Given the value of trade secrets in the global economy, businesses should always be on high alert for signs of misappropriation of trade secrets or other confidential information. COVID-19 has only increased the importance of doing so given employee mobility and a growing remote work force, which not surprisingly has spurred litigation by businesses attempting to protect trade secrets.
One recent example, CourtAlert.com (“CourtAlert”), a company offering case monitoring software for the legal industry, brought suit against a former employee and its competitor American LegalNet, Inc. (“ALN”) alleging trade secret misappropriation, unfair competition, and unjust enrichment among other claims. See CourtAlert.com, Inc. v. American LegalNet, Inc., No. 1:20-cv-07739 (S.D.N.Y.).
CourtAlert alleges its former account executive Robert Loeb resigned and began working as a regional sales manager at ALN, but in the weeks leading up to his resignation, disclosed confidential pricing information to ALN’s president and downloaded company documents on his computer, including confidential records identifying CourtAlert’s existing and potential client contacts. ALN’s president purportedly drafted Loeb’s resignation letter for him. Following Loeb’s departure, CourtAlert claims several of its clients were contacted by ALN, at least one switched to ALN’s services, and another required contract renegotiations to prevent their switching to ALN.
CourtAlert accuses ALN within weeks of launch of copying its product offerings, which were purportedly “highly confidential trade secrets closely guarded by CourtAlert and on which CourtAlert depends for its competitive advantage.”
It remains to be seen how this trade secrets battle will play out.