Website terms, copyright used to shut down real estate data scraping in Century 21 v Rogers

You can always tell when you are about to read a good case by its opening paragraph. The decision of the BC Supreme Court in Century 21 Canada Limited Partnership v. Rogers Communications Inc., 2011 BCSC 1196  doesn’t disappoint. It begins as follows:

The ability of the law to adapt is part of its strength. Technological innovation tests that resilience. This case considers that ability as claims for breach of contract, trespass to chattels and copyright infringement meet the Internet.  At the root of this lawsuit is the legitimacy of indexing publically accessible websites.

In the case, Century 21 sought an injunction and damages against the defendants for their conduct in accessing Century 21 Canada’s website and copying photographs and data from that website without consent for display on a competitve website.

The main defendant was 2167961 Ontario Inc., doing business as Zoocasa (“Zoocasa”). It is a wholly owned subsidiary of Rogers Communications Inc. Rogers was sued on the basis it participated in creating, developing, maintaining and marketing the Zoocasa site.

The case canvasses many important legal issues including the following issues:

Are Century 21’s Website Terms of Use an enforceable contract between the parties?

On this issue the court engaged in an extensive review of the enforceability of shrink wrap, web wrap (browse wrap) and click wrap agreements. After citing the leading Canadian and US cases on the enforceability of these agreements (as well as my book on Computer, Internet and e-Commerce Law), the court held that  Zoocasa knew about and was bound by Century 21’s website terms. It also breached them by, among other things, copying the content on the Century 21 site; reproducing the content; saving the content onto a computer; merging the data with other data; framing the data in another site; posting the data on another site, using it for a public, commercial, or non-personal purpose; disseminating the content; screen and database scraping; and linking to the Century 21 website.

Has there been copyright infringement?

The court goes through a long analysis of the right to sue for infringement and holds that Century 21 had no right to sue for infringement because it didn’t hold the title or an exclusive license in the works.

However, the individual owners of the copyrights in issue were successful in their copyright claims for infringement based on the reproduction of property descriptions and photographs. The full property descriptions copied were considered a substantial portion of each real estate listing page on the Century 21 website. But, the court held the copying of truncated property descriptions was not.

The court then canvassed whether Zoocasa could claim the fair dealing defense. The court acknowledged that to be a fair dealing the dealing had to be both for an allowable purpose and be fair. Rather than determine if the purpose was allowable, the court focused on whether the dealing was fair.

After citing CCH and several leading US cases, the court concluded that the dealing was not fair. You will want to read this part of the decision as it discusses a number of important issues related to fair deaing including whose purpose must the dealing be for; the effect of a search engine using the robot exclusion standard; and whether Canadian law recognizes transformative use as a fairness factor (it does not according to the case). The extent of the copying and its purpose, which was competitive to Century 21, were significant reasons why the dealing was not considered to be fair.

Has the defendant Zoocasa committed the tort of trespass to chattels in accessing Century 21’s website?

This is the first Canadian case to canvass whether the tort of trespass applies to an unauthorized access to or use of a computer. After citing the leading US cases on point, the court concludes that the tort cannot be made out on the facts of the case because Century 21 licensed use of third party technology to run its website. Century 21 had no possessory interest in the servers that were accessed. As a result, an essential element of the tort of trespass to chattels was not present.

Is Rogers liable for the actions of Zoocasa?

Rogers was not liable for authorizing infringement or inducing a breach of contract and the court refused to pierce the corporate veil to make Rogers liable.

The court made the following order:

a.         The claim of Century 21 for damages for copyright infringement is dismissed;

b.         The claim of Century 21 for damages for breach of contract is granted.  The sum of $1,000 is awarded;

c.         All claims against Rogers are dismissed;

d.         The claim of Century 21 for damages for trespass are dismissed;

e.         Century 21 is granted a permanent injunction against Zoocasa;

f.         The plaintiff Bilash is entitled to statutory damages for breach of copyright in the sum of $30,750;

g.         The plaintiff Walton is entitled to statutory damages for breach of copyright in the sum of $1,250;

f.         The plaintiffs Century 21, Bilash and Walton are entitled to interest pursuant to the Court Ordered Interest Act.

This isn’t the first Canadian fight over the protection of real estate listing data. An attempt by a broker to use Toronto Real Estate Board listing data also failed in Fraser Beach v. Toronto Real Estate Board, 2010 ONCA 883.

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