Can a challenger link to Trade Me feedback? Lawyer's verdict

Chapman Tripp partner Matt Sumpter

A leading intellectual property lawyer says Trade Me might not be able to stop a competitor linking to its members' reputation ratings - and may fall foul of competition laws if it tries.

Yesterday, Trade Me fired a shot across the bow of upstart Geta, which plans to incorporate Trade Me feedback ratings into Geta seller profiles.

While not speaking directly to Geta's move, the NZX-listed company did sound a general warning to the market.

"People work hard for their Trade Me feedback and there’s nothing to stop a person telling others what their Trade Me feedback rating is," head of marketplace Craig Jordon told NBR.

"However it is a violation of our terms and conditions to have other websites link to Trade Me feedback.

"We don’t want to get silly about it, but would remind other website operators that inducing people to breach a contract is a tort and probably not a great idea. We’d suggest any website considering this sort of thing takes good legal advice before proceeding."

Geta chairman Gerard Peters labeled this approach anti-competitive. Mr Peters sees linking to or otherwise incorporating a seller's Trade Me reputation rating as a way of jump-starting his site; helping to solve the critical mass problem and providing instant authority.

NBR asked Chapman Tripp partner Matt Sumpter - a specialist in intellectual property, commercial litigation and antitrust law - for his opinion.

"I understand that users write their own “about me” profiles.That means that they own copyright in those profiles and can licence Trade Me’s rivals to use the descriptions.  I can’t see anything obvious in Trade Me’s terms and conditions which would or could change that copyright position.  It seems to me that users give Trade Me an implied licence to use the profiles, but it doesn’t look like they’re handing over an exclusive licence to use the material," Mr Sumpter said.

"I can’t see how Trade Me could stop users saying that, as a matter of fact, they enjoy a particular Trade Me reputation rating. Intellectual property laws are designed to encourage creativity, not muzzle free speech."

From there, there are shades of grey.

"Linking is tricky. It should be okay, but Trade Me could run a technical copyright argument to the contrary," Mr Sumpter said.

"But at some point where Trade Me stretches its intellectual property rights too far, it might have a competition law problem on its hands."

Whether Geta - one any one of the pool of new Trade Me competitors - could link to Trade Me ratings could make a fascinating test case, the Chapman Tripp partner said.

The question now, is whether Mr Peters - an importer of American muscle cars when not working on Geta - has the stomach, and the financial means, to take on the $1.6 billion Trade Me.

Mr Peters said this afternoon that Mr Sumpter's comments had confirmed his take on the situation.

"It does not seem legally feasible to control user's feedback," the Geta chairman told NBR. Trade Me was making a "childish, bullying" attempt to force members to stay on its platform.

Trade Me shares [NZX:TME] were up 0.25% to $4.08 in midday trading.

ckeall@nbr.co.nz

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12 Comments & Questions

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The final comment of your story sums up the cold hard truth of any conflict - those with the most money can put upsarts out of business.

Right or wrong does not come into it if you can't pay your way to the steps of the local court house.

It's the golden rule. Those with the gold, rule.

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This same argument was made several years ago when http://www.oneway.co.nz was launch. Trademe tried to banning people for transferring their feedback to another site. The site still exists, and nothing happen even though legal threats were made against the site.

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Trade me allow Google & Bing to link to profile of users . Similar case with Craig's list in the US at this time and well

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This is a classic David vs Goliath scenario.

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Even if a Geta user can link to a TradeMe profile, who's to say that it's their profile they point at?

What's to stop me passing myself off as a high reputation TradeMe user when using my Geta account to sell stuff? It strikes me that this passing off issue is more of a reason for TradeMe to disallow linking.

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I'm pretty sure they will have some sort of screening process. It's not that hard to confirm authenticity and ownership of an account. They Can even confirm by signing-up with the same email. Problem solved :-)

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Charge an access fee for non TradeMe sites or a charge for storage after all TM are providing that service, individuals may arguable "own " the feedback but they don't own the storage devices. As usual with the internet everyone wants someone else to pay. I heard a great truth about the internet " if you're getting a free service you are the product"....

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Informatics Outsourcing is an Offshore Intellectual Property Services company. They are providing Intellectual Property services for Bio Technology, Biochemistry, Drug Discovery, Chemistry, etc

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I don't know why Geta is even being labelled "competition" to Trade Me TBH. Their web design is naff, the site is riddled with bugs, and they don't even have auctions! come back when you're actually ready, thanks.

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Geta and anybody else is deluded if they think they can compete with Trade Me. Its too well established. I respect these guys trying but they are never going to beat T.M

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i have the freedom to give my trade me user name as a reference to potential buyers of any other online selling site. It my feedback. I dont care TM thinks its got the monoply, its about time another selling site made some healthy competition I will definately choose lower fees or free, why wouldnt you????/

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I think TM has too much of a hold on us. We need better alternatives. Any new start-up such as Geta.co.nz has my support. I've spent far too much money on advertising fees on TM. I'm taking my feedback too when i leave !

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