Compulife Software Inc. v. Moses Newman

Judge: Brasher
Opinion Date: August 1, 2024

Compulife Software, Inc. created software to generate life insurance quotes using a proprietary database of insurance rates. The defendants, Moses Newman, Aaron Levy, Binyomin Rutstein, and David Rutstein, were accused of copying Compulife’s software code and misappropriating its trade secret by scraping its database to use on their own websites. Compulife alleged that this led to a decline in its sales and revenue.

The United States District Court for the Southern District of Florida initially ruled against Compulife on the copyright infringement claim but in favor of Compulife on the trade secret misappropriation claim. The court found that the defendants had not infringed on Compulife’s copyright because the copied elements were not protectable. However, it concluded that the defendants had misappropriated Compulife’s trade secret by acquiring the database through improper means, specifically scraping. The court awarded Compulife compensatory and punitive damages and held the defendants jointly and severally liable.

The United States Court of Appeals for the Eleventh Circuit reviewed the case. It found that the district court erred by not considering the arrangement of Compulife’s code as a potentially protectable element under copyright law. The appellate court reversed the district court’s ruling on the copyright claim and remanded for further fact-finding on whether the arrangement of the code was protectable. The appellate court affirmed the district court’s ruling on the trade secret misappropriation claim, agreeing that the defendants had used improper means to acquire the trade secret. It also upheld the joint and several liability for the defendants, noting that this is standard for trade secret claims under Florida law. The case was affirmed in part, reversed in part, and remanded for further proceedings. View “Compulife Software Inc. v. Moses Newman” on Justia Law

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