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A Texas appellate court reversed a $740 million trade secret theft and fraud judgment for real estate analytics company HouseCanary against rival Amrock, holding flawed jury instructions require a new trial.

In 2014, Title Source Insurance (TSI), a property valuation and settlement services company, contracted with HouseCanary, a real estate analytics company, to design an app that would allow TSI to perform appraisals more efficiently. The parties specifically agreed not to “decompile, disassemble, reverse translate, reverse engineer, or otherwise attempt to discover or directly access the source code of [the app] or any component or portion thereof.” HouseCanary’s work on the app involved multiple alleged trade secrets, including a complex data dictionary of property valuation attributes and a number of internal calculations and formulas used to evaluate property value. While HouseCanary built TSI’s app, TSI allegedly started developing its own products, utilizing HouseCanary’s protected data and formulas. Eventually the parties’ relationship deteriorated, and TSI accused HouseCanary of failing to deliver on the parties’ contract and sued for breach of contract and fraud. HouseCanary counterclaimed for breach of contract, misappropriation of trade secrets, and fraud. A jury found for HouseCanary and awarded actual and punitive damages.
Continue Reading Texas Court Orders New Trial After $740M Judgment

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The Southern District of New York denied defendant Lionbridge Technologies, Inc.’s (Lionbridge) motion to dismiss, holding that TransPerfect Global, Inc. (TransPerfect), sufficiently pleaded that information disclosed to potential bidders in an online auction constituted trade secrets and that Lionbridge misappropriated these trade secrets. In 2014, the Delaware Chancery Court ordered the dissolution through modified auction of TransPerfect, a translation, website localization, and litigation support company. The auction had three phases. At each phase the bidding pool narrowed, and the bidders received increasingly detailed and sensitive information about TransPerfect. HIG, an investment firm that had just submitted a bid to purchase Lionbridge (TransPerfect’s largest competitor), participated in the auction. According to TransPerfect’s complaint, HIG participated in all three phases, even though it never intended to purchase TransPerfect because TransPerfect would not agree to require its former owner to enter into a noncompetition agreement. During the final stages of the auction, HIG gained access to thousands of competitively sensitive documents, including detailed pricing and cost information. TransPerfect alleged that after the sale, HIG shared this confidential information with Lionbridge, which then used the information to undercut TransPerfect’s pricing.
Continue Reading Use of Information Outside Scope of Confidentiality Agreement as Misappropriation

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In 2013, Bloomberg and iSentium began a business relationship to consider incorporating iSentium’s sentiment-analysis app (iSENSE) into the Bloomberg platform. The app identified and analyzed market-related opinions posted to social media, anticipated changes in the price of publicly traded stocks, and made information available to traders. Id. The parties entered a non-disclosure agreement and an agreement titled “Developer Agreement for Bloomberg Application Portal” (the Development Agreement). Id. at *2. The Developer Agreement provided that “no action arising out of it may be brought by iSentium more than one year after the cause of action’s accrual.” Id. The iSENSE app appeared on Bloomberg for an unspecified amount of time, but in February 2016, iSentium requested that Bloomberg remove the app because it was no longer technologically compatible with the Bloomberg platform. Id. Shortly thereafter in July 2016, Bloomberg announced its own sentiment-analysis app. Id. Subsequently in October 2017, iSentium brought a claim for misappropriation of its trade secrets. Id.
Continue Reading Artificial Intelligence Company Fails to Sustain Trade Secret Claims