Recently Filed Cases

On August 18, 2011, Judge Walls of the District Court of the District of New Jersey held in Syncsort Incorporated v. Innovative Routines International, Inc. that a trade secret does not automatically lose its secret status if it has been posted online. His opinion, instead, offered practical guidance on how to determine whether a trade secret should remain secret after exposure on the Internet.

The case dates back to July 29, 2004, when Syncsort Incorporated (“Syncsort”) filed suit against its competitor in the data transformation market, Innovative Routines International, Inc. (“IRI”). As explained in the complaint, data transformation is the process of taking data in one form and changing it to another, such as by editing, reordering, or aggregating portions of the data. Syncsort’s and IRI’s data transformation programs (SyncSort UNIX and CoSORT, respectively) were incompatible.

Syncsort alleged that IRI misappropriated 1) the SyncSort UNIX command language, an “extensive symbolic system by which a user instructs the SyncSort UNIX program to perform specific data processing and transformation jobs” and 2) the SyncSort Unix Reference Guide that “defines commands, parameters and syntax and formal grammar definitions of the SyncSort UNIX command language.” In 2000, IRI developed software programs, SSU2SCL and RESCRIPT, which translated the SynSort UNIX command language for compatibility with CoSORT. Syncsort alleged that the translation programs were developed using pilfered scripts from the SyncSort UNIX command language and the Reference Guide, which IRI partly obtained from various websites.

IRI challenged that the scripts it found on the Internet had already lost their trade secret status and that Syncsort did not take precautions to maintain the secrecy of the scripts. Judge Walls, however, declared that “public posting of parts of the command language did not destroy the trade secret because the information contained in those postings were insufficient to develop the translator.” He considered the circumstances around each online posting and concluded that Syncsort did not lose its trade secrets. He wrote, “Widespread, anonymous publication of the information over the Internet may destroy its status as a trade secret.... But publication on the Internet may not destroy a secret if it is ‘sufficiently obscure or transient or otherwise limited so that it does not become generally known to the relevant people, i.e., potential competitors or other persons to whom the information would have some economic concern.’ The guiding ‘concern is whether the information has retained its value to the creator in spite of the publication.’”

Importantly, this decision marks a progressive benchmark in the acknowledgment in federal courts of the vast and pervasive nature of the internet. Moreover, Judge Walls also recognized the inevitable interplay with the internet and trade secret information, and how even if available on the internet, information may retain trade secret status if it cannot be replicated and is of some value.

On June 10, 2015, Lynx Systems Developers Inc. (“Lynx”) sued Zebra Enterprise Solutions Corp. (“Zebra”) in the United States District Court for the District of Massachusetts for a number of claims including misappropriation of trade secrets, breach of contract, and fraud. The dispute between the two parties stemmed from a joint venture the parties engaged in to build a system that would track NFL football players’ actions in real time using hardware installed in players’ shoulder pads. The business relationship between the parties disintegrated and the parties then developed competing tracking systems independently. After Zebra won a contract with the NFL, Lynx brought the initial suit in Massachusetts District Court.

Last week, in response to the complaint, Zebra filed a motion to dismiss the suit in Massachusetts District Court and on August 20, 2015, brought a new complaint against Lynx in Santa Clara County Superior Court in Santa Clara, California. Zebra’s complaint pleads for declaratory relief of no (1) trade secret misappropriation, (2) breach of contract, (3) interference with existing and advantageous business relationships, (4) fraud, (5) breach of fiduciary duty, (6) unfair competition or unfair or deceptive acts, (7) unjust enrichment, (8) conversion, and (9) intentional interference with prospective contractual and advantageous business and economic relationships. The California case is filed under docket number 115CV284620.

Plaintiff “John Doe,” a project manager at Google, sued the company in California State Court, claiming they illegally require employees to sign broad confidentiality agreements. Doe filed the complaint in the California Superior Court of San Francisco County on December 20, 2016.

The agreements essentially state that Google employees cannot disclose any company information that is not generally known with anyone, including other Google employees. According to the complaint, these confidentiality agreements are contrary to state law because they can prevent employees from discussing their wages or disclosing information to government agencies. Furthermore, the complaint alleges that Google enforces its confidentiality policy through an internal program called “Stopleaks” which essentially asks employees to spy on each other and report any disclosure of confidential information.

Google defends the confidentiality agreements as an attempt to protect sensitive company information and maintains it is committed to maintaining an open culture within the company.

The case is Doe vs. Google Inc. et al., Docket No. CGC16556034 (Cal. Super. Ct. Dec. 20, 2016). A copy of Doe’s complaint can be found here: http://tsi.brooklaw.edu/cases/doe-vs-google-inc-et-al/filings/employee-sues-google-overbroad-confidentiality-agreements