On March 26th, Alexa Internet, a subsidiary of online retail giant Amazon, filed suit against Ron Hornbaker in the Northern District of California. Alexa accused Hornbaker of trademark violation and theft of proprietary data, under the Anticybersquatting Consumer Protection Act, Sections 32 and 43 of the Lanham Act, and California Business and Professions Code Ã?§ 17200. Alexa also alleged breach of contract, unjust enrichment, and unfair competition. Alexa v. Hornbaker (2 Mb PDF) Alexa is one component of Amazon’s sustained push into the web services market. The company provides a free web browser toolbar. As toolbar users move through the Web, it reports back to Alexa, which then aggregates the data and ranks traffic for millions of websites. In late 2005, Amazon began distributing software tools to make it easier for web developers to integrate Alexa data into their own creations. The idea was that developers would create a host of new Alexa-based applications, and Amazon would make money from the fees it charged developers to tap into this data. Developers did begin jumping aboard. In February, 2006, one of them, Ron Hornbaker, created Alexaholic. The site takes Alexa traffic charts (not just the data) and provides additional functionality around those charts that many users feel is an improvement over Alexa. At least initially, Alexa management seemed to like what Hornbaker was doing. In time the relationship soured, and even after Hornbaker changed the name of the site, he owned the domain Alexaholic.com and was incorporating Alexa’s graphs without paying for their use. So Alexa brought suit. The dispute between Alexa and Hornbaker has turned into a PR nightmare for Amazon. Alexa is just one component in Amazon’s flexible web services business, which provides a broad range of capabilities for companies that would rather tap into Amazon’s existing infrastructure than build out their own. Now many developers are up in arms about Amazon’s treatment of Hornbaker. The underlying response seems to be that Hornbaker made the mistake of beating Alexa at its own game, and is being punished for that. Tim O’Reilly, who has created an ever-expanding business empire built around knowing what programmers want, discusses the controversy and what Amazon CEO Jeff Bezos told him about the lawsuit. O’Reilly’s take is that mistakes have been made by both sides, and the lawsuit is really a loose/loose proposition. There’s also a lot going on in the comments section, some of it in the “IANAL, but…” vein, but all of it interesting. The most fascinating comment of all is one from Hornbaker himself:

Thank you for the even-handed commentary here. You’re certainly right about both me and Amazon making mistakes in this ordeal, and I do wish I could turn back the clock on this one.

The controversy over Alexa’s handling of the matter has raised an immense firestorm in the “Web 2.0” developer community, the very audience Amazon has been vigorously courting with its web services division. But here’s the twist: Hornbaker spent 18 months in federal prison for an online extortion scheme he ran in 1996. Ironically, according to the TechCrunch article:

Hornbaker also says that Amazon is using his conviction as leverage in the case, threatening to disclose it publicly if he doesn�t settle immediately by paying $25,000 and transferring all Statsaholic assets to Amazon.

Much of the reaction to the lawsuit seems to have been gut reaction – the fear felt by small developers who see themselves in Hornbaker’s shoes, defenseless and overwhelmed by a corporate goliath that gives with one hand and takes away with the other. Perhaps a similarly emotional counter-response will flare up now that Hornbaker’s past has been revealed. But the legally relevant facts of the case, at least regarding breach of contract and unjust enrichment, seem rather straightforward. In the complaint, Alexa accuses Hornbaker of:

stealing Alexa’s proprietary data by disregarding the rules for Alexa’s Web Services — through which Alexa makes certain proprietary data available in exchange for a fee — and instead simply taking the data and graphs he wanted without permission.

In a comment on the O’Reilly blog post Hornbaker writes:

I still wish Amazon and Alexa no ill will over this, and have been trying for almost a month now to hand over the domain they want and start paying them for the use of their graphs.

Why, if he had been paying Alexa to tie into its data for over a year (but not paying for the charts), did Hornbaker only start “trying” to pay Alexa for the charts a month ago? Alexa actually negotiated earlier with Hornbaker in an attempt to buy Alexaholic, but was rebuffed. However, Hornbaker did switch domain names only a few days before Alexa filed suit. Amazon has refused to comment on the case so far. Perhaps they, too, wish they’d stayed at the negotiating table just a little longer.

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