Unreported / Non-Citable
Background
Bracket Company Inc. and other plaintiffs sought a temporary restraining order and preliminary injunction against Shaw Walters and Doe defendants in the U.S. District Court for the Northern District of California. Their motion, filed at Dkt. No. 5, presented claims for breach of contract, intentional interference with contracts, trade secret misappropriation, and violations of California's Unfair Competition Law. The court addressed whether the plaintiffs had made the required preliminary showing on the merits, both at the hearing and on the written record.
The contract claims depended on website Terms of Service that allegedly prohibited copying and reverse engineering. The trade secret claims concerned Walters's downloading of object code and website materials, including application code, stylesheets, fonts, icons, a logomark, and HTML. The plaintiffs also alleged that Walters used a bot identifying itself as a Google crawler to evade Cloudflare's bot-management controls.
The Court’s Holding
The court denied the motion without prejudice, concluding that the plaintiffs had not sufficiently established either a likelihood of success or a serious question on the merits of any claim. For the contract and interference claims, it found that the Terms of Service were not reasonably conspicuous under Berman v. Freedom Financial Network, LLC, 30 F.4th 849 (9th Cir. 2022). It also found insufficient evidence that Walters or the Doe defendants had actual knowledge or inquiry notice of the terms, so the plaintiffs had not shown formation of a contract assenting to them.
For the trade secret claims, the court emphasized that the plaintiffs' own expert described materials readable from a public Solana network node or accessible to website users. It explained that reverse engineering a trade secret from lawfully accessed materials does not establish misappropriation under California Civil Code section 3426.1(a) or 18 U.S.C. section 1839(6)(B). The alleged bot deception did not change that analysis because there was no evidence that the bot obtained anything Walters could not lawfully access.
At the hearing, plaintiffs' counsel referred to additional materials supposedly accessed by the bot but could not identify what they were, explain why they were necessary to develop the reverse-engineered source code, or identify supporting record evidence. The court therefore found insufficient evidence of likely trade secret misappropriation and held that the UCL claims were unlikely to succeed for the same reasons. The denial is without prejudice to refiling if the plaintiffs obtain evidence bridging the identified gap, and the court ordered electronic service of the order on all defendants using the method specified in its November 3, 2026 order, with equivalent notice permitted for Doe defendants whose X accounts are no longer publicly accessible.
Key Takeaways
- A preliminary injunction movant must support its merits showing with evidence, and the court found neither a likelihood of success nor a serious question on any presented claim.
- Website terms that are not reasonably conspicuous, without evidence of actual knowledge or inquiry notice, did not establish the contractual assent needed for the contract-related claims.
- Reverse engineering lawfully accessible materials did not support trade secret misappropriation under the statutes cited by the court.
- Allegations that a bot impersonated a Google crawler were insufficient without evidence that the bot accessed material beyond Walters's lawful access.
- The denial was without prejudice, leaving the plaintiffs an opportunity to refile if they obtain evidence addressing the specific deficiencies identified by the court.
Why It Matters
The order separates the act of reverse engineering publicly or lawfully accessible material from trade secret misappropriation and requires evidence connecting alleged improper means to material the defendant could not lawfully access. It also applies online contract-formation principles to copying and reverse-engineering restrictions, focusing on conspicuousness and notice rather than merely the existence of posted terms.
Because the ruling is expressly without prejudice, it resolves the present emergency motion rather than finally adjudicating the underlying claims. Its immediate practical effect is to deny the requested injunctive relief while identifying the evidentiary gaps the plaintiffs must address in any renewed motion.