In late July, Craigslist filed a lawsuit against a startup company called 3taps accusing it of copyright and trademark infringement for taking Craigslist housing ad posts, indexing them in a searchable database, and offering the data to third parties.
3taps on September 21 responded to Craigslist’s claims, denying the claims and raising the stakes even higher, filing a countersuit accusing Craigslist of being an anticompetitive monopoly.
Now as the two parties continue their legal battle with no quick resolution in sight, 3taps’ founder and legal experts are saying the case could be a landmark one for determining who owns and can use user-generated Web content, potentially affecting not just Craigslist posts, but other content such as tweets on Twitter and other social networking data.
“People shouldn’t have any illusions about what goes on when they put a tweet or a Craigslist ad up,” said 3taps founder and CEO Greg Kidd in a telephone interview with TPM. “It goes into a public place.”
That argument is part of what forms the core of 3taps’ counterclaim against Craigslist. As 3tap’s September filing states:
“Onboarding of classified ad content is not reasonably interchangeable with onboarding of other forms of online advertising–like search, display/banner, digital video, mobile, or rich media.”
3taps’ suit, filed in the Northern District of California, alleges Craigslist controls 90 percent of the classified ad “onboarding” market, but states that Craigslist gained this dominant position fairly, a “natural monopoly.”
However, because Craigslist sued 3taps for copyright and trademark infringement for indexing Craigslist housing ad data in a searchable format, 3taps says that this constitutes Craigslist unfairly wielding its monopoly power in one market to stifle innovation in what 3taps says is a distinct, but related market: “search-engine indexing of onboarded classified ad content,” that is, the search market for user generated content.
“It’s a problem if folks that are dominating one segment use that dominance to thwart development in another segment,” Kidd told TPM. “Craigslist dominating the onboarding market shouldn’t allow them to dictate the terms of competition in the search market.”
While legal experts aren’t ready to call the case, they do agree with Kidd’s assessment that the overall legal dispute has implications that reach far beyond the parties involved.
“If the Craigslist copyright claim with respect to user-generated content is effective, that would have important implications for copyright law online,” said Greg Lastowka, an intellectual law professor at Rutgers, in an email to TPM.
Specifically, Lastowka was referring to Craigslist’s original claims in its lawsuit filed on July 20, in which Craigslist asserts: “Before craigslist posts the ad to its website, the user is required affirmatively to accept craigslist’s TOU [terms of use] and confirm craigslist’s exclusive rights to the user-generated content.”
As Lastwoka went on:
“Many platforms use their terms of service to demand expansive rights with respect to user-generated content, but there have not been many cases where the platforms have sought to leverage those rights against third parties.”
However, as Kidd points out, Craigslist itself has waffled on the “exclusive license” to its user-generated content, briefly inserting that clause in its terms of use sometime in late July before abruptly withdrawing the “exclusive license” from the usage agreement in early August, following complaints and critiques from tech writers and user-advocacy groups.
“Craigslist already buckled on its exclusive license,” Kidd said. “They must have realized that was clearly an overreach and that’s why they took the exclusive license out of their terms of use. But when they took it out, did they stop suing us? No.”
In fact, as Kidd points out, Craigslist has yet to amend its lawsuit to change its assertion to the exclusive license to user-generated content.
Kidd says that fact alone supports his company’s claim that Craigslist’s lawsuit against 3taps is evidence of “sham litigation,” or a baseless claim designed specifically to interfere with a competitor’s business.
That’s just one of numerous accusations of anticompetitive and innovation-stifiling 3taps accuses Craigslist of pursuing in the 3taps counterclaim (grouped into five counts).
On a more sinister-sounding and technical note, 3taps also accuses Craigslist of “ghosting,” or obscuring its users’ ads from search engines and also bouncing back emails from third party services, like those that rely on 3taps’s index of Craigslist data, without telling the intended recipient of the email — the original Craigslist ad poster — that Craigslist is doing this.
“We’re pretty sure they’re doing what we say they’re doing,” Kidd told TPM. “If you conceal that fact to users and they don’t know they’re being ghosted, that’s a technically doable practice but a questionable one from a business standpoint.”
TPM has reached out to Craigslist and its law firm for a response to Kidd’s and 3taps’ claims but did not receive one in time for this article’s publication. We’ll update when we receive a response.
Kidd’s lawsuit also argues that consumers are harmed by Craigslist’s actions. In one prominent example, 3taps provided Craigslist data to another startup called PadMapper, which combined it with other real-estate listings data to generate localized maps of available housing, at least until Craigslist demanded it stop (Craigslist also filed its trademark and copyright infringement suit against PadMapper).
As 3taps lawsuit states:
“If craigslist succeeds in its efforts to use its monopoly power to inhibit 3taps’ and its partners’ competitive offerings, or even forces 3taps out of the indexing market, consumers will not have access to superior search services and superior onboarding products that real-time search engines are developing.
Still, even if 3taps wins on any of its claims, or at least doesn’t lose to Craigslist’s copyright and trademark infringement claims against it — Craigslist itself isn’t going anywhere, as Lastowka told TPM.
“I’m pretty sure Craigslist could survive losing every aspect of this case, though a ruling for 3taps would open the door to larger competitors using the data on Craigslist,” Lastowka explained.
Whatever outcome is reached, Lastowka and Kidd believe it will affect the fate of user generated content in general online.
“Some people may want their ads repacked by companies like 3taps so that it reaches a broader audience,” Lastowka wrote to TPM. “Other people may want their information to remain on Craigslist. Craigslist users may have interests at odds with both parties. For instance, users of Craigslist may want to assert their copyright interests in photos that are uploaded to the site and may want to control their subsequent use. On other user generated content platforms (e.g. Facebook), this would certainly be true.”
“It’s not just Craigslist,” Kidd said. “Twitter’s going through similar issues now. Who owns what data?”
3taps has called for a jury trial on the matter, and the evidence discovery process alone could take the better part of a year. Still, Kidd said he’d rather meet Craigslist and settle the matter before going to a jury trial, but hasn’t heard from the company about that possible route yet.
