Court Finds that DMCA Does Not Prevent Database Downloading

Downloading up to 85 percent of a proprietary advertising-tracking database does not violate the Digital Millennium Copyright Act (DMCA) but may violate the Computer Fraud and Abuse Act. That was the ruling of United States District Judge Naomi Buchwald who dismissed the DMCA claim but allowed a computer fraud claim to proceed in Inquiry Management Systems v. Berkshire Information Systems.

Inquiry Management Systems (IMS), a Canadian company, monitors advertising in about 2,500 magazines. Its customers are magazine sales representatives who receive an ID and password that enables them to browse through an IMS database. The database contains information about where advertisers are buying ad space. Knowing which companies advertise in particular magazines or which magazines attract ads from particular companies enables the sales representatives to identify potential ad customers for the magazine that he or she represents. IMS claims to be the largest ad-tracking service for the United States.

Berkshire Information Systems offers a competing service called MarketShare.com. Berkshire offers information about advertising by product, by market share, by share of book and by sales territory as well as editorial ratio. Apparently, an IMS customer allowed a Berkshire employee to use the customer's password and ID to access the IMS database and download information in the IMS database onto a Berkshire computer. The customer undoubtedly violated the terms of the customer's user agreement with IMS by allowing a Berkshire employee to use the person's ID and password. But, IMS sued its competitor, Berkshire, to recover damages for the unauthorized access and download.

IMS first alleged that Berkshire's conduct violated Section 1201 of the DMCA, which says "no person shall circumvent a technological measure" that protects copyrighted material. Judge Buchwald noted that Berkshire had received a legitimate password to access the IMS database. Therefore, it was a stretch to say that Berkshire had "circumvented a technological measure" which protected copyrighted material in the IMS database. In dismissing the DMCA claim Judge Buchwald wrote "Whatever the impropriety of defendant's conduct, the DMCA and the anti-circumvention provision at issue do not target this sort of activity."

Although the DMCA claim was dismissed, the judge allowed Berkshire's computer fraud claim to proceed. The United States Computer Fraud and Abuse Act prohibits intentional access to a protected computer without authorization where such conduct causes damages "aggregating at least $5,000.00 in value." The statute defines damages as "any impairment in the integrity or availability of data, a system or information." Any person who suffers damages or loss by reason of a violation may file a civil action to recover damages. In allowing the case to proceed Judge Berkshire concluded that IMS had at least alleged sufficient facts to establish unauthorized access and damages.

This is the first court decision to apply the DMCA and the Computer Fraud and Abuse Act to alleged database misappropriation. It remains to be seen whether other courts will agree with Judge Buchwald's interpretation of these statutes. The United States currently has no federal law that specifically provides database protection.