Evan Schuman's StorefrontBacktalk

A federal judge Monday came down strongly on the side of Ticketmaster, agreeing to order a software company to stop a service where it helps people—many of them ticker brokers—buy tickets for Ticketmaster events.

U.S. District Court Judge Audrey B. Collins ruled in Los Angeles that the software firm—RMG Technologies of Pittsburgh, PA—must halt the service and software distribution, even if that means the company may go out of business.

The court’s decision was being closely watched in E-Commerce circles because it spoke to how far federal law will go to protect online businesses from new and potentially threatening technologies.

In this instance, though, the judge didn’t address the E-Commerce issues in those broad terms, finding more than enough specifics in this case to justify the preliminary injunction, she said.

The court held that RMG violated its terms of use agreement with Ticketmaster by helping brokers purchase large blocks of tickets and doing so more quickly than most consumers could, thereby blocking them from buying tickets at list prices. The brokers would then turn around and sell the tickets—for the now sold-out event—at much higher prices.

Although the arguments centered on a wide range of narrow and technical definitions—such as whether the automatically-generated cache copy of a page in RAM constitutes a "copy" within the meaning of federal copyright laws, the judge ultimately found most damning promotional language that the court believed came from RMG’s own Web sites and advertisements.

For example, the judge pointed to some wording that she said made it clear an intent to violate Ticketmaster’s agreement.

Said the judge: "Use of an application designed to thwart (Ticketmaster’s) access control by, in (RMG’s) own description ‘stealth technology [that] lets you hide your IP address you never get blocked by Ticketmaster’ would breach the user’s agreement to ‘not use any device, software or routine that interferes with the proper working of the site."

Although Collins allowed that RMG might go out of business if the preliminary injunction was issued, she said the strong chance that RMG would lose out trial outweighed the harm they might endure. "In the copyright infringement context, once a plaintiff [Ticketmaster] has established a strong likelihood of success on the merits," Collins said, "any harm to the defendant that results from being preliminarily enjoined from continuing to infringe is legally irrelevant."

After the ruling, Ticketmaster issued a statement praising the ruling.

"Ticketmaster is committed to ensuring that consumers have fair and equitable access to tickets. Not only are we doing everything possible to create a secure and positive experience for ticket purchasers, we are making sure that the public knows it can come to the Ticketmaster web site and access the best available seats at the prices set by the event provider," said Ticketmaster President and CEO Sean Moriarty. "We will not allow others to illegally divert tickets away from fans. We recognize and respect the necessity and reality of a vibrant resale market, but we will not tolerate those who seek an unfair advantage through the use of automated programs."

David N. Tarlow, an attorney for RMG, disagreed with the judge that there had been a copyright violation and specifically took exception to the conclusion that his client’s product was automated, which is one of the law’s requirements, because it requires extensive human interaction.

He said oral argument before the judge on Monday didn’t make much difference, as the judge had already printed out copies of her 32-page ruling before the arguments began. "There wasn’t really much discussion," he said.

Another attorney involved in the case said Collins often prefers to make decisions based on written documents as opposed to oral arguments.