The Trade Secrets Blog

Following Trade Secrets Litigation

David vs. Goliath – Google Sued by Start-up for $1 Billion

According to this article on http://www.zdnet.com, tiny start-up LimitNone has sued Google in an Illinois circuit court for $1 billion over an email switching tool that LimitNone claims it created. The email switching tool was designed to migrate customers of Microsoft who rely on Outlook applications over to Google’s Gmail application. LimitNone’s switching tool, called “gMove,” was designed to move the email, contacts and calendar of Outlook users over to Gmail.

Key graphs:

LimitNone said it entered a confidentiality deal with Google to share trade secrets of its e-mail migration tool with Google engineers, sales people and key Google Apps customers.

Last December, the firm of less than five employees learned from Google that it planned to enter the market for LimitNone’s migration product itself because the business opportunity promised to be huge, according to court papers.

LimitNone alleges that Google had trouble building a similar tool–that is apparently the reason that Google entered into a confidentiality agreement with LimitNone. At this point it’s not clear how similar the tools are. According to the article: Google introduced a free, competing e-mail migration tool called “Google Email Uploader” earlier this year, which the lawsuit alleges is “almost identical” to gMove and that “both operate under a similar conceptual design.”

If true that Google had difficulty building a similar tool, and then after confidential meetings with LimitNone entered the market with a similar tool to LimitNone’s tool, it will be strong evidence of misappropriation. By virtue of the information exchanged pursuant to the confidentiality agreement, Google had access to information that would allow it to build its own version of LimitNone’s tool. However, Google could have independently created the tool, as well. The proof, as they say, will be in the pudding. If the tools are similar, then this lawsuit tilts decisively in favor of LimitNone.

Be that as it may, LimitNone will have to prove that they have reasonably protected the secrecy of their tool prior to disclosing it to Google. Much will depend on the existence and drafting of the confidentiality agreement.

The damages are staggering for what appears to be a small tool. However, LimitNone claims that the tool could help over 50 million subscribers migrate their information over to Gmail. It becomes pretty clear why Google wouldn’t want to give away licensing fees of that magnitude if it felt it could do it on its own. But, if Google could have done it on its own, why sign a confidentiality agreement with LimitNone?

LimitNone’s claim that there is a confidentiality deal in place will be the lynch pin of any successful lawsuit for LimitNone. A properly drafted confidentiality agreement tailored to the specific purpose for which the disclosure is needed will be your strongest protection against misappropriation of the type alleged by LimitNone. Ensure that your confidentiality agreements adequately protect you before disclosing any competitive information.

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June 30, 2008 - Posted by | confidentiality agreement, Intellectual Property, misappropriation, trade secret theft, Trade Secrets | , , , , , ,

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