Source: https://www.scribd.com/document/44799819/iCopyright-complaint-redaCTED
Timestamp: 2017-07-22 14:07:18
Document Index: 308234162

Matched Legal Cases: ['§ 1332', '§ 1391', '§ 1', '§ 1', '§ 1', '§ 1', '§ 4', '§ 4', '§ 4', '§ 3']

iCopyright.complaint.redaCTEDUploaded by PaidContentRating and Stats5.0 (1)Document ActionsDownloadShare or Embed DocumentEmbedDescription: iCopyright v. The AP, breach of contract complaint, sealed version filed 11.23.10.View MoreiCopyright v. The AP, breach of contract complaint, sealed version filed 11.23.10.Copyright: Attribution Non-Commercial (BY-NC)Download as PDF, TXT or read online from ScribdFlag for inappropriate content﻿" , UNITED STATES DISTRICT COURT _SO_U_T_H_E_R_N_D_IS_T_R_IC_T_O_F_N_EW_Y_O_RK ----e-----ifJ-IIf---.,C~LED u8~&O Civil Action No. ---- ICOPYRIGHT, INC., Plaintiff, -against- COMPLAINT THE ASSOCIATED PRESS and PRESS ASSOCIATION, INC., JUryT~r" ", e~anded Ie- I .... kh( ''!)I~f\VJ II; 1"1 / 1 h NOV 2 3 20 '-~IfJj-' ~ ~' J '"-;;--"" .. , . f0'Jfl f . r."", u.s o>. U CU'l ;,-' .C. S'f " '·~jy'N.Y. '>~~~, Plaintiff iCopyright, Inc., ("iCopyright") brings this action to prevent The~- Defendants. NATURE OF THE ACTION 1. Associated Press and Press Association, Inc. (collectively "AP") from breaching the Content Services Agreement ("CSA," attached as Exhibit A) between iCopyright and AP by, among other things, failing to maintain iCopyright tags and tools on AP's website, failing to promote iCopyright as required by the CSA, violating confidentiality provisions, improperly purporting to "terminate" the CSA, and cutting off iCopyright's access to AP's servers, and to recover damages for the same. Moreover, iCopyright seeks to prevent AP from violating New York unfair competition law. PARTIES 2. Plaintiff iCopyright is a corporation organized under the laws of the State of Washington with its principal place of business located in Seattle, Washington. 3. Defendant The Associated Press is a not for profit corporation organized under the laws of the State of New York with its principal place of business located in New York, New York. 4. Defendant Press Association, Inc., is a wholly owned subsidiary of The Associated Press and is a corporation organized under the laws cfthe State of New York with its principal place of business located in New York. New York. Upon information and belief, the Press Association, Inc., conducts its business through representatives and employees of The Associated Press. JURISDICTION AND VENUE 5. This Court has jurisdiction under 28 U.S.C. § 1332 because the matter in controversy exceeds the sun, of $75,000, exclusive of costs and interest, and there is complete diversity of citizenship between tho parties. 6. Venue is proper in this district under 28 U.S.c. § 1391 because a substantial part of the events or omissions giving rise to the claim occurred in this district and AP resides and is subject to personal jurisdiction In this district. Moreover, the parties agreed in their Content Services Agreement to submit to the exclusive jurisdiction of and venue in the federal and state courts in New York, New York for the resolution of any lawsuit arising out of or related to that Agreement, RELEVANT FACTS iCopyright 1. iCopyright was founded in 1998 by Michael O'Donnell, a veteran in the high technology industry with significantexperience in developing successful Internet ventures. Mr. O'Donnell recognized the fundamental difficulties in revenue management faced by many publishers, such as newspapers, due to tJ1IJ ease with which copyrighted content on the Internet can be "pirated" or misused by third parties. To address this. he developed a service that solved the problem of communicating copyright ownership and coupled it with a solution for quickly and easily obtaining the rights to reuse the content and lake delivery of the content via an "instant copyright clearinghouse." iCopyright extended its suite of licensing and content monetization services to include anti-piracy services, syndication services, and "push" services that deliver to users content 011 topics of interest with rights legally to re-use the content. iCopyrighl's services aloe available to both large publishers as well as small websites and individual bloggers. iCopyrigh! has a record of constantly enhancing and refining its services 1.0 fulfill the needs of it customers. 8. AP, through its approximately 1,300 members, has experienced first-hand the negative effects associated with pirated content 011 the Internet. Indeed) AP has recognized, "[a] significant portion of the news available on the Internet is ... used without the permission of or compensation of owners of the rights in news content." According to its public filings; "AP believes that this tree riding, on the investment of content owners is in part the result of a ignificant market failure," 9. Through its web of membership agreements exclusive contracts, and other arrangements AP has long been the dominant distributor of news and other content. 10. Through business acumen and foresight, Mr. O'Donnell was among the first to recognize the long term implications of the inability of content owners effectively to protect their rights in the Internet age. He was also one of the first entrepreneurs to devote substantial resources to addressing this issue, which costs publishers of content significant money each year. II. AP eventually came to the same realization; recently contending that "[i]t has proven infeasible for rcpublishers of content to negotiate in advance with all of these thousands of rights owners regarding the terms on which their content may be used .. " 12. The iCopyright platform provides Internet publishers with a solution to these revenue difficulties. To alleviate the concerns of publishers. including members of APt iCopyrighl developed a variety of digital means to protect, promote, and profit from content. Specifically, the iCopyright platform is a suite of software tools that, among other things, an Internet publisher can usc to permit Internet users to obtain proper copyright licenses efficiently and seamlessly. 13. Publishers using iCopyngl'll's service place iCopyJight tools in a toolbar at the top of each article. The following is a Lypical set of such tools, containing iCopy!ight's trademark clearinghouse symbol and listing multiple options tor end users: .f&. E~Ma.1I I Print I Save I Post I Get Photos I Get Reprints I Reuse Options 14. As discussed below, AP agreed to insert this toolbar at the top of each article in this exact format, to provide iCopyright with access to the tagged content so that iCopyrighl could perform all of the toolbar options for end-users. and to promote iCopyrighl's platform with its members. 15. Publishers using iCopyright>s service also place an identifier containing iCopyrighes trademark clearinghouse symbol and providing access (0 the iCopyright tools at the bottom of an article. For example, the iCopyright display at the bottom of AP articles was specified as the following under their agreement: 16. Once licensed, each article also is affixed with a unique tag, much like a bar code on consumer goods. This iCopyrigln tag identifies the copyright owner and all those properly licensed to use the article. 17, When users want to do something with an article beyond reading it, the iCopyright tools enable the publishers to monetize these uses, including printing, em ailing, saving, posting to a different website, and republishing, without erecting barriers around the content. For example, at the top of the following article are a set ofiCopyright tools. '-- Chin,!!! to pl • .., roi'", in Gene ... ' M'<>to ... EPO • ~~. II ....... n - ..... 'I: ... 'I'II~ ... ~ ... ~_~_:c.~;, i::r ~!~ " ..... ~.- -~--·4v •..... lRH_1I '_ftH .. .. -~ - I"~M"',J.I ~._...,~t-,._.n...-"'ii 1boiI"~ ,_"UL.'¥.I .. I._illi~1-inti.il on-- • ..... ~I .. "'1IIIi ., ..... 'ft"' ,;I'W.,\'I[." ~_li--"""""~' I· .... 4Ifiot ~r --- ~-- .-...."' ..... " ..... ~ l4\iiio .. ,(ft v'll ... __ ~ .... :=~-:.:~roi:_;:.:.."'u;. !!!!!!!II ~ •• ~1.~W!I.-"'lI,_n.II' .. __.. I[t. .... _air..__....I~(1oo'.l ~ _._ ........ ._~ n_ nif_ -_"~I~.'~'~. ~~~ ~ ... ",,", ........ 't'I.c::."'III_ ~ I ~~.I .. at .... trI, .... ....... ~ III'.".~- ... '~ 1lJiC ...... _ f~-I"i!!!t , .L"~. - 18, When an end user clicks on an iCopyright tool that has been placed on a copyrighted work on the Internet, iCopyright's technology causes a new window to be displayed containing information needed to fulfill a variety of content licensing and content fulfillment services. For example if a user clicked on "Print" she would see the following: , ..... ~ - - ."'c_ -.. ( .. ~ .. , .... ~ ~,",-'1'. ""'.i.ut"611\-(j China to play role in Gene..-al Motors IPO -- .:aIR ... " ,.:ii. .... ~ ....... Mn~ .. ~.~.I,~ ~ 9tlftilll"Whp ., c.uwll Meiqr "iiiEi_ .. , Rri,., • .,.. ~ gftt"hw ... r:.-.."-·,,,hl~]\ • .P!i1e~ • ~ ~ ctwY.. 8fY.u 0..11 ..... bit ,.ftIiIM~~"I'NI~ OWi .. ~...,..,....C' ......... trwp. ... ~'IOW!-!.~ ""~lwn~~.C.nu'" ~Ih" ... ~lh;'. ~~,j'IN ~~ .w ~NarQM"''''', WI"""~!I f,," tfYl.-tlbMii t.~ .'--....;r ...... &ri_~ .... rlII'DM~-.(I ... """_~1\ ......,.)m1l ~tD jrOtf~:r.- ,.-:;;.=-:-:-----11 ~ ttiIoN\h/ll"W" U' 1IIIIUlI~"n~ ~~1:'Joft "'JII'III~rIlu....,.,.,.~ 19. When end users want a high-quality version of an article to share with co- workers; colleagues, or clients, iCopyright's technology takes payment and delivers the content to the user in the format desired. The licensed content preserves the publisher's brand and interactive copyright notice, with links back to the publisher's website, 20. Through iCopyright's services, publishers are able to set the prices (including permitting free use monetized by advertising) and to specify the terms of use (i.e., permitting all uses) limiting to some uses such as email and saving, or prohibiting all reuse). The prices and terms of use are tied to the iCopyright tag for each article. 21. Each person who receives an article in print form, via email, or by viewing it on the web, can verify that the provider owns the content, or has a valid license from the owner to use it or to share it. In the same way that drivers can spot an automobile with no tags, or expired tags, iCopyrighfs License Verification Tag allows immediate identification of content that is being used without the owner's permission. 22. Moreover, iCopyright provides another service called Discovery in tho form of an automated system that finds copyrighted content that had been tagged by a publisher wherever it is being used online, even if it is being used without a valid iCopyright tag. The iCopyright Discovery service can notify the infringer and offer the infringer the opportunity Ito continue using the content legally, for free or for a fee, based on terms set by the publisher. 23. Furthermore, iCopyright's programs can also send automated take-down notices to the site's owner, the site's [SF, search engines; arid to the site's ad network, which will result in the removal of the copyrighted material from the website. As a result, iCopyright's automated take-down notices provide publishers with an effective means of enforcing their lights under the Digital Millennium Copyright Act. AP recognizes the immense value of such an automated process. Indeed. in May of 2010 AP's Srinandan Kasi co-authored an article recognizing the necessity of an automated means to protect copyrighted material online, wherein he wrote that "[gjiven the time and distribution scale of the conduct, it is doubtful whether news originators could handle a 'duty to police' on a manual basts," 24. iCopyright also provides publishers with reponing so that. publishers know which content is most popular, who is using the content and where it is posted. With information from the reporting system, publishers arc able to adjust intelligently the terms applicable LO the use of their content. 25. In addition, jCopyright. provides services aimed at promoting the publisher's content. One of these services, Clip&Copy, generates new opportunities for the publisher to monetize views of its content by sending article headline and abstracts ("dips") via email to subscribers who have registered "keywords" with iCopyright. If an iCopyright publisher posts an article containing such keywords, a clip of the article and a link to the full article is emailod to -7- the subscriber. Subscribers can view the article, which is delivered with a toolbar offering the fun suite of reuse services authorized by the content owner. If the subscriber posts the article to their website Or selects any of the other reuse options it creates A. monetization event for the content owner. 26. iCopyrighl's technology critically depends 011 having direct access to the publisher's content. Accordingly. iCopytight negotiates with publishers for access to a feed or their content. TIle CrJltfem Services Agl'eemelll 27. AP and iCopyright entered into the iCopyright Content Services Agreement ("CSA") effective April 15, 2008, in part because, as AP has stated, usc of iCopyright "raises awareness of copyright protections," "provides a legal yet practical alternative to simply cutting and pasting content and reusing at will," "slmpllfpes] the process by aggregating all the necessary reporting and administrative work," and because iCopyright "has proven technology, the ability tocontrol the service offerings. and strong IP management." 28. In the CSA, AP agreed that: AP shall affix, or arrange or approve to have affixed, rCopyright Tags at the top and bottom of each AP article displayed on AP Hosted . . .. AP shall maintain t11C iCopyriJl,ht Tags so that they link properly to iCopyright's servers. (eSA § 1.5). 29. The term "AF' Hosted" is defined as AP's "hosted news service displayed through AP Member websites." (ld. at § 1.11 Schedule A). 30" In the eSA, AP also agreed that: AP ... hereby ... appoints iCopyrlght as its exclusive agent to (i) Transact and deliver content services ... from the iCopyrighl tag ... . .. (ii) Manage and fulfill ... requests for Custom Licenses and ~8- other custom licensing services requmng human intervention initiated from the iCopyright Tag; and (iii) insert advertisements into Advertising Supported Free Uses initiated from the iCopyright Tag (ld. § 1.2). 31, AP also agreed that: AP grants to iCopyright the right to receive a feed of the content that is posted at http://hosted.ap.org to fulfill the Services. , .. AP grants to iCopyright the right to promote AP content through the iCcpyright Clip&Copy service, . , . (lei. § 1,2). 32, 111 the eSA, AP also agreed to: promote iCoPYli.ght as its preferred agent for managing [he [iCopyright] services , .. to such AP licensees, Members and wcbsites. (lei. § t .2). 33. Moreover, AP agreed that: Neither party shall use the other party's Confidential Information for IDly purpose except to perform its obligations under tJl1S Agreement. (ld. § 4,2), 34, The CSA slates that the "business practices of either party, and future business plans and services will be treated as Confidential Information, whether designated us Confidential or not." (ld. § 4.1). 111e terms and conditions of the CSA arc also expressly designated as Confidential Information, (Id § 4.1.) 35. The CSA contains a termination clause that expressly sets forth the manner in which the CSA may be terminated: The t01111 of this Agreement ... shall continue for three (3) years and automatically renew for additional terms of one (1) year unless -9- either party provides written notice of termination to the other party ninety (90) days prior to the automatic renewal data. (ld. § 3.1). 36. The CSA names Bruce Glover, AP's Deputy Director of Business Development, as the AP contact for Business Issues. (Id. Schedule A). AP's Admitted Failures Under the CSA 37. From the outset of the contract, AP did not properly institute the iCop)'lighl services and failed to provide the proper inrerconnections for significant periods of time. AP also failed to update its website with the most up-to-date tag formats as supplied by iCopyright. In contravention of the agreement, on many articles, AP stripped the iCopyright toolbar of iCopyrighl's trademarks. AP stopped displaying the "Post" button, which is designed to facilitate reuse of the article on ther websitesin a user-friendly manner, AP inserted "This material may not be published, broadcast, rewritten or redistributed" right above (he iCopyright tags that were expressly designed so thatconlcnt could be published and redistributed. Additionally, AP failed to promote iCopyright's services to its members as required by the CSA. 38. AP has repeatedly acknowledged these failures. 39. Indeed, 011 April 16., 2008; the day after the effective date of the contract, Ted Mendelsohn of AP admitted that he was 40, Likewise in July 2008, Bruce Glover, the AP business contact identified in the CSA, agreed with iCopyright that the level of support for iCopyright from AP was 41. Although AP acknowledged in April 2008 that "unacceptable. " n September 2008~ AP again admitted - in a -10'- public comment by Paul Colford, AP's Director of Media Relations, that AP had Indeed, AP went beyond not promoting iCopyrighttc its members .. In August 2008, David Gwizdowski of the AP in a phone conversation with iCopyright said that there must b h~·t.r,,·'" AP would recommend iCopyright to AP's members. Similarly in October 2008, when iCopyright sought to promote its technology to CNN, an AP member, Mr. Gwizdowski demanded that iCopyright 42. In April 2010, AP held an internal meeting and discussed the implementation of iCopyright and - based on an oral report of that meeting provided to iCopyright - AP acknowledged that its implementation of iCopylight was sub-optimal and inconsistent with AP's contractual obligations. 43. Similarly, in July 20W,. Bruce Glover of AP acknowledged in an email to iCopynght that he was to explain or justity AP's failure to correct ongoing t Mr. Glover acknowledged that AP was to fix. The vc resulted in customers being unable to print or email or otherwise use the iCopyright tools 011 AP's content. 44. In July 2010, Jay Tuten, an AI> employee responsible since April 2008 for implementing the rCopyright tags on AP's website, attempted to defend AP's lack of compliance with the contract sayi 45. Most directly, in October 20IOJ Bruce Glover acknowledged all a phone call with the CEO ofiCopyright that AP has -II ~ 46, On information and belief, AP's repeated and persistent failures under the contract were intended to induce iCopyright to seck to terminate the contract. Indeed, even prior to the effective date of the contract Bruce Glover stated that "the practical view; . , is that if we [AP) remove services that materially adversely impact on your revenue, you'll end the contract." However, iCopyright did not terminate the contract. As the dominant distributor of newspaper content, AP provides tile critical method of delivery throughout its l.300~plus member network. iCopyright realized Ap1s important position, and recognized the fact that terminating the CSA would be detrimental to iCopynght and. given the substantial investment iCopyright had devoted to its work with AP and its members, could irreparably harm iCopyright As a result; iCopyright had no choice other than to continue to try to have AP perform its contractual obligations to iCopyright. 47, iCopyright performed its duties under the CSA by, among other things, processing and fulfilling requests for services, continuing to provide services for the contracted term, using AP'g logos, design, layouts, and other graphical clements in accordance with AP's Brand Guidelines, and taking reasonable measures to protect AP's confidential information. 48. iCopyright additionally was paying AP under the contract until AP's repeated and persistent failures ultimately led the parties to revisit the section of the eSA concerning payments by iCopyright. Section 2.5 of the CSA contemplates that iCopyrightcollect the revenues paid by end users for licenses, ete., and each month distribute a share of that revenue to -12- 50. In light of AP's dominant position as a distributor of news content, iCopyright had little choice but to continue to try to make the relationship work. iCopyright ultimately carne to U1C conclusion that there was no "work around" for AP's failures and that the failures could be rectified by AP alone. Indeed, although AP had previously stated it would rectify the problems with its implementation of the iCopyright toolbar on AP Hosted as per the CSA, on May 6, 2010 Jay Tuten confirmed that AP would not in fact be making the changes, Mr. Tuten explained that using the iCopyrighr toolbar design on AP Hosted As a consequence of this determination by AP and AP's many other failures to perform, after May 201 AP repeatedly acknowledged its breaches and acquiesced Indeed, as late as October 22 of this year, Bruce Glover of AP stated in a telephone conversation with the CEO of iCopyright that AP would not be coming after iCopyright for the back payment nor would AP tum off the tags. Mr. Glover had discussed the issue with Sue Cross, his superior at AP, and she because AP had iCopyright paid the amount due AP under the revenue sharing arrangement -13- The Registry - Solely Owned by A P 52. On information and belief, AI> is not now - and since at least March 26; 2010 has not been - intending to fuIJ1IJI its obligations under the CSA because AP is actively working to develop and substitute an AP-owned product for iCopyright's services called "The Registry," 53. On information and belief, having reviewed confidential iCopyright revenue projections showing the significant. revenue available if [Copyright technology were properly implemented at AP, and having recognized the immense value associated with the technology, AP determined that it would replace iCopyright with its own services, despite AP's obligations under the CSA. 54. On information and belief, AP has been developing "The Registry" as a substitute product while it has had access to and knowledge of iCopyright's Confidential Information, including iCopyright's business plans, technology, and practices. 55. 011 information and belief, in developing "The Registry," AP was able to, and did, misappropriate [Copyright's labors, skills, expenditures, and goodwill that [Copyright used and created to develop the i pyright platform. A P's Letter to the Antitrust Division of the US. Department of Justice 56. On March 26,20] 0; unbeknownst to iCopyright, AP filed a request for a Business Review Letter with the Antitrust Division at the U.S. Department of Justice seeking a statement regarding the Antitrust Division's enforcement intentions relating to AP's creation of "The Registry" (attached as Exhibit B). Notably, AP did not disclose in its filing with the Justice Department the existence of iCopyright's functionally identical products or the ongoing relationship and obligations that AP has to iCopynght. -14- 57. According to AP's March 26 letter, "The Registry will offer content owners and content users a more efficient (but non-exclusive) means of licensing content." AP has previously characterized iCopyright services in a nearly identical manner as providing a way "to license AP content" that is "is intended to make it easy for people." Similarly. AP had previously noted that the iCopyright deal makes "widely available an efficient. user friendly mechanism to license AP content whenever necessary! in multiple reuse formats." 58. As with iCopyright's tagging system) AP told the Justice Department that The Registry will "work with a voluntary presentation format ... for the coding of news content with standardize-d metadata that would provide speci fie information about each news item's attributes ... 59. Like iCopyright, The Registry "will be designed to provide content owners and publishers with a system to,"mnoni other things "specify the types of uses others may make of all or portions of the registered content" and to "specify the terms on which such usc may be made" and "affix unique tags ... to each content item registered , _ . to connect the content item 'is it is being published and/or consumed with the ... Registry," 60. Furthermore, like iCopyright, The Registry "will employ a variety of digital means, including the tags. _ ., to identify use of individual pieces of registered content on dig-ital platforms." 61. Similarly, "AP plans to support the ... Registry activities by assessing fees on each participant for the services that the participant elects to receive pertaining to the ... Registry." 62. Utterly ignoring the rCopyright technology that it is contractually obligated to promote, AP told the DO) that "[albsent an offering like the AP's proposed New Registry, it is -15- c stly and difficult for republishers to quickly learn the terms upon which content may be licensed and contract with the local publisher, and similarly costly and inefficient tor the local publisher to identify unauthorized usc of its content in order to secure the royalties to which it may be entitled." 63. Moreover, despite having signed the CSA and having reviewed iCopyright's business practices and plans, and having detailed communications with iCopyright employees about the same for over two years, AP told the DOJ that: AP believes that use of news content occurs without permission 11'0111 the rights owners in part because there is today no ready way (let alone an automated way) for a content owner to ascertain nil interested republishers as news stories break and develop and to communicate terms and conditions for LIse of its content, and because there is similarly no ready way for a republisher to quickly determine the terms applicable to licensing of content. (emphasis supplied .. ) 64. As described above, lCopyright does exactly these things. The CSA reflects AP's desire to have iCopyrighl provide virtually identical services to AP - albeit for payment that AP clearly now intends to avoid paying, by utilizing iCopyright's know-how to develop The Registry it has outlined in its letter to the DO]. Indeed, AP previously stated that iCopyrighl "simplifIies] the process by aggregating all the necessary reporting and administrative work." 65. As mentioned above) AP's letter of March 26 did not inform U1C DO) of 'opyrighr's products or of AP's obligations under the CSA. iCopyright Seeks Clarity About The Registry 66. On September 14,.2010, Bruce Glover of AP emailed Srinandan Kasi of AP about iCopyright and stated that following: -16- 67. In an internal email exchangeatAP.Mr. Kasi (the AP employee who on information and belief, was leading the development of The Registry) responded approximately ten minutes later stating e CEO of iCopyright responded the following day and asked whether Srinandan Kasi had provided any explanation that he could share. Bruce Glover of AP responded that 68. On October 19,2010, Mr. Glover slated that 69. On October 20, 2010. Bruce Glover of AP sent another email stating eSA. Mr. Glover claimed that Yet that same week Tom Curley, CEO of AP, made, a. highly publicized speech in which he said "For nearly a decade, the content our industry has created has been losing value on the Internet. That's due mostly to two things. First, the common practice of leaving content exposed on the Web to scraping, copying, pasting and aggregating has led to the creation of secondary markets for our content that have siphoned away considerable value.. .Just this past week, the Board of Directors of the Associated Press authorized management to pursue initiatives in both areas. Today, we are announcing our intent to create an independent rights clearinghouse for news publishers to manage the distribution and use of their content beyond their own Web properties." -17 - 70. On November 3, 2010j Jane Seagrave of AP again suggested that iCopyright AP1s'[mproper "Termination jt 71. On November 15.2010, without notice, Bruce Glover of AP emailed the CEO of iCopyrighl and stu 72. AP's attempt to "terminate" the eSA immediately by way of an email is not a process contemplated by the CSA and is a violation of the terms of that agreement. Indeed, as discussed above, Section 3.1 of the eSA provides AP with no right to terminate the CSA prior to the end of the term or without notice. 73. iCopyright, through its attorney, promptly informed AP that; among other problems with AP's actions, AP's "purported termination" was inappropriate (attached as Exhibit C). 74. On November 16; 20 I 0, AI> responded, through its attorney, asserting that although iCopyrighl's Jetter of November 15, 2010 had 110t been reviewed. AI' was "denjying] in full" all of iCopyright 's "factual assertions" and "legal claims" (attached as Exhibit D). 75, Despite ostensibly (and impermissibly) terminating the CSA on November 15, 2010; AP also continued 10 place iCopyright tags 011 AP content. However, at some point after the purported termination, AP cancelled iCopyright's access to AP's content servers, and effectively broke iCopyright's tags that continued to appear on AP content. 76. Although iC(1pyright's tools still appeared on AP's content, without access to AP's server, iCopyri.ghtcol.lld not. fulfill user requests. In this manner, AP's actions ensured end users would have a negative experience while attempting to use iCopyright's tools, trademarks, and services. Moreover, without access to AP's servers, the thousands of subscribers to =18- iCopyright's Clip&Copy service are recci ving severely degraded service because a significant portion of the content flowing through Clip&Copy was AP content. 77. Once the problem of broken lags was discovered by iCopyright, through counsel it, on November 18, 20 I 0, notified AP and demanded that access to its tagged content be restored (attached as Exhibit E), Rather dum restore the link, APchose to compound its breach by beginning to remove entirely iCopyri/iht's tags from its new content (and leaving broken the tags oncontent that was already in existence) (attached as Exhibit F). 78. AP's action of denying access to its servers and failing to placerCopyrigltt tags on new AP content will caus iCopyright irreparable harm. Publishers that have agreed to use iCopyright's tags and tools for AP generated content will cease using iCopyright's platform for that content. Each of these publishers has signed an agreement with A P> the term of which are in Schedule D of the CSA. Those terms prohibit a publisher from "deployling] .1 service containing AP content that is not deployed for AP Hosted content." This means that as AP removes iCopyright.'s platform on AP Hosted, each of the AP members that have signed a copy of Schedule 0 to the CSA will also remove iCopyri!:,ht's technology from AP content on those publishers' websitcs. 79. Perhaps more importantly, AP's action has caused - and in the absence of action from this Court will continue to cause - reactions harmful to iCopyright by customers of iCopyright that are also AP members. [Copyright has agreements with several AP members to provide services relating to content those members produce. As these AP members learn that they can no longer use iCopyrighl services for the AP content on their site, they will likely stop using ICopyright for their own content, whether to maintain a consistent presentation or out of concern. about iCopyrlght's ability to meet its financial obligations in light of AP1s claims. -19- Moreover, AP's actions harm K'opyright's reputation with respect to potential. customers who are members of AP, making it more difficult for iCopyright to enter into service agreements with those publishers, 80. In light of this irreparable harm, on November 20, 2010, iCopyright again wrote to counsel for AP explaining that jCopyright was suffering irreparable harm and that AP should "restorej] iCopyright's access privileges, notobliterate the tags themselves" (attached as Exhibit G) .. 81. In response to iCopyright's, AP's counsel stated that they disagreed and would not discuss the matter further prior to November 29, 2010 (attached as Exhibit H). Coul1tl Breach of Contract 82. Plaintiff repeats the allegations above as if fully set forth herein. 83. The CSA is an enforceable agreement that imposes upon AP certain contractual obligations. 84. AP hut) breached the terms of the CSA by, among other things failing to institute iCopyrighl tags and tools on AP's website, failing to promote iCopyright as required by the CSA violating confidential it)' provisions, improperly purporting to "terminate" the CSA, and cutting off iCopyright 's access to AP's servers. 85. If AP is not immediately enjoined from improperly purporting to "terminate" the CSA and cutting off iCopyright's access to AP's servers, thereby violating the CSA, iCopyright will be irreparably injured. Count II Unfair Competition 86. Plainti ff repeats the allegations above as if fully set forth herein. -20~ 87. In developing and launching "The Registry," AP has misappropriated iCopyrigi1t's labors, skills, expenditures, and goodwil1. 88. AP has exhibited bad faith by; among other things, evading the spirit of the CSA; the willful rendering of imperfect performance, interference with or failure to cooperate in jCopyrighCs performance under the CSAI and by suggesting in its letter to the DOJ that there is currently no automated technology similar to "The Registry." 89. Jf AP is not enjoined from its continuing breach of the CSA and from .. launching The Registry. and thereby further violating New York unfair competition law, then iCcpyright will be irreparably injured. JURVDEMAND 90. Pursuant to Fed. R. Civ. P. 38(b), Plaintiff demands a trial by jury of all of the claims asserted in this Complaint. so triable. I)RA YER FOR RELIEF WHEREFORE, Pluiutiff'prays us follows: 3. Imposing preliminary and permanent injunctive relief ordering AP to immediately cease from altering the statusquo that existed prior to November 15 and to f1.l11111 its obligations under a Content Services Agreement between the two parties; b. Damages to be determined at trial; c. Repayment of all amounts previously paid by [Copyright to AP pursuant to the CSA; d. Awarding rCopyright's attorneys' fees, costs and disbursements incurred as a result of this action; and -21- e. Awarding iCopyright such further relief as the Court deems just and proper under the circumstances, Dated: New York" New York November 23,2010 CADWALADE~' WICKERSHAM & TA~ LLP By,~~tt_ Colin A. Underwood colin.underwoodsjowt.corn One World Financial Center New York. NY 10281 Tel: (212) 504~6000 Fax: (212) 504-6666 Charles F. Rule (Pro Hac Pending) rick.rule@cwt.com Joseph J. Bial joseph. biaI@cwt.com 700 6lh St NW Washington, DC 20001 Tel: (202) 862-2200 Fax: (202) 862-2400 Attorneys lor PlaintiffiCopyright; /I1C. -22- VERIFICATION ANDREW S. ELSTON hereby declares: I. I am the Chief Executive Officer of iCopyright, Inc., the plaintiff in this action. 2. I have read the foregoing Complaint and know the contents thereof. 3. The same is true to my own knowledge, except as to matters stated to be alleged on information and 'belief and, as to those matters, I believe them to be true. Novem ber 22. 2010 Executed: Seattle, Washington Recommended DocumentsDocuments Similar To iCopyright.complaint.redaCTEDSkip carouselEMI Opposition to GoogleDMCA Safe Harbor Provisions for Search EnginesGoogle Motion for Summary JudgmentGoogle Amicus BriefMicrosoft AmicusUnited States Complaint Against U.S. Investigations Services, Inc. (USIS)Pinterest ComplaintYelp v. 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