ProCD, Inc. v. Zeidenberg

Decision Date04 January 1996
Docket NumberNo. 95-C-0671-C.,95-C-0671-C.
Citation908 F. Supp. 640
PartiesProCD, INC., Plaintiff, v. Matthew ZEIDENBERG, and Silken Mountain Web Services, Defendants.
CourtU.S. District Court — Western District of Wisconsin

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Michael J. Lawton, Lathrop & Clark, Madison, WI, for ProCD, Inc.

David A. Austin, Garvey & Associates, Madison, WI, for Matthew Zeidenberg, Silken Mountain Web Services, Inc.

Christopher Dodge, Tomlinson, Gillman & Rikkers, S.C., Madison, WI, for Ivory Tower Information Systems.

OPINION AND ORDER

CRABB, Chief Judge.

This is a civil action for injunctive and monetary relief brought pursuant to the federal Copyright Act, 17 U.S.C. §§ 101-1010, the Wisconsin Computer Crimes Act, Wis. Stat. § 943.70, and Wisconsin contract and tort law. The facts are not in dispute. Defendants Matthew Zeidenberg and Silken Mountain Web Services, Inc., a one-person corporation formed by Zeidenberg, purchased copies of plaintiff's Select Phone™ CD-ROM software program, downloaded telephone listings stored on the CD-ROM discs to Zeidenberg's computer and made the listings available to Internet users by placing the data onto an Internet host computer. Plaintiff contends that defendants' actions constitute copyright infringement, breach of the express terms of the parties' software licensing agreement, a violation of Wisconsin's Computer Crimes Act, misappropriation and unfair competition. Defendants argue that the data they downloaded from plaintiff's Select Phone™ program were not protected by copyright, that defendants did not use Select Phone™ in a manner inconsistent with plaintiff's copyright, that they are not bound by the software licensing agreement and that plaintiff's state law claims are preempted by federal copyright law.

The case is before the court on the parties' cross motions for summary judgment. Jurisdiction is present under 28 U.S.C. § 1331, because plaintiff's copyright claim arises under federal law, and under 28 U.S.C. § 1332, because there is complete diversity of citizenship among the parties and more than $50,000 is at issue.

I conclude that defendants are entitled to summary judgment in their favor. First, defendants did not infringe plaintiff's copyright. Although the software plaintiff developed for its Select Phone™ program is protected by copyright, that protection does not extend to the telephone listings included on the CD-ROM discs. Second, defendants used the protected software for their own individual purposes, consistent with plaintiff's copyright, and distributed only unprotected data. Defendants never assented to the license agreement included in the Select Phone™ user guide and are not bound by it. Even if defendants had assented, the license agreement is preempted by federal copyright law to the extent plaintiff intended it to apply to uncopyrightable data. Finally, plaintiff's remaining state law claims are preempted by the Copyright Act because they are attempts to avoid federal copyright law.

From the facts proposed by the parties, I find that the following facts are not in dispute.

UNDISPUTED FACTS

Plaintiff ProCD, Inc., is a Delaware corporation with its principal place of business in Danvers, Massachusetts. Defendant Matthew Zeidenberg is a Wisconsin citizen residing in Madison, Wisconsin, and working on a Ph.D. in computer science. Defendant Silken Mountain Web Services, Inc., is a Wisconsin corporation incorporated by defendant Zeidenberg on April 27, 1995, with himself as president and sole shareholder.

Plaintiff spent millions of dollars creating a comprehensive, national directory of residential and business listings. Plaintiff compiled over 95,000,000 residential and commercial listings from approximately 3,000 publicly available telephone books. The listings include full names, street addresses, telephone numbers, zip codes and industry or "SIC" codes where appropriate. Plaintiff sells these listings on CD-ROM discs under the trademark "Select Phone™," as well as under other trade names and trademarks.

Each of plaintiff's CD-ROM discs contains both telephone listings and a software program used to access, retrieve and download the data. Plaintiff sells Select Phone™ in boxes containing a set of discs and a user guide. The user guide includes a series of terms entitled, "Single User License Agreement." The agreement states in its opening paragraph:

Please read this license carefully before using the software or accessing the listings contained on the discs. By using the discs and the listings licensed to you, you agree to be bound by the terms of this License. If you do not agree to the terms of this License, promptly return all copies of the software, listings that may have been exported, the discs and the User Guide to the place where you obtained it.

The license informs the user that plaintiff's software is copyrighted and that copying the software is authorized only for particular purposes and uses. Once the product is installed on the user's computer, the computer screens remind users that use of the product and the data is subject to the Single User License Agreement and that the products are licensed for authorized use only. Before a user can access the listings a field appears on the computer screen, stating:

The listings contained within this product are subject to a License Agreement.
Please refer to the Help menu or to the User Guide.

In addition, most screens contain the following warning:

The listings on this product are licensed for authorized users only. The user agreement provides that copying of the software and the data may be done only for individual or personal use and that distribution, sublicense or lease of the software or the data is prohibited. The agreement provides expressly that:

You will not make the Software or the Listings in whole or in part available to any other user in any networked or time-shared environment, or transfer the Listings in whole or in part to any computer other than the computer used to access the Listings.

The Select Phone™ box mentions the agreement in one place in small print. The box does not detail the specific terms of the license.

In late 1994, defendant Zeidenberg purchased a copy of Select Phone™ at a local retail store. In February or March 1995, defendant Zeidenberg decided he could download data from Select Phone™ and make it available to third parties over the Internet for commercial purposes. Zeidenberg purchased an updated version of Select Phone™ in March 1995 and in April 1995, incorporated Silken Mountain Web Services, Inc. for the purpose of making a database of telephone listings available over the Internet. In April and May 1995, after incorporation, Silken Mountain Web Services, Inc., began assembling its own telephone listings database, part of which contained data from Select Phone™ and part of which involved data from another company's product. Defendants were aware of the computer screen warning message notifying them that Select Phone™ was subject to the agreement contained in the user guide. Defendants disregarded the screen warnings because they did not believe the license to be binding.

Defendant Zeidenberg is the sole shareholder, sole employee and sole officer of defendant Silken Mountain Web Services, Inc. Defendants compiled their database by installing Select Phone™ on Zeidenberg's personal computer, thereby making a copy of the software onto Zeidenberg's computer's hard drive. Defendants used the software on this hard disk copy to download data from the Select Phone™ discs to contribute to the corporation's own database. Every time defendants downloaded data from the discs, an additional copy of Select Phone™ software was copied into the random access memory (RAM) of Zeidenberg's computer.

Defendant Silken Mountain Web Services, Inc., wrote its own computer program to allow users to search its database. No person who accessed the Silken Mountain Web Services, Inc. home page used or copied plaintiff's Select Phone™ software. The software that defendants created permits searches based only on name or standard industrial code while plaintiff's software can search a number of "fields," such as name, address, telephone number, area code, zip code, or any combination of the above.

In May 1995, defendants entered into a contract with Branch Information Systems pursuant to which Branch provided defendants with access to the Internet. Defendants uploaded their database onto Branch Information Systems' computer and provided access to the database to third parties via the Internet. Plaintiff discovered this activity and demanded that defendants discontinue their actions immediately. Zeidenberg wrote to plaintiff and admitted downloading listings from Select Phone™ and making some of those listings available over the Internet but explained that he would continue his project.

After learning of plaintiff's displeasure, Branch Information Services stopped doing business with defendants. In August 1995, defendants entered into a contract with Ivory Tower Information Services for Internet access. The parties contemplated that plaintiff would complain and they provided in the contract that Ivory Tower Information Services was required to continue providing defendants Internet access until ordered by a court to stop.

Pursuant to this contract, defendants made their database available over the Internet until this court issued a preliminary injunction on September 22, 1995. Prior to entry of the preliminary injunction, defendants' database was receiving approximately 20,000 "hits" per day on the Internet. (A hit occurs each time a new screen is displayed on a user's computer screen during a search of the database. Each search tends to generate multiple hits.) For each search of defendants' database, users are permitted to extract up to 1,000 listings. Because the public could access defendants' database for free, plaintiff believed its ability to...

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    ...for computer software was preempted because it was "an attempt to make an end run around copyright law." ProCD, Inc. v. Zeidenberg, 908 F.Supp. 640, 658-59 (W.D.Wis.1996). However, the Seventh Circuit reversed that decision, agreeing instead with the only three other courts of appeals that ......
  • DeFontes v. Dell, Inc.
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    ...shrinkwrap agreements cite explicit disclaimers advising consumers of their right to reject the terms. See, e.g., ProCD, Inc. v. Zeidenberg, 908 F.Supp. 640, 644 (W.D.Wis.1996) ("If you do not agree to the terms of this License, promptly return all copies of the software, listings that may ......
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    ...§ 117(a)(1), courts have interpreted the “used in no other manner” language as requiring solely personal use. See ProCD, Inc. v. Zeidenberg, 908 F.Supp. 640, 649 (W.D.Wis.1996), rev'd on other grounds,86 F.3d 1447 (7th Cir.1996). The plaintiff does not allege that the defendant used the ran......
  • ProCD, Inc. v. Zeidenberg
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    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • June 20, 1996
    ...inside the box rather than printed on the outside; second, federal law forbids enforcement even if the licenses are contracts. 908 F.Supp. 640 (W.D.Wis.1996). The parties and numerous amici curiae have briefed many other issues, but these are the only two that matter--and we disagree with t......
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3 books & journal articles
  • The fallacy that fair use and information should be provided for free: an analysis of the responses to the DMCA's section 1201.
    • United States
    • Fordham Urban Law Journal Vol. 31 No. 1, November 2003
    • November 1, 2003
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  • The disintegration of intellectual property? A classical liberal response to a premature obituary.
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    • Stanford Law Review Vol. 62 No. 2, January 2010
    • January 1, 2010
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  • Shrinkwrap and clickwrap agreements: 2B or Not 2B?
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    • Federal Communications Law Journal Vol. 52 No. 1, December 1999
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