SalesTraq America, LLC v. Zyskowski et al, No. 2:2008cv01368 - Document 22 (D. Nev. 2009)

Court Description: ORDER denying 16 Plaintiff's Motion for Preliminary Injunction. See order re specifics. Signed by Judge Larry R. Hicks on 6/10/09. (Copies have been distributed pursuant to the NEF - SL)
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SalesTraq America, LLC v. Zyskowski et al Doc. 22 1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 DISTRICT OF NEVADA 8 *** ) ) ) ) ) ) ) ) ) ) ) ) 9 SALESTRAQ AMERICA, LLC, 10 Plaintiff, 11 v. 12 JOSEPH A. ZYSKOWSKI and DEVMARKETING, INC., 13 Defendants. 14 15 2:08-CV-01368-LRH-LRL ORDER Before the court is Plaintiff SalesTraq America, LLC’s (“SalesTraq”) Motion for 16 Preliminary Injunction (#161). Defendants Joseph Zyskowski and devMarketing, Inc. 17 (“devMarketing”) filed an opposition (#17) to which SalesTraq replied (#21). 18 I. Facts 19 A. SalesTraq’s Evidence 20 SalesTraq is a business that provides information regarding Las Vegas-area residential 21 property on a fee-subscription basis. Before its formation, SalesTraq’s current president, Larry 22 Murphy, accumulated a large number of floor plans and information sheets published by Las Vegas 23 builders. In the course of arranging these materials into a compilation, Murphy authored three sets 24 of numeric designators. These designators are searchable by computer algorithm and encapsulate 25 26 1 Refers to the court’s docket entry number Dockets.Justia.com 1 information concerning the attributes and location of each house plan in the compilation 2 (“Information Content”). The Information Content indicates the ages of houses, the number of 3 alternative floor plans available for a given house model, and the builder associated with a given 4 floor plan. On a typical page of SalesTraq’s compilation, the Information Content appears in the 5 form of a “Details” box, which includes either a floor plan number or a model number, although 6 some pages include both numbers. 7 Since 1997, SalesTraq has provided its compilation to subscribers in two formats: its 8 website at salestraq.com and a CD-ROM or DVD. From August 2000 through August 2001, 9 Defendant Zyskowski held a six-month SalesTraq subscription and received multiple CD-ROMs or 10 DVDs. Zyskowski also held a six-month subscription to salestraq.com beginning September 20, 11 2007. 12 In late 2007, Murphy discovered devMLS.com, a website owned by Defendant 13 devMarketing. Murphy believes Defendants copied content from salestraq.com and placed that 14 content on devMLS.com. In particular, Murphy asserts that floor plans on devMLS.com contain 15 Information Content associated with the same floor plans on salestraq.com. 16 B. Defendants’ Evidence 17 In 2007, Defendant Zyskowski decided to create a database for real estate agents in the Las 18 Vegas area. As part of this endeavor, Zyskowski and a computer technician entered information 19 concerning all active Las Vegas area new home developments. After developing the active listing 20 database, Zyskowski decided to create an archived listings database containing floor plans and 21 information about house models in closed developments. To obtain this information, Zyskowski 22 purchased access to SalesTraq’s database and reviewed its archived files. If a floor plan was 23 included in an archived listing, Zyskowski used that floor plan and associated information to create 24 an archived listing in devMLS’s database. 25 26 While reviewing SalesTraq’s database, Zyskowski noticed floor plan numbers and model 2 1 numbers appearing on floor plan drawings. Zyskowski believed that the numbers were created by 2 builders or developers to identify floor plans or models. He therefore indicated the floor plan 3 numbers and some model numbers in the archived section of devMLS.com. The floor plan 4 numbers and model numbers in devMLS.com’s archived listings have no effect on the website’s 5 search function and have no significance for a devMLS.com user. Rather, each listing in the 6 devMLS database is assigned a unique “devMLS number,” and the archived listings are ordered by 7 square footage. 8 II. Legal Standard 9 A preliminary injunction is an “extraordinary remedy that may only be awarded upon a clear 10 showing that the plaintiff is entitled to such relief.” Winter v. Natural Res. Def. Council, 129 S. Ct. 11 365, 376 (2008). To succeed, a plaintiff seeking a preliminary injunction must establish the 12 following: (1) a likelihood of success on the merits, (2) a likelihood of irreparable injury to the 13 plaintiff if injunctive relief is not granted, (3) a balance of hardships favoring the plaintiff, and (4) 14 advancement of the public interest. Id. (citations omitted).2 15 III. 16 Discussion SalesTraq seeks a preliminary injunction on the basis that it will likely succeed on its claims 17 for copyright infringement, breach of a nonexclusive license, and commercial appropriation. The 18 court now turns to each of these claims in turn. 19 A. Copyright Infringement 20 To establish a prima facie case of copyright infringement, a plaintiff must demonstrate the 21 following: “(1) ownership of the allegedly infringed material and (2) violation by the alleged 22 2 23 24 25 26 Prior to Winter, the Ninth Circuit also applied an alternative, “sliding-scale” test. The Court in Winter did not discuss the continued validity of the this sliding scale approach. However, in light of the Winter decision, the Ninth Circuit has indicated, “To the extent our cases have suggested a lesser standard, they are no longer controlling, or even viable.” Am. Trucking Associations v. City of Los Angeles, 559 F.3d 1046 (9th Cir. 2009). Accordingly, this court will follow the Supreme Court and require Plaintiff to make a showing on all four of the preliminary injunction requirements. 3 1 infringer of at least one of the exclusive rights granted to copyright holders.” LGS Architects, Inc. 2 v. Concordia Homes, 434 F.3d 1150, 1156 (9th Cir. 2006). The court concludes SalesTraq has 3 failed to show a likelihood of success on its copyright infringement claim. Specifically, SalesTraq 4 has not made an adequate showing under the second prong of a copyright infringement claim: 5 Defendants’ violation of one of the exclusive rights granted to SalesTraq by a copyright in the 6 Information Content. 7 The court will assume for purposes of SalesTraq’s motion that the Information Content is 8 copyrightable expression by its coordination or arrangement of facts concerning the location, age, 9 builder, alternative floor plans, and builder associated with each floor plan. See Feist Publications, 10 Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 357-58 (1991) (stating that facts may be copyrightable 11 when they are selected, coordinated, or arranged in an original manner). SalesTraq has failed to 12 show, however, that Defendants copied SalesTraq’s coordination or arrangement of these 13 underlying facts. See id. at 361 (stating that not all copying is copyright infringement); 4 Melville 14 B. Nimmer & David Nimmer, Nimmer on Copyright § 13.01[B] (2009) (stating that even if a 15 defendant copied a plaintiff’s work, the question still remains whether the copying gives rise to 16 liability for infringement). 17 Defendants, of course, acknowledge that devMLS.com displays the Information Content in 18 the form of floor plan numbers or model numbers. Crucially, however, Defendants also present 19 uncontroverted evidence, that the numeric Information Content has no significance for a 20 devMLS.com user. (See Second Supplemental Decl. of Joseph A. Zyskowski (#18) ¶ 14.) Indeed, 21 it appears the Information Content serves only as a means for searching facts on SalesTraq’s 22 database. (See Murphy Aff. (#16) Ex. 1 ¶ 6) (“The Information Content thus reduces into 23 numerical form, easily searchable via computer algorithm, several different types of information 24 that may be important to people searching the SalesTraq compilation . . . .”). Thus, while the 25 Information Content may serve as a designator for a creative arrangement or coordination of facts 26 4 1 at salestraq.com, based on the present record, the court finds the Information Content is merely an 2 unprotected set of arbitrary numbers in the context of devMLS.com. See e.g., Toro Co. v. R&R 3 Products Co., 787 F.2d 1208, 1213 (8th Cir 1986) (holding that arbitrarily assigned part numbers 4 are not original expression). SalesTraq has therefore failed to show that Defendants’ copied a 5 protectible element of SalesTraq’s compilation. As such, SalesTraq has not demonstrated a 6 likelihood of success on the merits of its copyright infringement claim. 7 B. Breach of an Implied License 8 Turning now to SalesTraq’s breach of an implied license claim, SalesTraq must prove (1) 9 the parties intended to contract, (2) the parties exchanged promises, and (3) Defendants promised 10 not to place SalesTraq’s content on Defendant’s website. See Smith v. Recrion Corp., 541 P.2d 11 663, 665 (Nev. 1975). Here, although SalesTraq presents invoices indicating that Zyskowski 12 purchased multiple subscriptions to SalesTraq’s services, the court is unable to discern how these 13 documents imply limitations on Defendants’ use of SalesTraq’s compilation. SalesTraq has 14 therefore failed to show a likelihood of success on its breach of an implied license claim. 15 C. Commercial Misappropriation 16 SalesTraq’s evidentiary deficiency also extends to its commercial misappropriation claim. 17 Although Nevada has yet to recognize a claim for misappropriation of non-trade-secret 18 information, the court believes, if presented with the issue, the Nevada Supreme Court would 19 recognize such a claim. Nevada currently recognizes conversion and unjust enrichment, claims 20 closely related to commercial misappropriation. See Mainor v. Nault, 101 P.3d 308, 317 (Nev. 21 2004); Evans v. Dean Witter Reynolds, Inc., 5 P.3d 1043, 1048 (Nev. 2000). Moreover, California, 22 which Nevada has followed when recognizing new commercial tort theories,3 presently recognizes 23 24 25 26 3 See U.S. Fidelity & Guar. Co. v. Peterson, 540 P.2d 1070, 1071 (Nev. 1975) (looking to California law as persuasive authority for establishing the implied covenant of good faith and fair dealing in the insurance context). 5 1 a claim for misappropriation of non-trade-secret information. See U.S. Golf Ass’n v. Arroyo 2 Software Corp., 81 Cal. Rptr. 2d 708, 714 (Ct. App. 1999). 3 4 The current record, however, does not demonstrate SalesTraq is likely to succeed on its claim. A claim for commercial misappropriation consists of the following elements: 5 (a) the plaintiff invested substantial time, skill or money in developing its property; (b) the defendant appropriated and used the plaintiff's property at little or no cost to the defendant; (c) the defendant’s appropriation and use of the plaintiff's property was without the authorization or consent of the plaintiff; and (d) the plaintiff can establish that it has been injured by the defendant's conduct. 6 7 8 Id. In support of contention that it will succeed on its commercial misappropriation claim, 9 SalesTraq briefly addresses the first three elements but fails to provide any evidence concerning the 10 fourth, that is, whether SalesTraq has been injured by Defendants’ conduct. Rather, SalesTraq 11 avers only that “SalesTraq has been injured, to an extent that discovery will make more clear, by 12 Defendants’ misappropriation, in that SalesTraq has lost potential and existing subscribers to 13 Defendants due to Defendants’ misappropriation.” (Mot. Prelim. Inj. (#16) at 12:6-8.) This 14 assertion, however, without any evidentiary support is insufficient to meet SalesTraq’s burden of 15 showing a likelihood of success on the merits. SalesTraq’s motion for a preliminary injunction is 16 therefore denied. 17 IV. 18 Conclusion SalesTraq’s evidence is sufficient to show that it may ultimately succeed on the merits of 19 this action. Nevertheless, the present record falls short of the burden SalesTraq must meet to 20 warrant issuance of a preliminary injunction. While further discovery may provide the requisite 21 showing, the court cannot grant SalesTraq’s motion based upon the current record. 22 /// 23 /// 24 /// 25 /// 26 6 1 2 IT IS THEREFORE ORDERED that SalesTraq’s Motion for Preliminary Injunction (#16) is DENIED. 3 IT IS SO ORDERED. 4 DATED this 10th day of June, 2009. 5 6 7 __________________________________ LARRY R. HICKS UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 7