StubHub has been handed a win in a long-running court battle after the owners of a tech startup sued the ticketing giant for allegedly using proprietary code following the hiring of its former employees.
U.S. District Judge Stephen V. Wilson granted partial summary judgement to StubHub for all but one claim in the case brought by Calendar Research, which was instigated back in 2015. The allegations included violations of Defend Trade Secrets Act (DTSA) and Computer Fraud and Abuse Act (CFAA).
The lawsuit, which was filed in California District Court, claimed StubHub had violated trade secrets after the co-founder of start-up Calaborate, Michael Hunter Gray, attempted to sell the firm, along with its mobile app Klutch, to StubHub.
The deal was never completed, but the secondary ticketing firm and its parent company at the time, eBay, brought in Gray and the two other defendants, Calaborate’s vice-president of engineering Lisa Dusseault and developer Lasha Efremidze, as independent contractors. Calaborate was later sold to Calendar.
Calandar’s suit claimed that the Klutch source code and its user experience/interface were used within StubHub’s own applications, which the court deemed as “not a protectable trade secret.”
The court said another allegation that Klutch’s “venue focus” and “integration of third-party apps” did not constitute trade secrets as claimed, stating “the concepts are so vaguely defined and there is so little evidence regarding either concept in the record,” leading them to be removed from the suit.
The ruling read: “The Court’s findings in its summary judgment order applied equally to all defendants, not just StubHub. No defendant can be held liable for their role in the ‘use’ of Klutch source code in StubHub applications when the Court determined as a matter of law that the Klutch code was not used in any StubHub application.”
Judge Wilson also said it is “undisputed that the individual defendants used some of the knowledge, learnings, and know-how they developed at Calaborate while working for StubHub,” however, that does not mean trade secrets were misappropriated.
He ruled that the complaint “failed to sufficiently identify any protectable trade secret under the DTSA” and “also failed to produce sufficient evidence to create a triable issue of fact on all but one of its CFAA claims.”
A jury trial on that last remaining issue of whether Efremidze archived his Calaborate email account without authorisation on April 13, 2015 is scheduled for July 7, 2020 with a pretrial conference set for June 29.