Per many jurisdictions which have adopted the Uniform Commerce Secrets and techniques Act, Delaware’s model expressly preempts frequent legislation claims primarily based on the misappropriation of commerce secrets and techniques. See 6 Del. C. § 2007. In a recent opinion, Vice Chancellor Slights of the Court docket of Chancery dismissed a declare for unjust enrichment primarily based on defendant’s alleged misappropriation and use of plaintiff’s confidential and proprietary information as a result of Delaware’s commerce secret statute “occupies the filed” and preempts claims for frequent legislation unjust enrichment.
This latest case concerned a proprietary sensor community created by plaintiff, 250ok. This know-how helps e mail entrepreneurs keep away from spam traps designed to dam their e mail advertising and marketing efforts. 250ok entered right into a “Reseller Settlement” with defendant SparkPost to market and promote 250ok’s product with SparkPost’s personal services. Roughly 4 years later, SparkPost reverse engineered 250ok’s know-how and provided its personal aggressive product. Not surprisingly, 250ok sued SparkPost, alleging that it had misappropriated its proprietary data.
250ok asserted three claims: (I) breach of the Reseller Settlement; (II) misappropriation of commerce secrets and techniques below the Delaware Uniform Commerce Secrets and techniques Act (the “DUTSA”); and (III) unjust enrichment. SparkPost moved to dismiss Rely III—for unjust enrichment—as preempted by the DUTSA. The difficulty introduced by SparkPost’s movement was whether or not a standard legislation declare may very well be dismissed as preempted earlier than the court docket decided that an precise commerce secret exists. The court docket acknowledged that Delaware had “joined the ‘majority view’” that preemption below the DUTSA contains frequent legislation claims primarily based on misappropriation of enterprise data, even in circumstances wherein the declare doesn’t meet the statutory definition of commerce secret and wherein the time period “commerce secret” will not be explicitly talked about within the frequent legislation declare. Because the court docket defined, “[u]nder our settled legislation, what issues for preemption functions is whether or not the commerce secrets and techniques and unjust enrichment claims are primarily based on the ‘identical alleged wrongful conduct.’”
250ok’s claims all arose below the identical frequent nexus of information: SparkPost took 250ok’s confidential data to develop its personal aggressive product. Because the declare for unjust enrichment was primarily based on the identical information and wrongdoing, the court docket dismissed the declare for unjust enrichment with prejudice.
250ok fell into a standard lure—by choosing commerce secret safety, it deserted any doable frequent legislation claims (except for these primarily based on contract). Plaintiffs needs to be conscious and consciously make the choice to both pursue misappropriation claims below the UTSA, or pursue frequent claims that lack the statutory advantages but in addition don’t require proving the existence of a commerce secret.