Wednesday, November 17, 2010

Ex-Affiliate Scraped My Touch-Up Paint Database

Dear Rich: I have a website at Another site copied my entire color database and used it to create their site and sell touch up paint. I actually know this individual as he used to be an affiliate of and I used to pay him for referring sales to my site. My color list was based on customer requests for specific paints and these colors would ONLY be available in this format on The infringing site lists the exact same color and codes as my site here. (He copied the tens of thousands of colors from my site. He obviously used a program that automated the process of downloading all my color database information.) I only have a general copyright on my site. My company is in Nevada and the other site is based in New Jersey. Wow, the Dear Rich staffloves touch-up paint and will never forget the first time we used it to hide certain incidents from certain people (Or as Walter Matthau told his amazing wife, Carol, after stealing her cash for gambling purposes, "Sorry darling ...").
Right, you had a question. We checked out the other site. Yes, it looks like your database has been ripped off. You have two challenges: (1) You have to categorize the ripoff as a valid legal claim, and (2) you need to find out if there's a way to sue in Nevada (otherwise, you will you have to hire an attorney in New Jersey).
(1) Making a Valid Legal Claim. Okay, here's a long-winded explanation of the possibilities:
  • The Affiliate Relationship. You say the owner of the other site used to be your affiliate. Did you enter into an affiliate agreement (some sort of click-to-accept agreement that sets out the terms of the affiliate relationship)? If so, you may have  a few choices available to you. For example, many affiliate agreements prohibit reverse engineering, "scraping" of your site's code, and similar types of behavior. Affiliate agreements also often contain things like attorney fees provisions, or jurisdiction clauses (and that may require the other party to consent to Nevada jurisdiction). If an agreement exists, that could be your best strategy.
  • Terms and Conditions. A second (and similar) route is to enforce the terms and conditions of use of your website. The terms and conditions of your site prohibit reposting of the material and also require that lawsuits be filed in Nevada. That may assist you. However, we don't see a mechanism by which the user of your site must agree with those terms and conditions before proceeding. For example, we don't see a box to check when registering that says "I agree to abide by the terms and conditions of this website." That would certainly help as the enforcement of end user agreements usually requires that the other party demonstrate some form of consent to the terms and conditions. 
  • Copyright Claims. If you can't rely on the affiliate agreement, you may be able to pursue copyright infringement. If the other site "scraped" your site, you may have a claim for copyright infringement of your site's code, or alternatively, of your database. (You'll need to demonstrate that your database is sufficiently unique and required some judgment or creative skill to create.) We talk about database protection in more detail, here. You should register copyright applications for both the website and for the database using the Copyright Office's system for electronic registration (and you'll get a registration back within six to eight weeks). If you need a registration sooner than that, you could speed it up by using a more expensive special handling system.
  • Unfair Business Practices. There is also a patchwork set of state laws known as unfair competition lawsthat prohibit sleazy business practices and scraping of your site may qualify as such. 
(2) Jurisdiction. We mentioned jurisdiction (which refers to where you would have to sue). A lawyer can best advise you on how to proceed but we think that you may have a reasonable basis to sue in your home state of Nevada based on the previous affiliate relationship, your terms and conditions, and possibly because the other site may have customers in Nevada. All of these are factors in determining long-arm jurisdiction. You can read more about it here.