IP Law Daily Princeton, Facebook to face home design website’s misappropriation claims
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Thursday, July 30, 2020

Princeton, Facebook to face home design website’s misappropriation claims

By Pamela C. Maloney, J.D.

Although copyright infringement claims against Princeton and Facebook fell short, a home design website owner’s amended allegations of trade secret misappropriation were sufficient to overcome a motion to dismiss.

Certificates of copywrite registration obtained in 2019 by a home design website company did not cover works downloaded by Princeton researchers and Facebook in 2016, nor was the compilation of objects and scenes on the website copyrightable as original works, the federal district court in San Francisco ruled, dismissing infringement claims without prejudice as to the validity of registration issue. However, allegations regarding structural and legal measures taken by the website owner to protect its data files were sufficient to overcome objections to the sufficiency of trade secret misappropriation claims (UAB "Planner5D" v. Facebook, Inc., July 24, 2020, Orrick, W.).

Planner 5D operates a home design website that uses a library of some 4,500 virtual 3-D furniture items from which users were allowed to create virtual interior design scenes. Planner 5D claims copyrights in the 3-D objects and the scenes, as well as in the compilation of objects and scenes. According to Planner 5D, the copyrighted objects and scenes were "authored in Europe or Russia," and the company as well as the individuals who created the models were not U.S. nationals, domiciliaries, or residents. Planner 5D filed a lawsuit against Facebook, Inc., Facebook Technologies, LLC, and Princeton University for copyright infringement and trade secret misappropriation. The district court dismissed both claims, explaining that the infringement claim failed to meet the threshold registration requirements set forth in the Copyright Act and that the trade misappropriation claim for failure to explain how the home design website maintained the secrecy of the underlying data files and what improper means were used by Facebook and Princeton to obtain those files. Planner 5D was granted leave to address the deficiencies outlined in the court’s initial order and Facebook and Princeton moved to dismiss the amended claims.

Registration requirement. Following dismissal of its original complaint, Planner 5D obtained copyright registration certificates for the works at issue. The certificates plainly stated that the collection of scenes was completed and first published by Planner 5D in 2019. According to the complaint, Princeton’s researchers had downloaded Planner 5D works sometime around 2016 and that Facebook had copied the downloaded works sometime after that. Arguing that Planner 5D could not sue for infringement that occurred before it created the works, Facebook and Princeton moved to dismiss the infringement claims. In response, Planner 5D argued that the evidence showed that the registration applications covered all the objects it had created from 2011 through 2019 and the scenes created from 2012 to 2019. As such, the certificates themselves covered all of the objects and scene compilations Princeton scraped from its website in 2016, and which Facebook subsequently copied. Although the district court agreed that Planner 5D might have intended to cover the earlier works in its registration, a note included in the applications stated that the year of completion and publication was 2019. That note and correspondence between the Copyright Office clarified that the year of completion was 2019, which was the year stated on the certificates. Finding no authority that would allow the court to look at the underlying applications to determine the scope of the registration certificates, the court concluded that the registration did not cover the works downloaded in 2016.

The district court also ruled that the scope of Planner 5D’s registrations did not raise a question of fact. Furthermore, the court could not brush off the question of whether the registrations encompassed all of its works created between 2011 and 2019, or just those created in 2019 as mere "technical error." Whether the copyright registrations covered the 2016 works or just those created in 2019 made a difference to the outcome of the case and the district court could not conclude from the record that the copyright registrations covered the works at issued. Therefore, Planner 5D failed to sufficiently plead compliance with the Act’s registration requirements and the infringement claim was dismissed with leave to amend based on Planner 5D’s representation that it could file a registration application that covered the works at issue.

Derivative works. The court also rejected Planner 5D’s argument that the principle of derivative works should apply because the registrations encompassed each individual object and each compilation of scenes created between 2011 and 2019. The registration certificate did not identify any prior versions of the works on which the registered versions were based and Planner 5D did not plead any facts that attempted to connect the 2019 registrations to the 2016 objects and scenes.

Original selection or arrangement. The district court also found that Planner 5D’s copyright claims failed because the alleged compilation of objects did not amount to an original selection or arrangement. Although Planner 5D had alleged that its exercised authorial creativity in assembling its collection from among the virtually infinite variety of possible objects and scenes, these allegations were not enough to establish a creative selection. A selection of "all" of the works Planner 5D had created in a compilation did not automatically make the compilation original merely because Planner 5D could have created fewer or different works. Furthermore, Planner 5D did not cite any authority to support its argument that registration for a compilation extended copyright protection to the constituent elements. Therefore, the district court dismissed the claims as to the alleged "object compilations" with prejudice.

Works as trade secrets. Planner 5D’s expanded allegations that it had employed both structural and legal measures to protect its data files were sufficient to overcome Princeton’s contention that Planner 5D intended to provide free access to its object and scene data files to users, which meant that the files were not trade secrets. Specifically, Planner 5D alleged that, structurally, it had used a hard-to-guess URL and employed proprietary software to render the images, making it impossible for users to access the underlying data files without circumventing that software. In addition, the Terms of Service prohibited circumventing the structural protections via crawling, scraping, or otherwise accessing the data files.

Improper access. Explaining that the original complaint failed to explain how Princeton’s crawling and scaping constituted improper means of accessing, the district court concluded that the amended complaint sufficiently explained the reasonable steps Planner 5D had taken to protect its data files and detailed how Princeton bypassed that structure to scrape the data files. Specifically, the complaint alleged that because Planner 5D’s website hid the locations and contents of its data files, and because Princeton had to design and deploy hacking software to obtain this information, Princeton knew or should have known that Planner 5D intended for the data files to remain confidential. In addition, the Terms of Service prohibited Princeton from using any automatic devices to acquire, copy, or monitor any portion of the Planner5d project. Planner 5D also alleged that based on the many connections between Facebook and Princeton, Facebook knew or should have known that Princeton improperly had acquired data files from its website.

Based on these more specific allegations, the deficiencies of the original complaint were cured and the motions to dismiss the trade secret misappropriation claims were denied.

This case is No. 3:19-cv-03132-WHO.

Attorneys: Marc N. Bernstein (The Business Litigation Group, PC) for UAB "Planner5D" d/b/a Planner 5D. Dale Cendali (Kirkland Ellis LLP) for Facebook, Inc. and Facebook Technologies, LLC. David R. Singer (Jenner and Block LLP) for Trustees of Princeton University.

Companies: UAB "Planner5D" d/b/a Planner 5D; Facebook, Inc.; Facebook Technologies, LLC; Trustees of Princeton University

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