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[viper]

A vehicle auction company called Manheim provides a "run list" of vehicles on their website that details what vehicles are for sale at a given auction.  This run list also shows the time and order a vehicle will arrive on the auction block.  Manheim charges auto dealers a small fee for yearly access to this copyrighted information. 

I have a mobile application that dealers use at auctions to get pricing information for vehicles (e.g., Kelley Blue Book).  These dealers what me to create a solution that uses their existing Manheim website subscription to programmatically login to their Manheim account and import the Manheim run lists into their mobile account (on my website) for their individual use.  This will enable the dealer to easily search for vehicles, add vehicles to a wish list and get notifications on their mobile phone when and where a vehicle is available for sale.

Each dealer would only see the information he has specifically requested from the Manheim website.  The dealer must provide his Manheim user id and password, which will be used each time to login on his behalf, by my application, and pull the requested information for his exclusive use.  The Manheim Terms of Service specifically forbid this use.  However, would this be considered Fair Use with regard to copyright?  Wouldn't Manheim "go after" the dealer, who agreed to the terms of service, rather than my company? 

[NJ Patent1]

Viper:  First a caveat/disclaimer, it is a case of first impression for me and I’m not giving you legal advice- just some things to consider.  The first post-Feist question I have is how much “originality” goes into compiling a list of cars to go-up for auction.  There aren’t too many choices for arrangement: make, model, year, mileage, and, here, time the car is scheduled to get auctioned.  But you said the compilation is in fact copyrighted.  Whatever (c) protection is there may be “thin”. 

You may be overlooking possible liability for facilitating breach of contract.  This gives me as much pause as the (c) question.  The contract forbids the use you would be facilitating.  Does the subscriber agreement (a contract) have a choice-of-law provision (i.e shall be interpreted under the laws of the state of … ).  If so, do the laws of that state visit liability for tortuous interference with contract or any other type of joint liability even if when there is no privity of contract? 

[NJ Patent1]

Viper:  Further to my post.  As a pragmatic matter, if I were the atty for the auctioneer, I'd "go after" both of you, at least initially (entire case or controversy rule).  But I'd dismiss you as a defendant as soon as you shut-down / disabled the particular function on your website, and promised not to do it again.  A law suit has two parts - liability, then damages.  Contract damages (not statutory (c) damages) can't be "speculative", based on blue-sky maybes.  The damages phase of litigation can consume a lot of legal fees.  If it's tough to calculate and prove how much money you cost the auctioneer, they would most likely take my approach (no guarantee) and settle or take an injunction.   

[viper]

Thank you NJ Patent1,

Your questions:

"how much “originality” goes into compiling a list of cars to go-up for auction?"
Absolutely none.  It's a very simple list of vehicles exactly as you describe.

"You may be overlooking possible liability for facilitating breach of contract."
Quite possibly.  It's the Dealer who actually agreed to the contract.  I'm simply acting at his request to pull the data and make it available on his phone for use at auction.  In reality, Manheim is NOT going to start suing their customers (i.e., the Dealer).  That's why they are more likely to "come after" me if possible.

"do the laws of that state visit liability for tortuous interference with contract or any other type of joint liability even if when there is no privity of contract?"
The state is Georgia.  However, I'll have to research your question about tortuous interference and report back.

"If it's tough to calculate and prove how much money you cost the auctioneer, they would most likely take my approach (no guarantee) and settle or take an injunction."
Agreed.  In fact, instead of damages, I'm actually providing a substantial benefit to the auction by facilitating transactions.  Essentially, I'm helping to create a more efficient market where the dealer can easily find the vehicle he wants to purchase, and doesn't have to hold back a risk premium due to unknowns about the vehicle's value or history (he can see a CARFAX with my app).  I think Manheim would have a very difficult time proving any damages.  Their main issue is one of control.  Essentially, they want to control the information flow to the dealers in their auctions.  I've tried to license the data from them, but having made any progress.

Manheim has effective monopolistic control over the auction industry with 60%+ market share.  They've also been purchasing a number of companies throughout the value chain (vertical integration).  One could also argue that Manheim is being anti-competitive because they provide these run lists primarily to their own sister companies plus a couple of carefully selected partners.  I know this is way off topic...however, to use game therory, Manheim would need to carefully weight the FULL risks of suing a small entrepreneurial company that's actually trying to help them make their business more efficient.

My best guess is that Manheim would send me a Cease and Desist.  If I ignored this, they'd probably do nothing.