Craigslist, Inc. v. NATUREMARKET, INC.

• Decision Date: 05 March 2010
• Docket Number: No. C 08-5065 PJH.,C 08-5065 PJH.
• Parties: CRAIGSLIST, INC., Plaintiff, v. NATUREMARKET, INC., et al., Defendants.
• Court: U.S. District Court — Northern District of California

694 F. Supp.2d 1039

CRAIGSLIST, INC., Plaintiff, v. NATUREMARKET, INC., et al., Defendants.

No. C 08-5065 PJH.

United States District Court, N.D. California.

March 5, 2010.

Brian Patrick Hennessy, Perkins Coie LLP, Menlo Park, CA, Elizabeth L. McDougall, Perkins Coie LLP, Seattle, WA, for Plaintiff.

ORDER ADOPTING MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION, AND GRANTING MOTION FOR DEFAULT JUDGMENT IN PART AND DENYING IT IN PART

PHYLLIS J. HAMILTON, District Judge.

The court has reviewed Magistrate Judge James' report and recommendation re plaintiff craigslist, Inc.'s motion for default judgment. Defendants Naturemarket, Inc. d/b/a powerpostings.com and Igor Gasov filed no objections to the report. The court finds the report correct, well-reasoned and thorough, and adopts it in every respect. Accordingly, the court GRANTS plaintiff's motion for default judgment as to all claims asserted in plaintiff's first amended complaint; GRANTS the request for a permanent injunction; GRANTS the request for attorney's fees and costs; and DENIES the request for punitive damages.

Defendants Igor Gasov and Naturemarket, Inc., their employees, representatives, agents and all persons or entities acting in concert with them are preliminarily and permanently enjoined from

(a) manufacturing, developing, creating, adapting, modifying, exchanging, offering, distributing, selling, providing, importing, trafficking in, or using any automated device or computer program (including but not limited to, any technology, product, service, device, component, or part thereof) that enables postings on craigslist without each posting being entered manually;

(b) manufacturing, developing, creating, adapting, modifying, exchanging, offering, distributing, selling, providing, importing, making available, trafficking in, or using content that uses automated means (including, but not limited to, spiders, robots, crawlers, data mining tools, and data scraping tools) to download or otherwise obtain data from craigslist;

(c) copying, distributing, displaying, creating derivative works or otherwise using protected elements of craigslist's copyrighted website (located at www. craigslist.org), including but not limited to, the website's post to classifieds, account registration and account log in expressions and compilations, and from inducing, encouraging, causing or materially contributing to any other person or entity doing the same;

(d) circumventing technological measures that control access to craigslist's copyrighted website and/or portions thereof (including, but not limited to, CAPTCHAs and RECAPTCHAs), and from inducing, encouraging, causing or materially contributing to any other person or entity doing the same;

(e) manufacturing, developing, creating, adapting, modifying, exchanging, offering, selling, distributing, providing, importing, trafficking in, or using technology, products, services, devices, components, or parts thereof, that are primarily designed or produced for the purpose of circumventing technological measures and/or protection afforded by technological measures that control access to craigslist's copyrighted website and/or portions thereof, and from inducing, encouraging, causing or materially contributing to any other person or entity doing the same;

(f) accessing or attempting to access craigslist's computers, computer systems, computer network, computer programs, and data, without authorization or in excess of authorized access, including, but not limited to, creating accounts or posting content on the craigslist website, and from inducing, encouraging, causing, materially contributing to, aiding or abetting any other person or entity to do the same;

(g) manufacturing developing, creating, adapting, modifying, exchanging, offering, selling, distributing, providing, importing, trafficking in, purchasing, acquiring, transferring, marketing or using any program, device, or service designed to provide an automated means of accessing craigslist's website, automated means of creating craigslist accounts, or automated means of posting ads or other content on the craigslist's website, including, but not limited to, any program, device, or service that is, in whole or in part, designed to circumvent security measures on the craigslist website;

(h) repeatedly posting the same or similar content on craigslist, posting the same item or service in more than one category on craigslist, posting the same item or service in more than one geographic area on craigslist, and from inducing, encouraging, causing, assisting, aiding, abetting or contributing to any other person or entity doing the same;

(i) posting ads on behalf of others, causing ads to be posted on behalf of others, and accessing craigslist to facilitate posting ads on behalf of others;

(j) using, offering, selling or otherwise providing a third-party agent, service, or intermediary to post content to craigslist;

(k) misusing or abusing craigslist, the craigslist website and craigslist services in any way, including, but not limited to, violating craigslist TOU;

(l) accessing or using craigslist's website for any commercial purpose whatsoever, and;

(m) using the CRAIGSLIST mark and any confusingly similar designation in Internet advertisements and otherwise in commerce in any manner likely to confuse consumers as to their association, affiliation, endorsement or sponsorship with or by craigslist.

The court awards plaintiff $470,000.00 in statutory damages under the Digital Millennium Copyright Act, and $840,000.00 in liquidated damages under the Terms of Use Agreement(s), but DENIES Craigslist's request for punitive damages.

The court GRANTS plaintiff's request for attorneys' fees in the amount of $65,038.20, and costs in the amount of $1,712.07.

IT IS SO ORDERED.

REPORT AND RECOMMENDATION RE: PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

MARIA-ELENA JAMES, United States Magistrate Judge.

I. INTRODUCTION

Pending before the Court is Plaintiff craigslist's Motion for Default Judgment against Defendants Igor Gasov and Naturemarket, Inc. d/b/a powerpostings.com. (Dkt. # 43.) To date, Defendants have not filed an opposition or otherwise appeared in this matter. On July 2, 2009, the Honorable Phyllis J. Hamilton, the presiding judge in this matter, referred the pending Motion to the undersigned to prepare a Report and Recommendation. (Dkt. # 47.) After thoroughly reviewing Plaintiffs briefs, pleadings, and the controlling legal authorities, the undersigned REOMMENDS that the District Court GRANT Plaintiffs Motion for Default Judgment against Defendants as set forth below.

II. BACKGROUND

A. Factual Background

Plaintiff initiated this action by filing a Complaint against Defendant Naturemarket, Inc. d/b/a powerpostings.com. (Dkt. # 1.) On March 31, 2009, Plaintiff filed its First Amended Complaint adding Defendant Igor Gasov as a named defendant. (Dkt. # 23.) The following facts are taken from Plaintiff's Complaint and First Amended Complaint.

Plaintiff is a Delaware corporation, with its principal place of business in San Francisco, California. (Compl. ¶ 19; FAC ¶ 19.) Plaintiff owns and operates the website www.craigslist.org, which is an internet-based local classified ad service. (Compl. ¶ 2; FAC ¶ 2.) Plaintiff has registered copyrights in the website, including the website's account creation and ad posting pages. (Compl. ¶¶ 62-69; FAC ¶¶ 63-70.) Plaintiff has also registered the "craigslist" mark. (Compl. ¶¶ 70-77; FAC ¶¶ 71-78.)

Access to and use of Plaintiffs website and services are governed by its Terms of Use Agreement ("TOUs"). (Compl. ¶¶ 10, 11, 32-36; FAC ¶¶ 10, 11, 33-37.) The TOUs are posted on the website, and craigslist users cannot post ads or create accounts on the craigslist website without first agreeing to the TOUs. (Compl. ¶¶ 32-36; FAC ¶¶ 33-37.) The TOUs protect craigslist users and, according to Plaintiff, preserve the simplicity, ease of use, and fairness that are foundations of its website and services. (FAC ¶¶ 9-10.)

Plaintiffs TOU grants users a limited license to access and use Plaintiffs website subject to certain restrictions. (Compl. ¶ 33; FAC ¶ 34.) In particular, the TOU expressly prohibit users from engaging in repeated postings of similar content, posting ads on behalf of others, gaining unauthorized access to Plaintiffs computer systems, and using automated posting devices or computer programs that enable the submission of postings on craigslist.com without each posting being manually entered by the author thereof, including the use of any such automated posting device to submit postings in bulk for automatic submission of postings at regular intervals. (Compl. ¶ 35, Ex. A ¶¶ 7(y), 8; FAC ¶ 36 & Ex. A ¶¶ 7(y), 8.)

In an effort to prevent users from using automated posting devices, Plaintiff employs a number of security measures to protect its website. (Compl. ¶¶ 49-61; FAC ¶¶ 50-62.) These measures include providing users with temporary email addresses, telephone verification for ads, and use of "Completely Automated Public Turing test to tell Computers and Humans Apart" ("CAPTCHA") software, which is capable of determining whether an ad is being posted by a computer or a human. (Id.) Plaintiff employs CAPTCHAs to ensure that user accounts and user ads are created and posted manually (as required by the TOUs) and not by automated means. (Compl. ¶¶ 53, 54; FAC ¶¶ 54, 55.) CAPTCHAs therefore prevent automatic posters from using, accessing, and copying copyright-protected portions of Plaintiffs website, including its post to classifieds and account registration features, and protect Plaintiffs intellectual property rights. (Compl. ¶¶ 54-56, 69; FAC ¶¶ 55-57, 70.)

Plaintiff also employs telephone verification in certain categories of ads to prevent automated, repetitious, unauthorized, unlawful, and abusive postings. (Compl. ¶¶ 57-58; FAC ¶¶ 58-59.) Telephone verification also prevents posters from using, accessing, and copying...