In January 2011, a federal judge in San Jose, California ruled that Spring Design, Inc., an electronic reader (or eReader) development company, could proceed to trial over its claims that Barnes & Noble stole confidential information to create its Nook eReader device. In 2006, Spring Design developed a patent pending, dual-screen eReader design. Barnes and Noble expressed interest in Spring Design’s dual-screen design. In October 2009, after eight months of discussions between Spring Design and Barnes & Noble over a possible collaboration, Barnes & Noble independently launched the Nook, an Android-based, dual-screen eReader. Spring Design has sued the bookseller’s website division, Barnesandnoble.com, LLC, for misappropriation of trade secrets and unfair competition. Barnes & Noble has argued that Spring Design’s information does not qualify for trade secret protection because the information at issue was publicly available and because Spring Design failed to take reasonable steps to protect the secrecy of its design, among other defenses.
The case was settled on March 3, 2011. Pursuant to the settlement, Spring Design will grant Barnes & Noble a non-exclusive, royalty-free license to its patent portfolio. Other terms were not disclosed.