Coupons, Inc. v. Stottlemire: Alleged "Coupon Hacker" and Coupons, Inc. Settle DMCA Suit [UPDATED]

Copyright Patent

Coupons, Inc. v. Stottlemire

N.D. Cal., No. CV 07-03457 HRL
Court Documents (hosted by Justia)

Last week, Coupons, Inc. ("Coupons"), settled its DMCA suit against John Stottlemire, who had defended himself pro se. The parties have not fully disclosed the details of the settlement, but Stottlemire indicates that the case was dismissed with prejudice. The agreement follows a year's worth of litigation in the United States District Court for the Northern District of California.

Since the writing of this post, Coupons, claiming that Stottlemire breached material terms of the parties' settlement agreement, has resumed litigation.  Stottlemire, in a motion filed with the court, claims that Coupons is mistaken in its belief that he has breached the confidentiality term of the settlement.

In July, 2007, Coupons filed suit against Stottlemire alleging in its complaint that his online posting constituted a violation of the anti-circumvention provisions of the  Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. §1201, and related California state laws. The posting had detailed a "hack" that allowed Coupons patrons to avoid imposed maximums and print multiple coupons with unique and functioning serial codes. Coupons claimed that the dissemination of the hack effectively "offered to the public" a technology "primarily designed for the purpose of circumventing technological measures that effectively control access to Plaintiff's works."

Stottlemire denied the allegation and sought to dismiss on the grounds that his posting did not qualify as the "hacking" or circumvention of certain protection made illegal under the DMCA. He argued instead that this technique merely exploited Coupons's faulty and limited software. Ars Technica reports Stottlemire as stating, "There are big problems when you are not allowed to delete files off of your computer."

The Electronic Frontier Foundation ("EFF"), which joined the Berkeley School of Law's Samuelson Law, Technology and Policy Clinic in filing an amicus brief in support of Stottlemire, discussed its position on the legal issues in the case on its blog after the Court dismissed several of Coupons's claims in July:

Coupons claimed that Stottlemire's tool circumvents technological measures that limit use of its coupons (a "rights-control" claim), but also tried to allege that the tool circumvents measures that limit access to those coupons (an "access-control" claim). The problem is that the tool doesn't have anything to do with access ¾ anyone can access the coupons whether they use the original software or the modified software. This isn't just an academic issue. While the DMCA prohibits the distribution of tools that circumvent rights or access controls, it prohibits actual circumvention (e.g., through use of such tools) only in the case of access controls. This is because controlling use of copyrighted material is already addressed by copyright law, and addressing it again in the DMCA would upset the careful balance between the rights of copyright owners and those of the public.

Speaking to Wired, Stottlemire celebrated the settlement:

Without being represented by an attorney, I defended myself in federal court against a company who solicited the services of two separate law firms. And in my opinion, I kicked their ass. By refusing to succumb to their bullying tactics, I continued to assert my innocence and fought the claims Coupons Inc. filed against me.