StubHub, Quinn Defeat Defend Trade Secrets Act Claim
U.S. District Judge Stephen Wilson finds that none of the computer code used in eight StubHub apps was a protectable trade secret of Calaborate Inc.
August 13, 2018 at 04:59 PM
3 minute read
Quinn Emanuel Urquhart & Sullivan has punched StubHub Inc.'s ticket out of a Defend Trade Secrets Act case.
U.S. District Judge Stephen Wilson of the Central District of California granted summary judgment to the online ticket marketplace last week, finding that it did not knowingly acquire, disclose or use trade secrets developed by Santa Monica app maker Calaborate Inc.
Wilson's order disposes of only one of several causes of action in Calendar Research v. Gray. But it hands a resounding win to StubHub and, by implication, three employees who left Calaborate in 2014 to work at the company.
“StubHub very much appreciates the careful attention the court gave to the issues and factual record when addressing the merits of plaintiff's trade secret claim,” said Quinn Emanuel partner David Grable, who led StubHub's trial team.
Calaborate's scheduling app, called Klutch, gained some media buzz a few years ago, but the business struggled. Co-founder and CEO Hunter Gray tried to sell the company to StubHub, which is a subsidiary of eBay Inc., but his investors nixed the deal. Gray then joined StubHub and brought an engineer and developer along with him.
The investors sold the remaining Calaborate assets to an LLC called Calendar Research, which has since been pursuing Gray, his colleagues and StubHub for allegedly building aspects of Klutch into new StubHub apps.
“StubHub did, in fact, hire Calaborate employees with the intent of having those employees surreptitiously bring Calaborate's trade secrets with them,” Calendar Research alleged in a 2017 complaint signed by Pierce Bainbridge Beck Price & Hecht partner John Pierce.
Calendar Research won an order from Wilson last year compelling the production of what turned out to be 7 million lines of source code covering eight different StubHub apps. But Calendar Research's expert witness ultimately was forced to concede that only one of them contained any code that matched the Klutch app. And all of that code had either been published previously on websites such as GitHub.com or made available to developers by Apple, Wilson concluded.
Calendar Research argued that the apps shared the same set of outward features—event suggestions on a map, finding friends, group chat—which were combined in a sufficiently novel way to merit trade secret protection. “But,” Wilson wrote, “outward-facing features that every user of an app can see and experience are not trade secrets.”
Plus, Wilson noted in a footnote, Calendar Research had promised Wilson that “the most important evidence in this case with respect to the trade secrets is going to be a comparison of the source code.”
Wilson ordered a status conference next month on claims that remain pending, including Computer Fraud and Abuse Act claims.
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