Consistent with a lot of jurisdictions which have adopted the Uniform Trade Secrets and techniques Act, Delaware’s edition expressly preempts prevalent law statements primarily based on the misappropriation of trade tricks. See 6 Del. C. § 2007. In a new view, Vice Chancellor Slights of the Court of Chancery dismissed a assert for unjust enrichment dependent on defendant’s alleged misappropriation and use of plaintiff’s confidential and proprietary information mainly because Delaware’s trade key statute “occupies the filed” and preempts promises for typical regulation unjust enrichment.
This modern circumstance included a proprietary sensor network designed by plaintiff, 250ok. This engineering helps electronic mail marketers avoid spam traps developed to block their e-mail advertising and marketing efforts. 250ok entered into a “Reseller Agreement” with defendant SparkPost to market and promote 250ok’s product or service with SparkPost’s have products and solutions. About 4 years afterwards, SparkPost reverse engineered 250ok’s technology and made available its possess aggressive product or service. Not incredibly, 250alright sued SparkPost, alleging that it experienced misappropriated its proprietary information.
250alright asserted a few statements: (I) breach of the Reseller Agreement (II) misappropriation of trade techniques under the Delaware Uniform Trade Secrets and techniques Act (the “DUTSA”) and (III) unjust enrichment. SparkPost moved to dismiss Depend III—for unjust enrichment—as preempted by the DUTSA. The situation presented by SparkPost’s motion was no matter if a widespread regulation assert could be dismissed as preempted just before the court docket established that an actual trade key exists. The court regarded that Delaware experienced “joined the ‘majority view’” that preemption less than the DUTSA involves common regulation statements primarily based on misappropriation of business info, even in scenarios in which the claim does not satisfy the statutory definition of trade key and in which the phrase “trade secret” is not explicitly talked about in the typical legislation claim. As the court described, “[u]nder our settled law, what matters for preemption needs is irrespective of whether the trade tricks and unjust enrichment statements are centered on the ‘same alleged wrongful carry out.’”
250ok’s statements all arose beneath the same common nexus of facts: SparkPost took 250ok’s confidential facts to create its individual competitive products. As the declare for unjust enrichment was based on the similar information and wrongdoing, the court dismissed the declare for unjust enrichment with prejudice.
250alright fell into a prevalent trap—by opting for trade secret safety, it deserted any attainable common law statements (apart from people dependent on agreement). Plaintiffs ought to be knowledgeable and consciously make the determination to possibly pursue misappropriation statements under the UTSA, or go after frequent statements that absence the statutory positive aspects but also do not involve proving the existence of a trade solution.