CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066 (9th Cir. 2011), was a case in which CollegeSource sued AcademyOne for a number of claims including Computer Fraud and Abuse (CFAA). The case was dismissed by the Honorable Gonzalo P. Curiel in September 24, 2015 clearing AcademyOne of any wrong doing. Prior to summary judgement, The ninth circuit court of appeals ruled that AcademyOne was subject to specific personal jurisdiction in California, but not general personal jurisdiction. The court then remanded the case to the District Court for the Southern District of California for further proceedings.
Background
CollegeSource and AcademyOne are competitors in the market that helps students with the college transfer process. CollegeSource maintain it's principle place of business in California, while AcademyOne maintained it's principle place of business in Pennsylvania. However, both companies seek to serve the national market online. Important to the case, AcademyOne specifically targeted California residents through use of Google AdWords, soliciting California colleges and state educational agencies through phone and email, and sponsoring the keynote speaker at a conference held for the benefit of higher education executive officers in San Diego.
CollegeSource maintained a vast digital collection of 44,000 course catalogs from 3,000 colleges, worth allegedly $10 million. The digital collection was available as a .pdf file on CollegeSource's websites. AcademyOne, a few months after its founding, made several attempts to acquire the rights to CollegeSource's collection of course catalogs. After some initial consideration, CollegeSource declined AcademyOne's attempts to acquire rights to its catalog to keep its competitive advantage in the market place.
Therefore, AcademyOne decided to build its own collection of catalogs and course descriptions. At least three employees registered for trial membership with CollegeSource that allowed them to download three sample catalogs each. AcademyOne also hired a China-based contractor to collect thousands of catalogs and mine course descriptions from a list of schools' websites that AcademyOne had provided. During this process, the contractor downloaded .pdf files found on the schools' websites, but were sourced from CollegeSource's servers. Some course descriptions were traceable to CollegeSource's catalog versions because they contained errors introduced by CollegeSource's digitization and conversion effort. Moreover, the course catalog pdf files included the CollegeSource Copyright and URL on the first page along with terms prohibiting redistribution, modification, or commercial use of the catalogs without consent of CollegeSource) on the second page of the .pdf.
In April 2007, CollegeSource sent AcademyOne a cease-and-desist letter to stop using CollegeSource's college catalogs based upon copyright claims. AcademyOne removed public access to the catalog files after they received the letter. However, CollegeSource refuted this claim. CollegeSource submitted that AcademyOne left copies of CollegeSource's catalogs on AcademyOne's server for weeks and continued to keep copies of the course description on AcademyOne's website while they researched CollegeSource's claims.
College Source Online Video
Holding
The court held that AcademyOne was not subject to general personal jurisdiction. Instead, the court held that AcademyOne was subject to specific personal jurisdiction in California and remanded the case to the District Court for the Southern District of California for further proceedings.
Personal Jurisdiction
In the inquiry for a dismal for lack personal jurisdiction, CollegeSource bared the burden of establishing that jurisdiction by making a primae facie showing that the facts established that AcademyOne was subject to personal jurisdiction in California. Therefore, CollegeSource must show that AcademyOne was subject to either general personal jurisdiction or specific personal jurisdiction. For general personal jurisdiction to exist, CollegeSource must have shown that AcademyOne engaged in "continuous and systematic general business contacts." On the other hand, specific personal jurisdiction is analyzed under a three-part test: (1) AcademyOne must have purposefully availed itself, (2) the claim must be one which relates to the related activities, (3) the exercise of jurisdiction must comport with fair play and substantial justice.
General Jurisdiction
The court ruled that AcademyOne was not subject to general personal jurisdiction in California. The court noted that AcademyOne was not registered to do business in California and did not pay state taxes. Furthermore, the court reasoned that AcademyOne's alleged misappropriation of CollegeSource's intellectual property "was not a 'continuous and systematic' forum activity, but rather, a few discrete acts over a relatively short period of time." Lastly, the court reasoned that AcademyOne's relationships with three hundred California registered users, from which the company allegedly makes no profit; AcademyOne's single business trip to a trade show in San Diego; and AcademyOne's interconnectivity of its website fell below the threshold required to establish general personal jurisdiction.
Specific Jurisdiction
The court held that AcademyOne was subject to specific personal jurisdiction in California. Accordingly, the court reasoned that AcademyOne (1) directed its activities to California, (2) the claim of misappropriation to the related activities, and (3) AcademyOne did not prove that exercise of jurisdiction would not comport with fair play and substantial justice.
First, the Court reasoned that since CollegeSource claims alleged misappropriation, it would be fitting to use the purposeful direction analysis. Using this analysis --- the Court found that AcademyOne intentionally downloading the CollegeSource's catalogues and placing CollegeSource's catalogue and course descriptions on its website; reasonably knowing that CollegeSource was a direct competitor regardless of hiring contractors; and allegedly causing CollegeSource to suffer economic loss --- satisfied the purposeful direction analysis.
Second, the court found that AcademyOne downloading and republishing CollegeSource's catalogues satisfied a claim arising out of or related to forum activities. The facts that AcademyOne may not have known the state in which CollegeSource was registered and the AcademyOne may have not have known that it was downloading CollegeSource's material were not material.
Last, the court found that AcademyOne's reasons such as being a small company with little means and that CollegeSource could easily litigate in Pennsylvania were unpersuasive. Therefore, the court reasoned that the exercise of jurisdiction comported with fair play and substantial justice.
Conclusion
The Court ruled that AcademyOne was subject to specific personal jurisdiction in California with respect to CollegeSource's misappropriation claims, but not subject to general personal jurisdiction. With respect to CollegeSource's other claims, the court ruled that AcademyOne would be subject to personal jurisdiction under the doctrine of pendant personal jurisdiction (or supplemental jurisdiction). Eventually, after delays waiting on the related case in the third circuit, this case was dismissed in September 2015 by by the Honorable Gonzalo P. Curiel.
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