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Craigslist Inc. engaged in anticompetitive behavior and copyright misuse when it filed a lawsuit for breach of contract and copyright and trademark infringement against an apartment aggregator website, according to a 75-page answer and counterclaim filed Sept. 24 in the U.S. District Court for the Northern District of California (Craigslist Inc. v. 3taps Inc., N. D. Cal., No. 12CV3816, answer and counterclaim filed 9/24/12).
3taps Inc. denied all of the allegations that craigslist had asserted in a complaint filed July 20, and it also levied a number of counterclaims against Craigslist. It claimed that Craigslist owns a monopoly in the field of online classified advertising and has repeatedly engaged in anticompetitive behavior in order to maintain its dominant market position.
The counterclaim asserted three antitrust claims under the Sherman Act, a state law unfair competition claim, and a claim for interference with economic advantage.
Craigslist is a Delaware corporation with a principal place of business in San Francisco.
The complaint stated that one of Craigslist's valuable distinctive features is the fact that it allows users to post classified ads, often of a highly personal nature, in unique local marketplaces suited for basic necessities such as employment, relationships, and housing. It does this, it said, without exposing the posters to third-party ads and marketing.
The Craigslist service bars cross-posting to multiple geographic locations or product or service categories in order to avoid duplicative entries and non-germane geographic postings.
3taps, the complaint alleged, scrapes “tens of millions” of Craigslist postings and makes the data indiscriminately available through an application programming interface “to all manner of for-profit entities to copy, repurpose, redisplay, redistribute, surround with advertisements, expose to non-local audiences, subject to marketing come-ons, disturb with unsolicited communications, and otherwise exploit commercially.”
One of the applications that uses the content aggregated by 3taps is PadMapper Inc., which allows users to search apartment listings from Craigslist and other services by location, price, and apartment size on a Google map.
3taps also denied the federal trademark and copyright infringement claims.
Apart from noting that the craiggers.com domain is no longer in use, the answer offered only a general denial of the trademark infringement claims. However, it provided some specifics with respect to the copyright infringement claims. 3taps argued that the users, not Craigslist, owned the copyrights to the classified advertisements. The answer said:
3taps admits that it provides an API to access user-generated data that craigslist has made publicly available. 3taps denies that craigslist has any exclusive rights over user-generated content. craigslist recently eliminated its requirement that users grant craigslist exclusive rights. Having offered a “free” platform for the placement of user-created classified ads intended to be read by anyone with access to the web, craigslist has no legal basis on which to claim control over the user's ad once it is placed for the world to read. As previously described, multiple data aggregators and general search engines continuously use, harvest, and re-present on the internet the facts contained in craigslist users' ads. 3taps denies that craigslist has any legal basis on which to control or obstruct further dissemination of the facts contained in these ads.
The answer also raised copyright misuse as an affirmative defense.
The majority of the counterclaim focused on Craigslist's alleged misuse of its monopoly position to stifle competition.
3taps was quick to note that it was not alleging that Craigslist improperly acquired its monopoly position in the online marketplace. Indeed, “craigslist should be applauded for bringing online classifieds into the modern age and achieving its initial dominance over various U.S. markets,” 3taps said. However, the counterclaim asserted that Craigslist has failed to innovate and has used its market strength to prevent others from providing user friendly services that incorporate data that Craigslist has made publicly available.
Craigslist thwarts competition by “targeting competitors with sham cease and desist letters and sham lawsuits” the counterclaim said. Moreover, Craigslist's copyright claims “are objectively baseless because … no reasonable litigant in craigslist's position would believe that it has the right to enforce any copyright protection associated with its users' postings.”
The counterclaim seeks an injunction against craigslist's alleged anticompetitive behavior.
3Taps Inc. is represented by Allen J. Ruby of Skadden, Arps, Slate, Meagher & Flom, Palo Alto, Calif. Craigslist is represented by Christopher Kao of Perkins Coie, Palo Alto, Calif.
Answer and counterclaim at http://pub.bna.com/ptcj/123816Sept2412.pdf
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