Phantomalert, Inc. v. Google Inc.

Decision Date14 December 2015
Docket NumberCase No. 15-cv-03986-JCS
CourtU.S. District Court — Northern District of California
PartiesPHANTOMALERT, INC., Plaintiff, v. GOOGLE INC., et al., Defendants.

Plaintiff PhantomALERT, Inc. ("PhantomALERT") has created navigation applications for mobile telephones and GPS devices and maintains a proprietary database ("the Points of Interest database") that is used with these applications (the "Apps"). PhantomALERT alleges that Defendants Google Inc. ("Google") and Waze, Inc. ("Waze") copied the Points of Interest database and are using it for their own benefit. Based on these allegations, Plaintiff asserts copyright infringement and conversion claims against Google and Waze. Defendants bring a Motion to Dismiss ("the Motion") seeking dismissal of all of Plaintiff's claims. A hearing on the Motion was held on December 4, 2015 at 9:30 a.m. For the reasons stated below, the Motion is GRANTED in part.1

A. The Complaint

PhantomALERT is a Delaware corporation with its primary place of business in the District of Columbia. Compl. ¶ 13. According to Plaintiff, both Google and Waze are Delawarecorporations with their primary offices in Mountain View, California. Id. ¶¶ 14-15.

Plaintiff alleges that it "has created Global Positioning System ('GPS')-based navigation applications for mobile phones and GPS devices" that "notify users of the location of traffic conditions, road hazards, and traffic enforcement monitors, such as speed cameras (collectively, the 'Points of Interest')." Id. ¶¶ 1-2. It licenses these Apps to end-users and to GPS device manufacturers. Id. ¶ 2. PhantomALERT alleges that "[o]ver the last seven years, [it] has engaged in a systematic process of identifying the Points of Interest for its Apps, evaluating which Points of Interest would be of importance to users of the Apps, vetting the accuracy of the Points of Interest, organizing the Points of Interest, and refining the data associated with the Points of Interest." Id. ¶ 3. According to PhantomALERT, it created and maintains a proprietary database of these Points of Interest (the "Database" or the "Points of Interest database"), which can be accessed in real time by its Apps and displayed on a GPS-generated electronic map. Id. ¶ 4. PhantomALERT applied for a registration with the United States Copyright Office and on August 20, 2015, the U.S. Copyright Office issued a copyright registration, No. TXu001954208, covering its App source code and its Points of Interest database as a compilation. Id. ¶¶ 5, 26.

PhantomALERT alleges that it began developing its Apps in 2008. Id. ¶ 17. It alleges that it "uses a systematic process for selecting, coordinating, and arranging information about the Points of Interest," whereby it first allows users to "submit potential Points of Interest to PhantomALERT through the Apps" and then "evaluates whether a Point of Interest submitted by a user is a genuine Point of Interest based on a proprietary formula as well as human judgment." Id. ¶¶ 19-21. If PhantomALERT decides that a Point of Interest should be included in the Database, it then "refines the geographic and other data associated with the Point of Interest so that the Point of Interest is displayed in the most helpful location on users' GPS-generated maps, with the optimal amount of advance warning to the user." Id. ¶ 22. Finally, "PhantomALERT reviews the timing of the various users' reports for a particular Point of Interest to ensure that the Point of Interest remains relevant." Id. ¶ 23. Thus, for example, a speed trap may be removed from the database if there have been no recent reports of the trap. Id.

PhantomALERT alleges that Defendant Waze is a wholly owned subsidiary of WazeMobile Ltd., an Israeli Company formed in 2007. Id. ¶ 27. According to Plaintiff, Waze competed with PhantomALERT by operating a GPS-based application that "provides route information and traffic details, including accidents, congestion, and speed and police traps" until June 2013, when "Google acquired all of the assets and liabilities of Waze, and Waze was merged into Google." Id. ¶¶ 28, 31. PhantomALERT alleges that Google has operated the Waze app since it acquired Waze. Id. ¶ 32.

According to Plaintiff, on July 30, 2010, the CEO of Waze sent the CEO of PhantomALERT an email proposing that the two companies cooperate in the operation of their respective GPS-mapping companies. Id. ¶ 33. In a telephone conversation the same day, Waze's CEO proposed that the companies exchange their respective Points of Interest databases, but PhantomALERT's CEO declined the offer because "Waze did not appear to have substantial data to share." Id. ¶ 34. Plaintiff alleges, on information and belief, that in late 2012 "Waze copied the PhantomALERT Points of Interest database in its entirety . . . without any authorization or consent." Id. ¶ 45. Plaintiff further alleges, on information and belief, that "Waze copied the PhantomALERT Points of Interest database on multiple, additional occasions as the database was updated, starting in or around late 2012." Id. ¶ 36. PhantomALERT alleges that the data was incorporated in modified form into Waze's database and could be viewed by users of the Waze application. Id. ¶¶ 37-38. According to PhantomALERT, it "determined that Waze had copied its Points of Interest database by observing the presence of fictitious Points of Interest in the Waze application, which PhantomALERT had seeded into its own database for the purpose of detecting copying." Id. ¶ 39. PhantomALERT alleges that Defendants have "wrongfully profited from their copying and use of the PhantomALERT Points of Interest database, and PhantomALERT has been harmed." Id. ¶ 8.

Plaintiff asserts claims for copyright infringement and conversion against Waze and Google. In the Copyright cause of action, Plaintiff alleges that its Points of Interest database is an "original, creative work" and that it is protected as a compilation under a valid copyright registration, No. TXu001954208. Id. ¶¶ 44-45. Plaintiff alleges, on information and belief, that Defendants copied and reproduced the Database without its consent and "prepared derivativeworks" of the Database. Id. ¶¶ 46-47. According to Plaintiff, the Database, or "derivative works thereof," were publicly displayed by Defendants starting in late 2012 and continuing past June 2013. Id. ¶¶ 49-50. According to PhantomALERT, "in June 2013, Google acquired all of Waze's liabilities, including all liability associated with Waze's copyright infringement." Id. ¶ 51. In addition, Plaintiff alleges on information and belief that "following Google's acquisition of Waze, Google incorporated aspects of the Waze application, including information from the PhantomALERT Points of Interest database, into Google's own mapping services" and that it "reproduced the information from the Points of Interest database, created derivative works from the information, displayed the information, and sold or leased the information to users through an end user license agreement." Id. ¶ 52.

In the conversion cause of action, PhantomALERT alleges that it owns the Database, that Waze copied the Database and "incorporated the data into the Waze application, thereby disposing of PhantomALERT's property in a manner inconsistent with PhantomALERT's possession of that property" and that "Google acquired all of Waze's liabilities, including all liability associated with Waze's wrongful conversion of the PhantomALERT database." Id. ¶¶ 55-57.

In the Prayer, Plaintiff asks the Court to award compensatory damages for its own lost profits and Defendants' wrongful profits, "including through the calculation of a reasonable royalty" under the Copyright Act and to enjoin Defendants' operation of the Waze website and app. Id. at 8.

B. Contentions of the Parties

In the Motion, Defendants assert that Plaintiff's claims should be dismissed under Rule 12(b)(6) of the Federal Rules of Civil Procedure because: 1) neither the information contained in the Points of Interest database nor the Database as a whole is protectable under copyright law and in any event, the claim is insufficiently pled; 2) the conversion claim is preempted by federal copyright law and Plaintiff has not alleged the required element of dispossession; and 3) both claims fail as to Google because facts subject to judicial notice establish that Google is merely an acquiring shareholder of Waze and therefore is not liable for the past acts of Waze; moreover, allegations that Google used data it obtained from the Waze database in its own application areinsufficient because Plaintiff does not allege Google had access to or copied Plaintiff's Database and the data are unprotectable facts. Motion at 1-3.

Defendants contend the copyright claim fails because Plaintiff alleges that Defendants copied only facts, which are not subject to copyright protection. Id. at 5-6 (citing Feist Publ'ns, Inc. v. Rural Tel. Serv. Co, 499 U.S. 340, 361 (1991)). Even if the "facts" are false, Defendants argue, they are afforded no copyright protection. Id. at 6 (citing BanxCorp v. Costco Wholesale Corp., 978 F. Supp. 2d 280, 304 (S.D.N.Y. 2013); Nester's Map & Guide Corp. v. Hagstrom Map Co., 796 F. Supp. 729, 733 (E.D.N.Y. 1992); Alexandria Drafting Co. v. Amsterdam, No. CIV. A. 95-1987, 1997 WL 325769, at *8 (E.D. Pa. June 4, 1997); RAYMOND T. NIMMER, 1 INFORMATION LAW § 3:24 (2015); WILLIAM F. PATRY, 2 PATRY ON COPYRIGHT § 3:117 (2015)). Further, Defendants argue that Plaintiff only alleges that some of the Points of Interest from its Database appeared on the Waze app; aside from conclusory allegations, Plaintiff does not allege that Defendants copied the Database's "particular selection or arrangement." Id. at 6. These Points of Interest are purely factual and do not constitute original material, Defendants contend. Id....

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