Many ecommerce merchants offer a substantial number of SKUs through their stores. Inputting those SKUs into a database can be a time and labor intensive process. It can also be incredibly costly.
Moreover, ecommerce storeowners spend a substantial amount of time ensuring that the products represented by those SKUs appear in an eye-catching and functional manner on their websites. That is why it is important to understand how you can protect the investment in your website database content from nefarious competitors.
I see theft of this sort of data in primarily two contexts. First, storeowners will often scrape prices from their competitors’ websites. By analyzing this data, storeowners can reduce their cart abandonment rates, obtain insight into their competitors’ inventory, and ensure that their goods are competitively priced — on the fly.
… it is important to understand how you can protect the investment in your website database content from nefarious competitors.
Second, corrupt merchants will often use this sort of data to clone a competitor’s website, from its look and feel, which is tried and tested, to its product list. Cloning sites in this manner allows a would-be merchant to gain an unfair advantage in the marketplace by using a formula that has been proven to work, without the costs and time associated with startup and testing.
Ecommerce storeowners can protect against these types of tactics by implementing a terms-of-use agreement tailored to their business and by regularly filing for copyright registration of their website content. I will address each of these protections in turn.
It is worth addressing copyright protection of databases first. Terms-of-use agreements become an important tool due to the fact that only limited copyright protection is extended to databases. As a general rule, copyright protection does not extend to facts, and databases, such as SKUs and product lists, are primarily comprised of facts.
Combing SKUs and product lists into a database does not itself render the database copyrightable. If a database contains content other than facts, such as product descriptions, copyright protection can extend to that content provided it consists of original, creative expression.
If the selection, arrangement, or organization of a database is sufficiently creative, copyright law can protect it. Copyright protection extends, however, only to the selection, arrangement, or organization and not to the underlying facts contained within the database.
Consequently, if a competitor scrapes your product database, and not your product descriptions, and then rearranges it into its own selection and arrangement, it may not constitute copyright infringement. If, however, a competitor simply replicates your database, the copy may be infringing and it may be possible to sue for copyright infringement.
This is why it is important to file for copyright registration of your website content on a regular basis. Copyright registration has numerous benefits, including providing the registrant with the ability to file a federal lawsuit for copyright infringement and to obtain up to $150,000 in statutory damages per work infringed, plus costs and attorneys’ fees.
Copyright registration is quick and easy. But, if you don’t file for protection prior to infringement or within three months of publication, you will lose your ability to obtain statutory damages. For this reason, I typically recommend that ecommerce owners file for copyright registration of their entire website content every three months.
If a competitor only scrapes facts from your product database and rearranges those facts, copyright law likely does not apply. In these cases, the best protection against theft is a well-drafted terms-of-use agreement. Storeowners often take terms-of-use agreements for granted. But they can be incredibly effective tools in defending against lawsuits from end users and in prosecuting anti-competitive actions by competitors.
In the case of price or SKU scraping, a terms-of-use agreement can provide a storeowner with a breach of contract cause of action. A well-drafted terms-of-use agreement will contain a provision that limits the license to use the website, which is granted to the end user, to natural (human) individuals, and it will explicitly prohibit bots and scraping tools from accessing the website.
Scraping can be difficult to detect, but, if it is detected, the violation of the terms-of-use agreement can be used as a basis for a breach of contract claim. And, in a dispute between competitors, the non-scraping party may learn, through discovery, that its competitor has been scraping its website. In these cases, a breach of contract claim could add additional leverage to force a settlement of the lawsuit.
This is a very limited description of the benefits of adopting a terms-of-use agreement and for filing for copyright protection. But these are very real issues that I encounter regularly. As always, talk to an attorney for legal advice specific to your situation.