But Century 21 Canada and its agents failed to prove they were significantly harmed, the Supreme Court of British Columbia ruled in awarding $33,000 in damages.
In a Sept. 2 decision, Justice Robert D. Punnett concluded that Zoocasa did not act "dishonestly, unreasonably or unfairly," but instead "apparently entered into the market without due consideration of the legal issues surrounding copyright and intellectual property."
Zoocasa — a subsidiary of Canada’s biggest cell phone company and second-largest cable TV operator, Rogers Communications Inc. — says it no longer indexes property listings unless it has the permission of website operators.
Not in dispute is that Zoocasa used automated robots, sometimes referred to as "spiders," to crawl Century21.ca for information from late 2008 through early 2010, which it then displayed in various forms on its own website.
Zoocasa also maintained that the company’s indexing and display of property descriptions was permitted under fair use provisions of Canadian copyright law.
Punnett also rejected Zoocasa’s argument that its "transformative" use of the information it retrieved from Century21.ca was allowed under "fair dealings" provisions of Canadian copyright law, which he said are less permissive than the "fair use" rights granted by U.S. courts.
The U.S. Copyright Act allows for "fair use" of protected works "for purposes such as criticism, comment, news reporting, teaching, scholarship or research."
But Punnett noted that while U.S. courts have interpreted fair use broadly, in Canada, fair exceptions "are more narrowly defined and extensively listed" in the law itself.
Zoocasa argued that in indexing Century 21 Canada property listings, the company "transformed them from advertisements of properties for sale into an electronic reference tool," Punnett wrote.
Within days of launching in August 2008, Zoocasa received written notice from Century 21 Canada that the company did not consent to Zoocasa downloading or copying any information from its website.
In November 2008, Zoocasa began displaying truncated property descriptions rather than the complete text of descriptions "scraped" from Century21.ca.
Zoocasa, "created a copy (of the description of each listing) on its server and then later reproduced a portion of it, calculated to provide a visitor with just enough information to decide whether or not to click through to the original listing," Punnett said. But he also noted that Canadian courts have not recognized "transformative use" in the context of fair use.
"In my opinion, the difficulty that arises from the defendants’ emphasis on ‘transformative use’ is that what may be transformative, and, as a result, fair use in the U.S., may still be copyright infringement in Canada," Punnett concluded.
Although the copying of basic information such as the property address and the legal description is not copyright infringement, the copying of the property descriptions created by Century 21 agents "goes beyond such basic information," he said.
Zoocasa’s "repeated daily access and indexing" of property descriptions on the Century21.ca website further undermined the company’s "fair dealing" defense, Punnett concluded.
"This is not a situation of a one-time copy being taken. It is conduct consisting of repeated actions by the defendants," the judge wrote. "In my view the amount of dealing exceeds what is fair."
But Punnett concluded that because the length of the copyright infringement was "relatively short" and that Zoocasa has stopped the disputed activity, there "was no evidence that a high award is required to deter others."
Century 21 Canada, Vancouver-based Century 21 In Town Realty, and agents Charles Bilash and Michael Walton filed suit against Zoocasa and its parent company, Rogers Communications, in December 2008.
Neither Bilash nor Walton were able to prove actual damages to their business, Punnett said in awarding Bilash damages of $30,750 as the original copyright holder of 24 property descriptions and 99 photographs, and Walton $1,250 in damages as the original owner of five property descriptions.
But Century 21 Canada had not proven "damages of any substantial character," Punnett said in ordering Zoocasa to pay a "nominal" award of $1,000 in damages and issuing a permanent injunction barring Zoocasa from accessing Century21.ca.
Although Century 21 Canada claimed Bilash and Walton had assigned the copyrights to their listing descriptions and photos to it, Punnett dismissed the franchisors’ own copyright claims, saying the "assignments" were in fact nonexclusive licenses.
Claims against parent company
Punnett also dismissed Century 21 Canada’s claims against Zoocasa’s parent company, Toronto-based Rogers Communications.
Not in dispute, Punnett wrote, is that Michael Lee and Barry Choi developed the idea for Zoocasa in the spring of 2007 while employees of Rogers.
Work to build the Zoocasa search engine began before Zoocasa was incorporated, and Rogers employees completed the website’s original programming and registered its domain name.
In July 2008 — before the website launched — Rogers’ director of business development, Darrell Cox, sent an email to Century 21 Canada’s Barbara Fromm, inviting her to "discuss a real estate vertical search website we have developed," according to evidence submitted at trial.
In January 2009 — after Century 21 Canada had sued Zoocasa — Cox sent an email to Sherry Chris, president and CEO of Realogy Corp.’s Better Homes and Gardens Real Estate LLC, "in which he attempted to arrange a meeting between representatives of Rogers and (U.S.-based Century 21 Real Estate LLC, a Realogy subsidiary) to discuss the Zoocasa Website," Punnett noted.
Although attorneys for Zoocasa provided evidence that Rogers Communications helped get Zoocasa off the ground and continued to be involved in the development and maintenance of the company’s website, Zoocasa "failed to rebut the presumption that Rogers only authorized Zoocasa to use the Zoocasa website in accordance with the law," Punnett ruled.
Robot exclusion standard
The lawsuit also alleged that Zoocasa failed to honor the "robot exclusion standard," which allows sites that don’t want to be crawled by automated spiders used to index content to use a "robot.txt" file to block them.
When Zoocasa launched in September 2008, it "operated on the basis that target websites could opt out of being indexed," Punnett wrote, citing Lee’s testimony. But Zoocasa soon "abandoned that policy and in the case of (Century 21 Canada) continued to index their site and information despite knowing they did not wish to be indexed."
Punnett said that Century 21 "has not been able to use its robot.txt file to block Zoocasa because it does not know the name of Zoocasa’s robot or spider," which Zoocasa "has refused to provide."
Zoocasa does not currently have a "branded" Internet robot that would allow sites to opt out of indexing, Punnett said, and "has not explained why it does not, given how widespread the standard is in the industry."
Punnett noted that Zoocasa’s own website uses such "robot.txt" files to block unwanted search engine spiders.
In its defense, attorneys for Zoocasa said any site that did not want to be accessed by the listing portal’s spiders could block the Zoocasa Internet Protocol address. But the operator of Century 21 Canada’s website did not log IP addresses, Punnett wrote, and "blocking IP addresses is an inefficient and ineffective means of controlling access from unwanted robotic searches."
Lee testified that Zoocasa has since returned to its original policy of allowing websites to opt out of being indexed.