A New Jersey district court judge recently declined to dismiss trade secret claims against the Weather Channel, finding that the plaintiff Events Media Network Inc. (“EMNI”) had alleged sufficient facts to state a claim of trade secret misappropriation under the Georgia Trade Secrets Act.
The parties first entered into a licensing agreement in the spring of 2008. EMNI agreed that it would provide the Weather Channel with access to a continually updated database of information, including schedules for events and attractions throughout the United States. This information was compiled based on publicly available information. The Weather Channel was given broad rights to use and distribute this information, however, “EMNI retained proprietary rights to the information and imposed confidentiality requirements on its use.” Following the expiration of the agreement in 2011, some of these confidentiality provisions survived, and EMNI filed suit, alleging that the Weather Channel had misappropriated the information, and used it for purposes beyond those permitted by the contract, such as building maps and creating weather products.
The Weather Channel filed a motion to dismiss the claims, alleging that EMNI was “attempting to expand a simple contract dispute into a tort action for conversion and misappropriation of trade secrets.” Defendants also argued that the fact that the information at issue was publicly available and could be displayed publicly under the terms of the licensing agreement demonstrated that it was not a trade secret. The court, however, found otherwise, finding the pleadings sufficiently alleged a violation of the Georgia Trade Secrets Act to survive a motion to dismiss. Here, the plaintiff allegedly earned a “competitive advantage from compiling publicly available information,” and thus, “those public domain elements may be considered to have been integrated into a finished product that is deserving of trade secret protection.” The court found that EMBI had sufficiently alleged that it maintained the confidentiality of a database of information it had licensed to the Weather Channel, and had placed clear limits on the Weather Channel’s dissemination of EMBI’s information.
Defendants in trade secret litigation should use caution in relying on the defense that information is not a trade secret because it is publicly available. While this defense may be applicable in many cases, where the information is compiled into a finished product which provides the plaintiff with a competitive advantage, the court may be wary of this defense (at least made on the pleadings).
In addition, the case raises the issue of whether the terms of a written contract can establish the elements of a trade secret. Here, the parties contractually agreed the information supplied by EMNI was proprietary. EMNI used that provision to argue the Weather Channel had conceded that the information was proprietary, and the court agreed. As John Marsh points out in his own blog post on the case, “[i]n written agreements negotiated between sophisticated commercial parties, courts will frequently defer to the language of the agreement.” This is consistent with the recent Convolve case in which the Federal Circuit found that the parties’ negotiated non-disclosure language served to override any governing state law related to trade secret misappropriation. We will continue to keep you posted with any material developments in this case.