Gene Codes Forensics, Inc. v. The City of New York
March 1, 2010
Southern District of New York
Gene Codes Forensics, Inc. (GCF), a Michigan-based company, has accused the New York Office of the Chief Medical Examiner (OCME) of improperly sharing proprietary information about its software with the FBI. The software, named Mass-Fatality Identification System (M-FISys) was used to help identify victims of the September 11, 2001 (9/11) attacks. According to GCF, OCME employees were extracting information from M-FISys software in order to help the FBI develop its own software. In response, the city claims that 1) it obtained a "perpetual, royalty-free" license to use the M-FISys software for noncommercial purposes; 2) it helped developed the software; and 3) had some ownership rights. The court is currently deciding the defendant's motion for summary judgment.
Gene Codes Forensics, INC.
The City of New York
Filings from this case
On March 1, 2010, Gene Codes Forensics Inc. (GCF) filed a complaint against the City of New York Office of Chief Medical Examiner (OCME) for breach of contract and misappropriation of trade secrets used to develop GCF software that facilitated the identification of the September 11, 2001 (9/11) victims at Ground Zero. GCF is a firm that develops and licenses forensic software capable of analyzing DNA for human identification purposes. The Southern District of New York (SDNY) has diversity jurisdiction over this action and the court is considering the defendant’s summary judgment motion.
As detailed in the GCF’s complaint, the deceased victims of the 9/11 attack were very difficult to identify because no technology was then available to perform such a complex forensic analysis. The complaint provides that OCME asked GCF to develop unique software that could both provide accurate identification of the victims and organize the DNA data of the victims and of the fragmented remains located at Ground Zero.
GCF suspended existing software research and went to work in developing a new system of DNA matching technology, the Mass-Fatality Identification System (M-FISys). GCF believes that M-FISys was highly innovative because, unlike the previous DNA identification system used by OCME, M-FISys could perform mass screening of data. GCF had also previously developed a DNA analysis program for OCME before M-FISys known as “Sequencher.”
On March 1, 2002, GCF and OCME entered into a formal agreement for a term of three years beginning on September 12, 2001. Under the agreement, GCF must develop DNA identification software with specifications as required by OCME. Section VI(G) of the agreement, “Trade Secrets and Proprietary Information,” also provides that both parties must maintain each other’s confidential information using the same stringent methods the parties would use to protect their own confidential information (which is defined as all information marked confidential). The section further permits the parties to disclose confidential information to their affiliates as long as the disclosing party ensures that the affiliates would maintain confidentiality.
According to GCF, all copies of the M-FISys software were labeled as confidential. Additionally, GCF contends that the M-FISys database schema was never published, disclosed or demonstrated for public use and it was never distributed in the public domain. Section VII(D) of the agreement also provides that all software developed by GCF is the exclusive intellectual property of GCF. The section only grants OCME a non-exclusive license to use the software for non-commercial purposes. Under the agreement, OCME could not license the M-FISys software to any other persons or agencies.
In 2009, OCME employees allegedly “participated in printing out the confidential database schema” and worked with FBI software engineers to extract GCF’s trade secrets to enhance the functionality of FBI software, CODIS 6.0. GCF filed suit on March 1, 2010 seeking relief under New York law for breach of contract, misappropriation of trade secrets, unfair competition and unjust enrichment. OCME denied GCF’s allegations and filed a counterclaim for breach of contract against GCF.
Under New York law a trade secret consists of “any formula, pattern, device or compilation of information that is used in one’s business, and that gives the owner an opportunity to obtain an advantage over competitors who do not know or use it.” To recover under the law of New York, GCF must demonstrate that: “(i) it possessed a trade secret and (ii) that the defendant used that trade secret in breach of an agreement, a confidential relationship, or duty, or as a result of discovery by improper means.” GCF alleges that its trade secrets are: 1) the internal algorithms and program interfaces of the Sequencher program and the program itself; 2) the unique DNA matching algorithms in M-FISys; 3) the unique technique of collapsing data within the M-FISys program; and 4) the database schema for organization of large amounts of data. GCF adds that it has taken the proper measures to protect these trade secrets with “the use of non-compete and confidentiality agreements, password protection to its servers and databases, and confidentiality agreements with third parties.” Additionally, New York law has recognized computer programs and computer printouts as trade secrets. (See Kaufman v. IBM Corp., 97 A.D.2d 925 and Integrated Cash Mgmt. Servs., Inc. v. Digital Transactions, Inc., 920 F.2d 171 ). GCF also argues that New York City used GCF’s trade secrets in breach of their agreement.
Defendant’s Summary Judgment Motion
The City of New York (the City) filed a motion for summary judgment on August 30, 2010 to dismiss GCF’s entire complaint. In the memorandum of law in support of the motion, the City admits that OCME employees printed spreadsheets of the M-FISys database, but such action was necessary so as to migrate data from M-FISys to CODIS 6.0. GCF, however, points out easier methods of migrating data, arguing that OCME’s reason is merely pretext. The City further contends that the M-FISys’ database schema was not marked as confidential and therefore it cannot constitute a trade secret.Additionally, even if such schema could constitute a trade secret, GCF could not show that OCME used this trade secret “in breach of an agreement, a confidential relationship, or duty, or as a result of discovery by improper means.” (See Integrated Cash Mgmt. Servs., Inc. v. Digital Transactions, Inc., 920 F.2d 171).