Despite defeating LinkedIn’s attempt to block its access to public webpages, a data analytics firm may still have to face claims that it breached LinkedIn’s terms of service and misappropriated its data.
SAN FRANCISCO (CN) — A federal judge signaled Thursday he is unlikely to dismiss LinkedIn’s countersuit against a company that scrapes data from its members’ public profiles to alert employers which of their workers are probably looking for a new job.
The question of whether data analytics firm hiQ violated LinkedIn’s terms of service is likely a “fact-based inquiry” that should be resolved at a later stage of litigation, U.S. District Judge Edward Chen indicated during a virtual court hearing Thursday.
“Why is this not more of a fact-based question about the binding nature of the alleged user agreement,” Chen asked.
HiQ sells information to clients — including CapitalOne, eBay and GoDaddy — on which employees may be seeking a new job, based on information culled primarily from public LinkedIn profiles.
LinkedIn manages the largest online professional network on the planet, with more than 740 million members in over 200 countries, according to its website. Microsoft bought the social network for $26.2 billion in 2016.
LinkedIn claims HiQ uses anonymous, automated bots to bypass its data-scraping protections and track changes to profiles that users choose not to broadcast, undermining its privacy commitment to members.
HiQ sued LinkedIn in 2017, arguing the Microsoft-owned social network illegally cut off its access to public webpages. In September 2019, the Ninth Circuit upheld Judge Chen’s preliminary injunction requiring LinkedIn to restore hiQ’s access to its website.
LinkedIn has asked the Supreme Court to review that decision. Another case now pending in the Supreme Court could also affect the case. The high court is expected to issue a ruling this spring in Van Buren v. United States, which will determine if authorized access to a database for an unauthorized purpose constitutes a violation of the Computer Fraud and Abuse Act.
Chen said he would defer ruling on LinkedIn’s counterclaims related to that 1984 federal statute and a similar state law until after the Supreme Court renders its decision.
But the judge decided to move forward with ruling on hiQ’s motion to dismiss LinkedIn’s counterclaims of breach of contract, misappropriation and trespass to chattels.
HiQ argues that a 2019 Ninth Circuit ruling makes clear that it is no longer bound by LinkedIn’s user agreement because the social network terminated its user status.
In court Thursday, LinkedIn attorney Annette Hurst said that simply isn’t true. LinkedIn merely “restricted” hiQ’s member status but did not terminate it, she said. The LinkedIn lawyer added that even as a non-member, hiQ is still bound by LinkedIn’s terms of service as a visitor to the website.
“Even if LinkedIn terminated hiQ’s user status, the agreement would still govern hiQ’s access as a visitor,” Hurst said.
Judge Chen indicated the breach of contract issue will likely need to be resolved at a later stage of litigation after more evidence is collected and presented.
On claims that it misappropriated LinkedIn’s data, hiQ argued the social network does not own data generated by its users.
“LinkedIn has not and cannot allege that it owned the allegedly misappropriated data,” hiQ stated in its motion to dismiss LinkedIn’s counter claims.
LinkedIn says the law does not require it to show “exclusive ownership” of misappropriated information to pursue that claim. California law simply requires it to show that LinkedIn spent substantial time, skill or money developing the information, Hurst argued.
Judge Chen cited a 1918 Supreme Court decision which found The Associated Press had a “quasi-property right” in information it spent time and money gathering for news reports, even though the information was public and not copyrightable. Chen said that precedent likely allows LinkedIn to advance its claim to the next stage of litigation.
On the trespass to chattels claim, hiQ attorney Renita Sharma argued that claim should be dismissed because LinkedIn has suffered no harm as a result of hiQ using automated bots to scrape data from its webpages.
Sharma said LinkedIn failed to allege that hiQ’s data scraping activity has in any way slowed down its servers or caused other major problems.
“They are manufacturing their own harm,” Sharma said.
Hurst countered that hiQ’s data scraping has forced LinkedIn to make major investments to deal with increased requests to its server.
“LinkedIn has had to put in additional equipment, additional bandwidth, hired an entire team of people, developed multiple different types of software and specialized technical tools” to deal with the problem, Hurst said.
The LinkedIn attorney added the trespass claim must be advanced so her client can seek discovery and obtain evidence on how many times per day hiQ requested access to LinkedIn’s servers before the social network started tracking requests from hiQ’s IP addresses when Judge Chen issued a preliminary injunction in August 2017.
“All of the activity hiQ engaged in prior that is unknown and part of this claim,” Hurst said.
Chen took the arguments under submission