Victory in $57 Million Trade Secret Misappropriation Case
Finkel Law Group successfully defended a privately held software company against claims of trade secret misappropriation and conversion of confidential business information in a lawsuit filed in the Court of Common Pleas in Philadelphia, Pennsylvania by a plaintiff seeking damages in excess of $57 million.
The plaintiff, Third Pillar Systems, a Burlingame software company, filed suit against De Lage Landen Operational Services LLC, a Philadelphia based financial services company, and Ivory Consulting Corporation, a Walnut Creek based software company, alleging the defendants conspired to misappropriate trade secrets and convert confidential information, and use the information to compete against Third Pillar in the global market for equipment leasing software.
In a case that resulted in a complete victory for its client, Finkel Law Group defended Ivory Consulting Corporation against claims of trade secret misappropriation and conversion of confidential information. The firm’s attorneys succeeded in getting all claims dismissed on the grounds the Pennsylvania trial court lacked personal jurisdiction over Ivory.
One significant factor in the court’s decision was the fact that Ivory does not operate a commercially interactive website that targets Pennsylvania residents. The company’s website allows customers to view and exchange information, but does not allow them to enter into contracts with Ivory or otherwise purchase goods or services from Ivory via the Internet. The website also does not purposefully direct any information, including sales or marketing information, to Pennsylvania residents. Where a website is not highly interactive, not targeted to the forum state, not central to the defendant’s business in the forum state, and has no connection to the cause of action, no personal jurisdiction can be found.
In Pennsylvania, as in many other states including California, a trial court can assert personal jurisdiction over a defendant on the basis of either general or specific jurisdiction. The court can assert general jurisdiction if the defendant maintains systematic and continuous contact with Pennsylvania in conducting its business. The court can assert specific jurisdiction if the defendant purposefully directed actions that are the basis of the claims in the lawsuit toward residents of Pennsylvania or otherwise purposefully availed itself of the privilege of conducting business within Pennsylvania thus invoking the benefits and protection of its laws.
After lengthy and complex motions practice before the trial court, the judge concluded the court could not assert general jurisdiction over Ivory because the company does not maintain any presence in Pennsylvania, does not direct any marketing efforts to Pennsylvania, maintains no real estate, bank accounts, mailing or address listings in the state, and is not registered with the Pennsylvania Secretary of State. The court concluded it could not assert specific jurisdiction over Ivory because none of the company’s employees who worked on the software development project worked in Pennsylvania, or received or accessed any of the plaintiff’s proprietary or confidential information in Pennsylvania or any other state.
The court found the plaintiff offered no persuasive evidence to rebut Ivory’s evidence of lack of personal jurisdiction, and dismissed all claims against the company. The plaintiff elected not to re-file the claims against Ivory in California state court.