October 15, 2019

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Web Scraping Decisions Consider Contract Cause of Action

Two recent web scraping disputes highlight some important issues regarding whether a website owner may successfully allege a breach of contract action against a commercial party that has scraped website content contrary to “clickwrap” and “browsewrap” website terms of use.

In Southwest Airlines Co. v. Roundpipe, LLC, No. 18-0033 (N.D. Tex. Mar. 22, 2019), a Texas district court declined to dismiss Southwest Airlines Co.’s (“Southwest”) breach of contract claim against an entity that scraped airfare data from Southwest’s site in violation of the website terms of use. Southwest brought multiple claims against Roundpipe, LLC (“Roundpipe”) after it discovered that Roundpipe had created a website, SWMonkey.com, that, using scraping, sent consumers notifications if their Southwest ticket prices decreased after purchase (which would presumably allow them to exchange the original ticket for a lower-priced ticket).

Southwest’s website terms prohibited scraping or the use of any automated tools to access its fares or other content. Soon after the launch of SWMonkey, Southwest sent a cease and desist letter stating that Roundpipe was obtaining Southwest’s data in violation of the website terms, among other reasons, and demanded that the site be taken down.  After negotiations and additional correspondence from Southwest, Roundpipe shut down the website and disabled its scraping and fare tracking functionality.

Although it stopped scraping, Roundpipe kept the disabled SWMonkey site active and created a FAQ that included a link to an open source tool that users could use to automatically check fares on their own. Not amused, Southwest demanded that this modified site be taken down.  When Roundpipe refused– considering the matter already settled – litigation ensued.  Southwest filed suit for breach of contract, unfair competition, trademark infringement and violations of the Computer Fraud and Abuse Act (CFAA) and its state law counterpart.

In its motion to dismiss, Roundpipe brought several arguments beyond the scope of this post (including an anti-SLAPP defense and an interesting contractual estoppel theory that argued that Southwest had implicitly agreed not to sue if Roundpipe complied with its C&D letters, a defense the court declined to consider in its discretion as it would involve factual issues outside the pleadings). Regarding the breach of contract claim, the court concluded that Southwest’s complaint stated a plausible claim because Southwest pled the existence of a valid contract (e.g., website terms) and Southwest explained how Roundpipe’s scraping breached the terms and caused damage to Southwest. The court necessarily assumed, without much analysis, that Southwest’s website terms were enforceable against Roundpipe.  The decision does not offer great detail into how Southwest’s website terms were presented but it appears that the terms were a browsewrap agreement. Without going into any analysis of whether Roundpipe had actual or constructive notice of such terms, the court appears to have assumed that Roundpipe had notice of the browsewrap terms because Southwest had sent multiple cease and desist letters informing Roundpipe of its violation of the terms (a holding that would accord with the recent CouponCabin scraping dispute, where an Illinois court allowed a contract claim to go forward based on the allegation that the defendant received the C&D letter from website operator that highlighted the terms yet still continued to access the site despite this knowledge).

Following the decision, in May 2019, the parties settled the matter and Roundpipe entered into a consent judgment and permanent injunction barring it from, among other things, scraping airfares from Southwest’s site or otherwise accessing the site in violation of the terms.

This past May another scraping-related controversy was decided that touched on similar contractual claims. In Int’l Council of Shopping Ctrs., Inc. v. Info Quarter, LLC, No. 17-5526 (S.D.N.Y. May 7, 2019), the Southern District of New York granted the plaintiff’s request for a default judgment on some scraping-related claims (e.g., unfair competition and a permanent injunction on its Lanham Act cause of action), and left intact, but refused to grant a default judgment on its breach of contract claim because the plaintiff did not sufficiently specify a measure of damages in its petition.

The plaintiff, Int’l Council of Shopping Centers, Inc. (“ICSC”), a trade organization, brought suit against Info Quarter, LLC (“Info Quarter”), an offshore data miner that allegedly scraped and copied ICSC’s membership listings and used the directory data to send sales solicitations to ICSC members. According to the complaint, as the defendant registered for an ICSC membership to access to member directory, the defendant necessarily was required to agree to the ICSC Terms and Conditions for Membership (“Membership Terms”), which prohibited copying the proprietary ICSC membership directory. The defendant also registered for ICSC events and agreed to a separate Event Registration Terms and Conditions. ICSC claimed that both agreements expressly required registered users to observe and abide by additional terms or conditions communicated to the user, including the website terms communicated via a browsewrap agreement (which contained a forum selection clause).

ICSC advanced several causes of action, most notably, breach of contract and unfair competition. In a September 2018 ruling, the court refused to dismiss the breach of contract claim, finding that the defendant had actual or constructive notice of the Membership terms due to its registration on the ICSC website.  Moreover, in enforcing the forum selection clause contained in the ICSC website terms, the court noted even if the only contractual terms at issue were presented as a browsewrap, that “browsewrap agreements are typically only enforced in cases that ‘have involved users who are businesses.’”  Accepting the allegations of plaintiff’s complaint as true, the court deemed the defendant a “sophisticated party” and therefore assumed that the defendant was on notice, or had constructive notice, of ICSC’s website terms and the forum selection clause it contained.

In all, both cases shed some light into the availability of a breach of contract action against entities engaged in unwanted web scraping contrary to website terms, particularly in the uncertain area of law surrounding the enforcement of browsewrap agreements. The cases suggest that the enforceability of website terms may, in some cases, be contingent on instances of actual or constructive notice of the terms that occur outside ordinary access of a website (e.g., acceptance of related agreements that reference the website terms, receipt of a cease and desist letter outlining the terms and the recipient’s violations of said terms, or being a sophisticated commercial party that presumably may be deemed to have constructive notice of a website browsewrap agreement).

In addition, in the Southwest dispute, Roundpipe raised an interesting argument that it did not believe its scraping activities were unlawful because scraping public website data was not against the law – a view shared by many website aggregators and digital rights advocates that assert that usefulness of the open internet rests upon the free exchange of public data. Indeed, the landmark hiQ decision(currently pending in the Ninth Circuit) addressed similar reasoning. We await the issuance of the Ninth Circuit’s decision in hiQ, as the resolution of this unsettled issue will certainly impact the openness of website data for both established sites and upstarts in the marketplace.

© 2019 Proskauer Rose LLP.

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About this Author

Jeffrey D Neuburger, Proskauer Rose Law Firm, Technology Attorney
Partner

Jeffrey Neuburger is co-head of Proskauer’s Technology, Media & Telecommunications Group, head of the Firm’s Blockchain Group and a member of the Firm’s Privacy & Cybersecurity Group.

Jeff’s practice focuses on technology, media and intellectual property-related transactions, counseling and dispute resolution. That expertise, combined with his professional experience at General Electric and academic experience in computer science, makes him a leader in the field.

As one of the architects of the technology law...

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