of spam. To use plaintiff's service defendants, after being afforded the opportunity to view the Terms of Service, clicked on a box indicating their assent to be bound thereby. As such, the Court's holding reflects its willingness to uphold the validity of a click-wrap agreement between the parties. The Court also held that defendants' conduct constituted trademark infringement and dilution, as well as trespass to chattels and a violation of the Computer Fraud and Abuse Act.

30 Cal. 4th 1342, 71 P.3d 296, 1 Cal. Rptr. 3d 32, S103781 (Cal. Supreme Ct., June 30, 2003)

By a 4-3 margin, the California Supreme Court holds that the transmission of six e-mails criticizing Intel's employment practices to approximately 35,000 Intel employees over Intel's Intranet, despite Intel's objection, does not constitute an actionable trespass to chattels because the transmission did not cause any injury to Intel's computer systems.  The transmission of these e-mails neither slowed nor otherwise disrupted the functioning of Intel's computer system.  As a result, the California Supreme Court rejected Intel's application for an injunction, enjoining defendant, a former Intel employee, from continuing to send e-mails to Intel employees.  In reaching this result, the Court held that neither the time Intel's employees spent reviewing these unwanted communications, nor the funds Intel expended in attempting to block their continued transmission, constituted the type of injury necessary to sustain a trespass to chattels claim.

This result constituted a reversal of prior decisions by both the California Superior Court and the California Court of Appeals, each of which had enjoined future transmissions by the defendant.  Three justices dissented in two extensive dissents.  Each of the dissenters would have continued the injunction issued by the lower courts on the grounds, inter alia, that a trespass to chattels claim does not require injury to the chattel in question -- rather, such a claim can be established solely by showing an unpermitted and objected to use of the chattel.

469 F.3d 348, No. 05-2080 (4th Cir., November 17, 2006)

The Fourth Circuit affirms the dismissal of claims brought by defendants under CAN-SPAM and Oklahoma statutory and common law arising out of defendants’ receipt of 11 unsolicited commercial emails from plaintiff Cruise.com.  Defendants’ claims were premised both on their assertion that the email at issue contained inaccurate contact information, and that plaintiffs continued to send them commercial email after receipt of a complaint from defendants concerning the emails.

The Court dismissed the claims defendants advanced under an Oklahoma state statute that sought to regulate the transmission of commercial email that contained any false information as to its source, holding that state statute preempted by the Federal CAN-SPAM Act.  The Court dismissed the trespass to chattels claim asserted by defendants on the grounds that defendants did not establish that they sustained more than nominal damages as a result of their receipt of the commercial emails in question.  The Fourth Circuit held this failing fatal to defendants’ trespass to chattel claim.  Finally, the Fourth Circuit dismissed defendants’ CAN-SPAM Act claim, holding the immaterial errors in the header/source information of commercial emails was not actionable under CAN-SPAM.  Defendants could readily identify and contact the sender of the emails in question from the information contained therein.  Defendants’ claims that plaintiffs violated CAN-SPAM’s provisions concerning the removal of a recipient from future emails upon request failed because defendants did not show plaintiffs engaged in “a pattern or practice” of failing to honor such requests, a prerequisite to such a claim under CAN-SPAM.

No. C00-0724 JCS, 2001 US Dist. Lexis 22520 (N.D.Cal. November 13, 2001)

Court grants in part and denies in part defendant's motion for summary judgment. Plaintiff alleged that defendant and/or its agent posted meta tags on defendant's web site which were identical to those found on plaintiff's own site, and included a description of the plaintiff company and, apparently, plaintiff's trademark. Upon receiving a complaint from plaintiff, defendant removed the offending meta tags from its site. Plaintiff thereafter brought an action seeking redress, alleging that defendant's conduct constituted trademark infringement in violation of the Lanham Act and the California Civil Code, copyright infringement, and trespass to chattels. The court granted in part defendant's motion for summary judgment, finding that plaintiff had not submitted sufficient evidence to be entitled to an award of lost profits arising out of the alleged trademark infringement, despite plaintiff's showing that its web site traffic was adversely impacted during the period of defendant's infringing activities. The court reached this conclusion because of plaintiff's inability to demonstrate that its web site had actually generated business. The court denied the balance of defendant's motion, finding the evidence sufficient to require a trial as to plaintiff's trespass claim, its copyright infringement claim, and its entitlement, as a result of trademark infringement, to an accounting and injunctive relief.

356 F.3d 393 (2d Cir. 2004)

Affirming the court below, the Second Circuit holds that Register.com is likely to prevail on breach of contract claims arising out of Verio Inc.'s use of data obtained from Register.com's Whois database in violation of the database's Terms of Use, which prohibit use of that information for unsolicited advertising.  In reaching this conclusion, the Second Circuit held that Register.com's Terms of Use are likely to create a contract between Register.com and Verio, because Verio repeatedly used Register.com's Whois database with actual knowledge that the Terms provided that such use would constitute assent to be bound by the data use restrictions contained in the Terms.  Notably, the Second Circuit reached this result notwithstanding the fact that Verio did not click an "I Agree" icon indicating its agreement to be so bound.  More importantly, the Court found Register.com likely to prevail despite the fact that Verio did not see these Terms until after it had already completed the act - using the Whois database - which purportedly indicated its assent to be bound thereby. 

The Second Circuit also found both that Verio's use of a search robot to gather Whois data likely constituted a trespass to chattels, and that certain of Verio's promotional activities violated the Lanham Act.

As a result, the Second Circuit affirmed the District Court's issuance of a preliminary injunction, enjoining Verio from either utilizing a search robot to obtain information from Register.com's Whois database, or utilizing information obtained from that database to assist in the transmission of mass unsolicited advertising by telephone, direct mail or e-mail.

126 F. Supp. 2d 238 (S.D.N.Y., December 12, 2000) (Jones, J.) aff'd. 356 F.3d 393 (2d Cir. 2004)

Court issues a preliminary injunction enjoining Verio, Inc. from either utilizing a search robot to obtain information from Register.com's Whois database, or utilizing information derived from that database for mass unsolicited advertising by telephone, direct mail or electronic mail. Court holds that Verio's actions will likely constitute a breach of plaintiff's Terms of Use, as well as a violation of both the Computer Fraud and Abuse Act and the Lanham Act and a trespass to chattels. In reaching this conclusion, the court holds that Register.com's Terms of Use are likely to create a contract between Register.com and the users of its Whois database, notwithstanding the fact that these users are not required to click an "I Agree" button indicating their agreement to be so bound.

2003 U.S. Dist. Lexis 6483 (C.D. CA., March 7, 2003)

Court holds that a binding agreement can be formed by the use of a web site, without more, if the user has actual knowledge that the site's Terms and Conditions so provide.  As a result, the Court denied defendant Tickets.com's summary judgment motion, which sought dismissal of breach of contract claims arising out of Tickets.com's use of a search robot to obtain information about concerts from plaintiff Ticketmaster's web site.  The Court held that issues of fact as to defendant's knowledge of the site's Terms and Conditions at the time it used plaintiff's site precluded a determination as to the binding nature of such Terms.

The Court did grant so much of Tickets.com's summary judgment motion which sought dismissal of trespass to chattels claims Ticketmaster asserted as a result of such activity.   These claims failed because of the absence of evidence that "the use or utility" of Ticketmaster's computers were being adversely affected by Tickets.com's use of a search robot to gather information from plaintiff's site.

Finally, the Court dismissed several copyright infringement claims brought by Ticketmaster.  These included infringement claims arising out of the temporary copying into the RAM of defendant's computers of data from plaintiff's site, including materials in which plaintiff held a copyright.  These materials were copied as an intermediate step to obtaining, and displaying on Tickets.com's own site, factual information contained therein.  The Court held such copying was a protectable fair use given the only materials retained at the end of the process were the facts -- as to concert locations, dates and times -- contained therein, which facts were not protected by copyright.  Infringement claims arising out of deep linking to interior pages of plaintiff's website were dismissed because, by deep linking into plaintiff's site, Tickets.com was not showing or displaying plaintiff's copyrighted materials (which instead were being displayed by plaintiff itself).  Finally, infringement claims arising out of copying the URLs from such interior pages were dismissed because such URLs did not have sufficient originality to be copyrightable.

2000 U.S. Dist. Lexis 12987 (C.D. Ca., August 10, 2000)

Court denies plaintiff's application to enjoin defendant from using spiders to copy factual information contained on plaintiff's web site. In so holding the court rejects plaintiff's claim that such spidering constitutes an improper trespass on plaintiff's computers, because the spidering neither harms plaintiff's computers, nor interferes with their use. The court also held that even though copies of plaintiff's materials were made during this spidering, this was likely to constitute a protected fair use akin to the copying permitted during the reverse engineering of a product.

Quick Hits

American Airlines, Inc. v. Farechase, Inc.
Cause No. 067-194022-02 (Texas, 67th Dist., Mar. 8, 2003)

Court holds American Airlines likely to succeed on claims that defendant Farechase breached the terms of use governing AA.com by scrapping the site for data, including discount “web fares” and flight schedules, and using the data for unauthorized commercial purposes. While the Court’s decision does not so state, it has been reported elsewhere that the contract between the parties arose out of Farechase’s use of AA.com, who’s Terms of Use provide that such use constitutes a consent to be bound by the site’s Terms of Use. These Terms, among other things, prohibit the commercial use of the site or data thereon without American Airline’s consent. The Court further finds American Airlines likely to succeed on claims that this unauthorized use, combined with that of licensees of “Web Automation” software distributed by Farechase that allowed such licensees to also access and obtain the same data from AA.com, constituted a trespass to chattels – namely American Airlines computer system. This finding was premised on the damage caused AA.com, both in terms of lost capacity of its computer system arising from existing uses of its site by Farechase and its current licensees, as well as by projected use by prospective future licensees to whom Farechase planned to distribute its software.  It was also grounded on the damage American Airlines sustained in undertaking to block Farechase and its licensees from accessing its site. Farechase knew this use was unauthorized because of its receipt of cease and desist notices from American Airlines. As a result, the court enjoined FareChase from accessing, using, or scraping AA.com, via its “Web Automation” software or otherwise, or from distributing its “Web Automation” software to third parties.

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