EF Cultural Travel v. Explorica, Inc.

             United States Court of Appeals
                         For the First Circuit

No. 01-2001

                     EF CULTURAL TRAVEL BV, ET AL.,

                         Plaintiffs, Appellees,

                                   v.

                           ZEFER CORPORATION,

                         Defendant, Appellant,

                                   and

                        EXPLORICA, INC., ET AL.,

                               Defendants.


              APPEAL FROM THE UNITED STATES DISTRICT COURT
                    FOR THE DISTRICT OF MASSACHUSETTS

             [Hon. Morris E. Lasker,* U.S. District Judge]


                                 Before
                           Boudin, Chief Judge,
                       Torruella, Circuit Judge,
                     and Cyr, Senior Circuit Judge.


     William A. Zucker with whom Scott J. Nathan and Gadsby Hannah,
LLP were on supplemental brief for appellant.
     Joan A. Lukey with whom John J. Butts and Hale and Dorr LLP
were on supplemental brief for appellees.


                            January 28, 2003




     *
         Of the Southern District of New York, sitting by designation.
            BOUDIN,      Chief     Judge.    Defendant    Zefer    Corporation

("Zefer") seeks review of a preliminary injunction prohibiting it

from using a "scraper tool" to collect pricing information from the

website of plaintiff EF Cultural Travel BV ("EF").                 This court

earlier upheld the injunction against co-defendant Explorica, Inc.

("Explorica").     EF Cultural Travel BV v. Explorica, Inc., 274 F.3d

577 (1st Cir. 2001) ("EF I").             The validity of the injunction as

applied to Zefer was not addressed because Zefer's appeal was

stayed when it filed for bankruptcy, but the stay has now been

lifted.

            EF and Explorica are competitors in the student travel

business.    Explorica was started in the spring of 2000 by several

former EF employees who aimed to compete in part by copying EF's

prices    from   EF's    website    and    setting   Explorica's   own    prices

slightly lower.         EF's website permits a visitor to the site to

search its tour database and view the prices for tours meeting

specified   criteria      such   as   gateway   (e.g.,   departure)      cities,

destination cities, and tour duration.               In June 2000, Explorica

hired Zefer, which provides computer-related expertise, to build a

scraper tool that could "scrape" the prices from EF's website and

download them into an Excel spreadsheet.

            A scraper, also called a "robot" or "bot," is nothing

more than a computer program that accesses information contained in

a succession of webpages stored on the accessed computer. Strictly


                                       -2-
speaking, the accessed information is not the graphical interface

seen by the user but rather the HTML source code--available to

anyone who views the site--that generates the graphical interface.

This information is then downloaded to the user's computer.                                The

scraper program used in this case was not designed to copy all of

the information on the accessed pages (e.g., the descriptions of

the tours), but rather only the price for each tour through each

possible gateway city.

               Zefer built a scraper tool that scraped two years of

pricing data from EF's website.                  After receiving the pricing data

from       Zefer,    Explorica         set    its    own    prices    for    the    public,

undercutting EF's prices an average of five percent. EF discovered

Explorica's         use    of    the     scraper     tool    during    discovery      in   an

unrelated      state-court         action      brought      by    Explorica's      President

against EF for back wages.

               EF then sued Zefer, Explorica, and several of Explorica's

employees in federal court.1                  Pertinently, EF sought a preliminary

injunction on the ground that the copying violated the federal

Copyright      Act,       17    U.S.C.    §    101   et    seq.    (2000),   and     various

provisions of the Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C.

§ 1030 (2000).            The district court refused to grant EF summary



       1
      The individual defendants are Olle Olsson, Peter Nilsson,
Philip Gormley, Alexandra Bernadotte, Anders Ericksson, Deborah
Johnson, and Stefan Nilsson. We refer hereafter to Explorica and
the individual defendants collectively as "Explorica."

                                               -3-
judgment on its copyright claim, but it did issue a preliminary

injunction against all defendants based on one provision of the

CFAA, ruling that the use of the scraper tool went beyond the

"reasonable expectations" of ordinary users.             The preliminary

injunction states inter alia:

          [D]efendant Explorica, Inc., its officers,
          agents, servants, employees, successors and
          assigns, all persons acting in concert or
          participation with Explorica, Inc., and/or
          acting on its behalf or direction are
          preliminarily enjoined to . . . refrain,
          whether directly or indirectly, from the use
          of a "scraper" program, or any other similar
          computer tool, to access any data useable or
          necessary for the compilation of prices on or
          from the website of plaintiff EF Cultural
          Travel and its related entities, and/or the EF
          Tour Database.

          The defendants appealed, but soon after briefing was

completed,     Zefer   filed   for   bankruptcy    and   its     appeal     was

automatically stayed.     11 U.S.C. § 362(a)(1) (2000).          Explorica's

appeal went forward and in EF I a panel of this court upheld the

preliminary injunction against Explorica.         The panel held that the

use of the scraper tool exceeded the defendants' authorized access

to EF's website because (according to the district court's findings

for the preliminary injunction) access was facilitated by use of

confidential    information    obtained    in   violation   of    the     broad

confidentiality agreement signed by EF's former employees.                EF I,

274 F.3d at 582-84.




                                     -4-
          On Zefer's re-activated appeal, the question presented is

whether the preliminary injunction is proper as to Zefer.             We

conclude that it is proper even as to Zefer, which signed no

confidentiality agreement, but on relatively narrow grounds. Given

the prospect of further proceedings--this appeal is merely from a

preliminary injunction--it is helpful to explain where and why our

own reasoning differs from that of the district court.                The

principal issues are legal ones as to which our review is de novo.

Cablevision of Boston, Inc. v. Pub. Improvement Comm'n, 184 F.3d

88, 96 (1st Cir. 1999).

          EF argues at the outset that our decision in EF I is

decisive as to Zefer.    But the ground we adopted there in upholding

the injunction as to the other defendants was that they had

apparently     used   confidential    information   to   facilitate   the

obtaining of the EF data.       Explorica was created by former EF

employees, some of whom were subject to confidentiality agreements.

Zefer's position in that respect is quite different than that of

Explorica or former EF employees. It signed no such agreement, and

its prior knowledge as to the agreement is an open question.

             EF suggests that Zefer must have known that information

provided to it by Explorica had been improperly obtained.        This is

possible but not certain, and there are no express district court

findings on this issue; indeed, given the district court's much

broader basis for its injunction, it had no reason to make any


                                     -5-
detailed findings as to the role of the confidentiality agreement.

What can be gleaned from the record as to Zefer's knowledge

certainly does not permit us to make on appeal the finding urged by

EF.

          What appears to have happened is that Philip Gormley,

Explorica's   Chief   Information   Officer   and   EF's   former   Vice

President of Information Strategy, e-mailed Zefer a description of

how EF's website was structured and identified the information that

Explorica wanted to have copied; this may have facilitated Zefer's

development of the scraper tool, but there is no indication that

the structural information was unavailable from perusal of the

website or that Zefer would have known that it was information

subject to a confidentiality agreement.

          EF also claims that Gormley e-mailed Zefer the "codes"

identifying in computer shorthand the names of EF's gateway and

destination cities.    These codes were used to direct the      scraper

tool to the specific pages on EF's website that contained EF's

pricing information.    But, again, it appears that the codes could

be extracted more slowly by examining EF's webpages manually,2 so

it is far from clear that Zefer would have had to know that they



      2
      As an example, the website address for an EF Tour to Paris
and Geneva leaving from Boston is http://www.eftours.com/
public/browse/browse_detail.asp?CTID=PTG%20V&GW=BOS.     Looking
closely at the website address, one can determine that the
destination code for the Paris and Geneva tour is PTG, while the
gateway code for Boston is BOS.

                                -6-
were confidential.   The only information that Zefer received that

was described as confidential (passwords for tour-leader access)

apparently had no role in the scraper project.

          EF's alternative ground for affirmance is the rationale

adopted by the district court for the preliminary injunction. That

court relied on its "reasonable expectations" test as a gloss on

the CFAA and then applied it to the facts of this case.    Although

we bypassed the issue in EF I, the district court's rationale would

embrace Zefer as readily as Explorica itself.        But the gloss

presents a pure question of law to be reviewed de novo and, on this

issue, we differ with the district court.

          The CFAA provision relied upon by the district court

states:

          Whoever . . . knowingly and with intent to
          defraud, accesses a protected computer without
          authorization, or exceeds authorized access,
          and by means of such conduct furthers the
          intended fraud and obtains anything of value,
          unless the object of the fraud and the thing
          obtained consists only of the use of the
          computer and the value of such use is not more
          than $ 5,000 in any 1-year period . . . shall
          be punished as provided in subsection (c) of
          this section.


18 U.S.C. § 1030(a)(4).   The statute defines "exceeds authorized

access" as "to access a computer with authorization and to use such

access to obtain or alter information in the computer that the

accesser is not entitled so to obtain or alter."   Id. § 1030(e)(6).

The CFAA furnishes a civil remedy for individuals who suffer

                                -7-
damages or loss as a result of a violation of the above section.

Id. § 1030(g).

          At    the   outset,   one    might    think      that   EF    could   have

difficulty in showing an intent to defraud.                   But Zefer did not

brief the issue on the original appeal before bankruptcy.                         In

addition, there may be an argument that the fraud requirement

should not pertain to injunctive relief.              Accordingly, we bypass

these matters and assume that the fraud requirement has been

satisfied or is not an obstacle to the injunction.

          The    issue,   then,       is    whether     use    of      the   scraper

"exceed[ed] authorized access."            A lack of authorization could be

established by an explicit statement on the website restricting

access.   (Whether     public   policy       might    in   turn     limit    certain

restrictions is a separate issue.)            Many webpages contain lengthy

limiting conditions, including limitations on the use of scrapers.3

However, at the time of Zefer's use of the scraper, EF had no such

explicit prohibition in place, although it may well use one now.




     3
      For example, the "legal notices" on one familiar website
state that "you may print or download one copy of the materials or
content on this site on any single computer for your personal, non-
commercial use, provided you keep intact all copyright and other
proprietary notices. Systematic retrieval of data or other content
from this site to create or compile, directly or indirectly, a
collection, compilation, database or directory without written
permission from America Online is prohibited." AOL Anywhere Terms
and Conditions of Use, at http://www.aol.com/copyright.html (last
visited Jan. 14, 2003).

                                      -8-
            The district court thought that a lack of authorization

could also be inferred from the circumstances, using "reasonable

expectations"    as      the    test;     and   it    said    that   three     such

circumstances comprised such a warning in this case: the copyright

notice on EF's homepage with a link directing users to contact the

company with questions; EF's provision to Zefer of confidential

information obtained in breach of the employee confidentiality

agreements; and the fact that the website was configured to allow

ordinary visitors to the site to view only one page at a time.

            We   agree     with    the     district     court   that    lack     of

authorization may be implicit, rather than explicit.                   After all,

password    protection     itself        normally    limits   authorization      by

implication (and technology), even without express terms.                    But we

think that in general a reasonable expectations test is not the

proper gloss on subsection (a)(4) and we reject it.                       However

useful a reasonable expectations test might be in other contexts

where there may be a common understanding underpinning the notion,

cf. Terry v. Ohio, 392 U.S. 1, 9 (1968) (Fourth Amendment), its use

in   this   context   is       neither    prescribed    by    the    statute   nor

prudentially sound.

            Our basis for this view is not, as some have urged, that

there is a "presumption" of open access to Internet information.

The CFAA, after all, is primarily a statute imposing limits on

access and enhancing control by information providers. Instead, we


                                         -9-
think that    the    public     website     provider   can    easily    spell   out

explicitly    what     is   forbidden     and,   consonantly,     that    nothing

justifies    putting    users    at   the    mercy   of   a   highly   imprecise,

litigation-spawning standard like "reasonable expectations."                     If

EF wants to ban scrapers, let it say so on the webpage or a link

clearly marked as containing restrictions.

            This     case    itself     illustrates       the   flaws     in    the

"reasonable expectations" standard.               Why should the copyright

symbol, which arguably does not protect the substantive information

anyway, Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340,

344-45 (1991), or the provision of page-by-page access for that

matter, be taken to suggest that downloading information at higher

speed is forbidden.           EF could easily include--indeed, by now

probably has included--a sentence on its home page or in its terms

of use stating that "no scrapers may be used," giving fair warning

and avoiding time-consuming litigation about its private, albeit

"reasonable," intentions.

            Needless to say, Zefer can have been in no doubt that EF

would dislike the use of the scraper to construct a database for

Explorica to undercut EF's prices; but EF would equally have

disliked the compilation of such a database manually without the use

of a scraper tool.      EF did not purport to exclude competitors from

looking at its website and any such limitation would raise serious

public policy concerns.       Cf. Food Lion, Inc. v. Capital Cities/ABC,


                                      -10-
Inc., 194 F.3d 505, 516-18 (4th Cir. 1999); Desnick v. Am. Broad.

Cos., 44 F.3d 1345, 1351 (7th Cir. 1995).

          Although we conclude that the district court's rationale

does not support an independent preliminary injunction against

Zefer, there is no apparent reason to vacate the present injunction

"as against Zefer." Despite being a party to the case, Zefer is not

named in the ordering language of the injunction; it is merely

precluded, like anyone else with notice, from acting in concert

with, on behalf of, or at the direction of Explorica to use the

scraper to access EF's information.

          Under the applicable rules and case law, an injunction

properly issued against a named party means that anyone else with

notice is precluded from acting to assist the enjoined party from

violating the decree or from doing so on behalf of that party.   See

Fed. R. Civ. P. 65(d); G. & C. Merriam Co. v. Webster Dictionary

Co., 639 F.2d 29, 34-35 (1st Cir. 1980).     There is no reason why

Zefer should be freer than any other third party who was never in

this litigation to assist EF to violate the injunction against it

or to do so on EF's behalf or at its direction.     As we read the

injunction, that is all that is forbidden.

          It may still be of practical importance to Zefer to have

clarified the limited basis on which we uphold the injunction.   And

nothing we have said would prevent EF, if it matters in continued

litigation, from seeking to show that Zefer did use confidential


                               -11-
information, aware that it was being supplied in violation of

agreements made by former EF employees.       It is also of some use for

future litigation among other litigants in this circuit to indicate

that, with rare exceptions, public website providers ought to say

just what non-password protected access they purport to forbid.

              Lastly, Zefer has alleged that the First Amendment would

be offended if the statute were construed to forbid generally the

use of scrapers to collect otherwise available information where

there was no intent to defraud or harm the target website.              Here,

the   preliminary    injunction   is     premised    on    EF's   misuse     of

confidential information and Zefer thus far is constrained only in

helping   a   tentatively-identified     wrongdoer    in   exploiting      that

confidential information.     Cf. San Francisco Arts & Athletics, Inc.

v. U.S. Olympic Comm., 483 U.S. 522, 541 (1987).            None of Zefer's

arguments address this narrowed constraint or suggest to us that it

is constitutionally doubtful.

              The preliminary injunction is affirmed on the limited

basis set forth above and as construed by this court.              Each side

shall bear its own costs on this appeal.




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