Criteo vs. SteelHouse

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$<582
1 JACK P. DICANIO (SBN 138782)

Jack.DiCanio@skadden.com
2 JAMES P. SCHAEFER (SBN 250417)
James.Schaefer@skadden.com
3 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
525 University Avenue, Suite 1400
4 Palo Alto, California 94301
Telephone: (650) 470-4500
5 Facsimile: (650) 470-4570
6 ABRAHAM A. TABAIE (SBN 260727)
Abraham.Tabaie@skadden.com
7 WINSTON P. HSIAO (SBN 273638)
Winston.Hsiao@skadden.com
8 MATTHEW J. TAKO (SBN 307013)
Matthew.Tako@skadden.com
9 SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
300 South Grand Avenue, Suite 3400
10 Los Angeles, California 90071-3144
Telephone: (213) 687-5000
11 Facsimile: (213) 687-5600
12 Attorneys for Plaintiff Criteo S.A.
13
UNITED STATES DISTRICT COURT
14
CENTRAL DISTRICT OF CALIFORNIA
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WESTERN DIVISION
CRITEO S.A.,
) CASE NO.: 2:16-cv-4207-SVW-MRW
)
Plaintiff,
) 1) REPLY IN SUPPORT OF CRITEO
S.A.S MOTION FOR
)
PRELIMINARY INJUNCTION;
v.
)
)
FILED UNDER SEPARATE
STEEL HOUSE, INC.,
)
COVER:
)
Defendant.
)
) 2) SUPPORTING DECLARATIONS
AND EXHIBITS THERETO; and
)
)
) 3) PROOF OF SERVICE.
)
) Hearing Date: August 29, 2016
) Time:
1:30 p.m.
) Courtroom: 6
)
Hon. Stephen V. Wilson
) Judge:
)
) Complaint Filed: June 13, 2016
27
28
Criteo S.A.s Reply In Support Of Its Motion For Preliminary Injunction
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TABLE OF CONTENTS
2 INTRODUCTION ........................................................................................................ 1
3 ARGUMENT ................................................................................................................ 4
I.
Criteo Has Demonstrated A Substantial Likelihood Of Success

On Its Intentional Interference With Prospective Economic
Advantage Claim ...................................................................................... 4
II.

On Its False Advertising Claims .............................................................. 7
III.

On Its Californias Unfair Competition Law Claim ................................ 9
IV.
Criteo Has Demonstrated A Likelihood Of Irreparable Harm ................ 9
10
V.
The Balance Of Equities Tips In Criteos Favor ................................... 10
11
VI.
Criteos Motion Is Not Moot, Untimely, Or Otherwise Barred............. 11
12
VII. SteelHouse Has Not Met Its Burden To Obtain A Bond ....................... 12
4
5
6
7
8
13 CONCLUSION ........................................................................................................... 12
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i
TABLE OF AUTHORITIES
2 CASES
PAGE(S)
Castrol Inc. v. Pennzoil Co.,

987 F.2d 939 (3d Cir. 1993) .................................................................................... 9
4
5 Chern v. Bank of Am.,
15 Cal. 3d 866 (1976) .............................................................................................. 8
6
Clorox Co. Puerto Rico v. Proctor & Gamble Commercial Co.,
228 F.3d 24 (1st Cir. 2000) ...................................................................................... 9
7
8 Colin ex rel. Colin v. Orange Unified Sch. Dist.,
83 F. Supp. 2d 1135 (C.D. Cal. 2000) ................................................................... 12
9
Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills,
321 F.3d 878 (9th Cir. 2003) ................................................................................. 12
10
11 Cook, Perkiss & Liehe, Inc. v. Northern California Collection Service, Inc.,
911 F.2d 242 (9th Cir. 1990) ................................................................................... 9
12
Design Furnishings, Inc. v. Zen Path, LLC,
2010 WL 5418893 (E.D. Cal. Dec. 23, 2010) ....................................................... 11
13
14 eBay Inc. v. Digital Point Sols., Inc.,
2009 WL 2523733 (N.D. Cal. Aug. 17, 2009) ......................................................... 7
15
EEOC v. Fed. Express Corp.,
558 F.3d 842 (9th Cir. 2009) ................................................................................. 11
16
17 Elantech Devices Corp. v. Synaptics, Inc.,
2008 WL 1734748 (N.D. Cal. Apr. 14, 2008) ....................................................... 12
18
FTC v. Affordable Media, LLC,
179 F.3d 1228 (9th Cir. 1999) ............................................................................... 11
19
20 Groupe SEB USA, Inc. v. EuroPro Operating LLC,
774 F.3d 192 (3d Cir. 2014) .................................................................................. 10
21
HipSaver Co. v. J.T. Posey Co.,
490 F. Supp. 2d 55, 69 (D. Mass. 2007) .................................................................. 9
22
23 Herb Reed Enters., LLC v. Florida Entmt Mgmt., Inc.,
736 F.3d 1239 (9th Cir. 2013) ................................................................................. 7
24
IHOP Franchising, LLC v. Hameed,
2015 WL 429547 (E.D. Cal. Feb. 2, 2015)............................................................ 10
25
26 Innersvingen AS v. Sports Hoop, Inc.,
2012 WL 3048363 (C.D. Cal. July 26, 2012)........................................................ 12
27
Merck Eprova AG v. Gnosis S.p.A.,
760 F.3d 247 (2d Cir. 2014) .................................................................................. 10
28
ii
1 Meyer v. Portfolio Recovery Assocs., LLC,

2011 WL 11712610 (S.D. Cal. Sept. 14, 2011)..................................................... 11
2
Microsoft Corp. v. ATS Computers, Inc.,
3
1993 WL 13580935 (S.D. Cal. Oct. 29, 1993) ...................................................... 11
4 Mut. Pharm. Co. v. Ivax Pharm., Inc.,
459 F. Supp. 2d 925 (C.D. Cal. 2006) ..................................................................... 8
5
Oestreicher v. Alienware Corp.,
6
544 F. Supp. 2d 964 (N.D. Cal. 2008) ..................................................................... 9
7 Polo Fashions, Inc. v. Dick Bruhn, Inc.,
793 F.2d 1132 (9th Cir. 1986) ............................................................................... 11
8
Rubin ex rel. NLRB v. Vista Del Sol Health Servs., Inc.,
9
80 F. Supp. 3d 1058 (C.D. Cal. 2015) ..................................................................... 7
10 Southland Sod Farms v. Stover Seed Co.,
108 F.3d 1134 (9th Cir. 1997) ................................................................................. 9
11
Starcom Mediavest Grp., Inc. v. Mediavestw.com,
12
2010 WL 3564845 (N.D. Cal. Sept. 13, 2010) ...................................................... 12
13 Stiffel Co. v. Westwood Lighting Grp.,
658 F. Supp. 1103 (D.N.J. 1987) ............................................................................. 9
14
United States v. Beecroft,
15
608 F.2d 753 (9th Cir. 1979) ................................................................................... 4
16 United States v. Munoz,
233 F.3d 1117 (9th Cir. 2000) ................................................................................. 4
17
VMR Prods., LLC v. V2H ApS,
18
2016 WL 1177834 (C.D. Cal. Mar. 18, 2016)....................................................... 10
19 William H. Morris Co. v. Group. W, Inc.,
66 F.3d 255 (9th Cir. 1995) ..................................................................................... 8
20
STATUTES
21
18 U.S.C. 1343 .......................................................................................................... 7
22
California Business & Professions Code 17500 ....................................................... 8
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iii
INTRODUCTION
Criteo sued SteelHouse to stop SteelHouses theft of credit for online sales
3 attributable to Criteo and other industry participants. SteelHouse does not dispute
4 nor can it because it was caught red-handed that: (1) it injects code into the web
5 browsers of internet users who have not clicked on a SteelHouse-placed
6 advertisement; (2) this code reloads the e-tailer websites that the users are visiting in a
7 hidden window and attaches a tracking code to these hidden page visits that is
8 indistinguishable from the tracking code that indicates the users clicked on a
9 SteelHouse-placed advertisement; and (3) this practice resulted in SteelHouse
10 receiving credit, based on last click credit attribution, for online sales that should have
11 been attributed to Criteo and other competitors.
12
Instead, SteelHouse attempts to frame this case as a debate regarding the
13 relative merits of the parties business and attribution models and mischaracterizes
14 Criteos Motion for Preliminary Injunction (Motion) as an attempt to enjoin
15 SteelHouse from using a view-through attribution model. (Dkt. 19 (Oppn) 1;
16 25.) It is not. SteelHouse is free to use whatever attribution model it wants.
17 SteelHouse is not, however, free to deceive e-tailers and competitors by injecting
18 computer code into the web browsers of unsuspecting internet users that makes it
19 appear like they clicked on SteelHouse-placed advertisements when they did not.
20
Unable to deny its conduct, SteelHouse now claims for the first time (Spilman
21 Reply Decl. 5; Shaw Reply Decl. 21; Bostrom Decl. 17)1 that: (1) it has done
22 nothing wrong because it is merely taking credit for view throughs (i.e., taking
23 credit when a user is served an advertisement and later visits the advertised e-tailers
24 website without clicking on the advertisement that SteelHouse served); (2) an
25 inadvertent bug in SteelHouses code caused it to receive credit for sales attributable
26
Pursuant to L.R. 7-10, Criteo submits declarations from Leah Bliss (L. Bliss
Decl.),
Aaron Bostrom (Bostrom Decl.), Elyse Burns (Burns Decl.), Paula
27
Fedoris (Fedoris Decl.), Anna Hordov (Hordov Decl.), Hugo Loriot (Loriot
28 Decl.), Jackson McCulloch (McCulloch Decl.), J-Michael Roberts (Roberts
Decl.), Justin Wulf (Wulf Decl.), Jaysen Gillespie (Gillespie Reply Decl.),
Robert Shaw (Shaw Reply Decl.), and Mollie Spilman (Spilman Reply Decl.).
1
1 to Criteo and other competitors; and (3) solely to avoid a confrontation with Criteo, it
2 changed its code to stop taking credit for view throughs when it detects that another
3 marketing vendor also served the user an advertisement.2 (Dkt. 19-1 19, 45-50;
4 Dkt. 19-6 29-30.) Based on these claims, SteelHouse contends that Criteos
5 Motion should be denied as moot especially since it did nothing wrong in the first
6 instance. (Oppn 10:4-5.) Both contentions should be rejected.
7
First, Criteos Motion is not moot. SteelHouse continues to steal credit for
8 sales attributable to direct traffic. (See Roberts Decl. 8, 18-19; Bostrom Decl.
9 18-19; Gillespie Reply Decl. n.3.) In addition, absent an injunction, there is
10 nothing preventing SteelHouse from continuing/resuming its theft of credit for sales
11 attributable to Criteo and other competitors.
12
Second, SteelHouses claim that it has done nothing wrong is demonstrably
13 false. SteelHouse contends that because it assigns value to view throughs, it is an

14 accepted industry practice for it to report view throughs to Google Analytics.
15 (Oppn 8-10.) To the contrary, Google itself has made clear that Google Analytics
16 goals arent compatible with view-through conversion reporting. (Roberts Decl.
17 26.) Accordingly, SteelHouse clients and industry experts uniformly reject
18 SteelHouses new post-facto attempt to justify its fraudulent conduct:
19
" SteelHouses practice, as observed and captured independently by Vistaprint,
20
and as described by Criteo in its Motion and SteelHouse in its Opposition, is
21
not, in any way, common or acceptable industry practice nor should it be
22
because it is deceptive. (L. Bliss Decl. 10; see also Burns Decl. 17 (By
23
using a code to make a view of an advertisement register as though it was a
24
click, SteelHouse misled Vistaprint as to SteelHouses performance.).)
25
26
" SteelHouses conduct is not a generally accepted practice in this industry and
2
There are serious reasons the Court should doubt SteelHouses bug fix, including
that:
(1) SteelHouse has no means of determining when another marketing vendor has
27
served an advertisement; (2) tests by a SteelHouse client show that SteelHouses
28 CEOs descriptions of its current practice are not accurate; and (3) SteelHouse has not
provided either the Court or Criteo with its new code to substantiate this claim. (Burns
Decl. 18-21; Gillespie Reply Decl. 30-31; Roberts Decl. 29-33.)
2
SteelHouse never informed Bodybuilding.com of its practice. (Bostrom Decl.
20.)
" The version of Google Analytics that TOMS used . . . tracks clicks, not
impressions or view throughs . . . SteelHouse never informed me, or, to my
knowledge, anyone at TOMS, that it was taking credit or attribution under a
view through attribution model. . . . As a result, in my capacity as TOMS
Online Demand Generation Manager, I spent months believing that
SteelHouses numbers [were] based solely on clicks and post-click conversions.
SteelHouses conduct made it appear to perform better than it actually was
10
performing. (Hordov Decl. 12, 22.)
11
" SteelHouses conduct, as described in its Opposition, is not in line with these
12
definitions of accepted industry practice. In my 15 years in digital media, I
13
have never witnessed a marketing vendor attempt to track a view through in
14
Google Analytics by generating code that is indistinguishable from a click and
15
then assert that view throughs and clicks should be considered interchangeable
16
or that such conduct should be considered common practice. . . . SteelHouses
17
conduct: (1) is not a usual or commonly held industry practice; and (2) is
18
likely to mislead e-tailers. (Fedoris Decl. 31, 36.)
19
" Although marketing vendors may use different attribution models, by adding
20
its own tracking code, SteelHouse is unilaterally changing its clients
21
accounting of visits that would otherwise have been attributed to clicks from
22
other ad campaigns or recorded as direct traffic. . . . This practice hurts both
23
e-tailers and marketing vendors alike. (Roberts Decl. 23-24.)
24
" Mr. Douglas statement that there is nothing wrong with receiving credit for a
25
view through directly conflicts with the function of Google Analytics . . . It is
26
therefore simply not proper for SteelHouse to take credit for a view-through . . .
27
[and] is in direct contradiction with the transparency SteelHouse allegedly
28
promotes. . . . This behavior deceives all players in the internet marketing

3
industry with the primary victim being the e-tail clients themselves. (Loriot
Decl. 41.)
Thus, contrary to SteelHouses claim, it is not accepted industry practice for a
4 marketing vendor to decide for itself what is valuable and then tamper with the e5 tailers attribution system to make it fit the marketing vendors preference. (See
6 generally Fedoris, Gillespie Reply, Shaw Reply, Loriot, and Roberts Decls.)
7
By making SteelHouse view throughs register as clicks, SteelHouses code
8 tricked, and continues to trick, web analytics systems into counting its view
9 throughs as clicks. This conduct is deceitful, fraudulent, and harmful to both e-tailers
10 and marketing vendors. (See generally L. Bliss, Bostrom, Burns, Fedoris, Gillespie
11 Reply, Hordov, Roberts, and Shaw Reply Decls.)
12
In short, there is overwhelming evidence that SteelHouses claim that it was
13 merely trying to take credit for view through conversions is a flimsy, post-hoc
14 attempt to fabricate an excuse for fraudulent conduct that this Court should enjoin.
15
16 I.
17
18
ARGUMENT
Criteo Has Demonstrated A Substantial Likelihood Of Success On Its
Intentional Interference With Prospective Economic Advantage Claim
SteelHouse argues that Criteo has not established the existence of a scheme to
19 defraud or that SteelHouse acted with the requisite specific intent. (Oppn 19:1-3.)
20 This argument fails as a matter of law and fact.
21
Direct evidence is not needed to prove specific intent; it may be inferred from
22 the defendants statements and conduct. United States v. Beecroft, 608 F.2d 753, 757
23 (9th Cir. 1979). Additionally, a fraudulent scheme need not involve outright lies; it
24 may involve [d]eceitful statements of half-truths or the concealment of material fact.
25 Id. A fraudulent scheme may be established with evidence that the scheme as a whole
26 was reasonably calculated to deceive persons of ordinary prudence and
27 comprehension. Id.; United States v. Munoz, 233 F.3d 1117, 1129 (9th Cir. 2000).
28
Here, even without the benefit of traditional discovery tools, Criteo has
4
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1 submitted abundant evidence of SteelHouses fraudulent scheme and from which

2 SteelHouses specific intent may be inferred, including (1) detailed and explanatory
3 declarations from the Criteo employees who uncovered SteelHouses fraud (see
4 generally Gillespie, Gillespie Reply, Shaw, Shaw Reply Decls.); (2) exemplar
5 computer code that SteelHouse uses to perpetrate its fraud (see generally Patel Decl.);
6 (3) video and screenshot evidence capturing that code in action (see generally Anand
7 Decl.; Roberts Decl. 18-19); and (4) numerous declarations from Criteo personnel
8 regarding the impact of SteelHouses scheme on their clients (see generally Bernstein,
9 Breslav, Gillespie, Gillespie Reply, and N. Bliss Decls.).
10
In addition, industry experts and four e-tailers defrauded by SteelHouse have
11 now submitted declarations that plainly put the lie to SteelHouses excuses:
12
First, Vistaprint declares that: (1) it made clear to SteelHouse that it judges
13 performance based on clicks (Burns Decl. 4-5, 7); (2) There is no scenario by
14 which Vistaprint awards credit for a conversion to a marketing vendor for an internet
15 user simply being served or viewing an advertisement. (id. 7); and (3) By inserting
16 a code into an internet users browser to make a view of an advertisement appear
17 indistinguishable from a click on Vistaprints web analytics system, SteelHouse
18 deceived Vistaprint as to SteelHouses performance. (L. Bliss Decl. 9; see also
19 Burns Decl. 17; see also id. 8-22 (describing SteelHouses fraud and its impact);
20 and (4) as a result, Vistaprint believed that SteelHouses performance was better than
21 it actually was and Vistaprint made budget decisions . . . based on this incorrect
22 belief. (L. Bliss Decl. 11).
23
Second, TOMS Shoes declares that: (1) it made clear to SteelHouses
24 employees that TOMS does not measure views or impressions, and that it was
25 judging a head-to-head competition between SteelHouse and Criteo under a Last
26 Click Attribution model (Hordov Decl. 10, 15); (2) SteelHouse never informed
27 TOMS that it was taking credit or attribution under a view through attribution
28 model (id. 22); (3) SteelHouses conduct made it appear to perform better than it
5
1 actually was performing (id. 22); and (4) TOMS made spending allocation
2 decisions and marketing vendor choices based on SteelHouses inflated performance,
3 including splitting its finite retargeting budget between Criteo and SteelHouse,
4 instead of using Criteo exclusively for retargeting efforts (id. 14, 22).
5
Third, Bodybuilding.com declares: (1) it told SteelHouse it tracks clicks, not
6 views or impressions, to evaluate performance (Bostrom Decl. 6); (2) its head-to7 head comparison between Criteo and SteelHouse was governed by First Click
8 Attribution (id. 7-8); (3) it appeared that SteelHouse won the head-to-head
9 based solely on the click-based data (id. 9); and (4) SteelHouses artificially
10 inflated click count directly impacted . . . hiring SteelHouse instead of Criteo because
11 SteelHouses inflated performance made it believe [SteelHouse] was superior to
12 Criteo (id. 21). In fact, after Bodybuilding.com uncovered the conduct and
13 confronted SteelHouse (id. 12-19), SteelHouse falsely blamed the issue on a
14 bug, and never told [Bodybuilding.com] that its conduct was justified, or relied
15 on any of the arguments or logic set forth in its Opposition [brief] . . . (id. 16-17).
16 Bodybuilding.com has demanded a full refund from SteelHouse. (Id. Ex. A.)
17
Fourth, Deckers declares: By inserting a code into an internet users browser
18 to make a view of an advertisement appear indistinguishable from a click on Deckers

19 Adobe Analytics system, SteelHouse deceived Deckers . . . and Criteo lost Deckers
20 business as a result. (McCulloch Decl. 26, 39.)
21
Furthermore, SteelHouses opposition itself contains misrepresentations from
22 which its intent to defraud can be inferred. For example, SteelHouse asserts that last23 click attribution is outdated and oversimplified (Oppn 2), clicks are not an
24 important part of its services or business model (id. at 8; 13), it has absolutely no
25 incentive to take credit for Criteos clicks (id. at 13), and that [w]hen pitching for
26 business, SteelHouse does not suggest that clients or potential clients run tests based
27 on clicks. (Dkt. 19-6 at 12.) These assertions cannot, however, be reconciled
28 with the fact that as recently as February 1, 2016, SteelHouse employee Ryan
6
1 Martinson attempted to sell a Criteo client on the benefits of last-click attribution.

2 Mr. Martinson wrote: What we are proposing is to run in tandem with Criteo. . . . In
3 a last click environment, you award yourself the unique position of pushing each
4 company to do their very best in optimizing and finding unique pockets of customers
5 you can convert. (Wulf Decl. 2, Ex. 1.) In short, intent to defraud can also be
6 inferred by SteelHouses attempt to mislead this Court.
7
SteelHouse also argues that Criteo has not established a causal connection
8 between its harm and SteelHouses conduct because Criteo has only provided self9 serving statements and clients could have left Criteo for a number of reasons. (Oppn
10 19.) As an initial matter, the evidence Criteo submitted with its Motion was
11 sufficient, particularly given the relaxed evidentiary standard applicable to preliminary
12 injunction proceedings. See Herb Reed Enters., LLC v. Florida Entmt Mgmt., Inc.,
13 736 F.3d 1239, 1250 n.5 (9th Cir. 2013); Rubin ex rel. NLRB v. Vista Del Sol Health
14 Servs., Inc., 80 F. Supp. 3d 1058, 1072 (C.D. Cal. 2015) (It is well established that
15 trial courts can consider otherwise inadmissible evidence in deciding whether or not to
16 issue a preliminary injunction.). Moreover, any debate regarding causation is laid to
17 rest by the rebuttal declarations of the e-tailers that SteelHouse defrauded, which
18 conclusively establish causation.
19
Accordingly, there is sufficient evidence that SteelHouses counterfeit click
20 fraud scheme is both tortious and criminal. See, e.g., eBay Inc. v. Digital Point Sols.,
21 Inc., 2009 WL 2523733, at *1 (N.D. Cal. Aug. 17, 2009); Superseding Information,
22 Violation: 18 U.S.C. 1343 Wire Fraud, United States v. Hogan, No. 5:10-cr-00495
23 (N.D. Cal. Dec. 14, 2012), Dkt. 84; Judgment of Guilt, id. (May 1, 2014), Dkt. 139.
24 II.
25
26

False Advertising Claims
SteelHouse argues Criteo failed to demonstrate a likelihood of success on its
27 false advertising claims because it has failed to establish (1) any deliberately false
28 conduct (Oppn 13-14), or (2) that the challenged statements were actually false,
7
1 provide any extrinsic evidence of customer deception, and . . . were material (id. 12,
2 17). These arguments lack merit.
3
First, neither the Lanham Act nor Business & Profession Code 17500
4 (Section 17500) require a showing that the defendant acted with intent to deceive.
5 See, e.g., Mut. Pharm. Co. v. Ivax Pharm., Inc., 459 F. Supp. 2d 925, 932-33 (C.D.
6 Cal. 2006) (holding that Lanham Act requires neither proof of literal or obvious
7 falsehood, nor of intent to deceive.); see also Chern v. Bank of Am., 15 Cal. 3d 866,
8 876 (1976) (under Section 17500, [i]ntent of the disseminator . . . [is] irrelevant.).
9
Second, there is substantial evidence that SteelHouse made literally false
10 statements, and, therefore, actual deception is not required. See Mut. Pharm., 459 F.
11 Supp. 2d at 933. SteelHouse argues its statements that it outperformed Criteo in head12 to-head competitions cannot be literally false because there is no singular method to
13 define attribution in the Ad Tech industry, and therefore the way SteelHouse
14 defined outperformance did not unambiguously deviate from a set industry
15 definition of performance. (See Oppn 13.) SteelHouse ignores the fact that the head16 to-head tests referenced in its advertisements tested click performance. (Bostrom
17 Decl. 4, 7-8; Burns Decl. 4-5; Hordov Decl. 15; Wulf Decl. 2, Ex. 1.)
18 SteelHouses statements were literally false because it did not actually beat Criteos
19 click performance. That the head-to-head tests could have measured some other
20 performance aspect does not change the fact that SteelHouses statements were
21 literally false. (See generally Gillespie Decl. 56-72 (discussing impact of
22 SteelHouses fraud on head-to-head results).) SteelHouse also made a literally false
23 statement each time it sent an e-tailer a tracking code falsely indicating an internet
24 user clicked on a SteelHouse-placed advertisement.
25
Third, even if SteelHouses statements merely contained implied falsehood,
26 such that extrinsic evidence they tend to mislead or confuse consumers was
27 required, William H. Morris Co. v. Group. W, Inc., 66 F.3d 255, 258 (9th Cir. 1995),
28 such evidence exists in this case. (See generally Loriot, Gillespie Reply Decls.; L.
8
1 Bliss Decl. 9-11; Burns Decl. 17; Bostrom Decl. 20-21; Hordov Decl. 22.)
2
SteelHouse also incorrectly argues that its advertisement constitutes non-
3 actionable puffery. (Oppn 16.) While courts have held that generalized and vague
4 statements of product superiority can be considered non-actionable puffery,
5 Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964, 973 (N.D. Cal. 2008),
6 [c]laim[s] of product superiority based on product testing [are] not puffery.
7 Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134, 1145 (9th Cir. 1997).
8
Here, in emails and oral statements, SteelHouse advertised that it consistently
9 test[s] ahead of Criteo in performance and we just beat out Criteo for Zappos after a
10 head-to-head performance test. (Bernstein Decl. 6.) These statements were false
11 and are not protected puffery. See, e.g., Clorox Co. Puerto Rico v. Proctor & Gamble
12 Commercial Co., 228 F.3d 24, 38-39 (1st Cir. 2000) (statement that product
13 outperformed other products in head-to-head comparisons was not puffery); Castrol
14 Inc. v. Pennzoil Co., 987 F.2d 939, 946 (3d Cir. 1993); HipSaver Co. v. J.T. Posey
15 Co., 490 F. Supp. 2d 55, 69 (D. Mass. 2007) (statement that product was most
16 effective in head-to-head with competitor products was actionable); Stiffel Co. v.
17 Westwood Lighting Grp., 658 F. Supp. 1103, 1115 (D.N.J. 1987) (Westwoods
18 claims to superiority, flowing as they do from purported independent tests, do more
19 than simply allege general superiority, and are not protected as mere puffery.).3
20 III.
21

Californias Unfair Competition Law Claim
As shown above, because Criteo has shown a likelihood of success on its false
22
23 advertising and fraud-based claims the borrowed offenses for its UCL claim it has
24 shown a likelihood of success on the UCL claim as well.
25 IV.
Criteo Has Demonstrated A Likelihood Of Irreparable Harm
26
SteelHouse admits that a loss of goodwill and reputation can support
27
SteelHouses cases are inapposite. They involved vague non-contextual statements

such as higher performance, Ostreicher, 544 F. Supp. 2d at 973, and low cost,
28 Cook, Perkiss & Liehe, Inc. v. Northern California Collection Service, Inc., 911 F.2d
242, 246 (9th Cir. 1990), with no reference to testing or test results.
9
1 injunctive relief, but argues that Criteo only presented speculative evidence that it
2 might lose customers and goodwill. (Oppn 22-23.) SteelHouse is wrong. Criteo
3 presented concrete evidence of lost goodwill and reputation, and, in response to
4 SteelHouses opposition, e-tail clients have now done the same. (Bernstein Decl.
5 8-22; L. Bliss Decl. 11; N. Bliss Decl. 6-8; Bostrom Decl. 9-10, 21; Hordov
6 Decl. 16, 22.)4
7 V.
The Balance Of Equities Tips In Criteos Favor
SteelHouse argues that the balance of hardships weighs against issuing an
9 injunction because the injunction that Criteo seeks would force SteelHouse to change
10 its entire attribution modela model that is in line with many in the Ad Tech
11 industry, including Google Analytics reporting. (Oppn 25.) Criteos Motion does
12 not, however, seek to change any attribution model. Rather, as noted, Criteo seeks
13 only to enjoin SteelHouses use of computer code designed to steal credit for sales by
14 making views indistinguishable from clicks and from manipulating the data relied
15 upon by e-tailers that have chosen a click-based attribution model to judge
16 performance. Furthermore, there are existing alternatives for tracking views, such as
17 Double Click for Advertisers, that are not fraudulent. (Roberts Decl. 25-27; Loriot
18 Decl. 26-29; Gillespie Reply Decl. 32-35) Any hardship from switching to a
19 non-fraudulent alternative is self-inflicted, and, thus, should be discounted in
20 balancing the equities. See IHOP Franchising, LLC v. Hameed, 2015 WL 429547, at
21 *6 (E.D. Cal. Feb. 2, 2015).
22
23
24
25
26
27
28
SteelHouse argues a presumption of irreparable harm no longer exists in comparative

false advertising cases. (Oppn 20-21.) A court in this district recently acknowledged
otherwise. See VMR Prods., LLC v. V2H ApS, 2016 WL 1177834, at *11 (C.D. Cal.
Mar. 18, 2016). The cases cited by SteelHouse are copyright cases, not comparative
false advertising cases. (Oppn 20.) Other circuits are divided. Cf. Merck Eprova AG
v. Gnosis S.p.A., 760 F.3d 247, 259-61 (2d Cir. 2014) (holding that a presumption of
irreparable harm exists in comparative false advertising cases); Groupe SEB USA, Inc.
v. EuroPro Operating LLC, 774 F.3d 192, 205 (3d Cir. 2014) (finding while a
presumption no longer exists, in literally false comparative advertising . . . the
competitive relationship between the parties and products, and the judgment of
[plaintiff] that the harm . . . is impossible to quantify creates an inference of
irreparable harm). In any event, Criteo has presented substantial evidence of lost
goodwill, such that the Court need not resolve this debate.
10
1 VI.
Criteos Motion Is Not Moot, Untimely, Or Otherwise Barred
SteelHouse argues that Criteos Motion is moot because SteelHouse stopped the
3 challenged conduct. (Oppn 24 n.10.) However, the Ninth Circuit has squarely
4 rejected the proposition that any defendant can moot a preliminary injunction by
5 simply representing to the court that it will cease its wrongdoing. Meyer v. Portfolio
6 Recovery Assocs., LLC, 2011 WL 11712610, at *8 n.16 (S.D. Cal. Sept. 14, 2011).
7 This is because the defendant could simply begin the wrongful activity again. FTC
8 v. Affordable Media, LLC, 179 F.3d 1228, 1238 (9th Cir. 1999). Accordingly, a
9 defendant asserting mootness has [t]he heavy burden of making it absolutely clear
10 that the allegedly wrongful behavior could not reasonably be expected to recur.
11 EEOC v. Fed. Express Corp., 558 F.3d 842, 847 (9th Cir. 2009). The reform of the
12 defendant must be irrefutably demonstrated and total. Polo Fashions, Inc. v. Dick
13 Bruhn, Inc., 793 F.2d 1132, 1135 (9th Cir. 1986).
14
Here, SteelHouse has not met and cannot meet this burden because it (1)
15 previously claimed it would stop, but did not, (2) continues to steal credit attributable
16 to direct traffic, and (3) has presented no evidence that it could not readily resume
17 stealing credit for sales attributable to Criteo and other competitors. See FTC, 179
18 F.3d at 1238 (rejecting mootness argument where defendants show nothing that
19 would suggest that it is absolutely clear that their wrongful activities are not
20 reasonably likely to recur). Indeed, [i]f [SteelHouse] sincerely intend[s] not to
21 [continue its unlawful conduct], the injunction harms [it] little; if [it does], it gives
22 [Criteo] substantial protection. Polo Fashions, Inc., 793 F.2d at 1135-36.5
23
SteelHouse also argues that Criteos Motion is untimely. (Oppn 23-24.) To
24 the contrary, Criteo acted with deliberate speed in bringing its Motion. Criteo did not
25 uncover SteelHouses misconduct in January 2016 (see Oppn 23), it only uncovered
26
5
In a footnote, SteelHouse argues that Criteos Motion should be denied for unclean
hands. (Oppn 11 n.6.) SteelHouse bears[s] the burden of proving their allegations
28 with actual evidence. Microsoft Corp. v. ATS Computers, Inc., 1993 WL 13580935,
at *6 (S.D. Cal. Oct. 29, 1993). It has not done so. See Design Furnishings, Inc. v.
Zen Path, LLC, 2010 WL 5418893, at *8 (E.D. Cal. Dec. 23, 2010).
11
27
1 data irregularities. (Mot. 7-9.) Criteo then spent months trying to understand the
2 source and scope of these irregularities. (Id. 9-10.) Once Criteo confirmed
3 SteelHouse was engaged in fraud, it promptly confronted SteelHouse, which claimed
4 it would stop the conduct, but did not do so, forcing Criteo to file its Complaint.
5 (Mot. 10-13.) Criteos Motion was filed 18 days after it filed its Complaint, during
6 which time Criteo was collecting the necessary evidence to bring its Motion. There
7 was no undue delay. See Elantech Devices Corp. v. Synaptics, Inc., 2008 WL
8 1734748, at *9 (N.D. Cal. Apr. 14, 2008) (attempting to resolve disputes recognized
9 as a good explanation for the delay in seeking a preliminary injunction).
10 VII. SteelHouse Has Not Met Its Burden To Obtain A Bond
11
SteelHouse requests that Criteo be required to post a bond for tens of millions
12 of dollars. (Oppn 25, n.11.) SteelHouses request should be denied because it has
13 presented no evidence it will suffer damages from the requested injunction. See, e.g.,
14 Conn. Gen. Life Ins. Co. v. New Images of Beverly Hills, 321 F.3d 878, 882-83 (9th
15 Cir. 2003); Innersvingen AS v. Sports Hoop, Inc., 2012 WL 3048363, at *2 (C.D. Cal.
16 July 26, 2012). Nor can it because the injunction that Criteo seeks does not prevent
17 SteelHouse from using view-through attribution. Even if SteelHouse had presented
18 evidence, the fact that SteelHouses conduct is fraudulent and the strong likelihood of
19 Criteos success weigh against requiring a bond. See Starcom Mediavest Grp., Inc. v.
20 Mediavestw.com, 2010 WL 3564845, at *1 (N.D. Cal. Sept. 13, 2010); Colin ex rel.
21 Colin v. Orange Unified Sch. Dist., 83 F. Supp. 2d 1135, 1151 (C.D. Cal. 2000).
22
23
CONCLUSION
For the foregoing reasons, and for those set forth in Criteos Motion and
24 supporting papers, the Court should grant the requested preliminary injunction.
25 DATED: August 15, 2016 Respectfully submitted,
26
27
28
By:
/s/ Jack P. DiCanio

JACK P. DICANIO
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
Attorneys for Plaintiff Criteo S.A.
12

Criteo vs. SteelHouse

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Criteo vs. SteelHouse

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Ecug!3<27.ex.15318.UXY.OTY!!!Fqewogpv!36!!!Hkngf!19026027!!!Rcig!2!qh!27!!!Rcig!KF!

1 JACK P. DICANIO (SBN 138782)

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

Criteo Has Demonstrated A Substantial Likelihood Of Success

Criteo Has Demonstrated A Substantial Likelihood Of Success

Criteo Has Demonstrated A Substantial Likelihood Of Success

Criteo Has Demonstrated A Likelihood Of Irreparable Harm ................ 9

The Balance Of Equities Tips In Criteos Favor ................................... 10

Criteos Motion Is Not Moot, Untimely, Or Otherwise Barred............. 11

Castrol Inc. v. Pennzoil Co.,

1 Meyer v. Portfolio Recovery Assocs., LLC,

Instead, SteelHouse attempts to frame this case as a debate regarding the

Second, SteelHouses claim that it has done nothing wrong is demonstrably

13 false. SteelHouse contends that because it assigns value to view throughs, it is an

" SteelHouses practice, as observed and captured independently by Vistaprint,

and as described by Criteo in its Motion and SteelHouse in its Opposition, is

not, in any way, common or acceptable industry practice nor should it be

using a code to make a view of an advertisement register as though it was a

click, SteelHouse misled Vistaprint as to SteelHouses performance.).)

SteelHouse never informed Bodybuilding.com of its practice. (Bostrom Decl.

impressions or view throughs . . . SteelHouse never informed me, or, to my

knowledge, anyone at TOMS, that it was taking credit or attribution under a

view through attribution model. . . . As a result, in my capacity as TOMS

Online Demand Generation Manager, I spent months believing that

SteelHouses numbers [were] based solely on clicks and post-click conversions.

SteelHouses conduct made it appear to perform better than it actually was

performing. (Hordov Decl. 12, 22.)

definitions of accepted industry practice. In my 15 years in digital media, I

have never witnessed a marketing vendor attempt to track a view through in

Google Analytics by generating code that is indistinguishable from a click and

or that such conduct should be considered common practice. . . . SteelHouses

likely to mislead e-tailers. (Fedoris Decl. 31, 36.)

its own tracking code, SteelHouse is unilaterally changing its clients

other ad campaigns or recorded as direct traffic. . . . This practice hurts both

e-tailers and marketing vendors alike. (Roberts Decl. 23-24.)

view through directly conflicts with the function of Google Analytics . . . It is

[and] is in direct contradiction with the transparency SteelHouse allegedly

promotes. . . . This behavior deceives all players in the internet marketing

Thus, contrary to SteelHouses claim, it is not accepted industry practice for a

By making SteelHouse view throughs register as clicks, SteelHouses code

In short, there is overwhelming evidence that SteelHouses claim that it was

1 submitted abundant evidence of SteelHouses fraudulent scheme and from which

In addition, industry experts and four e-tailers defrauded by SteelHouse have

Second, TOMS Shoes declares that: (1) it made clear to SteelHouses

Third, Bodybuilding.com declares: (1) it told SteelHouse it tracks clicks, not

Fourth, Deckers declares: By inserting a code into an internet users browser

18 to make a view of an advertisement appear indistinguishable from a click on Deckers

Furthermore, SteelHouses opposition itself contains misrepresentations from

1 Martinson attempted to sell a Criteo client on the benefits of last-click attribution.

Accordingly, there is sufficient evidence that SteelHouses counterfeit click

Criteo Has Demonstrated A Substantial Likelihood Of Success On Its

Second, there is substantial evidence that SteelHouse made literally false

Third, even if SteelHouses statements merely contained implied falsehood,

SteelHouse also incorrectly argues that its advertisement constitutes non-

Here, in emails and oral statements, SteelHouse advertised that it consistently

Criteo Has Demonstrated A Substantial Likelihood Of Success On Its

Criteo Has Demonstrated A Likelihood Of Irreparable Harm

SteelHouse admits that a loss of goodwill and reputation can support

SteelHouses cases are inapposite. They involved vague non-contextual statements

The Balance Of Equities Tips In Criteos Favor

SteelHouse argues that the balance of hardships weighs against issuing an

SteelHouse argues a presumption of irreparable harm no longer exists in comparative