On September 13, 2011, Chief Judge Anthony W. Ishii of the District Court for the Eastern District of California refused to enjoin Plaintiff’s former business partner, the Trizetto Group, Inc. (“Trizetto”), from using concepts, designs, workflow processes and flows, and other insights developed during their partnership.
Plaintiff, Agency Solutions.com, LLC (“Agency Solutions”) and Trizetto had entered into an agreement to develop software to service the administration of insurance companies. However, the parties’ relationship soured and the agreement was terminated before the software was completed. Agency Solution’s product never entered the market. Agency Solutions then filed suit against Trizetto after learning that Trizetto was marketing a similar software product to its competitors. Plaintiff sought a preliminary injunction to prevent Trizetto from marketing the product, alleging that Trizetto misappropriated 26 “trade secrets” mainly pertaining to 1) conception and design; 2) workflow processes and flows; and 3) rating and underwriting.
Judge Ishii found that the allegedly misappropriated information, consisting of ideas and general experience from software development, did not qualify as “trade secrets.” Significantly, the Court explained that a trade secret did not consist of “conceptual datum,” such as ideas, concepts, or general knowledge, but “empirical datum,” such as “customer’s preferences, or the location of a mineral deposit.”
Plaintiff filed a notice of appeal of the Court’s refusal to grant a preliminary injunction, and Judge Ishii agreed to stay the proceeding pending the appeal’s resolution. However, during the pendency of the appeal, Plaintiff voluntarily dismissed the action on January 4, 2012. However, the Court denied Defendant’s motion for attorney’s fees.