Microsoft's Answer to Ticketmaster


 
David T. McDonald
Karl J. Quackenbush
McDonald & Quackenbush,
999 Third Avenue
Suite 3300
Seattle, WA 98104 (206) 224-7099

Jane H. Barrett
Preston Gates & Ellis LLP
725 S Figueroa Street
Suite 2100
Los Angeles, CA 90017
(213) 624-2395

Ronald L. Johnston
Blanc, Williams,Johnston & Kronstadt, LLP
1900 Avenue of the Stars
Suite 1700
Los Angeles, CA 90067
(310) 552-2500

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

TICKETMASTER CORPORATION, an Illinois corporation,
                                                            Plaintiff,

v.

MICROSOFT CORPORATION, a Washington corporation,
                                                            Defendant.

No. 97-3055 DDP
 
 
ANSWER TO FIRST AMENDED COMPLAINT, AFFIRMATIVE DEFENSES AND COUNTERCLAIMS

COMES NOW defendant Microsoft Corporation ("Microsoft") and referring to the numbered paragraphs of Ticketmaster Corporation's ("Ticketmaster's") first amended complaint, answers Ticketmaster's complaint as follows:

[Ed. Note: Optional JUMP to Affirmative Defenses raising Internet and Linking issues]

1. Admit.

2. Admit.

3. Deny that Microsoft has wrongfully appropriated or misused Ticketmaster's name or trademarks or engaged in unfair competition. Deny that Ticketmaster's name, trademarks, goodwill or business have been diminished or diluted in value. 4. Admit. 5. Admit.

6. Admit that plaintiff Ticketmaster Corporation ("Ticketmaster") is in the business of selling tickets for events at various arenas and sites in the United States and elsewhere. Microsoft denies all other averments in paragraph 6 of Ticketmaster's first amended complaint for lack of sufficient knowledge and information.

7. Admit that trademark registrations bearing the stated numbers and titles have been issued in the name of Ticketmaster. Microsoft denies all other averments in paragraph 7 of Ticketmaster's first amended complaint for lack of sufficient knowledge and information.

8. Deny for lack of sufficient knowledge and information.

9. Deny for lack of sufficient knowledge and information.

10. Deny for lack of sufficient knowledge and information.

11. Admit that Ticketmaster offers to sell tickets to events by means of the Internet. Admit that the lnternet is a worldwide network of computers originally developed for national defense and academic purposes. Admit that Ticketmaster is the operator of a worldwide web site with the Uniform Resource Locator ("URL") of "http://www.ticketmaster.com." Microsoft denies all other averments in paragraph 11 of Ticketmaster's first amended complaint for lack of sufficient knowledge and information.

12. Deny.

13. Deny.

14. Deny.

15. Admit that Microsoft develops markets and publishes software. Admits that Microsoft publishes Seattle Sidewalk, with the URL of http://seattle.sidewalk.com. Seattle Sidewalk contains, among other things, publicly available information concerning entertainment, events and restaurants in the greater Seattle area as well as reviews, commentary and recommendations. Admit that Microsoft is publishing a similar publication regarding New York City may publish similar publications regarding other cities and may obtain advertising revenues in connection with such publications. Admit that Seattle Sidewalk can be viewed from any Internet-connected computer in the world, including any such computers in the Central District of California. Except as expressly admitted, Microsoft denies all other averments in paragraph 15 of Ticketmaster's first amended complaint.

16. Admit that Microsoft and Ticketmaster have engaged in discussions on a variety of subjects. Deny Microsoft is making any improper use of a linkage. Deny Microsoft is a "freerider." Except as expressly admitted, Microsoft denies all other averments in paragraph 16 of Ticketmaster's first amended complaint.

17. Deny.

18. Admit that Microsoft's sidewalk.com worldwide web site uses the word "Ticketmaster" to refer to Ticketmaster Corporation and the words "Ticketmaster Northwest" to refer to Ticketmaster Corporation's local offices in the Pacific Northwest. Admit that Microsoft's sidewalk.com worldwide web site provides URLs to Ticketmaster's worldwide web site, allowing potential Ticketmaster customers to quickly point their computers to Ticketmaster's site. Deny Microsoft has used Ticketmaster's property or goodwill to sell anything. To the extent not expressly admitted, Microsoft denies all other averments in paragraph 19 of Ticketmaster's first amended complaint.

19. Deny that Microsoft has appropriated or used commercially Ticketmaster's name, marks and web site as set forth by Ticketmaster in paragraphs 1 through 18 of its first amended complaint. Admit that Microsoft has received revenue from the sale of advertising in connection with Seattle Sidewalk. Deny Microsoft has deprived Ticketmaster of favorable advertising business or opportunities. Except as expressly admitted, Microsoft denies alI other averments in paragraph 19 of Ticketmaster's first amended complaint.

20. Deny.

21. Deny

22 Admit that Ticketmaster has requested Microsoft alter Seattle Sidewalk to delete certain references to Ticketmaster and has requested changes in certain information. Microsoft denies all other averments in paragraph 22 of Ticketmaster's first amended complaint.

23. Deny

24. Admit or deny as set forth above.

25. Deny

26. Admit or deny as set forth above.

27. Deny.

28. Admit or deny as set forth above.

29. Deny.

30. Admit or deny as set forth above.

31. Deny.

32. Admit or deny as set forth above

33. Deny.

34. Admit or deny as set forth above.

35. Admit.

36. Admit that Microsoft and Ticketmaster have a dispute concerning Microsoft's right to publish facts which are publicly available and which make it convenient for consumers to contact Ticketmaster's worldwide web site. Microsoft denies all other averments in paragraph 31 of Ticketmaster's complaint for lack of sufficient knowledge and information.

37. Admit.

AFFIRMATIVE DEFENSES

The Internet and the Worldwide Web

38. The Internet is a worldwide network of computers. The purpose of the Internet is to permit easy communication between the computers belonging to the network. Each computer participating in the Internet has a unique identifying address. Use of this address is the only means by which communication between computers on the Internet can be initiated.

39. The World Wide Web is a system for initiating communications on the Internet. The World Wide Web simplifies Internet communication by permitting users to jump from computer to computer by simply clicking with a mouse on an image representing the unique address of the computer the user is seeking. The image typically an underlined word or phrase representing the target computer's address is called a "hypertext link." Hypertext links speed up the process of contacting another computer and eliminates the error prone process of typing instructions and unfamiliar computer addresses. However, the World Wide Web does not alter the fundamental aspects of communication over the Internet. Communication is initiated and conducted according to precise sequences and rules. In order to attempt communication, a user must contact a target computer, using its unique address. For communication to take place the target computer must respond and invite further contact. If the target computer does not respond or invite further contact, communication will occur.

40. A Web Page is a document designed for the purpose of being displayed on the Internet when it is accessed by another computer. A Web site is a collection of related Web Page documents. Every Web Page document has a unique address, called a Uniform Resource Locator {"URL") by which it can be accessed. Access cannot be secured other than by supplying the appropriate URL. Pursuant to the World Wide Web system, hypertext links are used to represent URLs.

41. A Web Page document may contain and display the URLs of still more Web Pages, whether part of that Web site collection or located on other Computers Thus, the Internet user may readily access information from a variety of sources that choose to participate in the World Wide Web. This easy access is an intended consequence of and fundamental to the nature of the World Wide Web.

42. Participation in the Internet and the World Wide Web by individuals and businesses is strictly voluntary. In order to participate a business or individual must take certain affirmative steps and comply with certain specified protocols. It is not possible to participate by accident or without the knowledge of the participating entity. At a minimum a participating entity must affirmatively seek unique addresses for its computers and provide URLs for its Web Pages.

43. Any business, such as Ticketmaster, participating in the Internet and the World Wide Web invites other participants to use the business' Internet addresses and URLs to contact it.

The Illusory Nature of Ticketmaster's Complaint

44. Ticketmaster maintains a group of publicly accessible documents or Web Pages which it calls a Web Site.

45. Microsoft does not use Ticketmaster's Web Site. Microsoft does not access, incorporate or redistribute Ticketmaster Web Page documents. All Microsoft does is provide viewers of its own Web Pages with the URLs for other Web Page on the Internet, including some operated by Ticketmaster, that the viewer may find of interest. Whether or not the viewer accesses a Ticketmaster Web Page document is up to the viewer. Whether or not Ticketmaster displays the Web Page document to the viewer is up to Ticketmaster. Microsoft is not a party to the communication between the viewer and Ticketmaster.

46. Ticketmaster's first amended complaint is based upon a fundamental fiction. Ticketmaster creates an illusion that Microsoft, not the Internet user, is accessing Ticketmaster's Web Pages. Ticketmaster knows that this illusion is completely false. Moreover, at any time it chose, Ticketmaster had the power to refuse access to any of its Web Pages. Ticketmaster voluntarily and knowingly chose not to refuse access. Ticketmaster has publicly acknowledged that it possesses the capability to refuse access and that it voluntarily elected not to do so.

47. Any actual linkage complained of by Ticketmaster in its Complaint and First Amended Complaint occurred because Ticketmaster intended it to occur.

Microsoft's Seattle Sidewalk

48. Microsoft maintains a collection of publicly accessible Web Page documents that it calls Seattle Sidewalk. These Web Pages provide members of the public with a variety of public information, including information about public events, and commentary. As a small part of that information, in connection with public events that require tickets, Microsoft indicates the range of ticket prices, where tickets may be purchased and how payment may be made. With respect to public events for which Ticketmaster sells tickets, Microsoft provides such information about Ticketmaster. None of this information is proprietary. There is no basis for Ticketmaster's claim that it owns this information or that the public should be denied free and ready access to it.

49. In the process of informing the public where to purchase tickets for an event, Microsoft necessarily uses Ticketmaster's name to identify Ticketmaster. Microsoft could not otherwise identify Ticketmaster.

50. Seattle Sidewalk is an on-line information service in the medium of the World Wide Web. When Seattle Sidewalk tells its readers how and where to purchase tickets, it necessarily does so in the manner contemplated by the medium in which it is published: it uses hypertext link, and URLs.

FIRST AFFIRMATIVE DEFENSE -- ASSUMPTION OF RISK

51. Microsoft realleges and incorporates by reference paragraphs 38-50.

52. When it elected to participate in the World Wide Web system, Ticketmaster assumed the risk that other participants in the Internet would use Ticketmaster's URLs and access its Web Pages.

SECOND AFFIRMATIVE DEFENSE -- ESTOPPEL

53. Microsoft realleges and incorporates by reference paragraphs 38-50.

54. Ticketmaster represents to the Internet community, including Microsoft, that it wants to be contacted over the Internet and that its Web Pages are available for viewing. Ticketmaster actively encourages Internet users to seek out its Web Site and to refer others to its Web Site. As a result, Ticketmaster is estopped from making any claim based on the conduct it has solicited.

THIRD AFFIRMATIVE DEFENSE -- FAIR USE

55. Microsoft realleges and incorporates by reference paragraphs 38-50.

56. The use by Microsoft of Ticketmaster's trademarks complained of by Ticketmaster is fair use including, without limitation, under 15 U.S.C. sec. 1125{c).

FOURTH AFFIRMATIVE DEFENSE -- NOMINATIVE FAIR USE

57. Microsoft realleges and incorporates by reference paragraphs 38-S0.

58. The use by Microsoft of Ticketmaster's trademarks is a nominative fair use. Such use is reasonably necessary to identify Ticketmaster and does not suggest sponsorship or endorsement by Ticketmaster of Microsoft or Seattle Sidewalk.

FIFTH AFFIRMATIVE DEFENSE -- NON-COMMERCIAL USE

59. Microsoft realleges and incorporates by reference paragraphs 38-50.

60. The use by Microsoft of Ticketmaster's trademarks is a non-commercial use, including, without limitation, under 15 U.S.C. sec. 1125(c)(4){C).

SIXTH AFFIRMATIVE DEFENSE -- NEWS REPORTING

61. Microsoft realleges and incorporates by reference paragraphs 38-50.

62. The use by Microsoft of Ticketmaster's trademarks constitutes reporting of information, including, without limitation, under 15 U.S.C. sec. 1125(c)(4)(C).

SEVENTH AFFIRMATIVE DEFENSE -- FAILURE TO MITIGATE DAMAGES

63. Microsoft realleges and incorporates by reference paragraphs 38-50.

64. Ticketmaster has failed to mitigate its damages and to protect itself from avoidable consequences.

EIGHTH AFFIRMATIVE DEFENSE -- FAILURE TO STATE A CLAIM

65. Microsoft realleges and incorporates by reference paragraphs 38-50.

66. Ticketmaster has failed to state a claim. All information about Ticketmaster used by Microsoft in Seattle.Sidewalk.Com is lawfully obtained and may be freely used in the fashion described herein.

NINTH AFFIRMATIVE DEFENSE -- PREEMPTION

67. Microsoft realleges and incorporates by reference paragraphs 38-50.

68. Ticketmaster's claims based upon state law or common law are preempted by federal law.

TENTH AFFIRMATIVE DEFENSE -- UNCLEAN HANDS

69. Microsoft realleges and incorporates by reference paragraphs 38-50.

70. Microsoft has done nothing wrong. Ticketmaster has engaged in the conduct that it complains of in this action. Ticketmaster's conduct constitutes unclean hands and bars Ticketmaster's claim for equitable relief in this action.

ELEVENTH AFFIRMATIVE DEFENSE -- FIRST AMENDMENT

71. Microsoft realleges and incorporates by reference paragraphs 38-50.

72. Microsoft's Seattle Sidewalk is an on-line information service publishing a wide variety of public information and is entitled to the full protection of the first amendment to the United States Constitution.

73. Ticketmaster is a public entity engaged in substantial commerce with consumers. Indeed, in its first amended complaint, Ticketmaster proclaims itself to be the "world's largest provider of computerized ticket distribution products and services" with annual ticket sales in excess of $1.6 billion.

74. Microsoft's publication of basic information and commentary about Ticketmaster is constitutionally protected speech. Interpretation of the laws at issue in such a fashion as to make such publication wrongful would make such laws unconstitutional to the extent so interpreted.

75. The injunctive relief which Ticketmaster seeks in this case would be an unconstitutional prior restraint upon Microsoft's right of free speech.

COUNTERCLAIM -- DECLARATORY JUDGMENT

76. Microsoft realleges and incorporates by reference paragraphs 38-52.

77. By this lawsuit and by public statements which go beyond the pleadings in this case, Ticketmaster has raised public doubt about whether the use by Microsoft, and Internet users generally, of hypertext links is lawful.

78. A judicial determination that Microsoft has lawfully used hypertext links, including links which incorporate the unique addresses and URLs of Ticketmaster computers and documents, is necessary and appropriate to remove any chill from the free workings of the Internet.

PRAYER FOR RELIEF

WHEREFORE, defendant Microsoft seeks relief against Ticketmaster and requests entry of judgment against Ticketmaster as follows:

1. Dismissing all of Ticketmaster's claims with prejudice;

2. Entering declaratory judgment in favor of Microsoft and against Ticketmaster, declaring that Microsoft's Seattle.Sidewalk has not damaged Ticketmaster's name, mark and web site or wrongfully invaded any proprietary interest of Ticketmaster;

3. Awarding Microsoft its costs and attorney fees; and

4. Awarding Microsoft such other relief as is just and equitable under the circumstances.

DATED this 28th day of May, 1997.