April 23, 2014

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A Response to Jerry: Craig Should Still Dismiss

[Cross-posted on my blog, Managing Miracles]

Jerry Brito, a sometimes contributor to this blog, has a new post on the Reason blog arguing that I and others have been too harsh on Craigslist for their recent lawsuit. As I wrote in my earlier post, Craigslist should give up the lawsuit not just because it’s unlikely to prevail, but also because it risks setting bad precedents and is downright distasteful. Jerry argues that what the startups that scrape Craigslist data are doing doesn’t “sit well,” and that there are a several reasons to temper criticism of Craigslist.

I remain unconvinced.

To begin with, the notion that something doesn’t “sit well” is not necessarily a good indicator that one can or should prevail in legal action. To be sure, tort law (and common law more generally) develops in part out of our collective notion of what does or doesn’t seem right. Jerry concedes that the copyright claims are bogus, and that the CFAA claims are ill-advised, so we’re left with doctrines like misappropriation and trespass to chattels. I’ll get to those in a moment.

First, there is a bit of confusion around the copyright claims, so it’s worth revisiting them. The court held that Craigslist unambiguously does not hold copyright in user-created postings, except for those three ill-fated weeks last summer when they instituted that horrible terms of service. At all other times, they do not own the posts. However, Jerry’s claim–which has been made by others–that no copyright exists in these posts whatsoever, seems weak. As the court noted, at this stage of the proceedings it portrays Craigslist’s claim of copyrightability in the “most favorable light” and concludes that the claim:

sufficiently alleges that users’ posts on the Craigslist site have a level of creativity that is not “so trivial as to be virtually nonexistent,” and thus are sufficiently “original” to fall within the scope of copyright protection.

It seems likely that the court will ultimately hold that these are not Feist-style facts, but instead creative works. I don’t necessarily think that this is a great policy outcome, but it is consistent with copyright jurisprudence generally (as ill-founded as that may be). It’s just that (other than during those three weeks) the copyright resided with the poster, not Craigslist.

The court did not dismiss Craigslist’s claim of copyright over the compilation of posts. The way in which Craigslist organizes and presents posts may well be copyrightable. I didn’t see that the order specifically spoke to the complaint’s allegation that the 3taps “craiggers” site imitated the “visual fashion” of the Craigslist posts, but perhaps this survives. It is somewhere between a copyright and trademark claim (maybe “trade dress”?). This is all to say that the copyright
claims are not entirely dead, although the strongest claims are indeed thrown out.

On the CFAA claims, Jerry says that, “one can understand why it might have thrown the kitchen sink into its lawsuit.” Well yes, I can understand why one might do that, particularly if one were a litigator interested solely in winning the case. However, the lawyers are not adequately representing the interests of their client here–I think that the client includes Craig, and the Craig I’ve met would not have agreed. If that’s the case, the “kitchen sink” approach is wildly inappropriate. It has the potential to do collateral damage to internet-related jurisprudence, and goes against principles of tolerance and freedom.

Jerry then argues that maybe this is the right case to test out some novel approaches to applying physical-world torts to online things that feel kinda like property. The tort of Misappropriation is about property. The tort of trespass to chattels is about property (“chattels” are, roughly speaking, “your stuff”). Jerry is suggesting that this case is a good opportunity to further propertize the digital world.

First of all, this is not the right case. It’s a messy fact pattern, and the conflicting interests of the Craigslist ethos and intellectual property make it more ugly. Second, moving law in this direction is bad policy. Jerry has written extensively about the problems with propertization creep, so I don’t know why he would think that this makes sense.

Jerry also turns to the economics of network effects to support his “it doesn’t feel right” hypothesis. As his argument goes, Craigslist built the network effects that it now enjoys, so competitors should have to do the same. I suppose that this satisfies a visceral sense of fairness, but it doesn’t say much about what is optimal for the market and for innovation. Jerry says that what Craigslist did was to disrupt the newspaper market for classifieds via, “true innovation: taking command of the network effect by offering a superior product.”

I agree that Craigslist innovated. However, their innovation contributed to their network effect, which then (as network effects tend to do) fed itself. Once you have a network effect in a market, your incentives to innovate decrease because of lock-in. Others, however, are strongly motivated to try to break into that market. Padmapper and others innovated–in a way that is no less “true” than Craigslist’s original innovation. Craigslist saw the value of that innovation and even tried to imitate it by creating its own mapping tool (arguably innovation in and of itself).

No doubt, some Paleo-Schumpeterian will argue that these incentives are necessary in order to motivate innovation. They will argue that without them, creative destruction will be halted and all of us will trade in our riding boots for birkenstocks. Of course, I’m not sure that Craig ever had the incentive to become the greatest horseman in San Francisco. He had a different incentive.

It all sounds more like a shift from incentive to excess to me.

Comments

  1. Nathan T. says:

    Thanks for your follow-up post. Again, I agree with your stance, though I feel you are wasting your breath. To be fair I wanted to give this Jerry an honest read and see whether he could sway me to even to understand why Craigslist is really “protecting its business interests.”

    Honestly though I got only half way through the short article and ran upon this statement that had me so appalled that I can’t take anything this Jerry has to say at face value. He uses this on the flip side to paint the picture why others (such as ourselves) have reason to ridicule the lawsuit.

    “The site’s icon is a hippy peace symbol, and it operates not under a ‘.com,’ but instead a ‘.org’ domain, which it says ‘symbolizes the relatively non-commercial nature, public service mission, and non-corporate culture of craigslist.’ Newmark has long held that the $1 billion company is not motivated by profit.”

    I was all for the TLD nomenclature of the 90′s. But, ‘.com’ boomed and busted and with it, so did the entire nomenclature. While you can still be relatively certain that a ‘.gov’ is a USA government website, and a ‘.edu’ is an accredited college/university, nothing else has any meaning.

    I don’t get how Jerry could even make a claim that a $1 billion company is even “relatively non-commercial” let alone claim it is not motivate by profit.

    [That is about as silly as claiming PBS stations don't have commercials because they are "public." Of course PBS has commercials usually not breaking in middle of the shows, but often dozens of commercials in between the shows. One time I counted no less than 30 commercials in one break.]

    The nature of “classified” listings may be a “non-commercial” activity for those posting classifieds, but Craigslist is most certainly a commercial classified listing agency whether it operates as a ‘.com’ or a ‘.org.’ Whether it makes its money from those posting or from those advertising. Anyone who thinks it is non-commercial is fooling themselves, and anyone who believes the lie that this is not about profit is completely delusional.

    He goes on to say that because of this nature of a “non-commercial” website, that is the reasoning behind the people that are upset at the move to litigate. Doesn’t this constitute a “straw man argument.” At least for me it is, I don’t see Craigslist as anything BUT a commercial operation, and that is EXACTLY why this lawsuit is bad. It is all about the money.

    That said, although I can’t take Jerry’s post at face value, hence one could still call me biased; but I still and again agree with you that Craig should just dismiss this case. My reasoning is that it appears to be a troll. Craigslist as a business may very well have “legitimate business interests” that need “protecting” but this lawsuit isn’t protecting any interests at all, this is a troll.

    If it is the Craig you know, maybe he will listen to you, I suspect otherwise. OR, In the common tongue, power corrupts, and absolute power corrupts absolutely. In my book $1 billion dollars is a whole lot of power.