Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Is scraping data from a publicly available website trade secret misappropriation? Based on a new opinion from the Eleventh Circuit, It might be.In <a href="https://law.justia.com/cases/federal/appellate-courts/ca11/18-12004/18-12004-2020-05-20.html" target="_blank" rel="noopener noreferrer">Compulife Software, Inc. v. Newman, Compulife Software</a>, a life insurance quote database service alleged that one of its competitors scraped millions of insurance quotes from its database and then sold the proprietary data themselves. Compulife brought a number of claims against its competitors, including misappropriation of trade secrets under <a href="https://repository.law.miami.edu/cgi/viewcontent.cgi?article=1122&context=umblr#:~:text=Florida's%20version%20of%20the%20Uniform,prevailing%20plaintiff%20in%20some%20cases." target="_blank" rel="noopener noreferrer">Florida’s version of the Uniform Trade Secrets Act (FUTSA)</a> and under the <a href="https://www.americanbar.org/groups/business_law/publications/blt/2016/09/03_cohen/">Federal Defend Trade Secrets Act (DTSA)</a>.Following a bench trial,<a href="http://davidrutstein.com/compulife-lawsuit-decision.pdf"> Magistrate Judge James Hopkins found</a> that, while Compulife’s underlying database merits trade secret protection, the individual quotes generated through public Internet queries to the database do not. So using a bot to take those individual quotes one by one did not constitute a misappropriation of trade secrets. On appeal, however, the <a href="https://law.justia.com/cases/federal/appellate-courts/ca11/18-12004/18-12004-2020-05-20.html" target="_blank" rel="noopener noreferrer">Eleventh Circuit disagreed</a>, vacated, and remanded the case.Facts of the CaseCompulife’s main product is its “Transformative Database,” which contains many different premium-rate tables that it receives from life insurance companies. While these rate tables are available to the public, Compulife often receives these tables before they are released for general use. In addition, Compulife applies a special formula to these rate tables to calculate its personalized life insurance quotes.Compulife sells access to its “Transformative Database” to life insurance agents. The agents can either buy a “PC version” of the database or an “internet-engine version” of the database. In addition, Compulife provides access to the database to consumers for free through its <a href="http://www.terms4sale.com">Term4Sale.com</a> website. When an individual gets a quote from the Term4Sale website, the site automatically refers that individual to an insurance agent who works with Compulife.The defendants operate two competing life insurance quote websites: NAAIP.org and beyondquotes.com. “NAAIP” stands for National Association of Accredited Insurance Professionals. Through NAAIP.org, the defendants offer a “Life Insurance Quoter Engine” that is similar to and partly copied from Compulife’s “Transformative Database.” Life insurance agents can sign up for a free website through NAAIP.org and put NAAIP’s life insurance quoter on their own website. Beyondquotes.com functions just like Compulife’s Term4Sale website. Individuals can use that site to obtain free life insurance quotes and are then referred to a NAAIP affiliated life insurance agent.As part of other efforts to take its proprietary data, Compulife alleged that the defendants retained an Israeli hacker to run automated queries on the Term4Sale website to obtain individual quotes that would be used in the defendants’ competing sites.Trade Secret MisappropriationUnder either the FUTSA or the DTSA, to prove trade secret misappropriation, Compulife had to show that (1) it possessed a trade secret and (2) the trade secret was misappropriated, either by one who knew or had reason to know that the secret was improperly obtained or by one who used improper means to obtain it. Misappropriation can be shown through improper acquisition, disclosure, or use.With respect to the hacker’s queries to its Term4Sale website, Compulife acknowledged that any individual could visit the Term4Sale website to obtain a quote and that there was no restriction on how an individual could use a quote obtained from the Term4Sale website. Similarly, the Term4Sale website engine was also available on Compulife customer websites, and those sites were also freely accessible to the public.Judge Hopkins held that, while the underlying Transformative Database is a trade secret, the individual quotes are not. Thus, Compulife’s FUTSA and DTSA claims alleging misappropriation of these quotes necessarily failed.Judge Hopkins also found that Compulife failed to establish a claim of misappropriation through either use or acquisition.On appeal, the Eleventh Circuit held that Judge Hopkins erred in reasoning that the public availability of quotes on Compulife’s Term4Sale site automatically precluded a finding that scraping those quotes constituted misappropriation.The Eleventh Circuit recognized that the quotes’ public availability is important to the first prong of trade-secret misappropriation—the initial determination whether a protectable secret exists. The Court held that public availability creates a vulnerability, which—if unreasonable—could be inconsistent with the reasonable precautions requisite to trade secret protection.The Court, however, held that, even granting that individual quotes themselves are not entitled to protection as trade secrets, Judge Hopkins failed to consider the possibility that so much of the Transformative Database was taken—in a bit-by-bit fashion—that a protected portion of the trade secret was acquired.The Court found that Judge Hopkins correctly concluded that the scraped quotes were not individually protectable trade secrets because each is readily available to the public but held that does not in and of itself resolve the question whether, in effect, the database as a whole was misappropriated. The Court reasoned that, even if quotes aren’t trade secrets, taking enough of them must amount to misappropriation of the underlying secret at some point.The Court further held that the fact that the defendants took the quotes from a publicly accessible site does not automatically mean that the taking was authorized or otherwise proper. Although Compulife plainly gave the world implicit permission to access as many quotes as is humanly possible, a robot can collect more quotes than any human practicably could. So, while manually accessing quotes from Compulife’s database is unlikely ever to constitute improper means, using a bot to collect an otherwise infeasible amount of data may well be.ConclusionsAs noted in <a href="https://www.sociallyawareblog.com/2019/09/17/ninth-circuits-linkedin-decision-does-not-greenlight-the-unauthorized-web-scraping-of-public-websites/" target="_blank" rel="noopener noreferrer">recent posts</a>, website owners have many tools at their disposal to combat unauthorized webscraping. The Eleventh Circuit reminds website owners that they may have one more arrow in the quiver. If the website owner can establish that the underlying data viewed in the aggregate is entitled to trade secret protection, it would be no defense under the Eleventh Circuit’s reasoning that the data is taken bit-by-bit through public access.

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Webscraping a Publicly Available Database May Constitute Trade Secret Misappropriation