In the fast-moving and often-opaque art market, information is power—as seen in a recent lawsuit between rival auction houses over allegedly pilfered sales data.

A complaint was filed last week in Texas federal district court by Heritage Auctions, a major U.S.-based auction house.  The defendants are auction giant Christie’s and its subsidiary Collectrium (which Christie’s acquired in 2015).  According to the complaint, Heritage’s website, www.ha.com, offers online-only auctions, provides catalogues for its live auctions, and advertises its business and services.  In particular, the “centerpiece” of the website, according to Heritage, is a core of original content (created by Heritage employees or contractors), including images “of every item offered for sale, or sold previously, at a Heritage auction since 1993, comprising over 8 million original images,” as well as “detailed descriptions” of those items, including not only physical characteristics, but history, provenance, and Heritage’s opinions about the quality or significance of the items.  In addition, website users can register and agree to certain terms of use in order to obtain additional information about each item—notably, the price at which a given item was sold at auction.  The website also offers other features, allowing users to enter information about their own collections and about items they are looking to acquire; these features are useful not only to the users but to Heritage’s business and marketing strategies.

Heritage alleges that this past summer it discovered on its website a “spider,” a term for “scraping” software that enables a third party to quickly copy information from all the pages of a website.  Here, Heritage claims it was able to trace this spider to an HA.com account that had been set up from the same computer as an account in the name of Collectrium’s Director of Product Development, with an IP address originating at Christie’s.  Heritage claims that the account associated with the spider repeatedly switched IP addresses, a tactic Heritage says was aimed at evading Heritage’s website security measures.  Heritage ultimately identified more than two dozen accounts operating the spider, with some accounts using plainly fake names (such as fictional character Jason Bourne).

Although Heritage has now suspended the offending accounts, the damage was already done; the spider had accessed “approximately five million pages of the HA.com website and all the content contained therein.”  Heritage alleges the data became part of a subscription service offered by Christie’s, “Collectrium Market Data Beta,” which purports to give users access to a “proprietary” “searchable database with millions of auction results.”  Heritage alleges that, as of the complaint’s filing date, Collectrium had over 11 million auction item descriptions available, of which more than 2.7 million “were stolen from Heritage” via the spidering.

Heritage’s first claim is for copyright infringement.  Generally speaking, bare facts in a database are generally not copyrightable under copyright law; only the arrangement of those facts is copyrightable, and then only to the extent that the arrangement is itself minimally creative.  But here, Heritage is arguing something different, taking the position that each item listing is itself an original copyrightable compilation of text and images (presumably to counteract any potential argument that the copied material is insufficiently original to merit copyright protection, Heritage emphasizes the creative effort, research, expertise, and investment that went into creating the photographs and descriptions).  Heritage asserts that if the defendants had sought to license this content from Heritage, “the price would have been in the millions of dollars.”  It also notes that Collectrium apparently copied the material verbatim, with minimal edits to remove references to Heritage and Heritage’s copyright notices.  Heritage’s damages theory is aggressive, arguing that each of the 2.7 million auction item listings should be treated as a separate instance of infringement, and that because the defendants acted willfully, they are entitled to $150,000 per infringed work, plus their legal fees and costs.  See 17 U.S.C. §§ 504-505.  They also ask for injunctive relief to stop the defendants from using the allegedly infringed material; this, they urge, should include a preliminary injunction to shut down Collectrium’s website until all Heritage content is removed, and then a permanent injunction to prevent future scraping and infringement.

The complaint also outlines a claim for violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq., which focuses on the technological methods used to access and obtain the information, and a claim under the Digital Millennium Copyright Act, 17 U.S.C. § 1201 et seq., which focuses in part on the defendants’ removal of Heritage’s copyright management information and falsely claiming that it is defendants’ own copyrighted content.  There is also a claim under a Texas statute for “harmful access by computer,” and common-law claims for trespass, unfair competition, and civil conspiracy.  Lastly, Heritage alleges a breach-of-contract claim, focusing on defendants’ violation of the contractual terms governing use of Heritage’s website.

Interestingly, Heritage’s complaint emphasizes that the stolen data also gives Christie’s a boost in terms of how the two auction houses are viewed in the marketplace.  Heritage claims that it is actually “the leading auction house in multiple collectibles categories” (for example, rare coins, sports memorabilia, and comic books, among other categories), with sales far exceeding Christie’s and other competitors in those arenas.  But, Heritage explains, the Collectrium database’s incorporation of Heritage’s information (and the fact that Collectrium shares information with Christie’s) means that a Collectrium member whose collection spans multiple categories is more likely to consign items to Christie’s, even where Heritage is the market leader in a category.  Moreover, because members can obtain that content without visiting www.ha.com, it diverts potential customers from Heritage and deprives Heritage of advertising opportunities.  Indeed, the complaint argues that collectors who focus on those categories where Heritage is the market leader “would be less likely to find value in a Collectrium membership as opposed to an HA.com membership (and therefore less likely to consign such items to Christie’s) if Collectrium’s website did not offer Heritage’s content, or if those individuals understood that” such contact was “simply stolen from Heritage.”

As Artnet pointed out last week, this is not the first instance of alleged pilfering of art-sales data; an app called Magnus was pulled from the market this summer following accusations that it operated in part using images and sales data stolen from other businesses.  Cases like this highlight a conundrum in the art market—the market is often criticized for its lack of transparency, yet those who hold important information about artworks do have some rights when it comes to protecting that data, keeping it confidential, and controlling access to it.  We’ll continue to follow this case as it develops.