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Broker Genius, Inc. v. Volpone
Citation: 313 F. Supp. 3d 484Docket: 17–cv–8627 (SHS)
Court: District Court, S.D. Illinois; May 11, 2018; Federal District Court
Broker Genius, a technology firm focused on the secondary ticket market, has developed AutoPricer v.3, an application for ticket brokers to automate pricing. Broker Genius alleges that Drew Gainor, a former customer and cofounder of the competing company Seat Scouts LLC, improperly used information obtained during his tenure as a customer to develop their competing product, Command Center, thereby breaching the Terms of Use. Broker Genius seeks a preliminary injunction to prevent the defendants from using and selling Command Center, citing claims of breach of contract and unjust enrichment. The court found that Gainor’s actions likely violated the Terms of Use and that Broker Genius would suffer irreparable harm without an injunction, leading to the granting of their motion. In terms of procedural history, Broker Genius previously filed two similar actions against NRZ Entertainment LLC and Select Seats LLC, both of which were resolved without a preliminary injunction. The current case against Gainor and Seat Scouts LLC was initiated on November 7, 2017, following Gainor’s departure from Broker Genius's service. The complaint includes claims for breach of contract, unfair competition, conversion, tortious interference with business relationships, unjust enrichment, and breach of the implied duty of good faith and fair dealing against multiple defendants. On November 9, 2017, the Court issued a Temporary Restraining Order (TRO) that did not prevent defendants from marketing or selling their product but prohibited them from breaching the contractual Terms of Use. Broker Genius subsequently filed a motion for a preliminary injunction based on claims of breach of contract and unjust enrichment. A fact hearing took place over five days in December 2017 and January 2018, during which evidence and witness testimonies were presented. The Court provided a detailed background on Broker Genius, a software company founded in 2013 by Shmuel (Sam) Sherman, aimed at automating ticket pricing in the secondary market—a multi-billion dollar industry. Sherman, leveraging his experience as a ticket broker, sought to develop a software product that would allow brokers to implement and adjust their pricing strategies dynamically. At the time of its founding, no comparable software was available, leading Broker Genius to invest over $4 million in developing its software, including multiple iterations over two years, culminating in the launch of AutoPricer v. 3 in July 2015. Broker Genius's revenue is generated based on the sales volume its users manage through AutoPricer, and by the time of the preliminary injunction hearing, the company had approximately 170 clients. Broker Genius requires users to accept its Terms of Use upon account creation, which include two versions relevant to this case: the Original Terms of Use effective May 2016 and the Updated Terms of Use finalized on June 6, 2016. New users had to agree to the Original Terms during registration, while existing users were prompted to accept the Updated Terms starting July 7, 2016, through a pop-up dialog upon login. Both versions are identical in terms relevant to the litigation. A key provision prohibits users from distributing or creating derivative works of AutoPricer. Defendant Drew Gainor has eighteen years of experience in the ticket industry, beginning with his college venture Source4tickets.com, which he developed into a business with several employees. After merging Source4tickets into National Event Company, he continued to enhance the product Concierge Live. Gainor later founded Ticket Evolution to create industry products and worked on specific projects, including Core and an "auto-uploader." In March 2015, he joined Event Ticket Sales to expand ticket inventory, where he remained employed at the time of the hearing on the preliminary injunction. Gainor initiated contact with Broker Genius on May 23, 2016, through LinkedIn, expressing interest in becoming a customer while working as a ticket broker for Event Ticket Sales. Following the conversation, Gainor registered for a free 30-day trial on May 26, 2016, during a call with Broker Genius's Alex Berrick. There is a dispute regarding whether Gainor accepted the Terms of Use during this registration; Gainor claims Berrick completed the registration on his behalf, while Broker Genius asserts Gainor assented to the Terms. Although no witnesses confirmed the specifics of Gainor's registration process, timestamps and auto-generated emails did not contradict his account, as acknowledged by Sherman. The court does not determine if Gainor accepted the Terms in May 2016 but notes he accepted them two months later. Gainor utilized the AutoPricer tool until the end of 2016, pricing Minnesota Vikings tickets. Broker Genius sought customer consent for updated Terms of Use, alleging Gainor agreed to these on July 7, 2016; however, no evidence from the defendants supported this claim, and Gainor continued using AutoPricer afterward. By 2017, Gainor ceased using AutoPricer but retained access until April 27, 2017, when his account was disabled. Additionally, Gainor acknowledged that his concept for developing an autopricer stemmed from his experience as a Broker Genius customer. In early January 2017, while still licensed to use AutoPricer, he drafted his ideas for a new autopricer and communicated to his business partner, Guinio Volpone, his desire to create a superior pricing tool. Gainor engaged in mockup sketching and coding task creation in a project management tool during the week following January 15, 2017. Prior negotiations with Seat Metrics in 2016 involved a potential partnership for an autopricing product, which Gainor had been beta testing since September 2016. On February 10, 2017, Gainor rejected the partnership, stating he was developing a more comprehensive suite than an autopricer. By late February 2017, he considered hiring an engineer for an autopricer product, leading to the incorporation of Seat Scouts LLC in March 2017 to market Command Center. Coding commenced on May 31 or June 1, 2017, with an initial version operational shortly thereafter. Seat Scouts announced its autopricer product in July 2017, and it underwent beta testing from September to mid-October. Command Center was officially launched on November 1, 2017. At the preliminary injunction hearing, both parties presented expert opinions regarding the similarities and differences between AutoPricer and Command Center. Dr. Eric Koskinen, representing Broker Genius, concluded that Command Center likely derived components from AutoPricer, while defendants' expert, Marina Martin, asserted that Command Center was independently developed and any similarities were due to common industry knowledge. Koskinen identified significant similarities, particularly in the architecture and User Interface/User Experience (UI/UX) designed for secondary-market ticket brokers, emphasizing the systems' dynamic and automatic pricing capabilities, which function as web-based applications linking point-of-sale ticket inventory systems with ticket exchanges. The UI/UX of both products features a "cascading flow of widgets" that allows users to create, monitor, and update dynamic automatic pricing rules. Users start by selecting ticketed events, viewing their current inventory, and selecting specific tickets or groups for rule creation. They then navigate to designate reference tickets, or "comps," which inform the pricing rules. The final step involves setting criteria for the dynamic pricing based on these comps and other factors. Dr. Koskinen identified six similar components (widgets) across both products: 1) Events List Widget, 2) Inventory List Widget, 3) Zones/Sections/Rows Widget, 4) Price By Comps Widget, 5) Seasons Widget, and 6) Groups Widget. Each widget displays relevant information and allows for user interaction, with Command Center offering additional details. These widgets interoperate to facilitate dynamic pricing through a cohesive UI/UX. Additionally, both products tackle scalability by prioritizing updates based on the proximity of the event; tickets for imminent events receive more frequent updates than those further out. They categorize tickets into four tiers based on the event's timeframe, although the intervals are similar rather than identical. Ms. Martin argued that the similarities noted by Dr. Koskinen are either innocuous or insignificant, contending they are industry-standard practices or derived from Gainor's experience. Ms. Martin highlights key differences between AutoPricer and Command Center. AutoPricer allows users to view all widgets on a single screen while navigating, maintaining visibility of multiple widgets. In contrast, Command Center displays only the Events List Widget upon login, opening each additional widget in a new, full-screen window, limiting visibility to one widget at a time. Furthermore, AutoPricer features separate Zones/Sections/Rows and Price By Comps Widgets, while Command Center consolidates these into a single widget. Broker Genius claims that Command Center's marketing targets its existing clients, leading to five distinct types of losses. First, five to ten clients have switched from Broker Genius to Seat Scouts. Second, at least eight clients have reduced their use of AutoPricer by shifting inventory to Command Center, thereby decreasing Broker Genius's revenue. Third, Broker Genius has had to renegotiate pricing agreements with some clients to retain their business. Fourth, ten to fifteen potential clients have chosen Seat Scouts over Broker Genius, and others have decided not to increase their business with Broker Genius. Fifth, Broker Genius's reputation has suffered due to perceptions of overpricing, which they attribute to the defendants' ability to offer lower prices by allegedly copying Broker Genius’s product without incurring significant development costs. Broker Genius asserts that its financial losses are ongoing as the defendants continue to promote Command Center. They warn that without a preliminary injunction to stop the marketing and sales of Command Center, the emergence of additional low-cost copycat products could jeopardize their business within months. A preliminary injunction is a significant judicial remedy that requires careful application. To obtain one, the moving party must clearly demonstrate several factors: 1) likelihood of success on the merits or serious questions that warrant litigation, with a balance of hardships favoring the plaintiff; 2) likelihood of irreparable injury without the injunction; 3) that the balance of hardships tips in favor of the plaintiff; and 4) that granting the injunction would not harm the public interest. Irreparable harm is defined as imminent loss that is difficult to quantify, and if damages can be adequately compensated with monetary relief, irreparable harm is not established. Broker Genius seeks a preliminary injunction based on breach of contract and unjust enrichment claims. The court finds that Broker Genius has demonstrated irreparable harm for the breach of contract claim due to potential loss of reputation, goodwill, and business opportunities, which can justify injunctive relief. However, the court concludes that irreparable harm is not established for the unjust enrichment claim as a matter of law. Specific relief is acknowledged as appropriate in certain breach of contract situations, especially where loss of goodwill or business relationships is at stake, citing various case precedents. Broker Genius has convincingly shown that without an injunction, it will suffer ongoing losses in reputation, goodwill, business opportunities, and customer relationships. Existing customers have shifted to Seat Scouts, leading to revenue declines, while potential customers are increasingly opting for Seat Scouts over Broker Genius, further reducing growth prospects. There is also a growing industry perception that Broker Genius exploits its customers, harming its reputation. Although defendants argue that an influx of investor capital undermines the notion that Command Center poses a significant threat, the Court finds credible evidence of irreparable harm that cannot be remedied through monetary damages. The defendants’ claim that Broker Genius has not linked its losses to specific features of Command Center is dismissed, as the Court views Command Center as a derivative work as a whole. Consequently, Broker Genius is likely to succeed on its breach of contract claim, as it is probable that Gainor accepted the Updated Terms of Use, which defendants violated by creating and distributing Command Center. Regarding the unjust enrichment claim, the Court notes that while such a claim can warrant a preliminary injunction in certain contexts, Broker Genius is not seeking to freeze the defendants' assets, nor are there concerns about the defendants' financial stability. Therefore, this claim does not support the request for a preliminary injunction. To establish a likelihood of success, a plaintiff must demonstrate a probability of prevailing greater than fifty percent; the Court concludes Broker Genius meets this threshold for its breach of contract claim. Gainor assented to the contract comprising the Original and Updated Terms of Use through a clickwrap agreement on the Broker Genius website, which required an explicit acknowledgment of the terms. The terms are enforceable as they provided conspicuous notice and demanded unambiguous assent, as established by relevant case law. Evidence of a user's continued website access, despite memory lapses regarding assent, can substantiate this assent, as seen in case precedents. Broker Genius maintained that new customers must agree to the Terms of Use during account registration, which involves ticking a checkbox that is mandatory for completing the process. The company records this assent in a spreadsheet, alongside the user's email and a timestamp. During the registration, a phone call with a Broker Genius employee ensures that the user completes the assent process. While witnesses did not specifically recall Gainor's registration, they affirmed that deviation from standard policy was unlikely and would contradict company protocols. Thus, the court concluded Broker Genius demonstrated that Gainor accepted the Updated Terms of Use on July 7, 2016. Defendants assert that an employee from Broker Genius created Gainor's account during or prior to a phone call, which included entering Gainor's email and agreeing to the Terms of Use. Expert testimony from Ms. Martin indicated that the existing code allowed account creation without agreeing to these terms. They also reference an email in which Ellman sent Gainor an unencrypted password, suggesting Broker Genius's involvement in account creation. Ellman confirmed that administrators, including himself, could view customer passwords unencrypted at that time. The Court finds conflicting evidence regarding Gainor's assent to the Original Terms of Use but concludes that Gainor accepted the Updated Terms of Use, which were established on June 6, 2016, and available for user assent starting July 7, 2016. Users were prompted to agree via a pop-up window, and their assent was logged with a timestamp. Gainor's assent is recorded as occurring on July 7, 2016, at 12:56 p.m. Although Gainor claimed he did not recall assenting, he undisputedly continued using the AutoPricer service after this date. The Court noted that defendants did not provide an explanation for how Gainor retained access without assent to the Updated Terms. Ms. Martin did not opine on whether the code allowed continued access without assent, unlike her comments on the Original Terms. Thus, the Court concludes it is likely Gainor could not have used AutoPricer post-July 7 without agreeing to the Updated Terms, affirming that Broker Genius can likely demonstrate Gainor's assent on that date. Under New York law, written contracts are interpreted to reflect the parties' intentions as expressed in clear language. If a contract is ambiguous, its interpretation is a factual question; otherwise, it is a legal question for the court. In this case, the parties did not claim that the Terms of Use were ambiguous, nor did they present extrinsic evidence regarding the contract's meaning. The court concluded that the language of the Terms of Use is unequivocal, thus it will interpret them as a matter of law. The specific contractual provision at issue prohibits the distribution or creation of derivative works from AutoPricer. The parties agreed this provision is not a noncompetition clause, allowing Broker Genius customers to compete, but preventing them from creating derivative products from AutoPricer. Both sides used the same definition of "derived" from Merriam-Webster, indicating something that originates from another source. For a product to be considered derivative, it must share similarities with the earlier product and those similarities must be traceable back to it. Evidence of common elements known in the industry could suggest a new product is not derived from the earlier one. The defendants argued that the existence of prior art negates the possibility of a later product being derivative; however, this interpretation does not align with the Terms of Use, which do not impose such a limitation on the term "derive." A businessperson may seek a competitive edge by covertly gathering information about a competitor's product, potentially posing as a customer. If this individual uses the acquired insights to develop a similar product, it would be linked to the original, regardless of any resemblance to prior art. Companies can safeguard against such actions by requiring customers to sign noncompetition agreements, which would prevent any competition, including non-derivative products. However, such agreements would have costs for both the company and its customers. The agreement in this case allowed for a balance: Gainor received a license to use AutoPricer in exchange for payment and a commitment not to create or distribute derivative works, but not a prohibition on competition. The court is to assess whether Gainor breached this agreement when he, alongside other defendants, created and distributed Command Center after agreeing to the Terms of Use, which specifically prohibited him from creating or distributing derivative works of AutoPricer. The court finds that Command Center is likely to be substantially similar to AutoPricer, with similarities traceable to AutoPricer, constituting a breach of the Terms of Use. The comparison highlights that Command Center shares significant architectural and user interface/user experience (UI/UX) similarities with AutoPricer, which are largely undisputed. The products exhibit a common structure as web-based applications that facilitate dynamic pricing rules for ticket brokers, characterized by a similar flow of user interface elements that allow users to create and manage pricing strategies. The extensive similarities in design and functionality overshadow any minor differences, indicating a deliberate parallel in development decisions. The excerpt identifies significant similarities between the AutoPricer and Command Center products, particularly regarding the functionality and features of widgets, which are identical and interrelated. Both products address scalability issues in the same manner. While defendants do not primarily dispute the similarities, they provide alternative explanations and highlight some differences, such as the single-page layout of AutoPricer versus the multi-page layout of Command Center. Dr. Koskinen asserts that the interaction flow between widgets is more critical than layout differences. Minor UI/UX distinctions, such as user interactions with maps and navigation differences, are considered insignificant compared to the substantial similarities. The Court concludes that Broker Genius is likely to demonstrate substantial similarity between the two products. Furthermore, the Court must determine if the similarities in Command Center can be traced back to AutoPricer, requiring evidence that Gainor derived Command Center from AutoPricer, rather than simply having access to it or developing it independently. There is considerable circumstantial evidence suggesting copying by Gainor, despite the absence of direct proof. Broker Genius has sufficiently shown a greater than fifty percent likelihood of prevailing, fulfilling the criteria for a preliminary injunction. Gainor's access to AutoPricer and his repeated use of it in his business operations are uncontested. Gainor began using AutoPricer in May 2016 and continued until the end of December 2016. During this period, he interacted with AutoPricer's features, which allowed him to identify effective elements for potential use in developing a competitive product. On September 18, 2016, he noted effective features of AutoPricer while beta testing a product for Seat Metrics. Although Gainor’s access to AutoPricer continued until April 27, 2017, there was no evidence that he accessed it in 2017. Following his use of AutoPricer, Gainor quickly began developing what became the Command Center product. He created a "first draft" of Command Center on January 8, 2017, just a week after concluding his use of AutoPricer. This draft included primary elements that were also present in AutoPricer, such as six widgets, event listings, ticket listings, and various user functionalities. Within two weeks of ceasing his use of AutoPricer, he developed wireframes and created tasks in a project management tool for Command Center. Dr. Koskinen testified that these initial drafts and wireframes indicated Gainor had a clear vision for Command Center's requirements by early January. Notably, Ms. Martin did not consider these documents when forming her opinion that Command Center was unlikely derived from AutoPricer, a point the Court found significant. The Court credited Dr. Koskinen’s testimony, supported by the evidence in the record. Gainor’s testimony indicates that his experience with AutoPricer motivated the creation of the initial draft and wireframes for a new pricing product. He claimed that the deficiencies of AutoPricer inspired him to improve upon it; however, the assertion that he only focused on AutoPricer's negatives while drafting requirements for his competitive product is implausible. His January 8, 2017, email to Guinio Volpone expressing a strong desire to build an improved auto pricer suggests prior discussions about developing a competing product, potentially while he was using Broker Genius's software. Following this, the development of Command Center progressed rapidly. A partner at Seat Metrics expressed skepticism about the quick development timeline, implying it may have been in development during the beta testing phase with Seat Metrics. The incorporation of AutoPricer elements into Command Center was not the product of an independent requirements engineering process, which encompasses the comprehensive identification of software operational aspects, including both functional and non-functional elements. Expert Dr. Koskinen identified key components of requirements engineering, such as project management, wireframes, and user studies, and found no significant evidence of such a process in the development of Command Center. He noted that the initial documents, including drafts and wireframes, contained crucial elements from AutoPricer. Furthermore, he found no user feedback involved in Command Center's development. Critically, opposing expert Ms. Martin did not consider the development process or relevant documents, which the Court deems a significant flaw in her analysis. The absence of a requirements engineering process in Command Center's development strongly indicates that its significant similarities to AutoPricer were not independently developed by the defendants. Gainor's use of AutoPricer functioned as a substitute for extensive and costly requirements engineering. His actions violated the Terms of Use by impersonating a customer to gain access to AutoPricer, from which he derived insights to enhance his own competitive product, Command Center. Evidence from a preliminary injunction hearing points to a systematic plan by Gainor to access competitors' products illicitly, including four key instances: 1. On September 18, 2016, while a customer of Broker Genius, Gainor provided his Broker Genius login to Seat Metrics, enabling them to access AutoPricer to resolve a feature issue. This act was a direct violation of the Terms of Use. 2. On January 8, 2017, just after claiming he ceased using AutoPricer, Gainor was simultaneously preparing requirements for his autopricer and beta-testing Seat Metrics’ product, continuing communication regarding potential collaboration. 3. On September 10, 2017, after his Broker Genius account was disabled, Gainor received an offer from a Broker Genius sales employee to demonstrate new features of AutoPricer. He discussed circumventing direct access and suggested obtaining information through another source to avoid revealing their competitive status. 4. In October 2017, a Seat Scouts employee successfully gained access to AutoPricer through indirect means, subsequently informing Gainor and others in the company. These instances collectively indicate Gainor's strategy to access AutoPricer and similar platforms for competitive advantage. Gainor testified that a ticket broker, after seeing a demonstration of Command Center, provided access to Broker Genius's AutoPricer during a screen share with Gainor and his Seat Scouts team. Gainor indicated that Command Center was already available in the market at that time, implying no insights could be gained from AutoPricer. The Court accepts this testimony, interpreting it as evidence of a potential plan to access competitors' products under false pretenses to gather market intelligence. However, the Court recognizes that similarities between Command Center and AutoPricer may not be directly linked to AutoPricer, as many features were already common in the industry or derived from Gainor's prior experience. Specific examples include similarities present in software developed before AutoPricer, such as the Core product, which Gainor developed while at Ticket Evolution and included features like the Events List Widget and interactive maps. Although Core allowed for price adjustments, it lacked the automated pricing capabilities of AutoPricer. Other tools like SeatTrax and goPricer also shared similarities with Command Center but were not autopricers. Testimonies also referenced autopricers from outside the ticket industry, but these typically price identical products, unlike event tickets, which necessitate a unique user interface. Furthermore, evidence suggests that some AutoPricer features were developed from external sources, including open-source code, supporting the argument that Command Center's elements may originate from various sources beyond AutoPricer. The document highlights the distinction between the architectural and functional aspects of software applications, particularly in the context of a dispute between Broker Genius and AutoPricer. Broker Genius does not assert that the concept of an events list in its Command Center software was derived from AutoPricer, but rather emphasizes the unique functionality, overall architecture, and user interface/user experience (UI/UX) of its product. Ms. Martin draws an analogy between houses to illustrate that basic shared features do not imply derivation or copying; however, the court finds that significant similarities in layout and features between two houses (or software applications) can indicate that one was derived from the other, especially when there is a connection between their creators. Gainor's prior exposure to autopricing concepts during his tenure at Ticket Evolution is noted, including his development of a feature that allowed brokers to adjust inventory pricing. Despite his experience, Dr. Koskinen asserts that even an industry veteran would need to navigate the complexities of creating an effective UI for new software, a process lacking in Gainor's development of Command Center. The excerpt also discusses commonalities between Command Center and AutoPricer that may seem obvious, such as chronological ordering of events and ticket pricing options. These similarities could suggest independent knowledge rather than copying. However, the lack of documented research and design processes for Command Center raises questions about the originality of its design choices. The testimony suggests that while some design choices may appear intuitive, they require significant thought and effort to develop. Ultimately, the evidence presented leans towards the conclusion that Command Center shows derivation from AutoPricer. The Court finds a strong likelihood that Broker Genius can prove Command Center and AutoPricer share substantially similar architecture, UI/UX, and widgets, with those similarities likely traceable to Broker Genius’s AutoPricer. Gainor’s extensive use of AutoPricer provided him with knowledge about its effective elements, which he later incorporated into Command Center shortly after discontinuing his use of AutoPricer. This timeline supports an inference that Gainor utilized insights gained as a Broker Genius customer to develop a competing product. Evidence indicates that Gainor may not have conducted any requirements engineering prior to drafting Command Center, suggesting a deliberate strategy to analyze competitors' products, potentially violating Broker Genius’s Terms of Use. While Gainor could have theoretically created a similar product independently, the Court concludes that it is more probable that the knowledge from AutoPricer directly influenced the development of Command Center. Consequently, Broker Genius is likely to succeed in demonstrating that Gainor breached its Terms of Use. Additionally, for Broker Genius to prevail on its motion for an injunction, it must show that the balance of hardships favors it and that the public interest would not be harmed. The Court has determined that Broker Genius is likely to suffer significant reputational and business losses without an injunction against the defendants, who only cite a vague harm of being unable to compete fully. The balance of hardships favors Broker Genius, while the public interest is not significantly affected by this dispute. Broker Genius argues that an injunction would uphold the enforcement of contracts, whereas the defendants claim it would hinder free competition; however, the Court finds no public interest detriment in granting the injunction. Broker Genius's request for a preliminary injunction is granted, specifically prohibiting the defendants from using or distributing the Command Center product and from destroying any evidence related to the case. The Court has also increased the security amount Broker Genius must post to $100,000. The injunction applies to all defendants and their associates, prohibiting them from accessing or disclosing Broker Genius's proprietary information. The Court did not consider certain submissions from Broker Genius due to a previous letter from the defendants. The defendants include multiple individuals and companies associated with the development and distribution of the Command Center product. Broker Genius is identified as a Delaware corporation based in New York. The Court has supplemental subject matter jurisdiction over state law claims under 28 U.S.C. § 1367(a) due to the original complaint's federal law claims, which were voluntarily dismissed after a comprehensive preliminary injunction hearing. The Court will exercise this jurisdiction for the remaining state law claims to promote fairness and judicial efficiency, as supported by Mauro v. S. New England Telecomms. Inc., 208 F.3d 384 (2d Cir. 2000). Definitions from the Terms of Use clarify that "Content" encompasses all elements viewable or submitted on the Broker Genius Site or Apps, which includes the AutoPricer product. Dr. Koskinen explains that UI/UX refers to user interaction with the application, where UI involves the application's appearance and UX pertains to user satisfaction and functionality. In both Command Center and AutoPricer, users can select options via an interactive map, although the interaction methods differ slightly. Ticket brokers utilize "comps" for pricing due to the uniqueness of each ticket, and "splits" allow users to define ticket block sizes for competition. The Court finds differences in program coding irrelevant, as there are no claims of defendants accessing AutoPricer's source code. The visibility of the interface can vary based on display size, but all widgets are accessible through scrolling. The distinction between user login processes in Command Center is deemed trivial, making it unnecessary to ascertain if Broker Genius can prove Gainor's assent to the Terms of Use on a specific date. Broker Genius cites New York law for breach of contract, and the defendants do not contest this choice; thus, the Court applies New York law in its analysis. Federal copyright law provides a framework for determining whether one computer program is derived from another; however, this does not imply that the parties intended to apply this framework to the prohibition against creating and distributing derivative works in the Terms of Use. The relevant provision may extend broader protections to Broker Genius, as it does not solely focus on copyrighted elements. Broker Genius's motion for a preliminary injunction is based on breach of contract and unjust enrichment claims, rather than copyright claims. The defendants argue that Command Center is not a "derivative work" under federal copyright law but fail to explain why this standard should replace contract law in this case. Their reliance on the NRZ case is deemed misplaced because that court determined the provision did not function as a confidentiality clause, not that it imported copyright law into the contract. Furthermore, neither party raised whether Broker Genius's breach of contract claim is preempted by the federal Copyright Act, which the Second Circuit has indicated is not the case for certain contract claims that assert rights only against the contractual counterparty. The court concludes that federal jurisdiction exists over Broker Genius's breach of contract claim. The excerpt also references advice from a defendants' expert recommending practices for gathering competitor information, emphasizing that such practices are common and generally harmless. Additionally, the evidence indicating traceability extends beyond mere access to the earlier product, distinguishing it from a covenant not to compete. The injunction applies to all defendants, even though the contract was solely between Broker Genius and Gainor, according to Federal Rule of Civil Procedure 65(d)(2).