UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

BidClerk, Inc., Civil No. _______________

Plaintiff,
COMPLAINT
vs. (JURY TRIAL DEMANDED)

Reed Business Information, a division of

Defendant.

Plaintiff BidClerk, Inc., for its Complaint against Defendant Reed Business Information,

a division of Reed Elsevier, Inc., hereby states and alleges, on personal information as to its own

status and actions, and on information and belief as to the status and actions of others, as follows:

INTRODUCTION

BidClerk and Defendant and its affiliates are primary competitors that offer information

products to the construction industry. From March through September, 2010, electronic signals

emanating from an Internet Protocol (“IP”) address belonging to the Defendant were responsible

for blatant “denial of service”attacks and “click fraud.” This illegal conduct was directed

toward both BidClerk’s website and its online advertising resources. The denial-of-service

attacks involved millions of electronic “clicks”on BidClerk’s website, causing BidClerk’s highly

robust computer systems to fail. Similarly, the “click fraud”involved hundreds of thousands of

electronic “clicks”that interfered with BidClerk’s online advertising resources and relationships.

This is an action to prevent the Defendant from carrying out further denial-of-service attacks and

click fraud, and to compensate BidClerk for the harm it has suffered as a result of the

Defendant’s conduct.
 PARTIES

1. Plaintiff BidClerk, Inc. (“BidClerk”) is a Delaware corporation with a principal

place of business in Chicago, Illinois. BidClerk operates an online search engine for the

construction industry that allows its customers to search online for construction projects, leads,

bids, and construction supplies. BidClerk aims to connect all parties within a construction

project, from owners and architects to contractors and suppliers.

2. Reed Elsevier, Inc. (“Reed Elsevier”) is a Massachusetts corporation with a

principal place of business in Newton, Massachusetts. Reed Elsevier is a large multinational

publisher and information provider. Reed Business Information (“RBI”) is a division of Reed

Elsevier and a primary competitor of BidClerk.

JURISDICTION AND VENUE

3. This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because

this action arises under the laws of the United States, specifically the Computer Fraud and Abuse

Act, 18 U.S.C. § 1030 et. Seq. This Court also has subject matter jurisdiction pursuant to 28

U.S.C. § 1332(a) because this action is between citizens of different states and the amount in

controversy exceeds $75,000.

4. This Court has personal jurisdiction over Defendant because Reed Elsevier is

registered with the Minnesota Secretary of State to do business in Minnesota and conducts

business in Minnesota. As a result, Reed Elsevier has subjected itself to the jurisdiction of this

Court.

5. Venue is proper in this district under 28 U.S.C. § 1391(c) because Reed Elsevier

is subject to personal jurisdiction in Minnesota.

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 FACTS
Background on BidClerk

6. BidClerk was founded in 2001. BidClerk’s website serves as a meeting place for

all parties within a construction project, from owners and architects to contractors and suppliers.

BidClerk allows contractors to find construction projects within local markets that meet their

exact criteria. The website provides tools that enable users to connect with each other, download

project contact data, manage projects, and advertise their business. BidClerk’s customer base is

not limited to contractors, but also provides a resource for those in need of a construction service.

The website offers a simple way to find contractors; users simply post a project on BidClerk.com

and receive responses from contractors that are looking for work. BidClerk customers sign up

for either a pay-as-you-go plan or an annual subscription that allows full access to all areas of the

BidClerk website. This access means that BidClerk customers can obtain project details, bidding

information, contact information, and available project documents, such as bidder’s lists, plans

and specifications, project maps, and site photos. BidClerk is not involved in the projects

directly. Rather, it provides users with information on projects that are in the planning and

bidding stages.

7. BidClerk’s website, BidClerk.com, is the cornerstone of BidClerk’s business.

BidClerk’s members pay to have full, consistent access to the site. Bidding on construction

projects is highly competitive and time sensitive, so BidClerk’s users depend on BidClerk to

provide timely, consistent access to BidClerk.com, and thus the bidding process. Without a

reliable website, BidClerk’s customers can lose potential business, and BidClerk in turn can lose

its valuable customer base and customer goodwill.

8. To protect itself and its members from improper online conduct, BidClerk

maintains a “Terms of Service”agreement (“Agreement”) with those who access BidClerk’s

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website. The Agreement specifies that “You acknowledge and agree that the following Terms of

Service, including the Privacy Policy posted on this BidClerk.com website (“Website”), shall

govern your use of each and every page of this Website and the provision of both free and

subscription-only information to you by or through the Website.”

9. The Agreement includes a section called “Use of Website.” This section

regulates the conduct of the website’s users and includes the following provisions:

• “You may not use the Website for any purpose that is prohibited by any

law or regulation, or to facilitate the violation of any law or regulation.”

• “You may not use the Website or any of its content in order to compete in

any manner with BidClerk… ”

• “You may not use the Website in a manner that would violate the security

of the Website or attempt to gain unauthorized access to the Website, data,

materials, information, computer systems or networks connected to any

server associated with the Website, through hacking, password mining or

any other means.”

• “The user of the Website may not interfere with, attempt to interfere with

or otherwise disrupt the proper working of the Website, any activities

conducted on or through the Website or any servers or networks connected

to the Website… ”

10. Because BidClerk’s website is pivotal to its continued success in the construction

information industry, any problems associated with website access are of primary concern to

BidClerk. Therefore, BidClerk must remain vigilant about protecting its customers’contractual

rights to access BidClerk at any time.

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 11. As a result, BidClerk takes very seriously any threat to web access or any

exploitation of BidClerk’s online marketing efforts. BidClerk monitors its site for instances of

“denial of service attacks,”“click fraud,”and “impression fraud,”all of which impair BidClerk’s

ability to provide its customers with their contracted-for services and its ability to reach potential

customers.

12. A “denial of service attack”occurs when an intruder attempts to make a

computer resource unavailable to its intended users. Although the means to carry out such a

cyber attack and the motives for doing so vary, a denial-of-service attack generally consists of

the concerted efforts of a person, people, or computer system to prevent an Internet site or

service from functioning efficiently or at all, as by flooding the victim computer or computer

system with useless or misleading information and preventing legitimate users from accessing it.

A denial-of-service attack can cause a computer server’s processing to slow down or it can

completely crash the system.

13. Because the construction information industry is highly competitive and time

sensitive, any instance of denial-of-service interferes with BidClerk’s ability to do business.

Therefore, BidClerk must protect the security and availability of its website against such attacks.

14. Likewise, BidClerk must protect the integrity of its online advertisements, which

are the primary means by which BidClerk markets itself to potential customers. “Click fraud”

and “impression fraud”are two means by which a competitor may take advantage of a

company’s advertising program to interfere with the company’s online presence and marketing

resources. Under a “pay per click”or PPC advertising program, a company pays for the right to

be listed online under a series of target-rich words that direct relevant traffic to their website.

The company pays only when someone clicks on its advertisement.

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 15. “Click fraud”is a type of wrongful Internet conduct that exploits PPC advertising.

It occurs when a person or computer program imitates a legitimate user of a web browser by

clicking on an ad, for the purpose of generating a charge-per-click without having actual interest

in the target of the ads link. The end result is that the advertiser may be paying for fraudulent

clicks, all the while believing it is reaching potential customers.

16. “Impression fraud”is another means by which a business competitor can interfere

with a company’s advertising campaign. Rather than exploiting “pay per click”advertising

programs, “impression fraud”targets advertisers who have arranged for “cost per impression”or

CPI advertising. Through this system, a company pays for exposure of their message per

thousand impressions. With CPI advertising, the company doesn’t pay per click; it pays for the

number of times its ad has been viewed by the specific audience it has targeted.

17. A competitor can exploit the CPI system by causing an ad to be artificially served

many more times than in normal circumstances. For instance, a competitor of BidClerk can

conduct a “Google”search for keywords appropriate to online construction information and then

purposely not click on BidClerk’s advertisement. If a competitor engages in enough “impression

fraud,”the company’s “click through rate”or CTR— which measures the percentage of users

who click on an ad— substantially decreases. The lower the CTR, the lower the ad positioning,

until it drops out of the search engine’s rankings. Thus, through “impression fraud,”a

competitor can create a situation where the company is paying for CPI advertising but not

reaching its intended audience. Simultaneously, the competitor can engage in its own

advertising efforts and move up in the search engine rankings, thus taking further advantage of

the company it defrauded.

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 18. BidClerk focuses its advertising efforts on online advertisements through Google.

BidClerk has both “pay per click”and “cost per impression”advertising with Google. BidClerk

relies on online advertising to maintain its reputation as a leader in the online construction

information industry and to market itself to potential customers. Because the integrity and

effectiveness of BidClerk’s online advertising campaign is directly tied to the integrity and

reputation of the company, BidClerk must vigilantly protect itself against all forms of fraudulent

activity targeted toward its online advertising.

Suspicious Activity on BidClerk.com

19. Over the course of several months, from March through September, 2010,

BidClerk experienced irregular web traffic that took the form of denial-of-service attacks and

numerous instances of click fraud and/or impression fraud. Given the length of time over which

these interferences occurred, it became apparent to BidClerk that the suspicious activity was not

an aberration.

20. BidClerk’s technical staff commenced an investigation, and ultimately they

uncovered evidence that the denial-of-service attacks and fraudulent hits on BidClerk’s

advertisements were caused by signals emanating from an IP address belonging to RBI.

Specifically, the flood of suspicious web traffic originated from computers located at Reed

Elsevier’s and/or RBI’s Highlands Ranch, Colorado facility with an IP address that Reed

Elsevier and/or RBI owns, specifically the IP address: 63.76.213.5.

21. Reed Elsevier and/or RBI exercises control over the relevant IP address, and the

IP address was used to advance Reed Elsevier’s and/or RBI’s business goals.

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 Denial-of-Service Attacks

22. Beginning in or about March 2010, BidClerk was subject to several denial-of-

service attacks.

23. Specifically, from approximately 10:00 a.m. on June 23, 2010 through

approximately 5:00 p.m. on June 24, 2010, BidClerk’s servers were flooded with over 3,700,000

web requests. This stands in stark contrast to the normal range of requests during such a time

period.

24. On June 23, from approximately 10:00 a.m. to 4:00 p.m., BidClerk received

between 175,000 and 190,000 page requests per hour.

25. On June 24 at approximately 2:51 p.m., the deluge of web traffic from RBI was so

severe that it caused BidClerk’s highly robust computer systems to fail and become unavailable

to BidClerk’s users.

26. Similarly, on March 10, 2010 from approximately 3:00 p.m. to approximately

8:00 p.m., BidClerk received approximately 189,000 requests, ranging from approximately

25,000 to approximately 35,000 requests per hour.

27. The denial-of-service attacks originating from RBI’s computers have not been

limited to a single incident. For example, between August 25 and September 1, 2010, traffic

from RBI’s IP address hit BidClerk’s site over 24,000 times. Most of the web traffic during that

timeframe came in one burst from approximately 3:54 a.m. to approximately 4:19 a.m. on

Friday, August 27. During this approximately 25 minute period, RBI’s servers hit BidClerk’s

site over 16,000 times. On September 2, 2010, from approximately 12:10 p.m.to 12:24 p.m.

traffic originating from RBI’s IP address hit BidClerk’s site over 40,000 times.

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 28. When the denial-of-service attacks caused BidClerk’s website to fail, BidClerk’s

customers were unable to access the site to conduct business, arrange bids, and utilize the

services for which they pay a monthly fee. This interference caused BidClerk to lose valuable

customer goodwill and interfered with BidClerk’s reputation for providing consistent, efficient

service.

Click Fraud

29. BidClerk’s technical staff also uncovered evidence that the large volumes of

suspicious web traffic from RBI’s IP address caused or attempted to cause fraudulent hits on

BidClerk’s advertisements within the Google advertising network.

30. On several occasions, the automated traffic emanating from the RBI IP address

63.76.213.5 programmatically traveled through Google’s servers and clicked on BidClerk’s paid

advertisements that were being displayed on the Google search engine page results or

advertisements distributed through Google’s advertisement network on other websites such as

Manta.com.

31. For example, on April 28, 2010, one URL was requested over 50,000 times by

signals emanating from RBI’s IP address; an advertisement for BidClerk’s products was

displayed and then that advertisement was programmatically clicked on over 50,000 times.

32. In another example, on June 28, 2010, another URL was requested over 53,000

times by signals emanating from an RBI IP address; an advertisement for BidClerk’s products

was displayed and then that advertisement was programmatically clicked on over 53,000 times.

33. In yet another example, on August 4, 2010, another URL was requested over

99,000 times by signals emanating from an RBI IP address; an advertisement for BidClerk’s

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products was displayed and then that advertisement was programmatically clicked on over

99,000 times.

BidClerk’s Communication with RBI

34. After BidClerk’s technical staff uncovered evidence that large volumes of

suspicious web traffic was originating from RBI’s IP address, BidClerk, through its counsel,

wrote a letter to RBI informing RBI that RBI was responsible for denial-of-service attacks and

click/impression fraud that BidClerk had suffered.

35. RBI promised to investigate BidClerk’s allegations and provide information about

the investigation on a daily basis. RBI failed to provide such information.

36. Throughout September, counsel for BidClerk repeatedly asked RBI— via mail and

telephone communications— to explain what led to RBI’s harmful actions and to explain what

RBI’s investigation discovered. RBI refused to provide the information that RBI had collected.

Instead, RBI attempted to avoid responsibility for its actions and blame BidClerk for the

resulting harm by accusing BidClerk of not promptly reporting the wrongdoing to RBI. In fact,

BidClerk did promptly report the misdeeds to RBI once the source of the denial-of-service

attacks and click/impression fraud became known.

37. BidClerk attempted to understand the cause of RBI’s attacks and resolve this

dispute before filing suit. However, given RBI’s stalling tactics, lack of explanation for why its

servers caused such severe online attacks, and RBI’s refusal to provide information as it had

promised, BidClerk is forced to pursue litigation to protect its legal rights and the rights of its

customers.

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 COUNT I
Violation Of The Computer Fraud and Abuse Act (18 U.S.C. § 1030 et. seq.)

38. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

39. The Computer Fraud and Abuse Act (“CFAA”) provides for a civil cause of

action for “any person who suffers damage or loss by reason of a violation of [the statute].” The

CFAA allows the wronged party to obtain compensatory damages, injunctive relief, or other

equitable relief.

40. RBI knowingly caused the transmission of a program, information, code, or

command, and as a result of such conduct, intentionally caused damage to a protected computer

without authorization.

41. RBI intentionally accessed a protected computer without authorization and caused

or recklessly caused damage to the computer.

42. BidClerk’s computers are used in or affecting interstate or foreign commerce or

communication and thus are “protected computers”under the CFAA.

43. BidClerk was damaged by the denial-of-service attacks initiated by RBI. The

availability of BidClerk’s website was impaired. Among other things, legitimate BidClerk

customers were not able to access BidClerk’s website because the flood of suspicious web traffic

directed from RBI’s IP address to BidClerk caused BidClerk’s website to fail.

44. BidClerk has incurred economic losses in excess of $5,000 in a one-year period.

RBI’s actions caused BidClerk to expend money conducting a damage assessment and

investigation of the suspicious activity and restoring the computer system to its condition prior to

the offense. In addition, BidClerk has incurred economic losses through lost business, lost

customer goodwill, and lost advertising revenue.

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 COUNT II
Breach of Contract

45. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

46. Defendant, through electronic signals emanating from IP addresses belonging to

Defendant, accessed BidClerk’s website.

47. By accessing BidClerk’s website, Defendant agreed to be bound by the Terms of

Service agreement that controls the access and use of BidClerk’s website, including the “Use of

Website”provisions.

48. BidClerk has performed all conditions, covenants, and promises required on its

part to be performed in accordance with the terms and conditions of BidClerk’s website’s Terms

of Service.

49. Defendant has breached BidClerk’s Terms of Service agreement by, among other

things:

• Using the website for a purpose prohibited by law, specifically the

Computer Fraud and Abuse Act;

• Using the website to compete with BidClerk by causing BidClerk’s denial-

of-service problems;

• Using the website in a manner that violated the security of the website and

gaining unauthorized, improper access to the website by causing

BidClerk’s systems to crash;

• Using the website to interfere with and disrupt the proper working of the

website and its servers by initiating denial-of-service attacks.

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 50. Defendant’s breach of the Terms of Service agreement has caused harm to

Plaintiff.

COUNT III
Fraudulent Misrepresentation

51. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

52. By creating and transmitting a computer program or code that automatically

clicked on BidClerk’s advertisements (“click fraud”) and searched for BidClerk with no intention

of clicking on BidClerk’s ad (“impression fraud”), RBI falsely represented that it was a

legitimate Internet user who was interested in BidClerk’s services, either as a customer or

prospective customer.

53. BidClerk would not have paid the advertising fees associated with RBI’s

click/impression fraud if it had known that the clicks were made by a competitor engaging in

fraudulent behavior rather than a legitimate Internet user.

54. When it created and transmitted the computer program or code that engaged in

click/impression fraud, RBI knew or should have known that the program or code would cause

numerous fraudulent clicks on BidClerk’s advertisements and would search for BidClerk ads

with no intention of clicking on them. Likewise, when it created and transmitted this program or

code, RBI knew or should have known that it had no intention of viewing BidClerk’s website for

legitimate reasons.

55. RBI created and transmitted this program or code intending that the clicks and

searches would appear to be legitimate to both BidClerk and the advertising provider, including

Google. RBI intended that BidClerk would be charged by the advertising provider for these

fraudulent clicks and for the impressions RBI’s automated program or code generated.

Likewise, RBI intended that BidClerk’s ads would experience lower ad positioning as a result of

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the “impression fraud.” Moreover, RBI intended that BidClerk would pay for these fraudulent

clicks/impressions believing them to be legitimate.

56. BidClerk relied on RBI’s representations. Specifically, and among other things,

BidClerk continued to abide by its engagements with Google and other Internet advertisers, the

terms of which were affected, as described above, by RBI’s conduct.

57. RBI’s actions caused BidClerk harm.

COUNT IV
Negligent Misrepresentation

58. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

59. By creating and transmitting a computer program or code that automatically

clicked on BidClerk’s advertisements (“click fraud”) and searched for BidClerk with no intention

of clicking on BidClerk’s ad (“impression fraud”), RBI supplied false information to BidClerk

and its advertising providers, including Google— namely that it was a customer, prospective

customer, or legitimate Internet user interested in BidClerk’s services.

60. RBI engaged in this wrongful behavior in the course of its business as a

competitor of BidClerk in the online construction information industry.

61. BidClerk justifiably believed that RBI’s clicks/searches were legitimate.

62. RBI failed to exercise reasonable care or competence in creating and transmitting

a program or code that automatically clicked on BidClerk’s advertisements and searched for

BidClerk with no intention of clicking on BidClerk’s ad.

63. RBI’s actions caused BidClerk harm.

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 COUNT V
Conversion / Trespass to Chattel

64. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

65. RBI willfully and intentionally interfered with BidClerk’s property, namely its

computer system, when it created and transferred an automated computer program or code that

caused a “denial of service attack.”

66. RBI’s interference was without justification. RBI had no legal right or legitimate

justification to access BidClerk’s computer system.

67. As a result of RBI’s interference with BidClerk’s property, BidClerk was

deprived of the use of its property, and BidClerk’s paying customers were unable to access

BidClerk’s website as they had a right to do.

COUNT VI

Tortious Interference with Prospective Contractual Relations

68. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

69. BidClerk has a reasonable expectation of economic benefit insofar as potential

customers, knowing BidClerk’s reputation as a leader in the online construction information

industry, will become paying members of BidClerk.

70. RBI knew that BidClerk reasonably expected that prospective customers would

sign up as paying members of BidClerk. RBI is one of BidClerk’s main competitors in the

construction information industry and knows that BidClerk’s website is the primary means by

which BidClerk conducts business.

71. RBI intentionally, knowingly, and without justification caused the transmission of

a computer program or command that caused BidClerk to experience a “denial of service attack.”

In so doing, RBI wrongfully interfered with BidClerk’s computer system, causing it to fail. As a

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result, BidClerk’s customers were unable to access the site and conduct business, and BidClerk

lost customer goodwill and potential future business.

72. RBI intentionally, knowingly, and without justification caused the transmission of

a computer program or command that caused numerous instances of click/impression fraud

relating to BidClerk’s advertising. In so doing, RBI wrongfully interfered with BidClerk’s

online advertising program and caused BidClerk’s ads to reach fewer potential customers.

73. In the absence of RBI’s wrongful conduct in causing the transmission of a

computer program or command that caused BidClerk to experience “denial of service,”“click

fraud,”and “impression fraud,”BidClerk would have maintained the goodwill that it lost with its

current and prospective customers.

74. RBI’s wrongful conduct in causing the “denial of service attack”caused BidClerk

to lose business revenue because customers may have canceled their membership plan as a result

of unreliable web access and potential customers may not have become members because they

learned of BidClerk’s unreliable web access.

75. RBI’s wrongful conduct in engaging in “click fraud”and “impression fraud”

caused harm to BidClerk’s advertising program because it impaired the accessibility of

BidClerk’s ads to prospective customers. Internet users who searched for an online construction

information company were unable to view BidClerk’s ad because of its poor location in the

search results.

COUNT VII
Violation Of The Minnesota Uniform Deceptive
Trade Practices Act (Minn. Stat. § 325D.44)

76. Plaintiff repeats and re-alleges paragraphs 1-37 as though set forth fully herein.

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 77. In the course of its business as a competitor of BidClerk, RBI disparaged the

business of BidClerk by false or misleading representations of fact.

78. By creating and transmitting an automated program or code that clicked on and

searched for BidClerk’s ads, RBI falsely represented that it was a customer, prospective

customer, or legitimate Internet user who was interested in BidClerk’s services.

79. “Impression fraud”affects the location of BidClerk’s advertisements on the

search engine’s results page.

80. By engaging in “impression fraud,”RBI both disparaged the business of BidClerk

by false or misleading information and engaged in conduct that creates a likelihood of confusion

or misunderstanding among consumers.

81. RBI’s conduct interfered with the ability of consumers to find BidClerk online,

which affected the location of BidClerk’s ad on the search engine’s results page.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff respectfully requests that the Court:

1. Enter judgment in favor of Plaintiff and against Defendant;

2. Grant Plaintiff injunctive relief barring Defendant from further interfering with

BidClerk’s website;

3. Award Plaintiff damages in an amount to be determined at trial, but in any event

in excess of $75,000;

4. Award Plaintiff its costs, disbursements, attorneys’fees, and witness fees herein;

and

5. Grant Plaintiff such other and further relief as is just and equitable.

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Dated: September 29, 2010 FAEGRE & BENSON LLP

/s/Randall E. Kahnke
Randall E. Kahnke, (#202745)
Christina C. Semmer, (#390505)
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3901
(612) 766-7000

ATTORNEYS FOR PLAINTIFF

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