Chegg, Inc. v. Doe

Background

Chegg, Inc. sued John Doe, identified as the individual or entity that owns or controls Homeworkify. Homeworkify allegedly allows members of the public to obtain Chegg solutions without creating a Chegg account or paying for a subscription. Chegg asserted claims under the federal Computer Fraud and Abuse Act, California’s Comprehensive Computer Data Access and Fraud Act, California contract law, and the federal Lanham Act’s trademark provisions.

Chegg sought a preliminary injunction, an extraordinary temporary court order intended to prevent harm while a case proceeds. It asked the court to stop Homeworkify’s activities and order the domain registry to seize and transfer Homeworkify’s domain to Chegg. Chegg also asked to serve the unidentified defendant by email under Federal Rule of Civil Procedure 4(f)(3), which concerns alternative service on foreign individuals or entities.

The defendant had not been served and did not appear or respond. Chegg had tried to identify the person or entity behind Homeworkify through cease-and-desist orders and subpoenas to the domain registrar and related services, but those efforts did not establish the defendant’s identity or location.

Preliminary-Injunction Analysis

To obtain a preliminary injunction, Chegg had to show a likelihood of success on the merits, likely irreparable harm without an injunction, that the balance of hardships favored Chegg, and that an injunction served the public interest.

For the federal computer-access claim, the court held that violating website terms of use, without more, does not establish liability under the Computer Fraud and Abuse Act. If Chegg had clearly withdrawn Homeworkify’s access through a specific cease-and-desist order and effective technical barriers, continued access might have violated the statute. But Chegg did not provide the cease-and-desist letter, evidence that Homeworkify continued accessing Chegg after the letter, or specific evidence that Chegg had blocked further access. The court therefore found that Chegg had not shown a likelihood of success on this claim. The court also found insufficient evidence that Homeworkify caused the type of computer “damage” required for another theory under that statute.

The court reached a similar conclusion on the California computer-access claim. Although Chegg argued that the cease-and-desist letter and technical restrictions revoked Homeworkify’s authorization, Chegg had not provided enough evidence to show a likelihood of success.

The court found a likelihood that Homeworkify entered into an enforceable contract by creating a Chegg account and agreeing to Chegg’s terms of use. Those terms prohibited commercial use of Chegg data and automated copying or extraction. The court concluded that Homeworkify likely breached those terms by scraping large quantities of Chegg solutions and publishing them for free while earning advertising revenue.

The court also found that Chegg had shown a likelihood of success on its trademark-infringement and false-designation claims. Homeworkify had used Chegg’s name and marks on its website and in Google advertising, including phrases such as “Unblur Chegg” and “Free Chegg Answers.” The court found that this use was intended to make users think Homeworkify was Chegg or associated with Chegg, and evidence of a Reddit post asking whether Homeworkify was a scam suggested that some consumers had been confused.

Irreparable Harm and Other Factors

Despite Chegg’s showing on some claims, the court found that Chegg had not established likely irreparable harm. Monetary injury ordinarily is not irreparable, and Chegg did not provide evidence that significant numbers of students were abandoning Chegg subscriptions for Homeworkify or that any business loss threatened Chegg’s continued existence. The evidence that one Homeworkify solution had received 34 “thumbs up” votes was insufficient. Chegg also did not provide actual evidence of substantial loss of goodwill or reputation.

The balance of the equities favored Chegg because Homeworkify’s continued use of Chegg’s solutions likely continued to breach Chegg’s terms, while Homeworkify would lose the ability to use those solutions for its own gain. The public interest also favored an injunction because Homeworkify’s use of Chegg’s marks was likely to cause consumer confusion, including possible disclosure of private information to an entity consumers did not know.

The court nevertheless held that a plaintiff must satisfy every required preliminary-injunction factor. Because Chegg had not shown likely irreparable harm, the court denied Chegg’s motion for a preliminary injunction without prejudice to a future motion addressing the court’s concerns.

Alternative Service

The court separately denied Chegg’s request to serve Homeworkify by email without prejudice. Rule 4(f)(3) permits alternative service in appropriate cases involving foreign individuals or entities, but Chegg had not demonstrated that the anonymous defendant was foreign. The court explained that the cases Chegg cited involved defendants known to be located outside the United States, even when their precise addresses were unknown.

The domain-registration information included an address pointing to Reykjavik, Iceland, but other information pointed to addresses in the United States, and Chegg did not appear to believe that the defendant was located in Iceland. Chegg also traced a Google AdSense account to a bank account in the Philippines but did not argue that this established the defendant’s location. The court therefore denied email service without prejudice to a future motion with more evidence that the defendant was outside the United States. The court added that, if Chegg believed the defendant was based in the United States, it would need to use the applicable procedures for serving a domestic person or entity.

Disposition

Judge Charles R. Breyer denied Chegg’s motion, including the request for a preliminary injunction and the request for service by email. Both requests were denied without prejudice.