Contract Dispute Between Craigslist And 3taps Takes New Twist

On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Contract Disputes on Tuesday, October 9, 2012.

An interesting copyright, trademark and breach of contract dispute between Craigslist Inc. and 3taps Inc. took on a new twist when the second company filed an answer and counterclaim against the well-known online classified advertiser. In its counterclaim filed in a federal court in California, 3taps alleges that Craigslist is engaging in anticompetitive behavior in an attempt to maintain the alleged monopoly that the company has in the online classified ad market. According to 3taps, Craigslist's allegations of IP infringement and the breach of contract dispute are just efforts to prevent competitors from chipping away at its domination of that business sector.

3taps further denied all of the accusations that Craigslist made against it in the original lawsuit. Craigslist claims that 3taps engages in the process of "scraping" millions of advertisements made on Craigslist and then disseminates the information it lifts to various for-profit entities. This practice allegedly violates the terms of use that visitors to Craigslist become subject to when they use its website.

On the other hand, 3taps maintains that it obtains its information from caches provided by third-party search engines like Google. It argues that Craigslist provides that information to the search engines. Accordingly, 3taps claims it is not gaining the information from the actual Craigslist website, and thus, the breach of contract claim is without merit. In its counterclaim against Craigslist, 3taps seems to focus in on the antitrust allegations it makes.

It doesn't claim that Craigslist unfairly or illegitimately gained its monopoly over the online advertising field. However, 3taps does accuse the other company of failing to innovate in that field and using its market strength to shoulder aside competitors who are trying to offer services to customers that make use of publically-available information. While there's no discernible way to predict how this case may proceed in California court, it does show how important it can be for businesses to make sure they have strong legal representation to protect their business interests in the event of a contract dispute.

Source: Bloomberg BNA, "3Taps Fires Back at Craigslist, Alleges Antitrust Violations, Copyright Misuse," Tamlin H. Bason, Sept. 26, 2012

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