CDM Media USA, Inc. v. Robert Simms

14 CV 9111
Federal Court
Illinois
Eastern Division, Northern District of Illinois

In CDM Media, the Defendant, former employee Robert Simms, was granted in part and denied in part a motion to dismiss the multiple claims filed in CDM’s complaint. CDM sued its former employee, Simms, for refusing to transfer control of a LinkedIn group allegedly owned by CDM and allegedly wrongfully retaining CDM’s confidential information after Simms left CDM and using it in competition with CDM. The court denied the motion with regard to one claim, but granted the motion regarding the remaining two claims.
CDM asserted Trade Secret protection under the Illinois Trade Secret Act over three separate aspects of CDM’s business. First, CDM asserts Trade Secret protection over a LinkedIn group called “the CIO Speaker Bureau,” a private online community of chief information officers and senior Information Technology executives interested in participating in or speaking at CDM events. Second, CDM asserts Trade Secret protection over the confidential information contained in this LinkedIn group. Lastly, CDM asserts Trade Secret protection over information from CDM’s Event Logistic Management database (“ELM”), which included CDM’s sensitive information including CDM vendor and customer lists, pricing and cost data regarding its products and services and profit or loss information. The court also denied Defendant’s motion to dismiss based on common law misappropriation.
The Northern District of Illinois denied the motion to dismiss, holding that there was a question of fact which a jury must decide regarding the Speaker Bureau membership list. The court denied the Defendant’s motion to dismiss regarding the confidential information contained in the LinkedIn group, holding that “[w]hile a private communication can contain a trade secret, it is not itself a trade secret. It is therefore insufficient for plaintiff to allege that the LinkedIn group’s private communications were trade secrets under the Illinois Act.” The court also denied the motion to dismiss regarding the ELM database, holding that the Plaintiff failed to allege that the defendant actually used the data from the ELM database after he left CDM, and therefore this claim was not viable.
Moving forward, cases that involve business development though social media will continue to mold the landscape of trade secret jurisprudence. Here, the Nothern District of Illinois court is willing to extend trade secret protections to cover social media business development and holds the defendant to a high bar to have the claims dismissed. The court is willing to consider the confidential nature of communications via social media and recognizes that a jury can find that business development through social media may have required a significant investment of time and money. It will be interesting to see in the future how other states interpret its own trade secret statutes as it applies to social media.

Mannish S., Shah
CDM Media USA, INC.
Robert Simms
Uniform Trade Secrets Act, Other state statute