Nora Sleeth is a JD candidate at Osgoode Hall Law School.
On September 2, 2011, the Supreme Court of British Columbia passed judgment on Zoocasa’s alleged breach of contract and copyright infringement against Century 21. The decision is important to both copyright and contract law in light of present and future technical advancements. The full judgment may be found here.
The plaintiffs in this case are Century 21, Canada’s primary real estate franchise, as well as brokers whose listings appeared on the Century 21 website. The plaintiffs allege that Zoocasa, an Internet real estate search tool owned and operated by Rogers Communications, violated Century 21’s Terms of Use and breached copyright by “scraping” materials from the Century 21 listings.
Launched in August of 2008, Zoocasa provides users with a real estate service that focuses on searches within a specific neighbourhood or municipality. Zoocasa’s listings were indexed from other real estate websites, including Century 21. The process, known as scraping, allowed Zoocasa to search for specific terms on known websites and compile their real estate listings. Despite warnings from Century 21 lawyers, it took Zoocasa nearly two and a half years to remove Century 21 from its list of indexed websites.
Century 21’s Terms of Use state that, by accessing the site, users are in agreement with the terms. Century 21 argues that it had thus formed a valid contract with Zoocasa. This position endorses the applicability of traditional contract law principles to modern technology. In contrast, the defendant argued that visitors to the Century 21 website are not required to read the terms, which are not prominently displayed, and that there is no evidence of consideration. Further, mere notice of the contract terms is not enough to constitute a valid contract; both parties must specify their agreement with the terms.
In considering the validity of the contract, the court considered the forms of unilateral electronic contracts that have been legally recognized. In particular, click wrap contracts bind the consumer after he or she clicks on a button or checks a box signifying agreement to the terms. Further, browse wrap contracts require only continued use of the product after reading the terms of use. This reflects an approach that if a benefit is taken with knowledge of the terms of the offer, there has been an acceptance and a valid contract exists. While the law of contract typically requires that the terms be brought to the offeree’s attention, the court found that the defendant in this case cannot rely on a lack of knowledge as it used similar terms in its own website and had acknowledged its understanding of this “industry standard”. Thus, the court concluded that Zoocasa’s act of “proceeding further into the website” constituted an agreement and formed a contract.
With regard to the copyright claims, it is important to determine who owns the copyright and whether it has been validly assigned. In this case, the individual brokers signed a Copyright License Agreement, assigning their interest to Century 21. The court, however, found that this agreement allowed Century 21 to use the works while ownership remained with the brokers. As a result, the ability to make a copyright claim is exclusively that of the brokers. In order to establish copyright protection for the written listing descriptions, it must be shown that the descriptions are a “product of skill and judgment.” The court agreed that they were, as some degree of thought and strategy is required to write a persuasive description. Further, the court also found that sufficient originality existed in the photographs of the properties, which were unique in their angle and style of photography, to qualify for copyright protection. The court found that Zoocasa copied the property descriptions and photographs, both directly and through the process of indexing.
Zoocasa attempted to rely on the fair dealing exception to copyright infringement. In order to rely on this exception, the purpose of the copying must be for “research, private study, criticism, review or news reporting, all of which must be without motive or gain.” Zoocasa claimed that it was simply researching real estate listings to provide information to its consumers; however, since Century 21 has the same function, Zoocasa’s dealing is for the purpose of commercial gain and amounts to direct competition. Intended commercial gain is one factor that supports a presumption that the dealing was not fair. Further, other factors include the amount of dealing, the effect of the dealing and the availability of alternatives. Here, the court found that there were alternatives to Zoocasa’s scraping, specifically searching for the information independently. The amount of the dealing exceeded one-time use and was a daily occurrence for the purpose of minimizing costs to Zoocasa and maximizing financial gain.
Century 21 also attempted to argue that, in continuing to access Century 21’s servers, Zoocasa was committing the tort of trespass to chattels. The court found against this allegation, however, since the servers were owned by a separate company and Century 21 lacked any possessory interest.
Finally, the court concluded that Rogers Communications could not be found liable for Zoocasa’s breach of contract and copyright infringement. While Rogers authorized Zoocasa to use Century 21’s website, it did so under the presumption that Zoocasa would do so lawfully. There is no evidence that Rogers intended Zoocasa to engage in the unlawful conduct.
Ultimately, the court granted Century 21 an injunction preventing Zoocasa from further accessing the Century 21 website in any manner contrary to the Terms of Use. Since Century 21 did not suffer any substantial loss, it was awarded nominal damages in the sum of $1,000. The individual brokers were awarded damages totaling $32,000 and proportionate to the amount of their listings appearing online.
This case illustrates the potential for flexibility within contract and copyright law. Clearly, it is essential that both disciplines adapt to meet the needs of current developments.