Am. Bio Medica Corp. v. Todd Bailey, & Premier Biotech, Inc.

341 F. Supp. 3d 142
CourtDistrict Court, N.D. New York
DecidedSeptember 27, 2018
Docket1:17-cv-302 (TJM/DJS)
StatusPublished
Cited by2 cases

This text of 341 F. Supp. 3d 142 (Am. Bio Medica Corp. v. Todd Bailey, & Premier Biotech, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Am. Bio Medica Corp. v. Todd Bailey, & Premier Biotech, Inc., 341 F. Supp. 3d 142 (N.D.N.Y. 2018).

Opinion

b. Misappropriation of Trade Secrets

Defendants claim that Counts 5 and 6 in the proposed Supplemental/Amended Complaint, which allege misappropriation of trade secrets, are also futile.

In New York, a plaintiff claiming misappropriation of a trade secret must show: "(1) it possessed a trade secret, and (2) defendant is using that trade secret in breach of an agreement, confidence, or duty, or as a result of discovery by improper means." Integrated Cash Mgmt. Serv., Inc. v. Dig. Transactions, Inc., 920 F.2d 171, 173 (2d Cir. 1990) ; see Norbrook Lab. Ltd. v. G.C. Hanford Mfg. Co., 297 F.Supp.2d 463, 482 (N.D.N.Y. 2003). A party claiming misappropriation must first demonstrate the existence of a trade secret. In New York, courts define a trade secret using the first Restatement of Torts Section 757. See North Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 44 (2d Cir. 1999). A trade secret is " 'any formula, pattern, device or compilation of information which is used in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not use it.' " Ruckelshaus v. Monsanto co., 467 U.S. 986, 1001, 104 S.Ct. 2862, 81 L.Ed.2d 815 (1984) (quoting RESTATEMENT OF TORTS § 757, Comment b). Courts use six factors in determining the existence of a trade secret:

(1) the extent to which the information is known outside of [the] business; (2) the extent to which it is known by employees and others involved in [the] business; (3) the extent of measures taken by [the business] to guard the secrecy of the information; (4) the value of the information to [the business] and [its]
*158competitors; (5) the amount of effort or money expended by [the business] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others.

Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 407, 604 N.Y.S.2d 912, 624 N.E.2d 1007 (1993) (quoting Restatement (First) of Torts § 757, cmt b (1939) ). " '[U]se' of a trade secret" can "include 'any exploitation of the trade secret that is likely to result in injury to the trade secret owner or enrichment to the defendant,' including 'marketing goods that embody the trade secret, employing the trade secret in manufacturing or production, relying on the trade secret to assist or accelerate research or development, or soliciting customers through the use of information that is a trade secret.' " Next Communications, Inc. v. Viber Media, Inc., No. 14-cv-8190, 2016 WL 1275659 at *4 (S.D.N.Y. Mar. 30, 2016) (quoting RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 40 cmt. c (Am. Law. Inst. 1995) ).

In New York, "a trade secret 'may consist of any formula, pattern, device or compilation of information [that] is used in one's business, and [that] gives [the owner] an opportunity to obtain an advantage over competitors who do not know or use it.' " Hudson Hotels Corp. v. Choice Hotels Intl'l, Inc., 995 F.2d 1173, 1176 (2d Cir. 1993) (quoting Restatement of Torts § 757 cmt. b (1939); Delta Filter Corp. v. Morin, 108 A.D. 2d 991, 485 N.Y.S.2d 143 (App. Div. 3d Dept 1985) ). An idea can constitute a trade secret, but "an action w ill not sound in tort for the misappropriation of an idea unless the idea was novel." Id. at 1178. This rule exists because " 'non-novel ideas are not protectible as property[;] they cannot be stolen.' " Id. at 1179 (quoting Murray v. National Broadcasting Co., 844 F.2d 988, 993 (2d Cir. 1988) ). "[A] trade secret is 'not simply information as to single or ephemeral events in the conduct of the business; rather, it is a process or device for continuous use in the operation of the business.' " Bear Stearns Funding, Inc. v. Interface Group-Nev., Inc., 361 F.Supp.2d 283, 305 (S.D.N.Y. 2005) (quoting Softel, Inc. v. Dragon Medical and Scientific Communications, Inc., 118 F.3d 955, 968 (2d Cir. 1997) ). " 'A trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation of which, in unique combination, affords a competitive advantage and is a protectable asset.' " Norbrook Labs. v. G.C. Hanford Mfg. Co., 297 F.Supp.2d 463, 483 (N.D.N.Y. 2003) (quoting Minnesota Mining & Mfg. Co. v. Pribyl, 259 F.3d 587, 595-96 (7th Cir. 2001). "The existence ... of a trade secret usually is treated as a question of fact." Chevron U.S.A., Inc. v. Roxen Service, Inc.,

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Bluebook (online)
341 F. Supp. 3d 142, Counsel Stack Legal Research, https://law.counselstack.com/opinion/am-bio-medica-corp-v-todd-bailey-premier-biotech-inc-nynd-2018.