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How Ticket Software Lost Trade Secret Protection
Trade secret protection applies only to confidential information. In almost all circumstances, broadcasting to the world the intricate details and applications of a trade secret extinguishes whatever “property right” an entertainment industry holder once possessed. What is a sufficient method of contractually notifying a software user of the trade secret status of certain information is a closer question.
According to a recent case from the U.S. District Court for the Southern District of New York involving live-event ticket sales, a purported holder of a trade secret cannot omit a confidentiality provision from its terms of use and then claim trade secret status afterward. Broker Genius v. Zalta, 17-cv-2099. In Broker Genius, the district court held that the inconspicuous language of the licensor's terms of use, coupled with its routine and frequent disclosure of the entire architecture of the user interface of the software supposedly protectable as a trade secret, precluded the licensor's successful motion for injunctive relief for trade secret misappropriation.
Plaintiff Broker Genius created software called “AutoPricer v.3,” which assists in automating the pricing of live event tickets in secondary markets. The founder of Broker Genius claimed he started the company to create software that allowed brokers to build on their existing manual ticket implementation strategies. Broker Genius's innovation was purportedly to allow the implementation of these strategies “within a user interface in which the user could engage with the software dynamically and have the ability to change strategy very quickly.”
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