Authenticom, Inc. v. CDK Global, LLC et al
Filing
199
Transmission of Notice of Appeal, Docketing Statement, Opinion and Order, Opinion, Preliminary Injunction and Docket Sheet to Seventh Circuit Court of Appeals re: 196 Notice of Appeal, (Attachments: # 1 Docketing Statement, # 2 Opinion and Order, #172, # 3 Opinion, #191, # 4 Preliminary Injunction, # 5 Docket Sheet) (lak)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN
AUTHENTICOM, INC.,
v.
Plaintiff,
CDK GLOBAL, LLC and
THE REYNOLDS AND REYNOLDS COMPANY,
OPINION
17-cv-318-jdp
Defendants.
The court has reviewed the parties’ submissions regarding the form of the preliminary
injunction. Because defendants’ circumstances and systems differ, the court will issue a
separate order for preliminary injunction for each defendant. The orders will be the same in
many respects, differing primarily in the implementation procedures and deadlines. In this
opinion, the court explains its decisions on the main points of contention; the terms of the
preliminary injunctions will reflect these decisions.
The court’s general perspective is that the preliminary injunctions extend a lifeline to
Authenticom, to maintain its viability until this case is finally decided on the merits. The
preliminary injunctions are not intended to give Authenticom free reign to maximize its
business as it sees fit while the court keeps defendants sidelined. Accordingly, Authenticom
will be allowed access to defendants’ systems for dealers who authorized Authenticom to
provide data integration services as of May 1, 2017, the date Authenticom filed suit. That
date marks Authenticom’s earliest assertion in this court that it was suffering irreparable
harm as a result of defendants’ conduct. Accordingly, the court will allow Authenticom to
return to that point to serve those dealers who, as of that date, authorized Authenticom to
access DMS data and provide data integration services.
Authenticom’s access to defendants’ DMSs is generally limited to read-only data
exporting. In supporting its proposed form of injunction, Authenticom contended that
“writing back data” is “an important part of Authenticom’s services (and a need of many
vendors).” Dkt. 182, at 4. But the assertion is conclusory, and it is not consistent with
Authenticom’s presentation on the merits of its motion for preliminary injunction, where it
downplayed the need for data write-back. See Dkt. 143, ¶¶ 45-46 (According to Steve
Cottrell: “Nearly all of Authenticom’s business . . . does not ‘push’ data[.] . . . The only
portion of Authenticom’s current business that ‘pushes’ data to the DMS is a service that
Authenticom provides to cleanse the dealership’s customer information stored in the DMS.”).
So, consistent with its previous testimony, Authenticom may write back only to provide datacleansing services for the dealers for whom it was providing data-cleansing services as of May
1, 2017, and this type of access is limited to the CDK DMS. It is not clear that Authenticom
was providing data cleansing for Reynolds dealers as of May 1, 2017, so the court will not
require Reynolds to allow Authenticom to write back to the Reynolds DMS.
Authenticom will need to secure the dealer’s authorization to access specific data
fields, and Authenticom will need to communicate those authorized data fields to defendants.
Authenticom does not say that it is unable to provide this information or that it would be
unduly burdensome; rather, it summarily contends that such a “provision is unwarranted.”
Dkt. 182, at 5. But as the court explained in its July 14, 2017 opinion and order,
Authenticom’s access is appropriately restricted to those data fields reasonably necessary to
provide data integration services. Dkt. 172, at 22. And defendants have a right to know what
those fields are. Once Authenticom secures the dealer’s authorization and represents to
defendants that the authorized fields are reasonably necessary to provide data integration
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services, defendants will facilitate access. That said, defendants will not be able to unilaterally
second guess the dealer’s and Authenticom’s representation that access to specific data fields
is authorized and reasonably necessary. If defendants believe that Authenticom is accessing
data that is not reasonably needed for its data integration services, they will have to bring
that matter to the court’s attention.
The court rejects the notion suggested by Reynolds that the preliminary injunction
has to provide Authenticom with access to its DMS in a manner identical to Reynolds’s
previous “whitelisting” approach. Reynolds’s previous whitelisting for certain vendors and
dealers demonstrates that Reynolds was willing and able to allow some exceptions to its
customary means of allowing third-party access to its DMS. But the court is not persuaded
that it must pattern the injunction on Reynolds’s past whitelisting practices. The court
adopts a simpler approach in which Reynolds will issue one set of Authenticom-specific
credentials for each dealer, not one set for each dealer/vendor relationship. One set of
credentials will allow Authenticom to access the authorized data fields necessary to provide
data integration services for all the vendors that provide services to that dealer. Similarly, the
court will not adopt Reynolds’s “Data Tracking Certification” proposal. Reynolds does not
explain why it needs to track where Authenticom sends the dealer’s data.
The court is not at all persuaded by Reynolds’s conclusory statements about the effort
it would take to set up user credentials for Authenticom. The court will grant Authenticom’s
motion to strike, Dkt. 188, the July 21, 2017 declaration of Robert Schaefer, Dkt 181-1.
Authenticom is correct that the court did not invite further evidentiary submissions after
affording the parties ample opportunity to present evidence on all issues pertinent to
Authenticom’s motion for preliminary injunction. At the evidentiary hearing, Reynolds’s
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explanation of its security needs relied heavily on vague metaphors (such as “iron gates” and
“sandboxes”) rather than actual data and measurements. But even if the court were to
consider the latest Schaefer declaration, the court would not find it persuasive because it
contains Schaefer’s seat-of-the-pants estimates based on some unspecified “past experience.”
And it apparently assumes that each Authenticom credential would be set up manually for a
particular vendor/dealer pair. The court has rejected that approach, and Schaefer does not
appear to have considered whether, if called upon to process a larger number of credentials,
the process could be streamlined or automated with Authenticom’s cooperation. Moreover,
the court is limiting Authenticom to dealers that had authorized Authenticom to provide
data integration services as of May 1, 2017, so that restriction will ameliorate the burden on
Reynolds.
The court will also enjoin defendants from enforcing those provisions in its contracts
with dealers or vendors that restrict, or have the effect of restricting, any dealer or vendor
from obtaining data integration services from Authenticom. Enforcing these provisions would
effectively prevent Authenticom from providing data integration services to dealers as
contemplated under the injunction. For the same reason, the orders prevent defendants from
retaliating against any dealer or vendor as result of its decision to do business with
Authenticom.
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The court’s determination of other issues will be apparent from the two orders for
injunction issued herewith.
Entered July 28, 2017.
BY THE COURT:
/s/
________________________________________
JAMES D. PETERSON
District Judge
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