Adtile Technologies, Inc. v. Perion Netwtork Ltd. and Intercept Interactive, Inc. d/b/a Undertone

Civ. No. 15-1193-SLR
June 23, 2016
Federal Court
United States District Court for the District of Delaware

On December 22, 2015, Adtile Technologies, Inc. (“Plaintiff”) filed a complaint in the United States District Court for the District of Delaware against Intercept Interactive, Inc. d/b/a Undertone (“Defendant”). The complaint asserted multiple intellectual property claims, including that defendant misappropriated plaintiff’s trade secrets and confidential information.

Plaintiff develops technology and services for motion advertisements used predominantly on smartphones and tablets. Defendant is a marketing company. On August 18, 2014, the parties entered into a license agreement and non-disclosure agreement whereby Plaintiff would create motion advertisements and Defendant would sell them. Under the license agreement, Plaintiff would give Defendant access to software to create the advertisements and approve any advertisements Defendant wished to release using the software. The agreement also allowed Defendant to purchase, license, or develop similar, even competitive technology or services. Some of the software Plaintiffs used in their advertisements were publicly available on the internet.

From February to April 2015, Defendant accessed Plaintiff’s proprietary information about the motion advertisements, as per the agreement. However, Plaintiff did not, and still has not, provided Defendant with the licensed software for the advertisements. The parties terminated the license agreement on June 12, 2015. Plaintiff alleges that Defendant sought termination only after accessing Plaintiffs’ proprietary information regarding the technology. Defendant counters that it sought termination after Plaintiff refused to provide motion advertisements despite the license agreement.

According to Plaintiff, the day the parties terminated the license agreement, Defendant released a motion-activated advertisement for Discover. The advertisement included Plaintiff’s proprietary information, including layout, interface, and a "handphone" image that Plaintiff used. Plaintiff argues that Defendants created this advertisement and others using trade secrets that were outside the scope of the parties’ license agreement. As a result, Plaintiff filed this lawsuit, and also moved for a preliminary injunction to enjoin Defendant from releasing motion advertisements that include features using Plaintiff’s proprietary information.

On June 23, 2016, the Court denied Plaintiff’s motion for a preliminary injunction on the grounds that its claims, particularly misappropriation of trade secrets, are unlikely to succeed on the merits. The Court concluded that much of the information Plaintiff claimed was a “trade secret” is publicly accessible online after an advertisement is delivered to a web browser. As such, the Court could not determine which features of the advertisements were Plaintiff’s trade secrets, and found that the record lacked persuasive evidence that Defendant used any of Plaintiff’s trade secrets at all. Accordingly, the Court found Plaintiff unlikely to succeed on the merits and denied its motion for a preliminary injunction.

The Memorandum Order can be found here:

Adtile Technologies, INC.
Inc. d/b/a Undertone, Perion Network Ltd. and Intercept Interactive
Other state statute