UnIntellectual Property (UnIP): Trade Secret for Donor List; Trademark for Non-Profit’s Name

This lawsuit in the United States District Court for the Eastern District of New York involved a dispute between the Defendant Alzheimer’s Disease and Related Disorders Association (the “Association”), a voluntary health organization dedicated to fighting Alzheimer’s disease, and the Plaintiff Alzheimer’s Disease Resource Center, Inc. (the “Former Chapter”), the former Long Island chapter for the Association. After these two entities disaffiliated from each other in late 2012, the Former Chapter filed a demand for arbitration against the Association seeking an order allowing the Former Chapter to retain the funds it previously raised for the Association.  Thereafter, the Former Chapter commenced this lawsuit and asserted that the Association unfairly competed with the Former Chapter after the Former Chapter’s disaffiliation by sending out 15 mass mailings under the name “Alzheimer’s Association—Long Island Chapter.” On August 9, 2013, the Association moved pursuant to Federal Rule of Civil Procedure (“Fed. R. Civ.P.”) 12(b)(6) to dismiss the complaint for failure to state a claim and to strike the Former Chapter’s request for punitive damages.

The Court granted the Association’s motion in part and dismissed, among other causes of action, two causes of action relevant to this blog.  First, the Court dismissed the unfair competition claim holding that the Former Chapter enjoyed no trademark in the name “Alzheimer’s Association—Long Island Chapter .” Moreover, the Court held that the name of an organization’s executive and address does not neatly fit within the categories typically associated with a common law claim for unfair competition.

Second, the Court dismissed the trade secret misappropriation claim under New York law.  The Court stated that “even assuming the donor lists constitute a trade secret, the Court finds that the ADRC has failed to allege that the Association used the former chapter’s donor information “in breach of an agreement, confidential relationship or duty, or as a result of discovery by improper means.” As noted above, the ADRC cannot claim that the Association breached the SOR by using the donor information after the agreement was terminated. Nor can ADRC allege that the Association acquired information improperly because the former chapter concedes in the complaint that it freely provided this information to the Association. Finally, the ADRC alleges no confidential relationship or duty between ADRC and the Associations; rather, only a contractual relationship between the parties. For these reasons, the Court grants that part of the Association’s motion to dismiss the complaint to the extent it asserts a claim of misappropriation of trade secrets.”  Put simply, since the donor information was provided freely by the Association to the Former Chapter, it did not qualify for trade secret protection.

This case confirms that, despite the altruistic mission of non-profits, the law of trademarks and trade secrets apply the same nonetheless.  This acrimonious dispute clearly involved several causes of action, but I wonder whether each should have been included.

Alzheimer’s Disease Res. Ctr., Inc. v. Alzheimer’s Disease & Related Disorders Ass’n, Inc., 13-CV-3288 ADS ARL, 2013 WL 5960748 (E.D.N.Y. Nov. 8, 2013).


 

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