Six4three, LLC v. Facebook, Inc.

Filing 1

NOTICE OF REMOVAL (Filing fee $400 receipt number 0971-11098204) from San Mateo Superior Court. Their case number is CIV 533328. (). Filed byFacebook, Inc.. (Attachments: #1 Exhibit A, #2 Exhibit B, #3 Exhibit C, #4 Exhibit D, #5 Exhibit E, #6 Civil Cover Sheet, #7 Certificate/Proof of Service)(Miller, Laura) (Filed on 1/24/2017)

EXHIBIT A

Basil P. Fthenakis, Esq (88399)
CRITERION LAW
2225 E. Bayshore Road, Suite 200
Palo Alto, California 94303
Tel [phone]
Fax [phone]

FILEB

SAN MATEO COUNTY
APR 1 0 2035

4

Of counsel:

Clerk of t

5

': gupenor

CoUrt

Fl~~kf8

o+M Cf+RK

David S. Godkin
Andrew A Caffrey, III

BIRNBAUMB'c GODKIN, LLP
280 Summer Street
Boston, MA 02210
[phone]
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godkin@birnbaumgodkin corn
caffrey@birnbaumgodkin corn

'3

Attorneys for Plaintiff,
SIX4THREE, LLC, a Delaware
limited liability company

SUPERIOR COURT OF CALIFORNIA

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COUNTY OF SAN MATEO

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I7

SIX4THREE, LLC, a Delaware limited

liability company,
Plaintiff,

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FACEBOOK, INC., a Delaware corporation
and DOES I through 50, mclusive

Case No

)
)
)
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COMPLAINT OF PLAINTIFF,
SIX4THREE, LLC, FOR INJUNCTION
AND DAMAGES FOR:
1
PROMISSORY ESTOPPEL,
2 INTENTIONALINTERFERENCE
WITH CONTRACT,
3 INTETIONALINTERFERENCE WITH

)
)
)

PROSPECTIVE BUSINESS
RELATIONS, AND,
4 VIOLATIONOF CALIFORNIA
BUSINESS AND PROFESSIONS
CODE $ ) 17200 ET SEQ

)
)
)

Defendants
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Plaintiff, Six4Three, LLC, alleges
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1.

as

follows:

This matter concerns Defendant Facebook, Inc.'s unilateral decision to terminate

third-party developer access to part of the Facebook platform, which it had previously pledged to
28
1

Case No

Plaintiffs Complaint for In~unction

and Damages

keep open In reliance on Facebook's representations

of open

access to the Facebook platform,

Plamtiff Six4Three, LLC ("643") invested considerable time, effort, and expense in developing
an application,

only to have that mvestment rendered worthless by Facebook's decision. 643

brings this action to make Facebook adhere to its open-access promise, or make 643 whole for the
loss

of its investment
PARTIES

Plaintiff 643

2

is a Delaware Limited

Liability Corporation with a principal place of

busmess at 175 Varick Street, 4th Floor, New York, New York

On information and belief, Defendant Facebook,

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Inc,

is a Delaware Corporation

with a pnncipal place of business of One Hacker Way, Menlo Park, California.
4.

Plaintiff is ignorant of the true
through 50, mclusive, and each

names and capacities

of them,

of the Defendants

sued herem

and therefore sues said Defendants by such

12

as Does

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fictitious names Plaintiffwill amend this complamt when the true names and capacities of said

14

Defendants have been ascertained

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Defendants Does

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manner for the events and happenings referred to herein and proximately caused or contributed to

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the injuries to Plamtiff as hereinafter alleged Wherever in this complaint any Defendant is the

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subject

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through 50, inclusive, and each of them, are likewise the subjects of said charging allegation

1

1

Plaintiff is informed and believes and thereon alleges, that

through 50, u>elusive, and each

of them,

of any charging allegation by Plaintiff, it shall

Plaintiff is mformed and believes,

are legally responsible in some

be deemed that said Defendants Does

1

and thereon alleges, that at all times herem

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5

21

mentioned, each

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Defendants and, in domg the thmgs herein alleged, was acting within the course and scope

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agency and employment

of the

Defendants was the agent and employee

of each of the remaining
of said

FACTS

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25

6

643 is an image pattern recogmtion startup company.

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7.

Facebook operates a social networking service that enables users to connect and

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share mformation with their friends and family.

FINAL

2

Case No

Plaintiffs Complamt for In~unction

and Damages

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Facebook refers to the network

8

2

9.

between its users as the "Graph" or

"

the "Social Graph

3

of relationships

The Facebook Developer Platform (also called "Facebook Platform" ) enables

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third-party developers ("Developers" ) to make their applications and other services available to

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Facebook users.

6
7
8

9

Facebook announced the opening

10.

of Facebook Platform to Developers

June 1, 2007.
11.

At the opening of Facebook Platform, Facebook

Facebook Platform,

we'e

made

stated "With-this evolution

can. And by that, we mean that they can integrate their application into Facebook

11

social graph

13

14
15

16

17
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23

12.

of

it so that any developer can build the same applications that we

10

12

on or about

— the
into

— same way that our applications like Photos and Notes are integrated."
the
Facebook thereby permitted Developers to have open, equal access to integrate

applications into Facebook.
13.

Facebook did not state or imply that access to Facebook Platform might later be

rescmded or provided on an unequal basis.
14

As recently

as

March 16, 2015, this representation remamed available on

Facebook's web page.
15.

On or about April 21, 2010, Facebook announced the launch

of Graph Application

Programming Interface ("Graph API") at its developer conference.
16.

Graph API allows Developers, with the consent

of a Facebook

user, to read data

from and write data to Facebook.
17.

Developers can only access Facebook content (referred to as "endpomts") with

explicit permission from the user.

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18.

Examples of endpoints include a user's birthdate, favorite athletes, or photos

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19

Graph API also permits access to endpoints regarding a user's friends. One such

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endpoint is the set

of photos

that a user's friends had chosen to share with that user (the

Friends'7

Photos Endpoint" ) A user's friends can control access to their photos and other endpoints by
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Developers even

I'INAL

ifthey are not users of the Developer

application.

3

Case No.

Plaintiff's Complamt for Injunction and Damages

1

20.

By granting Developers access to the Friends'hotos Endpoint, Facebook allowed

2

Developers to build applications that enabled a Facebook user to search the user's friends'hotos

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via a Facebook platform application, assuming the user's friend provided such permission to

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Developers.

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6
7

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During the announcement of Graph API, Facebook touted several features of

Graph API m order to increase its appeal to Developers such as 643.
22.

Facebook emphasized how Graph API would become more and more open to

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developers: "As we open the graph, developers can use these connections to create a smarter,

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more personalized Web that gets better with every action taken."

10

23.

Facebook also emphasized the busmess potential

Facebook's new tools and technologies, every developer
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13

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novice and advanced
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— engage
can

of Graph API: "Through

— and existing, big and small,
new

users, build businesses and revolutionize industries."

As recently as March 16, 2015, these representations remained available on

Facebook's web page.
25.

643 relied upon these representations, and others, as to the open nature

of Graph

16

API, and invested considerable time, energy, and money developing an application to make use of

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Graph API on Facebook.

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19

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26.

In December 2012, 643 entered mto the Facebook Developer Platform, which

permitted 643 to develop applications using the Graph API.
27.

643 has developed a unique automated image classification capability, which it

used to develop an application called Pikmis ("the App").

28.

The App is available for download on any iOS-compatible device, including the

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iPhone and iPad. The App enables Facebook users to reduce time spent searching by

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automatically classifying photos that their friends have shared with them through Facebook's

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network, assuming their friends have provided such permission to Developers.

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The App requires use

of Facebook's Graph API, and specifically the

Friends'7

Photos Endpoint.
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FINAL

4
Case No.

Plaintiff's Complaint for Injunction and Damages

30.

The App uses 643's pattern-recognition technology to search through shared

photos and identify those
31.

of their friends

at the beach or in the summer.

643 conducted initial user research that indicated considerable consumer demand

for the App.

of the App.

32.

Facebook has never expressed any disapproval

33

643 made plans to market and promote the App to attract users.

34

643 sells the App for $ 1 99 in Apple's App store.

35

The basic version

36.

In addition, users can choose to pay for premium access, which allows unlimited

of the App allows

a user

to run a certam number

of searches

per

month.
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searching. 643 offers different pricing tiers for premium access, ranging from $ 1.99 for a monthly
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subscription, to $ 6 99 for 6 months, to $ 9.99 for 12 months.
37.

Facebook benefits from the work of Developers such as 643 who create

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applications for use with Facebook. These applications can enhance user experience and drive

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traffic to Facebook's website and mobile app, which in turn generates revenue for Facebook

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through advertising sales, its primary revenue stream.

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38

On January 20, 2015, Facebook sent an email to 643 statmg that 643 must

"upgrade" the App to Graph API v. 2.0 by April 30, 2015.
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39.

The email stated that Facebook would end third-party access to the

Friends'0

Photos Endpoint on April 30, 2015
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The App will not function at all without access to the Friends'hotos Endpoint, so

Facebook's suggestion that 643 "upgrade" the App to Graph API v. 2.0 was not possible.
41.

By deciding to end access to the Friends'hotos Endpoint, Facebook has made it
I

24

impossible for 643 to continue to operate the App, to abide by the license agreements and

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purchase terms entered into by 643 with its users, and for 643 to recoup any

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capital, human labor, time, effort, and energy

of the App since

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42.

643 has sold approximately 5,000 copies

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43.

A substantial portion of App users have paid for premium

of its investment of

launch.
access

5

Case No.

Plaintiffs Complaint for Injunction and Damages

of the App users

entered into a license agreement with 643

1

44.

Each one

2

45.

Facebook requires Developers to enter mto license agreements with users

of

3

applications for Facebook These license agreements must, among other things, require that the

4

users

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6

of these applications

adhere to Facebook's terms

of service

Accordingly, Facebook knew, or had reason to know, about the existence of 643's

license agreements with its users.

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Had Facebook refrained from ending access to Friends'hotos Endpomt, 643

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could have quickly begun to generate hundreds

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of thousands of dollars of revenue

basis

48.

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11

$ 1.15

million m capital and uncompensated

labor by its executives m developing and marketing the App
49.

12
13

In total, 643 expended approximately

on a monthly

643 attended Facebook events for Developers and made known the harm caused

verbally and via email to the appropriate Facebook employees
50

14

Faced with the imminent loss

of its investment,

643 wrote to Facebook on March

Friends'hotos

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16, 2015, and informed Facebook that its decision to discontmue access to the

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Endpoint would harm 643 in several ways 643 informed Facebook that it had reasonably relied

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on Facebook's representations that the endpoints would remam open, and that Developers would

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have an equal opportunity to mtegrate applications into the social graph.

51.

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Friends'hotos Endpoint.
52.

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643 alerted Facebook to the considerable harm it would suffer should access be cut

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643 requested that Facebook continue to permit Developers to have access to the

643 also noted that some

off.

of its users

had entered mto subscriptions that extend

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beyond the April 30, 2015, cut-off date, and that these users could be entitled to refunds

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purchases.

of the

of this complamt,

54
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As

55.

Facebook has not announced that it would change its policy.

date

643 has received no response to its letter

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Fli 4%L

6

Case No

Plamtiff's Complaint for Injunction and Damages

of their

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1

2

ln doing the things herein alleged, Facebook acted with fraud, malice and

oppression. and m reckless disregard

of the nghts of 643

COUNT I: PROMISSORY ESTOPPEL
[Against all Defendants]
through 56

though set forth fully

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58

6

8

Facebook clearly and unambiguously promised to keep open the Friends'hotos

1

as

herem

Endpoint.
59.

9
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643 re-alleges and repleads paragraphs

643 invested considerable capital, labor, time, and effort into developing the App

in reliance on this promise.

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60

643's reliance was reasonable.

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61

643's reliance was foreseeable by Facebook.

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62

643 was injured as a result

of its reliance

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did not keep, in an unascertained amount in excess

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on Facebook's promise, which Facebook

of $ 25,000

00, to be established according to

proof at tnal
63

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COUNT II: INTENTIONALINTERFERENCE WITH CONTRACT
[Against all Defendants]

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through 63 as though set forth fully

64.

643 re-alleges and repleads paragraphs

65.

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Accordmgly, Facebook is liable to 643 for damages.

643 had entered into license agreements and subscriptions for premium access

1

herein

with its users

of these

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66

Facebook knew

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67

Facebook intentionally interfered with and disrupted these contracts when it stated

license agreements and subscriptions.

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that it would end 643's access to the Friends'hotos Endpoint on April 30, 2015, despite

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knowing that disruption of these contracts would be the natural result of ending 643's access.

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68

As of April 30, 2015,

ifFacebook

ends 643's access to the

Friends'hotos

Endpoint as it has announced, then Facebook will further intentionally interfere with and disrupt

FINAL

7

Case No.

Plaintiffs Complaint for Injunction and Damages

643's contracts with its users, despite knowing that disruption of these contracts would be the
natural result

of ending 643's

access

643's contract with its users was thereby disrupted, and as of April 30, 2015, 643's

69.

contract with its users will be further disrupted.

As

70.
excess

a result, 643 has suffered and

of $ 25,000.00 to be

will suffer

damage in an unascertained amount in

established according to proof at trial.

Accordingly, Facebook is liable to 643 for damages.

71.

COUNT III: INTENTIONALINTERFERENCE WITH
PROSPECTIVE BUSINESS RELATIONS
[Against all Defendants]
72

643 re-alleges and repleads paragraphs

73.

10

643 had an expectation

1

through 71 as though set forth fully

herein.
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of economic benefit from third parties, including its users

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who downloaded the App and other Facebook users who may have downloaded the App

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had marketed the App as

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it planned.

Facebook knew

74.

if643

of 643's relationship with the

users

of the App, and knew of 643's

plans to market the App widely.

Facebook intentionally disrupted these relationships when it announced that it

75.

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would end 643's access to the Friends'hotos Endpoint on April 30, 2015, despite knowing that

19

disruption

of these

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76.

As

relationships would be the natural result

of April 30,

2015,

ifFacebook

of ending 643's

ends 643's access to the

access.

Friends'hotos

it has announced, then Facebook will further mtentionally interfere with and disrupt

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Endpoint

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643's relationships with its users, despite knowing that disruption of these relationships would be

23

the natural result

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25

26

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as

77.

of ending 643's

access

643's relationship with its users was thereby disrupted, and will be further

disrupted.
78.

As a result, 643 suffered damage in an unascertained amount in excess

$ 25,000.00 to be established according to

79.

of

proof at trial.

Accordingly, Facebook is liable to 643 for damages
8

Case No

Plaintiff's Complaint for Injunction and Damages

1

COUNT IV: VIOLATIONOF BUSINESS AND PROFESSIONS CODE 55 17200 et see.
[Against all Defendants]

2

through 79 as though set forth fully

80

643 re-alleges and repleads paragraphs

5

81.

Facebook's decision to end access to the Friends'hotos Endpoint was unlawful

6

82.

643 suffered substantial injury as a result

4

7

herein

10

of Facebook's actions, including the

loss

of its investment in developing the App and lost revenue.
83.

No countervailing benefits of Facebook's decision to consumers or competitors

84.

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9

1

643 could not have reasonably avoided its injury because Facebook only

exist.

11

announced its decision after 643 had made considerable investment and Facebook had approved

12

the App.

13

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15

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17

85.

643 also requested that Facebook not end access to

Friends'hotos Endpoint, but

Facebook did not change its decision.
86.

Accordmgly, Facebook is liable to 643 for violation of Califorma's Unfair

Busmess Practices Act.
87

As a proximate result

of the

acts and conduct

of Facebook

herem alleged, 643 has

will continue to incur

18

found it necessary to engage attorneys, and incur attorney's fees, and

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attorney's fees, m an unascertained amount to be established accordmg to proof following the

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conclusion of trial

JURY TRIAL DEMAND

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88.

643 demands a trial by jury on all claims so tnable.

PRAYER FOR RELIEF

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WHEREFORE, Plaintiff 643 asks this Court to enter judgment against Defendant

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25

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Facebook, Inc., as follows

A.

A judgment or order declaring Facebook's conduct,

as alleged,

unlawful under

California's Unfair Busmess Practices Act,
B.

FINAL

A judgment, order, or award of damages

adequate to compensate 643;

9

Case No

Plaintiff's Complamt for Injunction and Damages

2

Friends'ser
D.

3

4

A permanent injunction prohibiting Facebook from removing

C

1

access to the

Photos Endpoint,

A permanent injunction prohibiting Facebook from interfering with 643's

contracts or prospective business relations;
E.

F.
7

An award of its reasonable attorneys'ees and costs;
Punitive damages and/or treble damages as provided by California's Unfair

Business Practices Act; and
G.

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Such other further relief as this Court or a jury may deem proper and just.

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10

Dated:

AiMMIP MP~

CRITERION LAW

y'1

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By:

BasifP. Fthenakis, Esq.
Attorney for Plaintiff
Six4Three, LLC

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Of counsel:
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David S. Godkin
Andrew A. Caf&ey,

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III

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Case No.

Plaintiff's Complaint for Injunction and Damages