injunctive relief – Attorney Evan Brown

October 1, 2019 Contracts, Litigation

Court will not aid company that was banned from accessing Facebook API

Facebook’s ability to decisively police the integrity of its platforms was without question a pressing public interest.

Plaintiffs provided software-as-a-service to help their clients locate social media content, gain approval to use that content, and then re-purpose it in the clients’ own advertising and marketing activities.

Previously, plaintiffs had operated in partnership with Facebook, whereby plaintiffs had access to the Facebook Open Graph API. In late August 2019 (a few weeks after a Business Insider article identified plaintiffs as misusing the Instagram platform) Facebook terminated the marketing partnership and access to the API.

After efforts to informally resolve the situation failed, plaintiffs, perhaps emboldened by the Ninth Circuit’s recent decision in hiQ v. LinkedIn, sued Facebook and Instagram asserting a number of claims, including breach of contract and tortious interference, and also sought a declaratory judgment that plaintiffs did not violate the Computer Fraud and Abuse Act. Plaintiffs sought a temporary restraining order that would have restored access to the platforms pending the case’s determination on the merits. But the court denied the motion.

No irreparable harm likely

The court rejected plaintiffs’ argument that they would suffer irreparable harm if access was not restored. It found that plaintiffs’ allegations of imminent harms shared a common fatal flaw in that they merely alleged speculative harm – they did not sufficiently demonstrate that irreparable harm was likely to occur.

Plaintiffs did establish for purposes of this motion that much (though not all) of the work they conducted for clients before losing API access involved Facebook. But the court found that plaintiffs had not sufficiently shown that they would actually lose current customers, or fail to acquire new prospective customers, if access were not restored.

Further, the court found that plaintiffs’ CEO’s statement that “this will soon reach a tipping point where [plaintiffs] can no longer operate” was not specific enough to demonstrate there was irreparable harm. “The extraordinary relief of a pre-adjudicatory injunction demands more precision with respect to when irreparable harm will occur than ‘soon.’ Such vague statements are insufficient evidence to show a threat of extinction.”

Not in the public’s interest

The court also found that the “public’s interest caution[ed] against issuing injunctive relief at this time.”

Plaintiffs argued that the public interest favored an injunction because one would prevent the imminent destruction of plaintiffs’ business, preserve employee jobs, and generally allow plaintiffs to continue operating. Additionally, they argued that the public interest would be served by enjoining defendants’ wrongful conduct.

Defendants argued that the public had an interest in allowing Facebook to exclude those who act impermissibly on its platform and jeopardize user privacy by, in this instance, automating data collection and scraping content en masse. Defendants argued that the public has an interest in allowing them latitude to enforce rules preventing abuse of their platforms.

The court decided that awarding injunctive relief at this stage would compel Facebook to permit a suspected abuser of its platform and its users’ privacy to continue to access its platform and users’ data for weeks longer, until a preliminary injunction motion could be resolved. Moreover, as precedent within Facebook’s policy-setting organization and potentially with other courts, issuing an injunction at this stage could handicap Facebook’s ability to decisively police its social-media platforms in the first instance. Facebook’s enforcement activities would be compromised if judicial review were expected to precede rather than follow its enforcement actions.

And although the public certainly has some interest in avoiding the dissolution of companies and the accompanying loss of employment, the court found that Facebook’s ability to decisively police the integrity of its platforms was without question a pressing public interest. In particular, the court noted, the public has a strong interest in the integrity of Facebook’s platforms, policing of those platforms for abuses, and protection of users’ privacy.

Stackla, Inc. v. Facebook Inc., No. 19-5849, 2019 WL 4738288 (N.D. Cal., September 27, 2019)

May 21, 2018 Litigation, Trade Secrets

Online marketer’s misappropriation claims against publicly traded former suitor move forward

Plaintiff – a small online marketing company – sued a large, publicly-traded competitor for copyright infringement, misappropriation of trade secrets, deceptive and unfair practices, and breach of contract. The parties had previously signed a nondisclosure agreement and an agreement whereby plaintiff would provide defendant with access to plaintiff’s technology used to monitor the scope of companies’ online presence and the accuracy of information appearing in search engines. The parties had also engaged in discussions about defendant acquiring plaintiff. But after the negotiations broke off, plaintiff discovered that it appeared defendant had appropriated plaintiff’s technology (including copyright-protected materials) into defendant’s own product offerings.

The lower court entered a preliminary injunction against defendant, barring it from offering the allegedly infringing and misappropriating technology. Defendant sought review of the entry of preliminary injunction with the U.S. Court of Appeals for the Eleventh Circuit. The appellate court affirmed the order.

The appellate court rejected defendant’s argument that the lower court had not described specifically enough those trade secrets of plaintiff that defendant had allegedly misappropriated. It also rejected defendant’s arguments that plaintiff’s delay in bringing suit undermined its argument of irreparable harm, that plaintiff failed to show that it was likely to succeed on the merits of its underlying claims, and that the district court erred in weighing the balance of harm and in considering the impact on the public interest.

Advice Interactive Group, LLC v. Web.com Group, Inc., 2018 WL 2246603 (11th Cir., May 16, 2018)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

October 23, 2017 Cybersquatting, Litigation, Trademarks

Court orders transfer of domain name at preliminary injunction stage of trademark case

Plaintiff sued a competitor under the Anticybersquatting Consumer Protection Act (15 U.S.C. 1125(d) (“ACPA”)) and brought other trademark-related claims concerning the competitor’s alleged online scam of selling infringing nutritional supplement products. Plaintiff also sued the domain name privacy protection service Namecheap, which the competitor had used to register the domain name. As part of the order granting plaintiff’s motion for preliminary injunction, the court ordered Namecheap to transfer the domain name to plaintiff.

The court noted that a preliminary injunction “is an extraordinary remedy never awarded as of right,” and that the “traditional purpose of a preliminary injunction is to protect the status quo and to prevent irreparable harm during the pendency of the lawsuit.” Given these parameters, one may be reasonably surprised that the court went so far as to transfer the domain name before the case could be taken all the way through trial. Usually the transfer of the domain name is part of the final remedy awarded in a cybersquatting case, whether under the ACPA or the Uniform Domain Name Dispute Resolution Policy.

The opinion did not address the issue of whether the domain name transfer prior to trial might go further than to “protect the status quo”. It would seem the court could have just as easily protected the status quo by ordering the domain name not be used. The court apparently found the evidence to be drastically in favor of plaintiff. And since the defendant-competitor did not show up for the hearing, plaintiff’s evidence went unrebutted.

Nutramax Laboratories, Inc. v. Nutra Max Labs, Inc., 2017 WL 4707447 (D.S.C. October 20, 2017)

No infringement means no injunction in software dispute

Former members of a limited liability company, who participated in the development of four pieces of software while a part of the company, sued the LLC and its remaining members for copyright infringement. Defendants moved for summary judgment, arguing that plaintiffs’ infringement claims must fail because defendants had not used the allegedly copyrighted software outside of the licensing agreements the LLC signed while plaintiffs were still with the company. The court granted defendants’ summary judgment motion.

Plaintiffs agreed that the software had not been used outside the license agreements with companies the LLC had entered while plaintiffs were with the company. But plaintiffs still sought injunctive relief with respect to their infringement claims.

To demonstrate copyright infringement, plaintiffs were required to prove “(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.” Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 362, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991)). In this case, plaintiffs essentially conceded that the second element of the Feist test was not met.

The court cited Arista Records, LLC v. Doe 3, 604 F.3d 110, 117 (2d. Cir.2010)) to note that in the second Feist element, “the word copying is shorthand for the infringing of any of the copyright owner’s five exclusive rights described in 17 U.S.C. § 106”. Those exclusive rights allow the owner to: (1) reproduce the copyrighted work; (2) prepare derivative works based upon the copyrighted work; (3) distribute copies of the copyrighted work; (4) perform the work publicly; and (5) display the copyrighted work. Because plaintiffs conceded that defendants had not used the software outside of the license agreements with its customers that were made while plaintiffs were still a part of the LLC, defendants had not infringed on plaintiffs purported exclusive rights.

Plaintiffs nevertheless claimed that they were entitled to injunctive relief to prevent defendants’ potential future use of the copyrighted software. Plaintiffs were required to show that: (1) they had suffered an irreparable injury; (2) that remedies at law were inadequate to compensate that injury; (3) that the balance of hardships warranted a remedy in equity in favor of plaintiffs; and (4) that the public interest would not be disserved by a permanent injunction.

Here, plaintiffs conceded that they had not suffered an injury – the copyrights had not been infringed. Instead, plaintiffs were arguing for a prospective injunction to prevent defendants from infringing upon a copyright for which there was no evidence defendants intended to infringe. The court denied the injunction, holding that a prospective injunction could be entered only on the basis of current, ongoing conduct that threatened future harm.

Brightharbour Consulting, LLC v. Docuconsulting, LLC, 2014 WL 1415186 (N.D.Ga. April 14, 2014)

Evan Brown is an attorney in Chicago, advising clients in technology transactions, intellectual property disputes, and other matters involving the internet and new media.

April 17, 2013 First Amendment, Litigation

Company sued by university can continue emailing that it will not hire students

University of Illinois v. Micron Technology, Inc., No. 11-2288 (C.D.Ill, Order dated April 11, 2013)

The University of Illinois sued Micron for patent infringement. Micron sent an email to several professors that read in part:

Because Micron remains a defendant in a patent infringement lawsuit that [the University] filed against Micron in Federal court in Illinois on December 5, 2011, effective immediately, Micron will no longer recruit [University] students for open positions at any of Micron’s world-wide facilities.

The University asked the court for a preliminary injunction barring future harassing communications from Micron to any University employee. The court denied the motion, holding that:

the term “harassing” was vague and therefore the requested injunction would violate Rule 65(d)’s requirement that the injunction describe in reasonable detail the acts to be restrained
the prior restraint of speech would likely violate Micron’s First Amendment rights
the sought after preliminary injunction did not pertain to the injury alleged in the complaint

Though the court sided in favor of Micron on the question of whether to enter an injunction, it questioned the company’s motives. It found Micron’s decision to be “without tact,” and was “very concerned” that Micron was trying to interfere with the litigation. But there was not sufficient evidence for the court to draw such a conclusion.

October 23, 2011 Employment, Litigation

Court requires fired social media employee to return usernames and passwords

Ardis Health, LLC v. Nankivell, 2011 WL 4965172 (S.D.N.Y. October 19, 2011)

Defendant was hired to be plaintiffs’ “video and social media producer,” with responsibilities that included maintaining social media pages in connection with the online marketing of plaintiffs’ products. After she was terminated, she refused to tell her former employers the usernames and passwords for various social media accounts. (The case doesn’t say which ones, but it’s probably safe to assume these were Facebook pages and maybe Twitter accounts.) So plaintiffs sued, and sought a preliminary injunction requiring defendant to return the login information. The court granted the motion for preliminary injunction.

The court found that plaintiffs had come forward with sufficient evidence to support a finding of irreparable harm if the login information was not returned prior to a final disposition in the case:

Plaintiffs depend heavily on their online presence to advertise their businesses, which requires the ability to continuously update their profiles and pages and react to online trends. The inability to do so unquestionably has a negative effect on plaintiffs’ reputation and ability to remain competitive, and the magnitude of that effect is difficult, if not impossible, to quantify in monetary terms. Such injury constitutes irreparable harm.

Defendant argued there would not be irreparable harm because the web content had not been updated in over two years. But the court rejected that argument, mainly because it would have been unfair to let the defendant benefit from her own failure to perform her job responsibilities:

Defendant was employed by plaintiffs for the entirety of that period, and she acknowledges that it was her responsibility to post content to those websites. Defendant cannot use her own failure to perform her duties as a defense.

Moreover, the court found that the plaintiffs would lose out by not being able to leverage new opportunities. For example, plaintiffs had recently hopped on the copy Groupon bandwagon by participating in “daily deal” promotions. The court noted that the success of those promotions depended heavily on tie-ins with social media. So in this way the unavailability of the social media login information also contributed to irreparable harm.

March 3, 2008 First Amendment

Court lifts injunction off of Wikileaks

Court Lifts Injunction Against Web Site Accused of Posting Confidential Banking Documents

Bank Julius Baer & Co. Ltd v. Wikileaks, 535 F.Supp.2d 980, 2008 WL 554721 (N.D.Cal. February 29, 2008)

Switzerland-based Bank Julius Baer sued the Web site Wikileaks.org and the registrar of the domain name, and sought an injunction against the publication on the site of allegedly forged and confidential records of Bank Julius Baer customers. The court initially entered a permanent injunction agreed to between Julius Baer and the registrar, which called for a lockdown of the domain name’s registration. The court also, at first, entered a temporary restraining order (TRO) against the Web site, restraining the “display, use or dissemination of the property identified by [Bank Julius Baer] as private, personal banking information of its clients.”

In the days following the entry of injunctive relief, numerous parties seeking to be amicus curiae provided the court with additional information concerning the matter. This additional information led the court to reconsider the entry of the permanent injunction and the TRO. In an order dated February 29, 2008, the court dissolved both orders and denied Julius Baer’s motion for entry of a preliminary injunction.

Among the factors guiding the decision were the First Amendment and the efficacy of any injunction concerning the allegedly confidential banking information. The court noted the important free speech issues implicated, including the right to receive information as “a necessary predicate to . . . meaningful exercise” of free speech. It expressed concern that the previous publication of confidential information meant that “the cat is out of the bag,” and thus an injunction would be ineffective in protecting the privacy rights of the bank’s clients.

Further, the court found that the injunction in place was not the least restrictive means to achieve the plaintiff’s goals, and thus should be dissolved. On this point, the court suggested that a constitutionally-permissible injunction would call for limited redaction of information, while permitting the non-confidential parts of the documents to be displayed online.