Advanced Copyright Issues on the Internet - Fenwick & West LLP

judge also recommended an award of statutory damages in the amount of $1,000 per copy ofsoftware distributed, estimated at 470 copies (obtained by dividing the defendants’ estimatedrevenue of $40,000 by the list price of $84.95 for the software), for a total statutory damagesaward of $470,000. 588 The district court adopted the magistrate judge’s recommendations andopinion in every respect, and entered a permanent injunction against the defendants enjoiningthem from distributing software that enabled postings on Craigslist without each posting beingentered manually or that used automated means to download or otherwise obtain data fromCraigslist, from circumventing the CAPTCHA system or other technological measurescontrolling access to the site, from repeatedly posting the same or similar content on the site or inmore than one category, and from accessing or using the site for any commercial purposewhatsoever. 589(3) What Constitutes an Effective Technological Measure(i)Auto Inspection Services v. Flint Auto AuctionIn Auto Inspection Services v. Flint Auto Auction, 590 the plaintiff was the owner of anautomotive inspection program that provided a uniform method of inspecting vehicles after theterm of a lease or use had expired. The plaintiff included a quality control feature as part of theprogram that allowed it to monitor all information collected using the program. For example,when a vehicle inspector collected data for a vehicle and entered it into the program, the data hadto be sent to the plaintiff for quality control inspection before the information could beforwarded to the owner of the vehicle. In this way, the plaintiff could monitor who was usingthe program to protect against unauthorized use. 591The defendant, a former licensee of the plaintiff’s program, wrote its own automotiveinspection program to replace the plaintiff’s program. The plaintiff claimed that the defendant’sprogram was a copyright infringement. The plaintiff also claimed that its quality control featureconstituted a technical protection measure to restrict access and use of its software, and that thedefendant had violated the anti-circumvention provisions of the DMCA by circumventing thequality control feature to gain access to the plaintiff’s source code to copy it. 592The court found it questionable that the quality control feature was a technical measurethat effectively controlled access to a protected work within the purview of the DMCA. Thecourt noted that the protected work at issue was the source code of the program, and the userdetection feature was a part of the program itself that in no way controlled access to the sourcecode. Rather, it merely alerted the plaintiff as to who was using the program. Consequently, the588589590591592Id. at *48-49. The magistrate judge also recommended that an award of actual damages be made against thedefendants based on the liquidated damages clause of the Terms of Use, which provided for $200 for every adthe defendants posted as posting agents on behalf of users, for a total of $840,000. Id. at *50-52.Craigslist, Inc. v. Naturemarket, Inc., 2010 U.S. Dist. LEXIS 19977 (N.D. Cal. Mar. 5, 2010) at *1-5y.2006 U.S. Dist. LEXIS 87366 (E.D. Mich. Dec. 4, 2006).Id. at *1-2.Id. at *4-5, 22.- 140 -