SAN FRANCISCO—A federal appeals court panel on Thursday grappled with a case that pits data miners' ability to tap the public portions of the internet for crunchable data with the intersects of large websites that seek to limit access to automated bots.

Former U.S. Solicitor General Donald Verrilli Jr., now a partner at Munger, Tolles & Olson, asked a three-judge panel at the U.S. Court of Appeals for the Ninth Circuit to toss out a lower court's injunction against his client LinkedIn Corp. A federal judge in San Francisco late last year issued a preliminary injunction barring LinkedIn from blocking data analytics company hiQ Labs from accessing the public profile information of LinkedIn users.

On Thursday, Verrilli said the ruling below was premised on LinkedIn's refusal to deal with hiQ and that merely refusing to engage in business with another party isn't actionable. “It's always been the law that companies get to choose the companies they do business with,” Verilli said.

To that, Ninth Circuit Judge Marsha Berzon, the most active member of Thursday's panel, asked when a party could “unchoose somebody” when the subject of the proposed deal was otherwise public information.

Berzon's question highlighted the tension at the heart of the case filed last summer after in-house counsel at LinkedIn sent hiQ a cease-and-desist letter and blocked the smaller company from its servers. HiQ to that point had used publicly available LinkedIn profile information to help employers analyze the skills of their talent pools and identify workers to target for retention. LinkedIn's letter warned hiQ that further effort to access its site would risk violating the Computer Fraud and Abuse Act, or CFAA, a federal anti-hacking law passed in 1986 that carries civil and criminal penalties.

HiQ filed a declaratory judgment suit in June seeking a ruling that its actions didn't violate the CFAA. HiQ's lawyers also brought claims that LinkedIn's actions violated California's Unfair Competition Law and amounted to a tortious interference with hiQ's contracts with employers who'd signed on to use its services.

In a 25-page decision in October, U.S. District Judge Edward Chen of the Northern District of California, who has been overseeing the case below, barred LinkedIn from placing any technical barriers to hiQ's access to the public portions of its site.

On Thursday, hiQ's lawyer, Farella Braun + Martel's C. Brandon Wisoff, pointed out to the Ninth Circuit panel that Chen had rejected LinkedIn's argument that it was acting to protect its users' privacy. He argued that LinkedIn had “either condoned or tolerated” hiQ's scraping activities for years and that LinkedIn employees had attended hiQ's conferences—even accepting an award at one. It wasn't until LinkedIn was purchased by Microsoft and sought to develop its own competing analytics products that it restricted hiQ's access, he argued.

Munger's Verrilli, meanwhile, argued that hiQ was clearly acting “without authorization” as defined by the CFAA. Verrilli said that hiQ was seeking to argue that once information has been made public, it's impossible to revoke authorization. But, he pointed out, his client had put up technical barriers to hiQ's data-scraping bots and sent the smaller company a cease-and-desist letter.

“Under any common-sense understanding of 'without authorization,' their conduct after those things happened was 'without authorization,'” he said.

Verrilli analogized LinkedIn's position to the owner of a bookstore. A bookstore, he said, could “still be open to the public” even if it barred someone who had previously shoplifted from entering.

“Their version is that they're not shoplifting,” Berzon responded. Berzon said that hiQ would argue that they were not stealing anything but just using the material for what it's on the web for: “Which is viewing,” she said.