100 F. Supp. 2d 1058 (N.D. Cal. 2000)
eBay, Inc. operates an Internet-based person-to-person trading site that allows sellers to list items for auction and buyers to search listings and place bids directly with sellers.1 The site has over 7 million registered users, adds more than 400,000 new items daily, receives 10 million searches per day, and processes 600 bids per minute across nearly 3 million items.2 Users register by clicking an “I Accept” button on a seven-page User Agreement that prohibits robots, spiders, or other automated devices from monitoring or copying web pages without prior written permission.3
Bidder’s Edge, Inc., a 22-employee company founded in 1997, operates an auction aggregation site that compiles data from more than one hundred auction sites into its own database containing over five million items.4 When a user searches on the BE site, the site queries its database rather than the original host sites. Approximately 69 percent of the items in BE’s database come from eBay auctions, and BE estimates it would lose one-third of its users if it stopped covering eBay.5
In early 1998 eBay permitted BE to include Beanie Babies and Furbies listings. In April 1999 eBay verbally approved BE crawling the site for a 90-day period while the parties negotiated a licensing agreement, but they failed to reach terms.6 After BE briefly stopped posting eBay listings in late August or early September 1999 and then resumed in November, eBay sent a November 9 letter demanding that BE cease access, alleging trespass, and offering a license.7 eBay then blocked 169 IP addresses it believed BE was using; BE evaded the blocks by routing queries through proxy servers.8
BE sent eBay’s systems between 80,000 and 100,000 requests per day, accounting for 0.70 to 1.53 percent of eBay’s requests and data transfer during October and November 1999.9 eBay calculated alleged damages of $45,323 to $61,804 over ten months but did not identify specific incremental costs caused by BE.10 The motion for a preliminary injunction was heard on April 14, 2000.11
Whether eBay demonstrated a possibility of irreparable system harm from Bidder’s Edge’s continued automated access?12
To obtain preliminary injunctive relief, a movant must demonstrate either a likelihood of success on the merits and the possibility of irreparable injury, or that serious questions going to the merits were raised and the balance of hardships tips sharply in its favor.13 The critical element is the relative hardship to the parties.14 Harm resulting from lost profits and lost customer goodwill is irreparable because it is neither easily calculable nor easily compensable.15
Yes. The court first evaluated the balance of harm and found that eBay established at least a possibility of irreparable system harm.16 eBay showed that Bidder’s Edge sent between 80,000 and 100,000 requests per day to eBay’s systems.17 If allowed to continue unchecked, this activity would encourage other auction aggregators to engage in similar recursive searching, leading to reduced system performance, system unavailability, or data losses.18
Such harms would inflict lost profits and lost customer goodwill on eBay.19 The court rejected Bidder’s Edge’s argument that its current load was negligible, noting that the threat of increased activity from multiple similar actors created the requisite possibility of irreparable harm.20 eBay’s delay in seeking relief was justified by good-faith licensing negotiations and self-help attempts, and its limited licensing to selected aggregators did not rebut the presumption of harm.21
eBay demonstrated a possibility of irreparable system harm from Bidder’s Edge’s continued automated access.22
Whether the balance of hardships tipped sharply in eBay’s favor?23
If the balance of harm tips decidedly toward the plaintiff, then the plaintiff need not show as robust a likelihood of success on the merits.24 Any harm to the defendant that results from being preliminarily enjoined from continuing to infringe or trespass is legally irrelevant once a strong likelihood of success on the merits is shown.25
Yes. Although Bidder’s Edge alleged that an injunction would cause a two-thirds decrease in listed items and reduce its value from $80 million to $70 million, this harm was not legally cognizable.26 It resulted from being forced to cease an ongoing trespass.27 eBay had established a strong likelihood of success on the trespass claim. Bidder’s Edge suffered no irreparable harm during the period it voluntarily ceased crawling.28
Any potential economic harm to Bidder’s Edge could be addressed through an adequate bond.29 The court therefore concluded that the balance of hardships did not weigh in Bidder’s Edge’s favor.30
The balance of hardships tipped sharply in eBay’s favor.31
Whether eBay showed a strong likelihood of success on the merits of its trespass to chattels claim?32
Trespass to chattels lies where an intentional interference with the possession of personal property has proximately caused injury.33 To prevail, the plaintiff must establish that the defendant intentionally and without authorization interfered with the plaintiff’s possessory interest in the computer system and that the unauthorized use proximately resulted in damage.34 Conduct that consists of intermeddling with or use of another’s personal property is sufficient even without substantial interference.35
Yes. eBay showed a strong likelihood of proving both elements.36 Bidder’s Edge intentionally employed an automated program to connect with and search eBay’s database, continuing even after eBay demanded termination and despite eBay’s robot exclusion headers and IP blocks.37 This access exceeded the scope of any consent and was therefore unauthorized.38
Bidder’s Edge’s 80,000 to 100,000 daily requests used a portion of eBay’s bandwidth and server capacity, depriving eBay of the ability to use that portion of its personal property for its own purposes.39 This intermeddling diminished the quality and value of eBay’s computer systems.40 The court rejected the argument that the load was negligible, holding that any deprivation of use satisfies the injury element and that eBay need not wait for a substantial impairment before seeking relief.41
eBay showed a strong likelihood of success on the merits of its trespass to chattels claim.42
Whether the trespass claim was preempted by federal copyright law?43
A state law cause of action is preempted by the Copyright Act if the rights asserted under state law are equivalent to those protected by the Copyright Act.44 The work involved must also fall within the subject matter of the Copyright Act.45 In order not to be equivalent, the right under state law must have an extra element that changes the nature of the action so that it is qualitatively different from a copyright infringement claim.46
No. The trespass claim asserts eBay’s right to exclude others from using its physical computer systems without authorization.47 This right to exclude others from physical personal property is not equivalent to any rights protected by copyright.48 The claim arises from Bidder’s Edge’s unauthorized access and use of the systems themselves rather than from what Bidder’s Edge does with the information it gathers.49 The extra element of unauthorized physical interference with personal property makes the trespass claim qualitatively different from copyright infringement.50
The trespass claim was not preempted by federal copyright law.51
Whether the public interest weighed against granting preliminary injunctive relief?52
The traditional equitable criteria for determining whether an injunction should issue include whether the public interest favors granting the injunction.53 Anticompetitive behavior may be considered where it constitutes an affirmative defense, but it is not appropriately considered in the context of a trespass to chattels claim that has no equivalent affirmative defense.54
No. The parties presented conflicting declarations about whether the Internet would cease to function if property rights were not respected or if information could not be universally accessed.55 The court was unable to determine on the limited record which balance would maximize the public good.56 Bidder’s Edge’s allegation of anticompetitive behavior by eBay did not weigh against relief because there is no equivalent affirmative defense to trespass to chattels.57 The court therefore concluded that the public interest did not weigh against granting the preliminary injunction.58
The public interest did not weigh against granting preliminary injunctive relief.59