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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Keep Your Pot of Gold Hidden, Ohio Court Rules Information Posted Online Not Trade Secret

Posted in Trade Secrets

St. Patrick’s Day calls to mind the traditional Irish folklore of leprechauns and their hidden pots of gold. These hidden pots of gold illustrate the fundamental and straightforward rule for protecting prized trade secret information – keep it secret. A recent Ohio District Court, the Honorable Judge Michael R. Barrett presiding, denied a Plaintiff’s motion for Temporary Restraining Order because the Plaintiff had publicly posted his alleged trade secret information online. (Allure Jewelers, Inc. v. Ulu, No. 1:12cv91, 2012 WL 367719 (S.D. Ohio Feb. 3, 2012).

Plaintiff Allure Jewelers, Inc. sells gold jewelry online through eBay, Amazon, and its own website. Allure’s competitor, Defendants Mustafa Ulu and Goldia.com, similarly sells gold jewelry online through eBay, Amazon, and its own website. Since both sellers acquire their products from the same manufacturer and distributor, Quality Gold, they often sell the same products.

A dispute arose when Ulu and Goldia.com allegedly “scraped” or copied information about products from Allure’s website for their own advertisements and product listings on Goldia.com, eBay, and Amazon. Allure claimed that it spent a considerable amount of time and expense developing its trade secrets, i.e. the details and descriptions of its marketed products.

Ulu and Goldia.com also allegedly used a computer program to automatically list and sell corresponding products calculated at 98% of Allure’s advertised prices.  Allure claimed that Ulu and Goldia.com were unfairly pricing products to compete with Allure.

Allure brought claims against Ulu and Goldia.com for, inter alia, misappropriation of trade secrets under the Ohio Trade Secrets Act (“OTSA”) and unfair competition. Allure also moved for a Temporary Restraining Order to enjoin Ulu and Goldia.com from advertising or selling any products in which they had illegally acquired data from Allure.

The court denied Allure’s Motion because Allure demonstrated “little to no likelihood of success on the merits of its claims.” The court highlighted the fact that Allure’s Complaint failed to provide any allegation that Allure took any efforts to guard the secrecy of the information about its products: “Instead … [Allure] has published this information on the Internet.”

The court also found Allure’s unfair competition claim for Defendants’ alleged unfair pricing was preempted by the OTSA to the extent it was based upon the misappropriation of trade secrets claim. The court noted again that Allure’s Complaint failed to show any reasonable efforts of secrecy regarding pricing information, which was also publicly available on Allure’s website.

This case reiterates the essential secrecy element for maintaining information’s trade secret status. Simply put, knowingly and intentionally posting information on the Internet is contrary to preserving or maintaining secrecy. While this decision appears clear-cut and not groundbreaking, the case involves underlying gold and secrecy themes that provide a nice St. Patrick’s Day treat. Finally, if you happen to find a hidden pot of gold on St. Patrick’s Day, make sure you keep its location a secret and do not post its whereabouts on the Internet.