CDK Global, LLC v. Tekion Corp.
3:25-cv-01394
N.D. Cal.Jul 15, 2025Background
- CDK Global, a leading automotive retail software provider, alleges Tekion Corp. and InDesign Data, LLC illicitly accessed its proprietary Dealer Management System (DMS) and extracted trade secrets, proprietary software, and data.
- Dealerships using CDK's DMS had contractual restrictions against sharing access or credentials with third parties under Master Services Agreements (MSAs).
- CDK claimed InDesign used its "1DMS" software to bypass CDK security, accessing, scraping, and exporting data, allegedly with Tekion’s assistance as part of customer migrations.
- CDK moved for a preliminary injunction to bar Defendants from accessing its systems; InDesign moved to dismiss all claims.
- By the time of the motion, Tekion ceased the allegedly prohibited conduct after CDK's cease-and-desist demand. CDK was aware of InDesign’s methods since at least 2019 but delayed seeking relief.
- The court ruled on both motions, scrutinizing whether CDK showed irreparable harm for an injunction and whether its legal claims sufficed to survive dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Preliminary injunction: irreparable harm | CDK will be irreparably harmed by continuing unauthorized access. | No ongoing irreparable harm, delay indicates no urgency. | Denied. CDK did not demonstrate irreparable harm. |
| CFAA (unauthorized computer access) | InDesign accessed DMS without authorization, knowing restrictions. | InDesign had dealer permission, so access was authorized. | Denied dismissal. Allegations plausibly allege unauthorized access after December 2024. |
| DMCA (circumvention of technological barriers) | InDesign bypassed technical security via 1DMS, marketing it for such use. | Use of provided credentials is not "circumvention"; software not primarily designed for that purpose. | Denied dismissal. CDK plausibly alleges circumvention and marketing for circumvention. |
| Trade secrets misappropriation (federal & state law) | InDesign accessed, used, and disclosed CDK’s trade secrets without consent. | Claims are conclusory or group defendants, fail to show misappropriation. | Denied dismissal. Allegations sufficient at pleading stage. |
| SCA (Stored Communications Act) | InDesign exceeded dealership authorization to access non-dealer data. | Access was as agent of dealer/users; statute allows authorized user access. | Granted dismissal with leave to amend. Allegations insufficient. |
| Tortious interference | InDesign intentionally induced dealerships to breach contracts. | No intentional inducement or specified breach after clear knowledge of contract. | Granted dismissal with leave to amend. Lacks specificity. |
| UCL (Unfair Competition Law) | InDesign’s conduct is both unlawful and unfair under UCL. | Only injury to CDK alleged, not competition; no harm to competition. | Dismissed “unfair” prong; “unlawful” prong survives. |
Key Cases Cited
- Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) (sets the standard for granting preliminary injunctions - likelihood of irreparable harm is required)
- Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058 (9th Cir. 2016) (permission from end users vs. system owner for CFAA authorization)
- LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009) (key elements for a CFAA claim)
- Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163 (1999) (unfair competition between direct competitors requires harm to competition, not just individual competitor)