Advanced Copyright Law on the Internet

b. Craigslist v. Mesiab

In Craigslist, Inc. v. Mesiab,^941 a magistrate judge recommended that the plaintiff’s
motion for default judgment and award of statutory damages be granted based on violations of
the DMCA anti-circumvention provisions in the following ways:

• Distribution of “EasyAd Suite” software that bypassed the CAPTCHA system of the
  Craigslist site and enabled users to post ads automatically and in unlimited quantity. The
  magistrate recommended that an award of $800 per copy sold be increased to $1,500 per copy
  because the defendants had shown disregard for the injunction entered by the court. Based on
  2,983 copies of the software distributed, the magistrate recommended an award of $4,474,500.^942


• Sale or offer for sale of “CAPTCHA credits,” which was a service to circumvent
  CAPTCHAs through instantaneous outsourcing for occasions when the EasyAd Suite program
  was unable to decode the CAPTCHA. The defendants also offered CAPTCHA circumventions
  in bulk for prices ranging from $12.50 for 500 credits to $157.50 for 10,000 credits. The
  magistrate ruled that damages under the DMCA could properly be calculated based on offers to
  sell and not actual sales of CAPTCHA credits, as well as credits sold through a third party.
  Because it was uncontested that defendants’ web site offered to sell CAPTCHA credits and those
  offers were made to at least the number of people who purchased the EasyAd Poster Deluxe
  software, the magistrate found the defendants liable for damages for 2,983 offers. The
  magistrate recommended an award of $400 per violation for offers to sell CAPTCHA credits, for
  an award of $1,193,200.^943


• Offers of Craigslist telephone-verified accounts. The “Adult” and “Therapeutic
  Services” categories on Craigslist required telephone verification in order to post ads and the
  telephone-verified accounts offered by the defendants allowed purchasers to pay to have their
  accounts fraudulently verified by contracted employees or devices. Again applying the rule that
  offers for sale were sufficient for damages, the magistrate found that at least 1,000 offers for
  telephone-verified accounts were made, and that an award of $400 per offer was reasonable
  ($400,000 in total).^944

The district court adopted the magistrate’s recommendation in full and entered judgment
against the defendants for a total statutory damages award of $6,067,700.^945

c. Craigslist v. Hubert

In Craigslist, Inc. v. Hubert,^946 the court ruled, on an entry of default judgment after the
defendant failed to appear, that the sale of software allowing users to automatically post ads to

(^941) 2010 U.S. Dist. LEXIS 134411 (N.D. Cal. Nov. 15, 2010).
(^942) Id. at 30-32.
(^943) Id. at 6, 33-35.
(^944) Id. at *35-37.
(^945) Craigslist, Inc. v. Mesiab, 2010 U.S. Dist. LEXIS 134381 (N.D. Cal. Dec. 20, 2010).