All lawsuits (basically) begin the same. The plaintiff files a "complaint" that alleges how it has been wronged. The defendant then "answers" by filing a response to those allegations. Often, with its "answer," the defendant will also file at least one "counterclaim" (legal translation: basically a countersuit outlining how the plaintiff harmed the defendant). This will force the plaintiff to file another document (an "answer" to the counterclaim) to respond to those allegations.
The complaint, counterclaims and answers are (normally) ordered documents with numbered-paragraphs containing admissions, denials and legalese. And if you set the documents side-by-side, you can see the conversation. Such as:
Excerpt from hypothetical complaint:
1. The defendant totally did it.
Excerpt from the hypothetical answer:
1. Plaintiff objects to Paragraph 1 as being vague as to what "did it" and "totally" means. Subject to this objection, Paragraph 1 is denied in its entirety.
Legal translation: We have no idea what you are talking about. And even if we did understand what you were saying, we deny that we did it.
The Beckett v. COMC case follows the above format. Beckett filed a complaint alleging, among other things, that COMC stole its trade-secret information by a sinister-sounding process called "scraping."
COMC responded by alleging 1) everything it did was approved by Beckett pursuant to a Beckett/COMC contract, 2) Beckett actually breached the Beckett/COMC contract by terminating it improperly and 3) not only is "scraping" an OK process, Beckett approved and helped COMC build the API that allowed it to "scrape."
Given the two incongruent stories, we were left waiting for Beckett's answer to COMC's counterclaims. This week, we got it. And it's telling. Below I've taken the juicier paragraphs from COMC's counterclaims, set them next to Beckett's response and then provided my legal translation.
Excerpt from COMC's claim:
53. COMC attracted the attention of Beckett Media representatives who were impressed with COMC's website and concept. On September 12, 2007, COMC received an email from Beckett Media which stated: "We are happy to provide a site license for you to use our pricing and related data." Within a couple of months, the parties had entered into their first written agreement, which was effective October 15, 2007 and valid for one year or up to 200,000 cards. The initial agreement explicitly allowed COMC to "scrape" pricing data from www.beckett.com to use as book value pricing data on COMC's website. The "scraping" mechanism to obtain the information was chosen by Beckett Media because it involved the least amount of work on the part of Beckett Media.
Excerpt from Beckett's answer:
53. Beckett admits only that it entered into an agreement with COMC in 2007 and that the agreement speaks for itself. Beckett denies all other allegations of paragraph 53 of the counterclaims.
Legal Translation: When a lawyer says, "the document speaks for itself," he means one of two things. Either 1) "this document hurts our case" or 2) I'm too jerky to admit everything you point out, even though it's likely correct.
I've never understood this objection because by stating "the document speaks for itself," the attorney is basically saying, "There is no ambiguity in this document. It's straightforward," which would seem to hurt any later argument that the document is "ambiguous."
And face it, to an attorney, every document is potentially ambiguous.
Here, I'm not sure if it's 1 or 2, but it is a jerky move that Beckett won't admit straightforward statements from the agreement like it was effective on October 15, 2006, for one year and 200,000 cards, allowed for "scraping," etc. Also, since Beckett "denies all other allegations" other than the fact the document "speaks for itself," it's really legal mumbo-jumbo that doesn't commit Beckett to a position.
Excerpt from COMC's claim:
54. A year later, the parties once again entered into a written agreement that explicitly allowed COMC to "scrape" pricing data from www.beckett.com to use as book value pricing data on COMC's website.
Excerpt from Beckett's answer:
54. Admitted
Legal translation: Now this is juicy. Here, Beckett admits it allowed COMC to "scrape" its data. Uhh, Beckett, did you forget in paragraph 16 of your complaint where you said:
16. COMC initially stole Beckett data by 'scraping' its copyrightable content - that is, its Checktists and Pricing Data - from Beckett.com.
If Beckett now admits COMC was "allowed" to scrape, then it didn't "initially steal" anything. Right?
Score one for COMC.
Excerpt from COMC's claim:
55. COMC has only had access to Beckett Media's publicly available pricing data. COMC has never had access to any of Beckett Media's alleged "secret" information. "Scraping" is a simple method to obtain the information that is publically-available on the website and nothing more.
Excerpt from Beckett's answer:
55. Beckett denies the first two sentences of paragraph 55. Beckett admits that scraping generally is a method to obtain publicly-available website data.
Legal translation: In its complaint, Beckett trashed the sinister-sounding process of "scraping" and analogized it to stealing! See like Paragraph 36:
36. COMC has already shown a willingness to steal Beckett data and content by 'scraping' its content from Beckett websites.
Now, it basically admits it's a method to obtain publicly available website data. That doesn't sound evil at all.
Score another for COMC.
Excerpt from COMC's claim:
56. In 20l1, COMC and Beckett Media entered into a two-year license that was to expire in November, 2013. However in March of 2013, the current Beckett Media owners requested that COMC enter into the most recent Data License Agreement and, at that time, the parties opted to switch to a flat fee for unlimited use.
Excerpt from Beckett's answer:
56. Becket admits only that COMC and Beckett entered into a license in 2011 and then another agreement in 2013, and that the agreements speak for themselves.
Legal translation: Beckett really likes the fact that documents "speak for themselves." They don't. But whatever.
Excerpt from COMC's claim:
58. Beckett Media wanted COMC to start forcing COMC customers to pay to see the Beckett pricing data instead of offering it for free. COMC agreed, provided Beckett Media permitted use of an API to help ensure that the pricing data on COMC's website was up to date. The Online Price Guide Agreement allowed COMC to use an API to sell Beckett Media subscriptions to COMC customers. Building the API was a joint effort on the part of COMC and Beckett Media. It was initially created in May, 2013 and implemented in July, 2013. The API simply facilitated acquisition of data which was available on the Beckett Media website. The API made it easy to generate a list of changes instead of COMC having to review every page for possible changes.
Excerpt from Beckett's answer:
58. Beckett admits only that it wanted to derive revenue from its proprietary data, that COMC agreed to pay for it, and denies any remaining allegations in the first two sentences of paragraph 58. Beckett admits the last five sentences of paragraph 58.
Legal translation: Well, there are a lot of words here, but the biggest takeaway is that Beckett acknowledges that it and COMC worked together to create the API that "scraped" the data.
Score yet another for COMC.
Excerpt from COMC's claim:
60. On December 6, 2013, Greg Lindberg fíom Beckett Media contacted Tim Getsch, CEO and founder of COMC. He mentioned he was interested in acquiring COMC. When it became apparent that COMC would not sell for a price Beckett Media would be willing to pay, Mr. Lindberg abruptly stated Beckett Media was terminating the Data License Agreement between the parties and accused COMC of infringement. Mr. Lindberg followed up with a letter purporting to be notice of the Data License Agreement's immediate termination. Also on December 6, at 9:25 p.m., but unknown to COMC at the time, Beckett Media disabled COMC's API access.
Excerpt from Beckett's answer:
60. Beckett admits that Mr. Lindberg contacted Mr. Getsch and that they discussed a possible acquisition. Beckett also admits that it sent a termination letter and that it disabled COMC’s API access thereafter. Beckett denies all other allegations.
Legal translation: The theme of COMC's counterclaims was that Beckett was motivated to bring its suit because COMC spurned its acquisition offers. Beckett's initial document was silent on any acquisition overtures, so its admission now that this is true gives COMC a good theme for its case.
Score another for COMC.
Excerpt from COMC's claims:
61. COMC responded with a letter advising that the purported termination violated the parties' agreement and requesting a statement of the grounds for the purported termination. Beckett Media replied on December 13, stating it was discontinuing its services and, therefore, had good cause to terminate its agreement with COMC.
Excerpt from Beckett's answer:
61. Becket admits only that COMC sent Beckett a letter related to the termination and that Beckett responded on December 13. The letters speak for themselves as to their content.
Legal translation: Again, with the documents "speak for themselves"! Darn it! Don't ask us to explain what the documents say! Even though, technically, that's what the fight is about, it is a breach of contract action after all and whether or not these letters complied with the contract requirements.
Fine then. If the documents are clear on their face, you can't argue they are ambiguous later.
Excerpt from COMC's claim:
62. Counsel for COMC responded, pointing out that Beckett Media did not discontinue its service, as it was still providing that service to other business partners, and therefore, Beckett Media had failed to show good cause. COMC continued to tender payment for use of the data pursuant to the parties' agreement. Beckett Media refused COMC's monthly payments.
Excerpt from Beckett's answer:
62. Beckett admits that COMC responded further, but denies that Beckett was providing service to others as alleged. Beckett admits the last two sentences of paragraph 62.
Legal translation: From COMC's allegations, Beckett could only terminate the contract 1) with 30 days' notice or 2) for good cause. COMC believes Beckett did neither.
Beckett alleged its "good cause" was that it stopped providing services like the ones COMC was using to all customers. From its answer to this specific paragraph, Beckett continues with its "good cause" theme, but technically only "denies that Beckett was providing service to others as alleged." Not sure there is anything there, but any time I see lawyer, wiggle words, I get a little suspect.
Excerpt from COMC's claims:
64. Beckett Media's improper, unlawful and abrupt termination of the API access caused COMC damages. COMC customers who had purchased subscriptions though COMC could no longer get updated pricing. This occurred without any notice, much less the 30-day notice required by the Online Price Guide Agreement.
Excerpt from Beckett's answer:
64. Beckett denies the allegations of the first sentence of paragraph 64. Becket lacks information sufficient to admit or deny the allegations of the second sentence of paragraph 64. Beckett denies that the termination was without notice.
Legal translation: Here's a true example of lawyer, wiggle wording. The sentence in COMC's counterclaims was, "This occurred without any notice, much less the 30-day notice required...." However, Beckett's response is simply, "Beckett denies that the termination was without notice."
What about the last part -- the whole "30-day notice" wording? I guess since Beckett did not deny it gave a 30-day notice, it's stuck with only arguing "good cause" for termination. For COMC's counterclaims then, this will be the focus of the case
My take away: Beckett's answer strengthened COMC's counterclaims. It's no guarantee that COMC will win, but it focuses the case on whether or not Beckett had "good cause" to terminate the contract. It also provides COMC with a theme (Beckett was upset it couldn't buy COMC, so it brought this suit to put a potential competitor out of business).
Beckett's answer really does no damage to its trade secret allegations, which will turn on other facts. But, as I stated before, that's a hard case for Beckett. It'll need to prove that whatever data was stolen were "trade secrets." But since it sounds like the data was admittedly "scraped" from public information, that could be a hard one for Beckett to win.
Also, outside of the context of these documents, Beckett fought hard and successfully kept this case in state court after COMC moved it to federal court. In my opinion, this was a mistake. By doing so, Beckett cannot raise copyright infringement issues (legal translation: copyright claims can only be heard in federal court).
As a plaintiff, you hate giving up claims in cases. To concede a powerful claim like copyright infringement so early in a case just seems like a tactical mistake.
Still, it’s early in the case. Beckett hasn't given too much information about exactly what its "trade secrets" are so we'll just have to wait and see how it develops.
The information provided in Paul Lesko's “Law of Cards" column is not intended to be legal advice, but merely conveys general information related to legal issues commonly encountered in the sports trading card industry. This information is not intended to create any legal relationship between Paul Lesko, Simmons Hanly Conroy or any attorney and the user. Neither the transmission nor receipt of these website materials will create an attorney-client relationship between the author and the readers.
The views expressed in the “Law of Cards" column are solely those of the author and are not affiliated with Simmons Hanly Conroy. You should not act or rely on any information in the “Law of Cards" column without seeking the advice of an attorney. The determination of whether you need legal services and your choice of a lawyer are very important matters that should not be based on websites or advertisements.
 |
