Nautical Solutions Marketing Inc. won a legal case recently that dealt with issues similar to eBay's lawsuit against Bidders Edge. But in this case, the aggregator proved it was not violating copyright when it extracted information from a competitor's Web site.

"While it might be distinguishable from the Bidder's Edge case, it does show that the courts are not unanimous on this issue," said Michael A. Geist, a law professor at the University of Ottawa specializing in Internet and e-commerce law and Technology Counsel to Osler, Hoskin & Harcourt LLP.

Bidder's Edge allowed visitors to search across multiple auction sites, including eBay. eBay sued Bidder's Edge, and in 2000, a judge granted an injunction barring Bidder's Edge from using an automated system to search eBay on the grounds that it could slow the site. In 2001, Bidder's Edge settled the lawsuit with eBay and ceased operations.

"The eBay versus Bidder's Edge case was very important in our case," said G. Donovan Conwell, Jr., lawyer at Fowler White Boggs Banker, the law firm representing Nautical Solutions Marketing (NSM). Boats.com had accused NSM of trespassing when its Internet "spider" (software) visited Yachtworld.com, owned by Boats.com, and extracted facts. eBay had claimed Bidder's Edge was trespassing the eBay site, though the case was settled before going to trial.

NSM's lawyer Conwell said eBay had instructions on its Web sites telling robots to stay away, while Boats.com had instructions that robots were welcome and were invited to come back every 30 days. He said another difference in the two cases was the amount of resources used by the spiders. He said the impact of NSM software on Yachtworld.com was the same as one visitor using an AOL dial-up account.

NSM filed a lawsuit against Boats.com for defamation because of the public accusations. The jury found in favor of NSM and awarded it $250,000 in actual damages and $50,000 in punitive damages. And the judge ruled that NSM had not violated copyright when it extracted data from Yachtworld.com.

NSM used a software program that searched Yachtworld.com and other sites and extracted data from the listings, such as manufacturer, model, price, and URL of the Web page containing the yacht listing. NSM's software extracted the facts by momentarily copying the HTML of the Web page containing the yacht listing and then collecting the prescribed facts, entering the facts into a searchable database, and then discarding the HTML.

In his ruling on the case, U.S. District Judge Steven D. Merryday said NSM software's momentary copying of Yachtworld's public Web pages in order to extract facts that are unprotected by copyright law constituted a fair use, and was not an infringement of copyright.

"Individual yacht brokers, not Yachtworld.com, own the copyright to these pictures and descriptions," Judge Merryday stated in his ruling.

On eBay, individual eBay sellers own copyright, although they license non-exclusive copyright to eBay under the terms of eBay's User Agreement.

eBay has been aggressive in controlling access to its data. It recently barred a service called GoHook from archiving eBay auctions on its site. GoHook believed they had the right to store the completed auctions because they had signed contracts with eBay sellers, who gave GoHook permission to archive their own individual auctions. After it was contacted by eBay, GoHook discontinued its service and wrote a letter to customers saying it had neither the resources nor inclination to challenge eBay’s licensing claims.

GoHook's approach was different from Bidder's Edge and other aggregators in that it had signed contracts from eBay sellers allowing it to store their eBay listings. However, GoHook stored the listings in the exact same way as presented on the eBay site.

Attorney Conwell said that while facts cannot be copyrighted, you can copyright the visual presentation of the data. In NMS's case, the judge ruled that "a preponderance of the credible evidence reveals that NSM's employees "copied and pasted" only the descriptions and pictures contained in each listing rather than the HTML for the entire webpage."

The Nautical Solutions Marketing Inc. v. Boats.com ruling certainly has ramifications for Internet publishers and could have an impact on future eBay copyright disputes. But it seems unlikely eBay will loosen its aggressive stance on site access and copyright.

Copy of Judge Merryday's Ruling (Note: the following link is a PDF file.)

http://www.usedboats.com/newsletter/YachtBrokerWin.pdf