Law of Cards: COMC Countersues Beckett
The hobby has a new corporate soap opera. It's Beckett v. Check Out My Cards (COMC).
Last week, we looked at Beckett's complaint, which wove a story of alleged theft of trade secrets. In it, Beckett portrayed COMC as a shadowy organization that "scraped" Beckett's data on multiple occasions (sometimes with Beckett's permission and sometimes without). Despite this, Beckett did business with COMC, but at some point, it grew concerned about its "trade secret" pricing and checklist information so it told COMC that the relationship was over. Beckett alleged COMC had a hard time accepting this breakup, and then, Beckett had to sue COMC to protect its trade secrets.
Now, there were a few holes in Beckett's complaint, like not addressing how publicly available prices and checklists qualify for trade secret protection. And it didn't point to any facts showing COMC was in possession and using Beckett trade secrets (it was really just Beckett saying, "We think they stole trade secrets"). But the complaint looked like it recited a proper cause of action.
We were all eager, however, to hear COMC's side.
Last week COMC filed its answer, giving its side of the story.
And it has a slightly different history than Beckett's.
I joked around in my last article on this case that Beckett and COMC were a couple, and Beckett was the one that broke it off. According to COMC's answer, I was wrong. The answer also states that rather than having a suspicious Beckett throughout the relationship, the COMC/Beckett relationship was happy until the very end.
The COMC/Beckett relationship started in 2007. After seeing an early version of COMC's website (which included Beckett pricing), Beckett allegedly was intrigued by a potential partnership with COMC. In 2007, it sent COMC an email which stated, "We are happy to provide a site license for you to use our pricing and related data."
Legal translation: "Check this box if you like me."
COMC agreed that working with Beckett would be beneficial for both sides, so they entered into their first of many license agreements.
Legal translation: "We're dating!"
Throughout the years, the COMC/Beckett licenses allegedly, explicitly allowed COMC to "scrape" pricing data from Beckett. Also, COMC's answer states that "scraping" was chosen by Beckett because it involved the least amount of work on Beckett's part.
Legal translation: I'll just lay here and you do all the work.
After years of working together, including creating their own API "scraping" tool together, the relationship culminated with a phone call on December 6, 2013 where Beckett indicated it wanted to buy COMC.
Legal translation: "Let's get married!"
COMC's purchase price, however, was too high for Beckett so there could be no deal.
Legal translation: "I can't marry you. You're not rich enough! But I hope we can still be friends."
Beckett allegedly did not take this too well because the phone call ended with Beckett stating COMC was in breach of contract and, therefore, Beckett was terminating their agreement.
Legal translation: "Oh, yeah! Well, I didn't want to marry you anyway. So we're breaking up!"
Beckett followed up the phone call with a letter confirming it was immediately terminating the license agreement. Beckett also blocked COMC's "scraping" process.
In its haste to breakup with COMC, however, Beckett allegedly forgot the license agreement between the two could only be terminated with 30-days notice and after a showing of "good cause" for why the contract must end.
COMC therefore responded that any immediate termination actually violated the agreement the parties had.
Realizing its mistake, Beckett sent a second letter that attempted to terminate the license correctly, but COMC alleges Beckett still got it wrong. Apparently, Beckett's alleged "good cause" in this second letter was (and we'll use COMC's own words for this), "its discontinuance of the service (to COMC, but not others) was 'good cause.'"
COMC admits that Beckett's decision to terminate the license forced COMC to quickly build its own catalog and develop suggested pricing data. But, "[a]fter the initial shock, COMC embraced this challenge." And COMC really did, by encouraging COMC users and sellers to crowd source the information through a series of challenges.
Legal translation: "Hey Beckett, the breakup hurt at first, but I'm enjoying seeing other people. And I'm seeing lots of other people. And they're all just as good as you, if not better."
To put the court's mind at ease about trade secrets, COMC also confirms in its answer that "As of April 1, 2014, all pricing data previously furnished by Beckett Media was purged from COMC's website."
Legal translation: COMC even allegedly threw away and burned that symbolic sweater Beckett left behind.
Now, COMC didn't just use its answer as a vehicle to get its narrative out there, it also counter sues Beckett for breach of contract and, my favorite part, that Beckett's lawsuit is an abuse of process.
Legal translation: Abuse of process = I claim that your lawsuit is BS!
COMC alleges the purpose of Beckett's lawsuit is actually to harass COMC, cause it financial hardship, prevent it from implementing its alternative suggested pricing and catalog and is an attempt by Beckett to get COMC's intellectual property.
It kind of topspin volleys that whole trade secret lawsuit back into Beckett's court, right?
The breach of contract action is less sexy. It alleges that by not providing 30-days notice and proper "good cause," Beckett hurt COMC….zzz…
Enough about the breach of contract cause of action. It's way too boring.
We'll just focus on the abuse of process claim.
While I like it, abuse of process claims are difficult to raise. And to win. Otherwise, an abuse of process claim could potentially be brought in every lawsuit filed.
After reading Beckett's complaint and COMC's answer, I can say with confidence that if this case proceeds, it's going to be one beautiful Jerry Springer-type mess. It's going to be difficult for Beckett to prove its trade secret information (if it qualifies as a trade secret) is/was improperly used by COMC.
It's also going to be difficult for COMC to win on its abuse of process claim. Sure, both sides might win on smaller issues (Beckett wins on an improper use of trade secret claim prior to April 1 but damages are small, and COMC could win on that snoozer of a breach of contract claim), but then both sides actually lose this lawsuit.
Don't get me wrong, while both sides might lose this lawsuit, us gapers will surely win.
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