Power.com Counterclaims Dismissed — Facebook v. Power Ventures

[Post by Venkat]

Facebook and Power Ventures have been involved in a lawsuit over whether Power.com can allow its users to access user data on Facebook’s network. Facebook brought suit against Power.com asserting a slew of claims ranging from copyright infringement to violations of the Computer Fraud and Abuse Act. Power.com brought a motion to dismiss, which the court denied. This ruling was noteworthy, among other reasons because it recognized Facebook’s potentially tenuous copyright claims and gave credence to Facebook’s argument that access of user data by Power.com (or Power.com users) in violation of Facebook’s terms of use was potentially actionable by Facebook. (For comments on this ruling, see Cyberlaw Cases; BNA’s TechLaw blog; Jeff Neuberger; and an earlier post from me.) After the court denied Power.com’s motion to dismiss, Power.com answered the complaint and asserted counterclaims against Facebook. Power.com’s counterclaims garnered some attention, likely due to the fact Power.com alleged that Facebook engaged in anti-competitive conduct by restricting consumers’ access to their data. (See, e.g., NYT/Bits Blog (“Power.com Fights Back Against Facebook“).)

In a recent order, Judge Fogel granted Facebook’s motion to dismiss, finding that Power.com failed to sufficiently articulate the bases for its counterclaims. (Access a copy of the order here: [pdf].) There’s not much to say about Judge Fogel’s order, except that it was brief (four pages!), and the court was not moved by Power.com’s vague allegations of misconduct by Facebook. As noted by the court:

Power’s Answer and Counter-Complaint contains a seven and a half page ‘Introduction and Background’ narrative untethered to any specific claim. The claims themselves each consist of a conclusory recitation of the applicable legal standard and a general ‘reference [to] all allegations of all prior paragraphs’ . . . .[T]his form of pleading does not enable the Court to surmise which facts in the introductory narrative support which claims, if in fact they do.

The court observes that antitrust claims require a heightened standard of pleading, and throws in a reference to Twombly for good measure. The court also strikes Power.com’s affirmative defenses (of misuse and estoppel) as unsupported by “any factual allegations.” Although the court grants Power.com leave to amend its counterclaims and affirmative defenses, I would guess Power.com will think twice about filing amended counterclaims unless these claims have solid factual backup.

Rumors of an impending settlement between the parties swirled around, even after Facebook filed its complaint. Then it looked like Power.com was looking to fight back. It’s always tough to tell from the win or loss of a particular motion which way the lawsuit will go, but Judge Fogel’s order certainly lets the air out of Power.com’s counterclaims. To the extent Power.com was looking to gain leverage by asserting counterclaims, it may be out of luck.