Facebook, Inc. v. Power Ventures, Inc.

Filing 41

Power Ventures, Inc.'s and Steve Vachani's ANSWER to Complaint with Jury Demand, COUNTERCLAIM of Power Ventures, Inc. and Steve Vachani against Facebook, Inc. bySteven Vachani, Power Ventures, Inc.(a California corporation), Power Ventures, Inc.(a Cayman Island Corporation). (Fisher, Lawrence) (Filed on 7/9/2009)

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Facebook, Inc. v. Power Ventures, Inc. Doc. 41 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page1 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LAW OFFICES OF SCOTT A. BURSOR Scott A. Bursor (pro hac vice) 369 Lexington Avenue, 10th Floor New York, NY 10017 Telephone: (212) 989-9113 Facsimile: (212) 989-9163 BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER, LLP Alan R. Plutzik (State Bar No. 077785) Michael S. Strimling (State Bar No. 96135) L. Timothy Fisher (State Bar No. 191626) 2125 Oak Grove Road, Suite 120 Walnut Creek, CA 94598 Telephone: (925) 945-0200 Facsimile: (925) 945-8792 Attorneys for Defendants Power Ventures, Inc. and Steve Vachani UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA FACEBOOK, INC., Plaintiff, -againstPOWER VENTURES, INC. d/b/a POWER.COM, a California corporation; POWER VENTURES, INC. a Cayman Island Corporation, STEVE VACHANI, an individual; DOE 1, d/b/a POWER.COM, an individual and/or business entity of unknown nature; DOES 2 through 25, inclusive, individuals and/or business entities of unknown nature, Defendants. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case No. 5:08-cv-05780 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Dockets.Justia.com Case5:08-cv-05780-JF Document41 Filed07/09/09 Page2 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants Power Ventures, Inc. and Steve Vachani (hereafter collectively referred to as "Defendants" or "Power") hereby answer the First Amended Complaint ("Complaint") filed by Plaintiff Facebook, Inc. ("Facebook"). I. INTRODUCTION AND BACKGROUND Power believes in a borderless Internet where users have the right to own and control their own data. Indeed, Power recently published an Internet User Bill of Rights detailing three fundamental rights of Internet users that must be protected rights to ownership, control and privacy. Power's Internet User Bill of Rights details these three fundamental rights as follows: Ownership The right to complete and total ownership of their content-- including profiles, messages, media, contacts and all other data. Control The right to access, disseminate, transfer or aggregate their content on any platform, or to authorize third-parties to do so for them. Privacy The right to protect their content and personal information from other users and corporate entities alike. Power's core mission is to protect and to defend these rights and to provide users with the tools they need to exercise them. Facebook, on the other hand, has attempted to thwart its users' ability to exercise these rights with respect to their own data. The bulk of the Facebook site is comprised of "User Content." This "User Content" includes "photos, profiles, messages, notes, text, information, music, video, advertisements, listings, and other content that [users] upload, publish or display" on the Facebook site. This data is not owned by Facebook. It is owned by the user. Although users' ownership of their own data seems self-evident, and it has been one of our core principles since Power was founded, Facebook historically has been criticized for not respecting its users' rights to ownership of their own content and that is the crux of the dispute. Facebook is attempting to prevent Power from providing tools to Internet users that allow those users to exercise ownership and control over their own data. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 1 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page3 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Facebook is also attempting to stifle the development of Power's innovative new technologies that will liberate Internet users from proprietary restrictions that prevent them from controlling access to their own data. A. Facebook's Allegation That Power.com Has Made "Unauthorized" Use Of Users' Login Passwords Is False And Frivolous One example of Facebook improperly restricting their users' ownership and control of their own data is Facebook's purported "security measure" of prohibiting users from providing their own username and password to third parties, such as Power. This purported "security measure" is discussed at paragraph 3 of Facebook's complaint. But this is not a "security measure" at all. The entry of usernames and passwords to access a website through a third-party site poses no threat to security. On the contrary, it is commonplace in the industry. Indeed, it is a practice that Facebook itself employs on its own site to allow its users to access other websites through Facebook. For example, below is a screen capture from http://www.facebook.com/gettingstarted.php? ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 2 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page4 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 On this page, Facebook solicits users to enter their account names and passwords for users' email accounts at Google's Gmail, AOL, Yahoo, Hotmail, or other third party websites. Facebook then uses the account information to allow the user to access those accounts through Facebook, and to import information i.e., to "scrape" data from those third-party sites into Facebook. This practice fueled Facebook's growth by allowing Facebook to add millions of new users, and to provide users with convenient tools to encourage their friends and contacts to join Facebook as well. Facebook seeks to stifle competitors from using the same type of utility. Facebook's purported "security measure" prohibiting Facebook users from logging into Facebook through third-party sites, such as Power.com unduly restricts users' ability to access their own data. It thwarts the development of innovative technologies, platforms, and applications that users might wish to use, such as those offered by Power.com. In this lawsuit Facebook alleges that Power has made "unauthorized" use of Facebook users' login credentials (usernames and passwords). See Complaint 50 ("In order for a visitor to integrate a Facebook account into Power.com's website, Power.com requires that users provide it with their Facebook username and password."). Power permits users to enter their account information to access the Facebook site through Power.com, just as Facebook does with respect to other sites. This is a common industry practice. Is not "unauthorized." It is clearly authorized by the user who enters his own account information. Facebook's complaint does not identify a single instance of "unauthorized" use of a username or password. Nor does Facebook's complaint identify a single instance in which anyone's account security was compromised by Power in any way. As we point out above, users' right to security of their data is one of the three fundamental principles underlying Power's Internet User Bill of Rights. Power has taken every appropriate measure to protect that security. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 3 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page5 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 B. Facebook's Allegation That Power.com Has Sent Unsolicited Commercial Messages To Facebook's Users Is False; In Fact, Facebook Itself Sent The "Unsolicited Message" Referenced In The Complaint Facebook's complaint alleges that Power sent "unsolicited" email messages to Facebook users which were "deceptive and misleading." See Complaint 65-73. That allegation is false. Power did not send the email message referenced in the complaint. Facebook did. Facebook allows users to create "events," which Facebook then invites friends to attend. The screen captures from www.facebook.com below illustrates the event creation process. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 4 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page6 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI After the user has created the event and selected the friends to be invited, Facebook then sends the invitations by email: 5 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page7 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 This email is sent by Facebook. Facebook determines the address that appears in the "From:" field See Complaint 68 ("From: Facebook"). Facebook also adds the closing signature from "The Facebook Team." See Complaint 69 ("The message ... is signed by "The Facebook Team," which is both misleading and false."). Neither the user nor Power has any control over these elements of the email message. All content in these email messages that Facebook alleges to be misleading and false was written and appended to the message by Facebook itself. Notably, Facebook's complaint is devoid of any allegation that any user was actually misled by any of these messages. Facebook's pleading is also devoid of any allegation that any user, or any recipient of such messages, has complained about the contact or about the message being unsolicited. Facebook's allegations concerning these "unsolicited" emails are trumped-up and frivolous. As Facebook well knows, Facebook itself was the source of these messages. And Facebook was the source of every element that Facebook contends is false or misleading. Every email referenced in Complaint 65-73 was generated and transmitted by Facebook as a result of a conscious action taken by users. C. Facebook's Allegations That Power.com Has Violated Facebook's Intellectual Property Rights Are Frivolous Power.com believes strongly in intellectual property rights, including the right of users to own and to control their own data. That is the intellectual property of the user. Facebook does not own that intellectual property. The users do. Facebook's complaint broadly alleges that Power.com has violated Facebook's rights by copying the Facebook website. But the complaint does not identify either the copyrighted work or the allegedly infringing work. It refers generically to `Facebook's website,' but does not identify any portion of the website, any graphics or text, or any computer program that is alleged to have been copied `and/or' the source for a derivative work. See Complaint 125. The complaint also refers generically to "copies and/or derivative works created by Defendants," id. 127, but it does not identify the "copies and/or derivative works" in any intelligible way. This is probably the most vague allegation of copyright infringement that has ever been filed. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 6 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page8 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Facebook website is massive. It includes many different elements some of which are subject to copyrights owned by Facebook and some of which clearly are not. The bulk of the Facebook site is comprised of "User Content." This "User Content" includes "photos, profiles, messages, notes, text, information, music, video, advertisements, listings, and other content that [users] upload, publish or display" on the Facebook site. See Facebook Terms of Use (rev. Sept. 23, 2008), available at http://www.facebook.com/terms.php. Facebook owns no copyright to such User Content. Indeed, Facebook's own Terms of Use expressly state that "Facebook does not assert any ownership over your User Content." Id. The Facebook site also contains "articles, photographs, text, graphics, pictures, designs, music, sound, video, information applications, software and other content or items belonging to or originating from third parties." Id. (section headed "Third Party Websites and Content"). Facebook does not own the copyrights to these third party materials. Power.com provides users with utilities that allow them to copy their own User Content for purposes of updating it and making it portable to other sites without copying other elements of the Facebook website. The Complaint does not allege that Power.com has copied any element of the Facebook site that is subject to a copyright owned by Facebook. The applicable copyright statute, 17 U.S.C. 512, requires a notification of copyright infringement to include "[i]dentification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site." 17 U.S.C. 512(c)(3)(A)(ii). It also requires "[i]dentification of the material that is claimed to be infringing or the subject of infringing activity." Id. 512(c)(3)(A)(iii). Indeed, even Facebook's own DMCA Notice of Copyright Infringement, which it uses to address reports of potential copyright infringement on its own site, requires this information. See Facebook DMCA Notice of Copyright Infringement, available at http://www.facebook.com/copyright.php?copyright_notice=1 ("Identify the copyrighted work that you claim has been infringed. ... Identify the content on our site that you claim infringes your copyright. ... Where does the infringing content appear on our site? In almost all instances the ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 7 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page9 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 best way to help us locate the content you are reporting is to provide us with the URL."). Facebook's complaint does not include even the most basic information that it requires from its own users in order to report copyright infringement. Unable to identify any actual infringement of a copyright-protected element of its website, Facebook has resorted to arguing that Power "created cached copies of the [Facebook] website." See Facebook's 4/17/09 Opposition to Power's Motion to Dismiss at 9:13-15. What that means is that Facebook alleges that every time the Facebook website is displayed on a computer it is "copied," albeit momentarily, in the computer's cached memory. This allegation of copying is akin to charging the Dell company with copyright infringement whenever a user accesses the Facebook website through a Dell computer; or charging the Lexmark company with copyright infringement every time a user prints a page from the Facebook website on a Lexmark printer. Furthermore, even if Facebook could premise a copyright claim on the ephemeral and momentary copying of a website in a computer's cached memory, such temporary and intermediate copying in order to extract non-copyrighted elements such as the User Content at issue here falls squarely within the fair use doctrine. II. GENERAL DENIAL Pursuant to Fed. R. Civ. P. 8(b)(3), Defendants generally deny all allegations in the complaint except those specifically admitted herein. III. SPECIFIC DENIALS 1. 2. Defendants deny the allegations in paragraph 1. Defendants deny knowledge or information sufficient to form a belief as to the truth of the allegations in 2, except that Defendants admit that Facebook operates a social networking site. 3. Defendants deny knowledge or information sufficient to form a belief as to the truth of the allegations in 3, except that Defendants deny that Facebook's attempt to prohibit users from sharing their login information is a "security measure." Facebook solicits login information ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 8 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page10 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 for third-party sites. This is a common industry practice. Facebook's attempt to prohibit others from doing the same is an illegal and anticompetitive practice. 4. Defendants deny knowledge or information sufficient to form a belief as to the truth of the allegations in 4. 5. Defendants deny the allegations in 5, except that Defendants admit that they operate a website, www.power.com, which offers to integrate multiple social networking accounts into a single experience on Power.com. 6. 7. 8. Defendants deny the allegations in 6. Defendants deny the allegations in 7. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 8. 9. 10. Defendants deny the allegations in 9. Defendants deny the allegations in 10, except that Defendants admit that Power Ventures, Inc. is a corporation incorporated in the Cayman Islands, doing business in the State of California. 11. Defendants deny the allegations in 11, except that Defendants admit that Vachani is CEO of Power.com. 12. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 12. 13. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 13. 14. 15. 16. 17. No response needed. The allegations of 15 state conclusions of law to which no response is required. The allegations of 16 state conclusions of law to which no response is required. The allegations of 17 state conclusions of law to which no response is required. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 9 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page11 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18. Defendants deny the allegations in 18, except that Defendants admit that Power permits users to enter their account information to access the Facebook site through Power.com, just as Facebook does with respect to other sites. This is a practice common in the industry. 19. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 19. 20. 21. Defendants admit the allegations in 20. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 21, except that Defendants admit that Facebook users register with a unique user name and password. 22. 23. 24. 25. 26. Defendants admit the allegations in 22. Defendants admit the allegations in 23. Defendants admit the allegations in 24. Defendants admit the allegations in 25. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 26. 27. 28. Defendants deny the allegations in 27. Defendants deny the allegations in 28, except that Defendants admit that Facebook permits limited integration with third party websites through Facebook Connect. 29. Defendants admit the allegations in 29, except that Defendants deny that the Terms of Use attached as Exhibit A are current. Defendants also deny that certain of the terms of use are legally enforceable. 30. Defendants admit that the allegations in 30, except that Defendants deny that certain of the terms of use are legally enforceable. 31. 32. 33. The allegations of 31 state conclusions of law to which no response is required. Defendants deny the allegations in 32. Defendants deny the allegations in 33. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 10 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page12 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 34. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 34. 35. 36. 37. Defendants deny the allegations in 35. Defendants deny the allegations in 36. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 37. 38. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 38. 39. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 39. 40. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 40. 41. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 41. 42. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 42. 43. 44. Defendants admit the allegations in 43. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 44. 45. Defendants deny the allegations in 45, except that Defendants admit that Power permits users to enter their account information to access the Facebook site through Power.com, just as Facebook does with respect to other sites. This is a practice common in the industry. 46. Defendants deny the allegations in 46, except that Defendants admit that Vachani and other Power employees have registered for personal Facebook accounts. 47. 48. 49. Defendants deny the allegations in 47. Defendants deny the allegations in 48. Defendants admit the allegations in 49. 11 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case5:08-cv-05780-JF Document41 Filed07/09/09 Page13 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 50. Defendants deny the allegations in 50, except that Defendants admit that Power permits users to enter their account information to access the Facebook site through Power.com, just as Facebook does with respect to other sites. This is a practice common in the industry. 51. 52. 53. 54. 55. 56. 57. Defendants deny the allegations in 51. Defendants deny the allegations in 52. Defendants admit the allegations in 53. Defendants deny the allegations in 54. Defendants deny the allegations in 55. Defendants deny the allegations in 56. Defendants deny the allegations in 57, except that Defendants admit that Facebook has communicated such claims to Mr. Vachani. 58. Defendants deny the allegations in 58, except that Defendants admit that Vachani offered to attempt to integrate Power.com with Facebook Connect. 59. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 59. 60. Defendants deny the allegations in 59, except that Defendants admit that Vachani communicated concerns about Power's ability to integrate Power.com with Facebook Connect on the schedule that Facebook was demanding. 61. 62. 63. Defendants deny the allegations in 61. Defendants deny the allegations in 62. Defendants deny the allegations in 63, except that Defendants admit that Facebook implemented technical measures to block users from accessing Facebook through Power.com. 64. Defendants deny the allegations in 64, except that Defendants admit that Power provided users with tools necessary to access Facebook through Power.com. 65. Defendants admit the allegations in 65. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 12 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page14 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 66. Defendants admit the allegations in 66, except that Defendants deny that Power.com sent unsolicited commercial emails, and Defendants deny that any of their conduct was "unauthorized." All of Defendants conduct was fully authorized by the users. 67. 68. Defendants deny the allegations in 67. Defendants admit the allegations in 68. In fact, Facebook sent the referenced message, and it was Facebook that designated the message with an "@facebookmail.com" address. 69. Defendants deny the allegations in 69, except that Defendants admit that the email message purports to be "signed by `The Facebook Team.'" In fact, Facebook appended that signature to the message. 70. Defendants admit the allegations in 70, except that Defendants deny that the message was "unsolicited." 71. 72. Defendants deny the allegations in 71. Defendants deny the allegations in 72, except that Defendants admit that Power.com's offer of potential monetary compensation may have induced some Facebook users to participate in Power's launch program. 73. 74. Defendants deny the allegations in 73. Defendants admit the allegations in 74. Facebook has also "developed computer software and other automated devices and programs to access and obtain information" from other websites, as detailed above, for example. This is a common industry practice. 75. Defendants deny the allegations in 75, except that Defendants admit that Power creates temporary cached copies of the Facebook website in order to display it through the Power browser. This is a standard practice used by all browsers. For example, the Microsoft company also creates "cached copies" every time a user views the Facebook site through the Internet Explorer browser. Similarly Google creates and stores "cached copies" of nearly every website on the internet, including Facebook.com. (Other search engines do the same.) Power does not store or retain these cached copies. Facebook has also accessed and copied third party websites ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 13 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page15 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (including but not limited to, creation of cached copies of the website) to develop, test, implement, use and provide" Facebook's services. This too is a common industry practice. 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. Defendants deny the allegations in 76. Defendants deny the allegations in 77. Defendants deny the allegations in 78. Defendants deny the allegations in 79. Defendants deny the allegations in 80. Defendants deny the allegations in 81. Defendants deny the allegations in 82. Defendants deny the allegations in 83. Defendants deny the allegations in 84. Defendants deny the allegations in 85. Defendants deny the allegations in 86. First Claim For Relief Violation of Controlling The Assault of Non-Solicited Pornography And Marketing ("CAN-SPAM"), 15 U.S.C. 7701, et seq. 87. Paragraph 87 simply refers back to the allegations of prior paragraphs. No further response is required. 88. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 88. 89. 90. 91. 92. 93. 94. 95. The allegations of 89 state conclusions of law to which no response is required. The allegations of 90 state conclusions of law to which no response is required. Defendants deny the allegations in 91. Defendants deny the allegations in 92. Defendants deny the allegations in 93. Defendants deny the allegations in 94. Defendants deny the allegations in 95. 14 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case5:08-cv-05780-JF Document41 Filed07/09/09 Page16 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 96. 97. 98. 99. 100. 101. 102. Defendants deny the allegations in 96. Defendants deny the allegations in 97. Defendants deny the allegations in 98. Defendants deny the allegations in 99. Defendants deny the allegations in 100. Defendants deny the allegations in 101. Defendants deny the allegations in 102. Second Claim For Relief Violation of The Computer Fraud And Abuse Act, 18 U.S.C. 1030, et seq. 103. Paragraph 103 simply refers back to the allegations of prior paragraphs. No further response is required. 104. 105. 106. 107. 108. 109. 110. 111. The allegations of 104 state conclusions of law to which no response is required. Defendants deny the allegations in 105. Defendants deny the allegations in 106. Defendants deny the allegations in 107. Defendants deny the allegations in 108. Defendants deny the allegations in 109. Defendants deny the allegations in 110. Defendants deny the allegations in 111. Third Claim For Relief California Comprehensive Computer Data Access And Fraud Act, California Penal Code 502 112. Paragraph 112 simply refers back to the allegations of prior paragraphs. No further response is required. 113. 114. 115. 116. Defendants deny the allegations in 113. Defendants deny the allegations in 114. Defendants deny the allegations in 115. Defendants deny the allegations in 116. 15 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case5:08-cv-05780-JF Document41 Filed07/09/09 Page17 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 117. 118. 119. 120. 121. Defendants deny the allegations in 117. Defendants deny the allegations in 118. Defendants deny the allegations in 119. Defendants deny the allegations in 120. Defendants deny the allegations in 121. Fourth Claim For Relief Copyright Infringement (Direct Vicarious And Contributory) 17 U.S.C. 101, et seq. 122. Paragraph 122 simply refers back to the allegations of prior paragraphs. No further response is required. 123. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 123. 124. 125. 126. 127. 128. 129. 130. 131. 132. 133. Defendants admit the allegations in 124. Defendants deny the allegations in 125. Defendants deny the allegations in 126. Defendants deny the allegations in 127. Defendants deny the allegations in 128. Defendants deny the allegations in 129. Defendants deny the allegations in 130. Defendants deny the allegations in 131. Defendants deny the allegations in 132. Defendants deny the allegations in 133. Fifth Claim For Relief Violation Of The Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. 1201, et seq. 134. Paragraph 134 simply refers back to the allegations of prior paragraphs. No further response is required. 135. Defendants deny knowledge sufficient to form a belief as to the truth of the 16 allegations in 135. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case5:08-cv-05780-JF Document41 Filed07/09/09 Page18 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 136. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 136. 137. 138. 139. 140. 141. 142. 143. 144. Defendants deny the allegations in 137. Defendants deny the allegations in 138. Defendants deny the allegations in 139. Defendants deny the allegations in 140. Defendants deny the allegations in 141. Defendants deny the allegations in 142. Defendants deny the allegations in 143. Defendants deny the allegations in 144. Sixth Claim For Relief Trademark Infringement, 15 U.S.C. 1114 and 1125(a) 145. Paragraph 145 simply refers back to the allegations of prior paragraphs. No further response is required. 146. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 146. 147. 148. 149. 150. 151. 152. 153. Defendants deny the allegations in 147. Defendants deny the allegations in 148. Defendants deny the allegations in 149. Defendants deny the allegations in 150. Defendants deny the allegations in 151. Defendants deny the allegations in 152. Defendants deny the allegations in 153. Seventh Claim For Relief Trademark Infringement Under California Law 154. Paragraph 154 simply refers back to the allegations of prior paragraphs. No further response is required. 17 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case5:08-cv-05780-JF Document41 Filed07/09/09 Page19 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 155. Defendants deny knowledge sufficient to form a belief as to the truth of the allegations in 155. 156. Defendants deny the allegations in 156. Eighth Claim For Relief Unlawful, Unfair, And Fraudulent Competition Under California Business & Professions Code 17,200, et seq. 157. Paragraph 157 simply refers back to the allegations of prior paragraphs. No further response is required. 158. 159. Defendants deny the allegations in 158. Defendants deny the allegations in 159. IV. AFFIRMATIVE DEFENSES First Affirmative Defense Fair Use, 17 U.S.C. 107 160. The "copying," if any, constituted fair use under 17 U.S.C. 107, and thus is not copyright infringement. Second Affirmative Defense Copyright Misuse 161. Facebook's conduct, as described herein, constitutes copyright misuse. Third Affirmative Defense Trademark Misuse 162. Facebook's conduct, as described herein, constitutes trademark misuse. Fourth Affirmative Defense Estoppel 163. By its own conduct as described herein, Facebook is estopped from asserting any right to recover on the alleged causes of action in the Complaint. Fifth Affirmative Defense Unclean Hands 164. Facebook's recovery against Defendants is barred by the doctrine of unclean hands. Sixth Affirmative Defense ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 18 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page20 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 170. 167. 166. 165. Business Justification The conduct challenged by Facebook was justified under the circumstances. Sixth Affirmative Defense Additional Defenses Defendants reserve the right to allege additional defenses as they become known during discovery and to amend this Answer accordingly. V. COUNTERCLAIMS First Counterclaim Unfair Competition In Violation Of California Business & Professions Code 17200 Et Seq. (Unfair Business Practices) Defendants incorporate by reference all allegations of all prior paragraphs as though fully set forth herein. 168. Facebook is subject to the Unfair Competition Law, Sections 17200 et seq. of the California Business & Professions Code (the "UCL"). The UCL provides, in pertinent part: "Unfair competition shall mean and include unlawful, unfair or fraudulent business practices and unfair, deceptive, untrue or misleading advertising..." 169. Facebook violated the unfair business practices prong of the UCL by improperly restricting Facebook users' ability to access their own data in order to stifle the growth of competitors, including Power. Second Counterclaim Unfair Competition In Violation Of California Business & Professions Code 17200 Et Seq. (Unlawful Business Practices) Defendants incorporate by reference all allegations of all prior paragraphs as though fully set forth herein. 171. Facebook violated the unlawful business practices prong of the UCL by virtue of the violations of the Sherman Act and Cartwright Act detailed below. ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 19 Case5:08-cv-05780-JF Document41 Filed07/09/09 Page21 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 178. 176. 174. 172. fully set forth herein. 173. Third Counterclaim Restraint Of Trade, 15 U.S.C. 1 Defendants incorporate by reference all allegations of all prior paragraphs as though Facebook's conduct restricting users' ability to access their own data constitutes an unlawful restraint of trade under Section I of the Sherman Act. Fourth Counterclaim Restraint On Competition, Cal. Bus. & Prof. Code 16,720 et seq. Defendants incorporate by reference all allegations of all prior paragraphs as though fully set forth herein. 175. Facebook's conduct restricting users' ability to access their own data constitutes a prohibited restraint on competitions under 16720 et seq. of the Business and Professions Code. Fifth Counterclaim Monopolization, 15 U.S.C. 2 Defendants incorporate by reference all allegations of all prior paragraphs as though fully set forth herein. 177. Facebook's conduct constitutes monopolization of the market for social networking website services in violation of Section 2 of the Sherman Act. Sixth Counterclaim Attempted Monopolization, 15 U.S.C. 2 Defendants incorporate by reference all allegations of all prior paragraphs as though fully set forth herein. 179. Facebook's conduct constitutes an unlawful attempt to monopolize the market for social networking website services in violation of Section 2 of the Sherman Act. VI. PRAYER FOR RELIEF WHEREFORE, Defendants Power and Vachani pray for judgment as follows: 1. That plaintiffs take nothing by the Complaint, and that judgment be entered against Plaintiffs and in favor of Power and Vachani; 20 ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI Case5:08-cv-05780-JF Document41 Filed07/09/09 Page22 of 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. That Power and Vachani be awarded costs of suit incurred in defending this action, including reasonable attorneys' fees; 3. That Facebook be permanently enjoined from the unlawful and anticompetitive practices identified herein; 4. That Power and Vachani be awarded monetary damages for the injuries caused by Facebook's unlawful and anticompetitive practices; 5. 6. That such damages be tripled under 15 U.S.C. 15(a); That Power and Vachani be awarded reasonable attorneys' fees, expenses and costs associated with prosecuting their claims; and 7. For such further relief as this Court deems necessary, just or proper. DEMAND FOR JURY TRIAL Defendants demand a trial by jury. Respectfully submitted, BRAMSON, PLUTZIK, MAHLER & BIRKHAEUSER, LLP By /s/ Alan R. Plutzik __ Dated: July 9, 2009 Alan R. Plutzik (State Bar No. 77785) Michael S. Strimling (State Bar No. 96135) L. Timothy Fisher (State Bar No. 191626) 2125 Oak Grove Road, Suite 120 Walnut Creek, CA 94598 Telephone: (925) 945-0200 Facsimile: (925) 945-8792 LAW OFFICES OF SCOTT A. BURSOR Scott A. Bursor 369 Lexington Avenue, 10th Floor New York, NY 10017-6531 Telephone: (212) 989-9113 Facsimile: (212) 989-9163 Attorneys for Defendants Power Ventures, Inc. and Steve Vachani ANSWER AND COUNTERCLAIMS OF DEFENDANTS POWER VENTURES, INC. AND STEVE VACHANI 21