Snap-on Bus. Solutions Inc v. O'neil & Assoc.s Inc, Case No. 5:09-CV-1547.

• Decision Date: 16 April 2010
• Docket Number: Case No. 5:09-CV-1547.
• Citation: 708 F.Supp.2d 669
• Parties: SNAP-ON BUSINESS SOLUTIONS INC., Plaintiff,v.O'NEIL & ASSOCIATES, INC., Defendant.
• Court: U.S. District Court — Northern District of Ohio

708 F.Supp.2d 669

SNAP-ON BUSINESS SOLUTIONS INC., Plaintiff,v.O'NEIL & ASSOCIATES, INC., Defendant.

Case No. 5:09-CV-1547.

United States District Court N.D. Ohio.

April 16, 2010.

COPYRIGHT MATERIAL OMITTED

Amanda H. Wilcox, R. Eric Gaum, Cleveland, OH, Phillip G. Eckenrode, Jr., Columbus, OH, for Plaintiff.

Alan B. Parker, Roy A. Hulme, Reminger & Reminger, Cleveland, OH, Matthew L. Schrader, Reminger & Reminger, Columbus, OH, for Defendant.

OPINION & ORDER: [Resolving Doc. No 41 ]

JAMES S. GWIN, District Judge.

In this computer trespass and copyright case, Defendant O'Neil & Associates, Inc. (“O'Neil”), moves this Court for summary judgment. Defendant O'Neil and Plaintiff Snap-on Business Solutions, Inc. (“Snap-on”), compete with one another in the electronic database market. Plaintiff Snap-On claims that the Defendant unlawfully accessed its servers and copied a database Snap-on had created for its client Mitsubishi Caterpillar Forklift (“Mitsubishi”). In response, O'Neil says that Mitsubishi owned the copied data and Mitsubishi had given O'Neil the right to access the database.

For the following reasons, this Court GRANTS IN PART and DENIES IN PART the Defendant's Motion for Summary Judgment.

I. Background

Plaintiff Snap-on provides electronic parts catalogs for clients in the automotive and heavy equipment industries. Customers give Snap-on raw data, such as parts catalogues, and Snap-on creates a searchable database with linked data and images. In 2007, one of Snap-on's clients, Mitsubishi, began considering whether to move its on-line parts catalog from Snap-on to Defendant O'Neil. When Mitsubishi and Snap-on disagreed about Mitsubishi's rights to the information in the Snap-on database, however, Mitsubishi directed Defendant O'Neil to run a data retrieval program to recover data and images on Snap-on's servers. Although the parties dispute the nature and ownership of the data O'Neil took from Snap-on's computers, the parties agree that O'Neil took data in April, May, and June 2009. Snap-on filed this lawsuit on July 7, 2009.

Although the two companies had already been doing business with one another for several years, Snap-on and Mitsubishi entered into their most recent contract in June 2005.¹ [Doc 44-1.] Under the contract, Snap-on licensed use of its Net-Compass software to Mitsubishi, and Mitsubishi agreed to supply Snap-on with catalog data to upload into the software. [ Id.] After incorporating Mitsubishi's data into its software, Snap-on would then license the finished “system” to Mitsubishi. [ Id.]

The License Agreement contained a specific provision setting out the scope of the license:

[Mitsubishi] may use the Software internally and may permit Dealers to use the Software only in connection with their authorized use of [Mitsubishi]'s Data. [Mitsubishi] shall require all access to the Software to be limited to individuals associated with Dealers who are registered to use the System and to whom a user ID and password have been assigned. [Mitsubishi] shall require its personnel who use the System and all Dealers to maintain the confidentiality of their respective user IDs and passwords and to use the Software only for its intended purpose as part of the System.

[Doc 44-1 at 3.]

In addition to the License Agreement, the parties executed a Web Hosting Agreement. [Doc 44-3.] Under this agreement, Snap-on would “host” the software and Mitsubishi's content on Snap-on's servers and make the system available to Mitsubishi via a website.² [ Id. at 1.] Mitsubishi, however, would retain sole responsibility for securing the website domain name and maintaining the website content. [ Id. at 1-2.]

This Web Hosting Agreement also established security responsibilities between the parties. While Snap-on agreed to provide “host network security,” Mitsubishi would be “solely responsible for authorization security.” [Doc. 44-3 at 8.] Accordingly, the parties gave Mitsubishi sole responsibility “for assigning user names and passwords to authorized users.” [ Id.] Nevertheless, Snap-on would grant Mitsubishi “limited rights to access the Customer Web Site using an administrator user name and password for the purpose of administering the user names and passwords of authorized users ....” [ Id.] Mitsubishi correspondingly agreed “not to use the access granted to the Customer Web Site for any other purpose without the express prior written consent of [Snap-on].” [ Id.]

Given that both parties contributed data and proprietary information to the system, the various agreements also set out ownership rights between the parties. For example, the Web Hosting Agreement stated that:

All materials, including, but not limited to any computer software, data or information developed or provided by [Snap-on] or its affiliates, suppliers or agents pursuant to this Agreement, and any know-how, methodologies, equipment or processes used by [Snap-on] to provide the Hosting Services to Customer ... shall remain the sole and exclusive property of [Snap-on] or its suppliers.

[Doc. 44-3 at 4.] Conversely, Snap-on acknowledged that the “Data constitutes a Trade Secret of [Mitsubishi],” and agreed, “not to use, disclose, replicate, copy, transfer, market, sell or distribute” that data unless permitted under the Agreement. [Doc. 44-1 at 6.]

Under these agreements, Mitsubishi provided parts data to Snap-on, largely in the form of paper parts catalogs and services manuals for Mitsubishi's various products. [Doc. 47-2 at 2, 49-2 at 3.] According to Snap-on senior program manager Jewel Drass, Snap-on then converted the paper catalogs into digital information and created a “data tree” ordered by product lines, models, and other sub-categories. [Doc. 47-2 at 3.] Mitsubishi continued to provide new data to Snap-on whenever the company updated its parts catalogs or published service bulletins. [Doc. 41-6 at 17-21.]

After uploading the data, Snap-on also manually created “hot spots” for any images stored in the database and “NodeID” links that connect data from level to level in the data tree. [ Id.] According to Mitsubishi's Director of Parts Jay Gusler, the hot spots are “relationships between spots on the picture and specific part numbers on the parts list.” [Doc. 49-2 at 4.] Manger Drass says that both the hot spots and NodeID links are wholly original and proprietary to Snap-on. [Doc. 41-6 at 17-21.] Snap-on also provided connections between part numbers and services bulletins and created a notation when a part number had been superseded. [ Id. at 4-5.]

Sometime after the parties entered into the 2005 agreements, Mitsubishi approached Snap-on to request a copy of its parts data in electronic format. [Doc. 41-6 at 3-7, 49-10.] Then, as now, the parties disputed Mitsubishi's ownership in the information stored on Snap-On's database. Regardless, Snap-on offered to sell Mitsubishi the electronic information with minimal if any enhancements for one price and with full enhancements-hot spots, links, photographs-for a much larger sum. [Doc. 49-10.] Mitsubishi, believing it had already paid for the enhanced data as part of its licensing relationship with Snap-on, refused the offer. [Doc. 41-6 at 9-11, 13.]

In 2007 Mitsubishi began talks with Defendant O'Neil about putting “solutions and processes in place to help [Mitsubishi] better serve [its] dealer network end users.” [Doc. 47-13.] In October 2008, the two parties entered into a letter agreement under which O'Neil would provide an “electronic parts catalogue and parts content management” services to Mitsubishi, apparently to replace Snap-on. [Doc. 49-9.]

In order to create the new system and catalog, however, Defendant O'Neil needed electronic versions of Mitsubishi's parts manuals, price information, graphics, service information, and other content. [Doc. 49-1 at 4-5.] Although Mitsubishi apparently had some paper copies of this data, akin to what it had originally provided to Snap-on, [Doc. 49-1 at 5 ], Mitsubishi concluded that “it was not economical to provide data” in that manner because “the paper did not have ... any tangible information behind it. It was one-basically one big image.” [Doc. 49-1 at 5-6.]

As a solution, Defendant O'Neil suggested that it could use a scraper tool to retrieve the electronic data from the Mitsubishi/Snap-on system. [Doc. 41-3 at 4-6.] This automated tool, designed by O'Neil, would access Snap-on's database, copy information stored on the system, and save it onto O'Neil's database where O'Neil could then analyze and manipulate it. [Doc. 41-5 at 12-20.] According to O'Neil employee David Stackhouse, the scraper tool would generally:

simulate what a user could do interactively with the website by pointing and clicking, only it's automated, and, therefore, able to point, click and do other things that the user would do in an automated manner, making it able to run unattended in a much more efficient way .... And then when it interacts with the site, then it then copies what data it can via that interaction and stores it.

[Doc. 41-8 at 6.]

According to O'Neil employee Armando Monzon, O'Neil only wanted to gather “raw data” from Snap-on.³ [Doc. 41-5 at 19.] After copying this raw data, O'Neil would then “enrich” it by creating various associations and hyperlinks, standardizing it, and consolidating it to work in the O'Neil-designed system. [Doc. 41-7 at 8.]

Ultimately, Mitsubishi agreed to have Defendant O'Neil run the scraping program. Mitsubishi provided O'Neil with a spreadsheet “checklist” so that O'Neil could ensure it had obtained all of the data needed. [Doc 49-12, 49-3 at 11.] Because the scraper tool mimicked a user accessing the password-protected website, Mitsubishi also gave O'Neil approximately thirty existing logon credentials. [Doc. 49-4 at 8-9.] Mitsubishi's parts manager Samuel Herrick testified that O'Neil used existing credentials-ones Mitsubishi had also assigned to several of Mitsubishi's dealers-to avoid detection by Snap-on. [Doc. 49-4 at 8-9.]...