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)

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                                                            EXHIBIT A Basil P. Fthenakis, Esq (88399) CRITERION LAW 2225 E. Bayshore Road, Suite 200 Palo Alto, California 94303 Tel (650) 352-8400 Fax (650) 352-8408 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 (617) 307-6100 10 godkin@birnbaumgodkin corn caffrey@birnbaumgodkin corn '3 Attorneys for Plaintiff, SIX4THREE, LLC, a Delaware limited liability company SUPERIOR COURT OF CALIFORNIA 14 COUNTY OF SAN MATEO 15 I7 SIX4THREE, LLC, a Delaware limited liability company, Plaintiff, 19 20 FACEBOOK, INC., a Delaware corporation and DOES I through 50, mclusive Case No ) ) ) ) ) ) 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 23 24 Plaintiff, Six4Three, LLC, alleges 26 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, 3 10 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 13 fictitious names Plaintiffwill amend this complamt when the true names and capacities of said 14 Defendants have been ascertained 15 Defendants Does 16 manner for the events and happenings referred to herein and proximately caused or contributed to 17 the injuries to Plamtiff as hereinafter alleged Wherever in this complaint any Defendant is the 18 subject 19 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 20 5 21 mentioned, each 22 Defendants and, in domg the thmgs herein alleged, was acting within the course and scope 23 agency and employment of the Defendants was the agent and employee of each of the remaining of said FACTS 24 25 6 643 is an image pattern recogmtion startup company. 26 7. Facebook operates a social networking service that enables users to connect and 27 share mformation with their friends and family. FINAL 2 Case No Plaintiffs Complamt for In~unction and Damages 1 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 4 third-party developers ("Developers" ) to make their applications and other services available to 5 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 18 19 20 21 22 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. 24 18. Examples of endpoints include a user's birthdate, favorite athletes, or photos 25 19 Graph API also permits access to endpoints regarding a user's friends. One such 26 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 28 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 3 via a Facebook platform application, assuming the user's friend provided such permission to 4 Developers. 5 6 7 21 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 8 developers: "As we open the graph, developers can use these connections to create a smarter, 9 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 12 13 14 15 novice and advanced 24 — 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 17 Graph API on Facebook. 18 19 20 21 22 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 23 iPhone and iPad. The App enables Facebook users to reduce time spent searching by 24 automatically classifying photos that their friends have shared with them through Facebook's 25 network, assuming their friends have provided such permission to Developers. 26 29 The App requires use of Facebook's Graph API, and specifically the Friends'7 Photos Endpoint. 28 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. 10 searching. 643 offers different pricing tiers for premium access, ranging from $ 1.99 for a monthly 12 13 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 14 applications for use with Facebook. These applications can enhance user experience and drive 15 traffic to Facebook's website and mobile app, which in turn generates revenue for Facebook 16 through advertising sales, its primary revenue stream. 17 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. 19 39. The email stated that Facebook would end third-party access to the Friends'0 Photos Endpoint on April 30, 2015 21 22 23 40 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 25 purchase terms entered into by 643 with its users, and for 643 to recoup any 26 capital, human labor, time, effort, and energy of the App since 27 42. 643 has sold approximately 5,000 copies 28 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 46 5 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. 47 7 Had Facebook refrained from ending access to Friends'hotos Endpomt, 643 8 could have quickly begun to generate hundreds 9 of thousands of dollars of revenue basis 48. 10 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 15 16, 2015, and informed Facebook that its decision to discontmue access to the 16 Endpoint would harm 643 in several ways 643 informed Facebook that it had reasonably relied 17 on Facebook's representations that the endpoints would remam open, and that Developers would 18 have an equal opportunity to mtegrate applications into the social graph. 51. 19 20 Friends'hotos Endpoint. 52. 23 643 alerted Facebook to the considerable harm it would suffer should access be cut 53 21 22 643 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 24 beyond the April 30, 2015, cut-off date, and that these users could be entitled to refunds 25 purchases. of the of this complamt, 54 27 As 55. Facebook has not announced that it would change its policy. date 643 has received no response to its letter 28 Fli 4%L 6 Case No Plamtiff's Complaint for Injunction and Damages of their 56 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 57 58 6 8 Facebook clearly and unambiguously promised to keep open the Friends'hotos 1 as herem Endpoint. 59. 9 10 643 re-alleges and repleads paragraphs 643 invested considerable capital, labor, time, and effort into developing the App in reliance on this promise. 11 60 643's reliance was reasonable. 12 61 643's reliance was foreseeable by Facebook. 13 62 643 was injured as a result of its reliance 14 did not keep, in an unascertained amount in excess 15 on Facebook's promise, which Facebook of $ 25,000 00, to be established according to proof at tnal 63 16 COUNT II: INTENTIONALINTERFERENCE WITH CONTRACT [Against all Defendants] 17 21 22 through 63 as though set forth fully 64. 643 re-alleges and repleads paragraphs 65. 19 20 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 23 66 Facebook knew 24 67 Facebook intentionally interfered with and disrupted these contracts when it stated license agreements and subscriptions. 25 that it would end 643's access to the Friends'hotos Endpoint on April 30, 2015, despite 26 knowing that disruption of these contracts would be the natural result of ending 643's access. 27 28 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. 12 of economic benefit from third parties, including its users 13 who downloaded the App and other Facebook users who may have downloaded the App 14 had marketed the App as 15 16 17 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. 18 would end 643's access to the Friends'hotos Endpoint on April 30, 2015, despite knowing that 19 disruption of these 20 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 21 Endpoint 22 643's relationships with its users, despite knowing that disruption of these relationships would be 23 the natural result 24 25 26 27 28 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. 8 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 14 15 16 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 19 attorney's fees, m an unascertained amount to be established accordmg to proof following the 20 conclusion of trial JURY TRIAL DEMAND 21 22 88. 643 demands a trial by jury on all claims so tnable. PRAYER FOR RELIEF 23 WHEREFORE, Plaintiff 643 asks this Court to enter judgment against Defendant 24 25 26 27 28 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. 8 Such other further relief as this Court or a jury may deem proper and just. 9 10 Dated: AiMMIP MP~ CRITERION LAW y'1 12 By: BasifP. Fthenakis, Esq. Attorney for Plaintiff Six4Three, LLC 13 Of counsel: 15 David S. Godkin Andrew A. Caf&ey, 16 III 17 19 20 21 22 23 24 25 27 28 10 Case No. Plaintiff's Complaint for Injunction and Damages

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