Outsourcing of course catalogs, false advertising, and copyright

CollegeSource, Inc. v. AcademyOne, Inc., 2011 WL 1540403 (E.D. Pa.)

The parties compete to provide online college transfer services. CollegeSource complained that AcademyOne republished course catalogs and course information that CollegeSource digitized and made available to customers. These are used to facilitate transfer agreements between schools and to help consumers determine whether courses at different institutions are equivalent.

CollegeSource argued that AcademyOne breached CollegeSource’s Terms of Use by republishing the course descriptions, or in the alternative unjust enrichment. It also claimed false advertising based on a letter AcademyOne sent to various academic institutions “under the guise of a freedom of information request.” CollegeSource sought an injunction against use of the catalogs and corrective advertising. (The case is related to two previous lawsuits, one in which AcademyOne failed to win its claims of false advertising, trademark infringement, and cybersquatting, and one with similar claims to this one dismissed for want of personal jurisdiction, now on appeal in the Ninth Circuit (pending for more than 18 months, it appears).)

The court denied a preliminary injunction for want of irreparable injury on the contract and unjust enrichment claims, and for failure to show likely success on the merits of the false advertising claim.

CollegeSource has accumulated more than 39,000 digital course catalogs over 16 years by contacting individual colleges and requesting copies. It had no formal contracts or licensing agreements for distributing the catalogs. When it receives paper copies, it scans and OCRs them to digitize them. It adds a cover “splash page,” makes the data searchable, and appends its ToU specifying that the information may only be used for personal use and that data may not be displayed for use on another website or service.

The ToU say (quite implausibly, w/r/t the derivative works claim):

CollegeSource® and Career Guidance Foundation CollegeSource® digital catalogs are derivative works owned and copyrighted by CollegeSource®, Inc. and Career Guidance Foundation. Catalog content is owned and copyrighted by the appropriate school.
While CollegeSource®, Inc. and Career Guidance Foundation provides [sic] information as a service to the public, copyright is retained on all digital catalogs.
This means you may NOT:
* distribute digital catalog files to others,
* "mirror" or include digital catalog files on an Internet (or Intranet) server,
* modify or re-use digital catalog files without the express written consent of CollegeSource® and Career Guidance Foundation and the appropriate school.
You may:
* print copies of the information for your own personal use,
* store the files on your own computer for personal use only, or
* reference this material from your own documents.
CollegeSource® and Career Guidance Foundation reserves [sic] the right to revoke such authorization at any time, and any such use shall be discontinued immediately upon written notice from CollegeSource ® and Career Guidance Foundation.

AcademyOne testified that it built its corpus of course descriptions and college catalogs by getting it directly from about 80 schools, visiting about 4000 school websites and downloading html or PDF files—about 18,000 PDF files (its Chinese contractor did this). CollegeSource found approximately 680 catalogs that were digitized or converted by CollegeSource on AcademyOne's www.collegetransfer.net website, all with Terms of Use intact. Some of the 680 catalogs may have been downloaded by the Chinese contractor because some colleges and universities re-direct or "back-link" to CollegeSource's collection of PDF catalogs or because the colleges and universities posted copies of CollegeSource's catalogs directly on their own website.

AcademyOne also previously attempted to license CollegeSource’s catalogs, but CollegeSource declined.

After receiving CollegeSource’s C&D, AcademyOne removed the links to every PDF file of a whole course catalog on its website. However, the actual PDF files themselves were not immediately removed. Thus, someone who had the direct URL of the PDF catalogs would still be able to access the catalogs directly. A few months later, AcademyOne also removed the PDF files of every whole catalog from its servers and deleted the feature allowing users to access course catalogs. The 680 whole catalogs in question have not been in AcademyOne's database since mid-2007, though it did keep computer backup and litigation copies of the files at issue in compliance with its litigation obligations.

The Chinese contractor then re-collected course descriptions from school websites, with new protocols against downloading PDFs from CollegeSource, checking to make sure there were no downloads from CollegeSource internet addresses. AcademyOne nonetheless posted course descriptions from two course catalogs that might have been from CollegeSource’s websites, which it removed after becoming aware of the issue. It removed every course description that might have been derived from CollegeSource’s materials, then reposted certain descriptions after verifying derivation from other sources. There was no evidence that course descriptions from the 680 catalogs currently appear on AcademyOne's website or in its database.

Meanwhile, AcademyOne’s principal sent letters to public schools under applicable state freedom of information laws. AcademyOne requested any copies of any correspondence, emails or contractual agreements between the academic institution and CollegeSource that granted CollegeSource the authority to create and claim a derivative copyright of the institutions' printed or digital catalogs or add CollegeSource's various enhancements to the catalogs. Every school that responded indicated that there were no agreements giving CollegeSource the right to restrict the use of the course descriptions created by the schools. In response to this letter, various academic institutions questioned CollegeSource about what it was doing, and one client asked CollegeSource to remove the institution’s catalog from its collection.

The court found no irreparable injury on the breach of contract/unjust enrichment claim. CollegeSource argued that, without an injunction, nothing would prevent AcademyOne from reposting information gleaned from CollegeSource-digitized catalogs, but the court was unpersuaded given AcademyOne’s compliance with CollegeSource’s takedown requests and institution of procedural safeguards against future uses. CollegeSource’s delay in filing for a preliminary injunction (it sued in California in 2008, then in E.D. Pa. in July 2010, but didn’t ask for a PI until December 2010) also cut against a finding of irreparable harm. Damages could compensate for any ultimately proven violation of the law.

False advertising under the Lanham Act: the letter AcademyOne sent sought copies of any agreements between the academic institution and CollegeSource that would "grant[ ] CollegeSource … the authorization to create and claim a derivative copyright of [the academic institution's] printed or digital catalog for [2006-2010]; limit the rights of distribution of the electronic version located on their website; archive the file; add their logo and Terms of Use to the front of each catalog and charge for access to the catalog." The letter further explained that the request was made in connection with "copyright claims filed" in this lawsuit.

CollegeSource argued that the letter was an ad and that it was literally false: (1) no copyright claims are asserted in the lawsuit; (2) CollegeSource wasn’t attempting to preclude AcademyOne "and other software providers" from providing automated student transfer systems; (3) CollegeSource didn’t claim control of catalogs on its clients website.

The court rejected the literal falsity arguments, declining to address the “advertising or promotion” issue.

First, although no violation of copyright law is asserted in this lawsuit, such an understanding and description is a reasonable characterization of this matter for a non-lawyer to make. The heart of the violation alleged in this action is that AcademyOne violated the copyright and disclaimer notice appended to CollegeSource's catalogs by extracting course descriptions for its own products. In essence, the rights CollegeSource seeks to vindicate, though styled in terms of breach of contract, are very similar to a lay conception of copyright infringement. Indeed, the plaintiff has cited to several copyright cases to support its claim for injunctive relief and its original cease and desist letter declared AcademyOne's actions to be a violation of the Copyright Act.

The author of the letter testified that he meant to refer to CollegeSource's copyright notice included in its digitized catalogs, not a legal cause of action. This was ambiguous, not literally false.

AcademyOne’s contention that CollegeSource was attempting to prevent AcademyOne and other software providers from providing automated student transfer systems was also ambiguous. CollegeSource argued that only AcademyOne was the subject of the lawsuit and thus it is false to refer to "other software providers." But AcademyOne had reason to believe that CollegeSource intended to pursue claims against other companies that might utilize CollegeSource's digitized information.

Finally, it was not unambiguously false for the letter to state that "CollegeSource claims control of the digital catalogs they collect, even if they reside on your website." “AcademyOne presented evidence that some colleges and universities either directly posted, or provided links to, CollegeSource's digitized catalogs that contain CollegeSource's Terms of Use. In this way, a university's course catalogs that appear to an ordinary user to be on the university's website may be subject to CollegeSource's asserted Terms of Use.”

These statements were either true or ambiguous. (Materiality also seems important: the difference between the technical aspects, whether legal or on whose servers the catalogs were located, is unlikely to be incredibly important to schools, especially schools discovering that they outsourced their catalogs to a private provider who now claims monopoly control over the digital versions.)

Given this result, the next question was whether there was sufficient evidence of deceptiveness. Though one institution requested that its catalog be removed from CollegeSource’s collection, there was no evidence in the record about its reasons. Several other institutions asked CollegeSource for more information, but there was no evidence about how many inquiries or whether the requesters were actually confused about the facts. Thus, CollegeSource didn’t show likely success on the merits.

Comments: though this is a legal loss for CollegeSource, it’s worth noting that AcademyOne apparently felt bound to respect the ToU—even in cases where that was the best way to get the course catalogs from the schools themselves, which had linked to the CollegeSource copies. So CollegeSource protected a lot of its investment. Also, the schools that did this probably do need to make clear to CollegeSource that it has no claim to the catalogs. Maybe a CC license?