Overview
In an opinion Friday, Judge Cote concluded that a trade secret holder's accidental revelation of trade secret information to a competitor, in connection with due diligence for a possible transaction, could not constitute the competitor's acquisition of the information by "improper means," as required to prevail on a misappropriation claim. The plaintiff, TransPerfect, argued that the defendants used information learned during the diligence process to poach TransPerfect's clients.
While Judge Cote agreed that certain information TransPerfect had shared with the defendants constituted trade secrets, she found that TransPerfect had failed to adduce evidence that defendants acquired the information by improper means, as required under the Defend Trade Secrets Act:
TransPerfect has failed to show that the Defendants acquired trade secrets through improper means in violation of § 1839(5)(A) of the DTSA. TransPerfect notes that the definition of improper means in § 1839(6) of the DTSA is not exhaustive and argues that it should be read to include use of customer specific information when provided by accident. In support of this, TransPerfect highlights that the Custodian did not wish [the defendants] to have access to information about specific TransPerfect customers. The Agreement explicitly permitted [the defendants] and [their] representatives to access Evaluation Material. The Custodian’s error in uploading unredacted documents that included the trade secrets at issue here did not create a breach by the Defendants of [DTSA] § (5)(A).Judge Cote found it "noteworthy" that TransPerfect "never requested the return or destruction of" the alleged trade secret information that was accidentally disclosed to the defendants. Judge Cote granted summary judgment to the defendants on TransPerfect's remaining claims, ending the case in its entirety.
