Is scraping data from a publicly available website trade secret misappropriation? Based on a new opinion from the Eleventh Circuit, It might be.

In Compulife Software, Inc. v. Newman, Compulife Software, 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 Florida’s version of the Uniform Trade Secrets Act (FUTSA) and under the Federal Defend Trade Secrets Act (DTSA).

Following a bench trial, Magistrate Judge James Hopkins found 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 Eleventh Circuit disagreed, vacated, and remanded the case.

Facts of the Case

Compulife’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.
Continue Reading Webscraping a Publicly Available Database May Constitute Trade Secret Misappropriation

A recent decision from the Ninth Circuit Court of Appeals in a dispute between LinkedIn and hiQ Labs has spotlighted the thorny legal issues involved in unauthorized web scraping of data from public websites. While some may interpret the LinkedIn decision as greenlighting such activity, this would be a mistake. On close review of the decision, and in light of other decisions that have held unauthorized web scrapers liable, the conduct remains vulnerable to legal challenge.

hiQ and LinkedIn

Founded in 2012, hiQ is a data analytics company that uses automated bots to scrape information from LinkedIn’s website. hiQ targets the information that users have made public for all to see in their LinkedIn profile. hiQ pays nothing to LinkedIn for the data, which it uses, along with its own predictive algorithm, to yield “people analytics,” which it then sells to clients.

In May 2017, LinkedIn sent a cease-and-desist letter to hiQ demanding that it stop accessing and copying data from LinkedIn’s servers. LinkedIn also implemented technical measures to prevent hiQ from accessing the site, which hiQ circumvented.

Shortly thereafter, with its entire business model under threat, hiQ filed suit in the United States District Court for the Northern District of California seeking injunctive relief and a declaration that LinkedIn had no right to prevent it from accessing public LinkedIn member profiles.
Continue Reading Ninth Circuit’s LinkedIn Decision Does Not Greenlight the Unauthorized Web Scraping of Public Websites