eBay, Inc. v. Bidder’s Edge, Inc

Brief Fact Summary. eBay, Inc. (Plaintiff) sought a preliminary injunction enjoining Bidder’s Edge, Inc. (Defendant) for trespass against eBay’s (Plaintiff) online trading site.

Synopsis of Rule of Law. A preliminary injunction may be granted in order to prevent an increase in the complained-of activity when a likelihood of harm is presented by the increase.

Facts. eBay, Inc. (Plaintiff), an Internet person-to-person trading site offers people the ability to sell a variety of items, to the highest bidder, on its website.  Plaintiff users must register and agree to a User Agreement, which includes the prohibition of using software “robots†or “spiders†on eBay (Plaintiff).  A software “robot†or “spider†is a computer program that performs wide searches, and copies and retrieves information from other websites across the Internet.  These programs can search sites by executing thousands of instructions each minute, which can slow those sites to the point where they become overwhelmed and can “crash.â€Â  Such crashes or malfunctions can result in the loss of data and interrupt that website’s services.  Bidder’s Edge, Inc. (Defendant) is an online “auction aggregation†site that offers buyers the ability to search the World Wide Web by using the “robot/spider†search capacity, allowing the buyers to search several auction websites at one time rather than one-by-one.  Plaintiff and Defendant negotiated to agree to terms that would allow Defendant to access Plaintiff’s site, but when negotiations broke down, Plaintiff tried to block Defendant by using software that can interrupt the “robot/spider†searches.  A lawsuit was filed and eBay (Plaintiff) moved for preliminary injunctive relief to stop Bidder’s Edge (Defendant) from accessing Plaintiff’s website.

Issue. Can a preliminary injunction be granted in order to prevent an increase in the complained-of activity when a likelihood of irreparable harm is presented by the increase?

Held. (Whyte, J.)  Yes.  A preliminary injunction may be granted in order to prevent an increase in the complained-of activity when a likelihood of harm is presented by the increase.  eBay (Plaintiff) claimed that Bidder’s Edge (Defendant) “robot/spider†searches caused economic loss and potential harm from the damage that would be caused by a possible “crash†of the eBay (Plaintiff) website.  Potential monetary damages are usually not “a proper foundation for a preliminary injunction†and eBay (Plaintiff) does not seem to have made a showing that monetary damages could support relief.  If Defendant activities were allowed to continue and similar “robot/spider†engines also joined in searching Plaintiff at the same time, Plaintiff ould suffer great harm if the website crashed.  For Plaintiff to prevail on a trespass claim, it must establish that: (1) Defendant intentionally and without authorization interfered with Plaintiff’s possessory interest; and (2) this unauthorized use proximately caused damage to eBay (Plaintiff).  First, Plaintiff explicitly and repeatedly informed Defendant that Defendant’s use of the website was not authorized.  The unauthorized use did cause damage to eBay (Plaintiff), even if Plaintiff cannot show that Defendant’s use of the site did slow it down.  Plaintiff’s website is personal property, and a person does not have to cause physical or material damage to that property in order to be considered a trespasser.  Therefore, even if eBay (Plaintiff) cannot show that Bidder’s Edge (Defendant) caused the website to slow down to the point that Plaintiff’s ability to serve other customers was hindered, Plaintiff has still met the requirements necessary to demonstrate trespass.  Preliminary injunctive relief is, therefore, the proper remedy.

Discussion. The court sought to prevent the loss of profits and loss of customer goodwill, which because such losses are difficult to calculate or compensate monetarily, is appropriate injunctive relief.