CustomGuide v. CAREERBUILDER, LLC
2011 U.S. Dist. LEXIS 95278
N.D. Ill.2011Background
- CareerBuilder owns CareerBuilder.com and CareerBuilderInstitute.com; CustomGuide develops online training content and spent ~$1.75M to create it.
- The High brothers (CustomGuide) alleged CareerBuilder sought a license to sell CustomGuide products but limited licensing to business-to-consumer sales per a February 4, 2008 agreement.
- CareerBuilder allegedly proceeded to sell CustomGuide content in the business-to-business market without a license and used unauthorized samples branded with CareerBuilder.
- After an August 4, 2008 meeting, CustomGuide did not sign a B2B license; CareerBuilder allegedly continued unauthorized access and misrepresented products as CareerBuilder's own.
- CustomGuide asserted numerous state and federal claims (breach, CFAA, UDTPA, ICFA, misappropriation, fraud, etc.) and sought injunctive relief; CareerBuilder removed and moved to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract viability | Pre-February 2009 breaches alleged; contract valid. | No pre-February 2009 breaches alleged; either no contract or preemption later. | Count I dismissed without prejudice; can replead consistent with rule 11. |
| CFAA claim viability | Loss tied to CareerBuilder's B2B use caused damage. | Loss not tied to impairment of a computer system; not a cognizable CFAA loss. | CFAA claim dismissed without prejudice. |
| UDTPA preemption by copyright | UDTPA based on reverse passing off; may survive preemption with extra elements like likelihood of confusion. | UDTPA claim preempted as derivative of copyright; no extra element. | UDTPA claim premised on reverse passing off is preempted; dismissed without prejudice. |
| ICFA preemption and pleading | ICFA claim premised on deceptive practices; may survive with consumer nexus and proper pleading. | ICFA preempted and pleading deficiencies. | ICFA claim dismissed without prejudice for preemption; pleading guidance noted. |
| Misappropriation and remaining counts | Misappropriation and related claims not fully preempted; may rely on proprietary info. | Claims preempted by copyright; shotgun pleading inadequate. | Misappropriation and certain counts dismissed without prejudice; remaining leave to amend limited; other counts dismissed with prejudice. |
Key Cases Cited
- Seng-Tiong Ho v. Taflove, 648 F.3d 489 (7th Cir. 2011) (copyright preemption governs rights under §301; two-element test)
- Baltimore Orioles, Inc. v. Major League Baseball Players Ass'n, 805 F.2d 663 (7th Cir. 1986) (preemption and scope of rights under copyright)
- ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996) (contract not per se preempted by copyright; balance of interests)
- Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (U.S. 2003) (reverse passing off and preemption considerations)
- Medline Indus. v. Maersk Med. Ltd., 230 F. Supp. 2d 857 (N.D. Ill. 2002) (fraud in making a contract; limits on premiss reduction)
- R.J. O'Brien & Associates, Inc. v. Forman, 298 F.3d 653 (7th Cir. 2002) (fraud claims can be based on fraud in the making of a contract)