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

The Romance of Trade Secrets: Competing Speed Dating Companies Engaged in Trade Secret Misappropriation Battle

Posted in Social Media, Trade Secrets

Dating comes with its own set of challenges, and apparently, these now include trade secrets!  This month, a speed dating service provider, Speed Date USA Inc. (“Speed Date”) filed a multi-million dollar lawsuit against Match.com (“Match”) in Pennsylvania federal court.

According to the Complaint, the parties had an agreement under which Speed Date would operate and manage speed dating events for Match for a period of two years.  Match would then allegedly pay Speed Date $25 for each ticket the company sold, as well as an additional fee per person for events with more than twenty participants.  Under the terms of the agreement, each party was required to give sixty days written notice in order to terminate the event.  Furthermore, for termination purposes, no “agreed upon events” could be” outstanding,” and scheduled events could only be canceled with five days notice.  However, Match allegedly terminated the agreement a year before its scheduled termination, and in the process, cancelled more than 80 scheduled speed dating events. 

Speed Date also alleges Match illegally misappropriated Speed Date’s trade secrets, which Match then used to run its own speed dating events.  According to the terms of the complaint, Match “agreed to keep in confidence and not to disclose to a third party the others’ confidential or proprietary information.”  Speed Date alleges it spent years creating the formulas and patterns for marketing and running speed dating events, and that the information had significant independent economic value, as it was not generally known.  Furthermore, Speed Date alleges the information and successful business model it developed were the very reason Match sought to partner with Speed Date.  Speed Date alleges that following the termination of the contract, Match then used this confidential information to compete with Speed Date, and to begin to run their own speed dating events.  Ultimately, as a result of the “early termination of the agreement” Speed Date alleges that they have suffered and may continue to suffer the loss of “clients, business, profits and revenue.”  Speed Date has requested damages totaling $1.65 million from the loss of the contract, as well as $4 million in punitive damages.

The case is still in its infancy, but whether Speed Date is successful in proving its trade secrets claim will likely turn on whether it can show that (1) it has instituted reasonable measures to maintain the secrecy of the information, (2) the information is economically valuable because of its secrecy, and (3) any evidence of misappropriation.  Here, the parties had a non-disclosure agreement, suggesting that there were at least some efforts made to maintain the secrecy of Speed Date’s confidential information.  However, the protectability of this information will likely turn on whether it is economically valuable because of its secrecy.  Here, it is not clear from the complaint what sort of confidential information Speed Date considers a trade secret, and whether its information that could be easily duplicated or required considerable effort to compile. While business plans, customer lists, and financial information are frequently alleged to be trade secrets, it is not clear that the formula for running a speed dating event would necessarily fall under the realm of trade secret protection.  Further, Speed Date will need to establish that the information was actually misappropriated. We will continue to keep you updated on this lovely case as it continues to progress.