Compulife Software Gets Second Chance in Competitor Hacking Case

Written June 1, 2020

The US Court of Appeals for the Eleventh Circuit on May 20, 2020, vacated and remanded a Florida court ruling that found that a group of website operators who hacked into a competitor’s server and database didn’t infringe its source code copyright or misappropriate its proprietary information. Compulife Software Inc. v. Newman, 11th Cir., No. 18-12004, 5/20/20.

Compulife Software Inc., alleged that the defendants, who operate competing websites, gained access to its proprietary database by pretending to work for Compulife licensees, and then hired a hacker to scrape data, including its HTML source code, from its server to obtain life insurance quote information for use in their software.

The lower court ruled in favor of the defendants, but the Eleventh Circuit found that the magistrate judge applied the wrong legal standards and failed to sufficiently explain conclusions. Specifically, the magistrate judge erred by requiring Compulife to affirmatively show that the copied sections of its HTML source code were protectable.