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Pagerank Software System and the Issue of Liability

By Martha L. Arias

Some predict that the growth on Internet advertisement is so large that some day companies' marketing budgets may shift to 100% internet advertisement. "This record spending was once again led by ads linked to Web search results," said the Interactive Advertising Bureau.

No doubt, Internet advertisement is a growing industry and every day more companies are recurring to the Internet to offer and sell their products. But, how do those selling advertisement convince their clients of the effectiveness of their marketing plan and how do those selling over the Internet survive in cyberspace? What statistics are shown to convince a company to invest millions of dollars in Internet advertisement?

PageRank is one of those systems used by advertisement agencies to sell and e-commerce companies to buy Internet advertisement. Google, as the company using PageRank software, has been sued for the use of this system under the theory of 'tortuous interference with contractual relations." 

 "Tortuous interference with contractual relations" is a cause of action under U.S. Torts Law (analogous to extra contractual liability theory in Civil Law systems). It occurs when a third party intentionally damage plaintiff's contractual relationship with other parties. The elements and standard of proof of this tort action must be found in state case law. Usually, plaintiff has to prove that an interference has occurred, that it relates to a contractual or business relationship, that the interference was malicious or wrongful (tort law also defines these two terms), whether there are justification or excusable factors, and whether plaintiff suffered injury as the proximate cause (defined by tort law) of the interference.

Google, as a leading Internet search engine and creator (through its founder) of the PageRank software system, has been sued by sellers of Internet advertisement based on this tort. These lawsuits have not succeeded but remarkable law analyses have been ascertained by the U.S. Courts, including Constitutional analysis of freedom of speech.

The PageRank System
Google's founder created a software system for ranking webpages called PageRank. Through a mathematical algorithm, PageRank produces a numerical representation of the importance of a particular web site as it corresponds to a search query. Frequency of visits or links to that website and text matching are some of the factors used by the PageRank system to show the significance of a particular website. Those important and high quality websites receive a higher PageRank when a query is entered. The PageRank system casts its votes through ?links' to the particular web page and the rank goes from 0 to 10.

Stanford University holds the patent of the PageRank system, patented (U.S. Patent 6,285,999).

Even though PageRanks cannot be purchased, they have a value. There are some marketing companies looking for those highly-ranked sites to sell advertisement to their clients and offer some revenue to the highly-ranked sites. Those marketing companies rely on PageRanks to sell their services.

Lawsuits
In Search King, Inc. v. Google, a case in the U.S. District Court for the Western District of Oklahoma Case (No. Civ-02-1457-M (W.D. Okla., Jan. 13 2003)), plaintiff sued Google for tortuous interference with contractual relations under Oklahoma law.

Plaintiff, (hereafter "Search King"), was an e-commerce company whose business model was locating highly-ranked websites willing to profit from advertisement in their web pages and selling that Internet ?space' to companies investing in advertisement. Search King charged the advertiser, paid the highly-ranked web page and kept some profit. Between 2001 and early 2002, Search King PageRank was 7. After September 2002, Search King rank dropped to 4. Search King alleged this devaluation impacted its business opportunities because it limited its exposure in Google's search engine. Search King sued Google under this tort action.

Two main questions of law were considered:
1. Are PageRanks constitutionally protected opinions under the First Amendment of the U.S. Constitution?
2. Is the publication of PageRanks lawful under state law (in this case Oklahoma Law), thereby precluding tort liability based on the intentional and even malicious manipulation of PageRanks by Google?

Constitutional Issues
In Search King v. Google, the Oklahoma Court held that PageRanks are constitutionally protected speech under the First Amendment of the U.S. Constitution because they are subjective opinions (this Court's holding was based on Jefferson County, 175 F.3d 852). Intentionally and malice motivated speech is still protected under the First Amendment, the Court said.

The Court found that PageRanks refer to matters of public concern as the World Wide Web. It further said: "The Court finds that PageRanks do not contain provably (capable of being proved) false connotations. PageRanks are "opinions of the significance of particular web sites as they correspond to a search query."

Search King argued that PageRanks did not enjoy First Amendment protection because it was an objective method that was even patented by the U.S. Patent Office and that as such, it could not be a subjective opinion.

The Court replied that one must distinguish between ?process and result.' PageRank as a patented software system is an objective ?process.' PageRanks results are subjective because they correspond to the application of an objective process to users' specific search query.
Tort Claims

The Court held that "protected speech cannot constitute improper interference in the context of a claim for tortuous interference with contractual relations." Protected speech is ?per se' lawful and cannot give rise to a cause of action under this tort. Thus, Google is immune from tort liability arising out of manipulation of PageRanks even if its conduct is malicious because of its free speech protection.

Full post as published by IBLS Internet Law Blog on January 30, 2008 (boomark / email).