Bold Limited v. Rocket Resume, Inc.

Background

Bold Limited and Bold LLC sued Rocket Resume, Inc. and Stephen Zimmerman. They alleged copyright infringement, violation of California’s Unfair Competition Law, and breach of contract based on alleged copying of original job descriptions and other material from Bold’s MyPerfectResume website. The defendants moved to dismiss the First Amended Complaint and, alternatively, moved to require arbitration and pause the case.

Motion to dismiss

The court held that the MyPerfectResume Terms of Use formed a valid contract with Bold LLC. The website displayed a notice below the “Create My Resume” button stating that clicking the button meant agreeing to the Terms of Use and Privacy Policy. The court found that this notice was sufficiently visible and that clicking the button clearly showed agreement.

The court also held that Bold LLC’s contract claim was not preempted by the Copyright Act. The terms prohibited automated software, data mining, scraping, and similar methods of accessing the website. According to the court, those restrictions addressed conduct beyond copying or reproducing copyrighted material. The court therefore denied the defendants’ motion to dismiss Bold LLC’s breach-of-contract claim.

The court denied the motion to dismiss Bold LLC’s unfair-competition claim. It concluded that the claim was not preempted because it relied on alleged data mining and inappropriate access, and that Bold LLC had adequately alleged unfair and unlawful theories. The court agreed, however, that Bold LLC had not adequately pleaded a fraudulent theory.

The court granted the motion to dismiss Bold Limited’s unfair-competition claim with leave to amend. As pleaded, that claim was based on copyright violations and therefore was preempted by the Copyright Act. The court noted that Bold Limited suggested a trespass-to-chattels theory in its opposition, but that theory was not stated in the First Amended Complaint. The court allowed Bold Limited to try to plead a non-preempted claim consistent with its position that it was not bound by the Terms of Use.

Arbitration and stays

Because the Terms of Use were a valid contract as to Bold LLC, the court granted the motion to compel arbitration of Bold LLC’s breach-of-contract and unfair-competition claims.

The court denied the motion to compel arbitration of Bold Limited’s unfair-competition claim. It rejected the defendants’ arguments that Bold Limited was covered directly by the arbitration clause, bound through agency principles, or bound by equitable estoppel. The court then stayed Bold Limited’s unfair-competition claim. If Bold Limited amends that claim, the order requires the amendment to be filed no later than 21 days after the stay is lifted.

The court denied the defendants’ request to stay Bold Limited’s copyright claim pending arbitration. It found that the alleged copyright infringement could continue during an indefinite arbitration, that the defendants’ claimed hardship was minimal, and that the copyright claim involved distinct issues. The court also denied the request to stay discovery.

Final directives

The parties were ordered to begin arbitration within 60 days or show cause why they had not done so. They must advise the court within 10 days after the arbitration concludes. Judge Beth Labson Freeman signed the order.