UnIntellectual Property (UnIP): Trade Secret for Concept of Combining Computer Program Functionality
The United States District Court for the Eastern District of New York denied a Plaintiff’s Motion for Reconsideration following the Court’s granting of Defendant’s Motion for Summary Judgment as it related to a claim for trade secret misappropriation.  The claimed trade secret was as follows:
“Scienton’s trade secrets consist not of a piece of computer source code, a discrete formula, or a single software program. Rather, it is far more sophisticated. Scienton created a complex methodology for enterprise security by combining numerous elements and programs into a powerful and unified security solution previously unknown to the industry. Scienton used certain of CA’s existing programs as some of the building blocks because of the relationship it has entered into with CA. In effect, Scienton conceived and disclosed ways to use CA’s programs in combination with its own and others that neither CA nor anyone else in the field had foreseen or understood.”
Not surprisingly, motion practice ensued regarding more adequate specificity in identification of the trade secret.  After being told by Plaintiff’s counsel that “[i]t’s not the source code that’s at issue. It’s the overall unique concept of combining all of these elements”, the Judge ordered that Defendant produce its computer program and the Plaintiff identify with specificity the portions of the program that misappropriated its alleged trade secrets.  Not liking the Plaintiff’s general responses, the Court ultimately granted summary judgment to Defendant.  It held that “Plaintiffs’ purported trade secret was the idea or concept of combining certain program functionalities-and not the source code or technical details regarding how those different programs would interact with one another-it was not entitled to trade secret protection.”  Further, the Court went on to state: “The most important consideration in determining whether a trade secret exists is whether the information was actually a secret, and the Court found that the secrecy of Plaintiffs’ “concept”-as opposed to the source code-would have necessarily been lost once the product was placed on the market.”
Having litigated computer trade secret cases, the procedural aspects of this case do not surprise me, namely the Defendant’s request for additional specificity.  I am, however, surprised that the Court allowed discovery to proceed and have the Plaintiff identify with specificity that which constituted its trade secrets as it existed in Defendant’s computer program.  Typically, the whole point of identifying the trade secret with specificity at the outset is so the Plaintiff can not later change that which it claims rights to once it sees what the Defendant has.  I am also surprised that Plaintiff chose not to rely upon the source code, which has time and time again been held to be sufficient identification, especially where supported by underlying functionality identification (although I am not saying I haven’t seen judges find differently, unfortunately).  The Court’s ruling that the “concept” could not be secret because it would lose its secrecy once disclosed seems logical, so long as it actually had been disclosed.  If not, would it not still be a secret?  Nonetheless, my reading is that this case could have come out very differently had the source code been identified as a trade secret, and not so clearly articulated by Plaintiff in response to the request for specific identification that source code was not the trade secret.

Scienton Technologies, Inc. v. Computer Associates Int’l Inc., 04-CV-2652 JS ETB, 2013 WL 1856653 (E.D.N.Y. May 1, 2013).


Leave a Reply

Your email address will not be published.