SAN FRANCISCO—A panel of three federal appellate judges appeared generally skeptical on Wednesday as forgotten social networking startup Power Ventures claimed that the company and its former CEO are not liable for violating an anti-spam and an anti-hacking law. A lower court previously ruled in favor of Facebook, which brought the original case, and issued an award of $3 million to the social network giant.

Back in 2008 when the original suit was filed, Power.com attempted to be a one-stop-shop for all social networks—its users could post to Facebook and other sites all in one place.

But as part of its "Power 100" campaign, Power Ventures offered its customers the chance to win $100 if they invited 100 friends to join. In so doing, Power Ventures sent messages through Facebook that came from @facebookmail.com and appeared to come from "The Facebook Team," giving the impression that they had come from Facebook itself. Facebook attempted to block this activity through an IP block, which Power Ventures circumvented. When Power Ventures ignored Facebook’s requests to cease-and-desist, Facebook then filed a lawsuit in 2008.

According to Facebook’s original case, Power "is offering a product that solicits, stores, and uses Facebook login information stored on Facebook computers without authorization."

In 2011, computer experts testified that "the Defendants developed the PowerScript system and PowerProxy system to scrape information from Facebook, proxy the Facebook website and avoid detection when engaged in such activities. In addition, our analysis shows how Defendants’ programmed access initiated actions that resulted in unwanted commercial ‘spam’ messages being sent to Facebook users soliciting them to join Power.com."

During the Wednesday hearing before the 9th Circuit Court of Appeals, Power Ventures' attorney, Amy Anderson, tried to argue that because Facebook itself was not the owner of its users’ data, Facebook’s objections were largely immaterial.

"This has nothing to do with data ownership," Anderson said. "The data that was copied is the user's data. Facebook expressly disclaimed ownership to this data."

However, Circuit Judge Mary Murguia pointed out that Power Ventures continued its behavior even after Facebook told it to halt its actions. Power Ventures made similar arguments before two other lower court judges to no avail.

The wheels of justice turn slowly

One federal judge ruled against Power Ventures in 2012, finding that the company was civilly liable for violations of the Computer Fraud and Abuse Act (CFAA) and the CAN-SPAM Act. Power Ventures filed for bankruptcy shortly thereafter, and the case was soon dismissed.

Facebook then convinced the US District Court for the Northern District of California to re-open the case. And in September 2013, US District Judge Lucy Koh found in favor of Facebook—awarding it $3 million in damages.

Beyond the damages, Judge Koh also granted Facebook a "permanent injunction" against former Power Ventures CEO Steve Vachani and his former colleagues and shareholders, preventing them from engaging in similar behavior in the future.

Power Ventures, or what is left of it, and Vachani soon appealed to the 9th Circuit.

Vachani appeared personally at the Wednesday hearing, saying that between 2006 and 2009, the company grew to over "10 million users" and raised "over $10 million in investment from top Silicon Valley investors." He tried to make the case that Facebook, now an even bigger corporate giant, was essentially squashing innovation.

"Why is Facebook, seven years later, still fighting over a spam issue?" he said. "They've tried to position all of us as these thieves of data, notorious spammers." (Vachani neglected to mention that it was his company who filed the current appeal.) The former CEO argued before the court that the permanent injunction against him was "uncharted territory" and had led him to a personal bankruptcy.

Facebook’s attorney, Eric Shumsky, forcefully argued that this case was not about being "anti-competitive."

"It’s because Facebook has obligations, including regulatory obligations," he said. "When third parties start going through unapproved unsecure methods, it creates all manner of problems."

Dueling analogies

Both Shumsky, representing Facebook, and Anderson, representing Power Ventures, made different purely non-digital—and imperfect—analogies to try to convince the judges of their respective sides.

Shumsky likened the case to a safe deposit box at a bank.

"Let’s say I want someone to access my safe deposit box," he said. "If the accountant shows up at the bank naked, and the bank says you can’t come in—no shirt, no shoes, no service—no one would say the bank has lost the ability to keep people out?"

In short, just because Power users had allowed them to access their Facebook accounts, that did not mean Facebook then washed its hands of what Facebook users, via Power, were doing.

Anderson later countered with her own analogy.

"As much as I don’t wish to encourage the analogy to trespass of physical property, I would like to offer that in this case, the facts are more like giving access to a storage facility, stored under lock and key," Anderson said. "Users store their own data that Facebook doesn’t have any right to, they expressly disclaim to. They could have given the key to Power or to anybody else."

A ruling from the 9th Circuit is expected within the coming months.