Collegesource, Inc. v. Academyone, Inc.

• Decision Date: 24 September 2015
• Docket Number: CASE NO. 08CV1987-GPC(MDD)
• Court: U.S. District Court — Southern District of California
• Parties: COLLEGESOURCE, INC., Plaintiff, v. ACADEMYONE, INC., Defendant.

COLLEGESOURCE, INC., Plaintiff, v. ACADEMYONE, INC., Defendant.

CASE NO. 08CV1987-GPC(MDD)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF CALIFORNIA

September 24, 2015

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT

[Dkt. No. 251.]

Before the Court is Defendant's motion for summary judgment. (Dkt. No. 251.) Plaintiff filed an opposition on August 21, 2015. (Dkt. No. 273.) Defendant filed a reply on August 28, 2015. (Dkt. No. 276.) A hearing was held on September 17, 2015. (Dkt. No. 282.) Darren Quinn, Esq. and William Woods, Esq. appeared on behalf of Plaintiffs, and David Landau, Esq. and Aliza Karetnick, Esq. appeared on behalf of Defendants. After a review of the briefs, supporting documentation, the applicable law, and hearing oral argument, the Court GRANTS Defendant's motion for summary judgment.

Procedural Background

On October 27, 2008, Plaintiff CollegeSource, Inc. ("Plaintiff" or "CollegeSource" or "CS") filed this action against Defendant AcademyOne, Inc. ("Defendant" or "AcademyOne" or "A1") alleging numerous causes of action based on Defendant's alleged improper access and use of Plaintiff's databases. On August 24,2009, the Court granted Defendant's motion to dismiss for lack of personal jurisdiction.¹ (Dkt. No. 93.) On September 21, 2009, Plaintiff filed a notice of appeal of the district court's order granting motion to dismiss for lack of personal jurisdiction. (Dkt. No. 99.)

While this case was dismissed and on appeal with the Ninth Circuit, on July 20, 2010, CollegeSource filed a separate complaint against AcademyOne in the United States District Court for the Eastern District of Pennsylvania alleging similar causes of action. See CollegeSource, Inc. v. AcademyOne, Inc., Case No. 10-CV-3542 (E.D. Pa., filed July 20, 2010) ("the Pennsylvania Action"). In the Pennsylvania Action, CollegeSource asserted the following nine causes of action in its first amended complaint: (1) violation of U.S. Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1964; (2) violation of U.S. Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1964; (3) violation of U.S. Computer Fraud and Abuse Act ("CFAA"), 18 U.S.C. § 1030; (4) breach of contract; (5) unjust enrichment; (6) trademark infringement under the Lanham Act, 15 U.S.C. § 1114; and (7) unfair competition under the Lanham Act, 15 U.S.C. § 1125(a); (8) declaration of trademark invalidity due to fraud on U.S. Patent and Trademark Office; and (9) false advertising under the Lanham Act, 15 U.S.C. § 1125(a). (Dkt. No. 278, D's RJN, Ex. B.)

In this action, CollegeSource asserts the following ten causes of action in its second amended complaint: (1) violation of the U.S. Computer Fraud and Abuse Act, 18 U.S.C. § 1030(g); (2) violation of California's Comprehensive Computer Data Access and Fraud Act ("CCDAFA"), Cal. Penal Code § 502(e); (3) breach of contract; (4) misappropriation; (5) unjust enrichment; (6) trademark infringement under the Lanham Act, 15 U.S.C. § 1114; (7) unfair competition under the Lanham Act, 15 U.S.C. § 1125(a); (8) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (9) declaration of trademark invalidity, 28 U.S.C. § 2201; 15 U.S.C. §§ 1064, 1119; and(10) violation of California's unfair competition statute, Cal. Bus. & Prof. Code §§ 17200 et seq. (Dkt. No. 115.)

The district court in the Pennsylvania Action dismissed the RICO claims in May 2011. (Dkt. No. 275, SUF No. 3.) AcademyOne then filed a motion for summary judgment on the remaining nine claims on February 27, 2012. (Pennsylvania Action, 10cv3542-MAM, Dkt. No. 164.) After full briefing, the Pennsylvania district court held a hearing on AcademyOne's motion on June 13, 2012. (Id., Dkt. No. 206.) On September 21, 2012, after the motion for summary judgment was fully briefed and after having heard oral argument, CollegeSource filed a motion for leave to supplement its opposition to Defendant's motion for summary judgment and conduct additional discovery based on newly uncovered evidence. (Id., Dkt. No. 222.) On September 27, 2012, the Pennsylvania district court denied Plaintiff's motion. (Id. Dkt. No. 225.) On October 25, 2012, the district court in the Pennsylvania Action granted Defendant AcademyOne's motion for summary judgment in its entirety. (Id., Dkt. No. 226; CollegeSource, Inc. v. AcademyOne, Inc., No. 10-3542, 2012 WL 5269213 (E.D. Pa. Oct. 25, 2012.) On November 2, 2012, CollegeSource filed a notice of appeal with the Third Circuit. (Pennsylvania Action, 10cv3542-MAM, Dkt. No. 228.)

Meanwhile, in this case, on October 15, 2012, CollegeSource filed an amended motion for partial summary judgment on the merits of its case.² (Dkt. No. 172.) On March 8, 2013, AcademyOne filed an opposition to Plaintiff's motion for summary judgment which included an expert report by its expert, Paul Lewis, dated March 8, 2013. (Dkt. No. 215, Landou Decl., Ex. A, Lewis' Rebuttal Expert Report (filed Under Seal).) On March 29, 2013, Plaintiff filed objections to Lewis' Report. (Dkt. No. 219.)

On November 28, 2012, AcademyOne filed a motion for summary judgment alleging claim and issue preclusion based on the district court's ruling granting its motion for summary judgment in the Pennsylvania Action. (Dkt. No. 186.) On March11, 2013, CollegeSource filed a motion to stay and a motion to refer summary judgment related motion to Magistrate Judge Mitchell D. Dembin for report and recommendation. (Dkt. Nos. 204, 207.) On April 15, 2013, the Court granted Plaintiff's motion to stay the case pending a ruling by the Third Circuit. (Dkt. No. 230.) On April 16, 2013, the Court terminated all pending motions subject to reopening once the stay was lifted. (Dkt. No. 231.)

On February 5, 2015, the Third Circuit affirmed the district court's grant of summary judgment in favor of Defendant. CollegeSource, Inc. v. AcademyOne, Inc., 597 F. App'x 116 (3d Cir. 2015). On March 5, 2015, the Third Circuit denied Plaintiff's petition for rehearing by the panel and the court en banc. (Pennsylvania Action, 10cv3542, Dkt. No. 233.) On May 14, 2015, Plaintiff informed the Court it would not file a petition for certiorari with the United States Supreme Court. (Dkt. No. 245.)

On May 28, 2015, the Court granted the parties' joint motion to lift the stay and set a telephonic status conference. (Dkt. No. 247.) At the status hearing, the Court indicated it would first rule on Defendant's motion for summary judgment on claim preclusion based on the judgment in the Pennsylvania action before ruling on Plaintiff's motion for partial summary judgment concerning liability. (Dkt. No. 252 at 5.³) Subsequently, the Court set a briefing schedule on Defendant's motion for summary judgment based on claim preclusion. (Dkt. No. 249.)⁴

Defendant filed a motion for summary judgment on June 8, 2015. (Dkt. No.251.) On August 21, 2015, Plaintiff filed an opposition. (Dkt. No. 273.) On August 28, 2015, Defendant filed a reply. (Dkt. No. 276.)

Factual Background

The facts are taken from the Third Circuit opinion in CollegeSource, Inc., 597 F. App'x at 120-21.

CS touts itself as "the pioneer of the digital college course catalog and college transfer credit industry." CS's main product is the "CollegeSource Online" database, which allows paying subscribers and trial users to search and inspect over 50,000 digital course catalogs and related documents culled by CS from the offerings of colleges across the country. CS has long undertaken efforts to prevent, or enable the detection of, duplication or use of its materials by potential competitors. For instance, throughout the period at issue here, CS embedded in its catalog files an unavoidable "splash page" alerting the user that the catalog originated from CS, and a full-page "Copyright and Disclaimer," which states that "CollegeSource digital catalogs are derivative works owned and copyrighted by CollegeSource, Inc. . . . Catalog content is owned and copyrighted by the appropriate school," The notice also declares that distribution and noncommercial use are prohibited.

Users of CollegeSource Online must check a box that states, "By signing in above, I agree to be bound by the terms of the . . . Subscription Agreement." The hyperlinked Subscription Agreement states: "This Subscriber Agreement and Terms of Use govern your use of CollegeSource Online, TES, and, unless other terms and conditions expressly govern, any other electronic services from CollegeSource, Inc. that may be made available from time to time . . . ."The agreement also states that commercial use of the data is prohibited.

Along with CollegeSource Online, CS offers a service known as "CataLink," which allows colleges to store their catalog information on CS's servers and link to that information from their websites, rather than hosting the information themselves. Since CataLink's inception, 110 schools have paid to use that service. Course catalogs accessed via CataLink, like those accessed via CollegeSource Online, contain the aforementioned Copyright and Disclaimer.

A1 was founded by Appellee David Moldoff in 2005 as a free online alternative to CS. In 2006, Moldoff approached CS to inquire whether A1 could purchase or license the contents of CS's database, but he was rebuffed. A1 then hired Beijing Zhongtian-Noah Sports Science Co., Ltd. (Noah), an independent Chinese subcontractor, to obtain course catalogs by downloading them directly from individual schools' websites. A1 also pursued an in-house effort to obtain course catalogs in the same way. By the time its database launched in early 2007, A1 had amassed course catalogs from roughly 4,000 schools, most of which originated from Noah's collection efforts.

A week after the debut of A1's database, CS sent a cease-and-desist letter to A1 alleging over 700 instances of copyright infringement anddirecting A1 to remove the infringing materials from its website. After a brief review, A1 discovered that CS's allegations were largely correct. In an email

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