Court Scraps Trade Secrets Claims Against Google
SAN FRANCISCO — A New York startup represented by Morrison & Foerster has hit a road block in a suit accusing Google of stealing its idea for a social networking site where friends can virtually gather to chat, watch videos and share other media.
Be In Inc. contends that Google copied the idea for "Hangouts", a central feature of its social media site Google+, after a 2011 meeting where Be In executives pitched their concept for CamUp — a "social entertainment consumption platform that allows friends to simultaneously watch, listen, chat and collaborate" in a virtual room.
U.S. District Judge Lucy Koh in San Jose dismissed the suit Wednesday with leave to amend some claims, finding Be In had not detailed how information shared at the pitch was then used to launch Hangouts two months later.
"Be In fails to allege that defendants used improper means to acquire, disclose, or use Be In's trade secrets," wrote Koh. "Without showing of improper means, the court finds that Be In's [complaint] fails to properly plead impropriety," an essential element of a misappropriation claim under the Uniform Trade Secrets Act.
The order dealt a fatal blow to Be In's breach of implied covenant claim but gave the startup until next month to amend its allegations for trade secrets misappropriation and breach of contract. The company has dropped its demands for copyright damages.
Be In first sued Google in June 2012. In an amended complaint filed in June, the company came out swinging:
"Google not only copied Be In's unique entertainment consumption platform — the only platform of its kind in existence at the time — defendants also implemented, and are continuing to implement on a step-by-step basis, each of the proprietary business strategies Be In disclosed to Google in confidence in May 2011," wrote MoFo partner Charles Barquist, who is representing Be In along with Wendy Ray and Kenneth Kuwayti.
Google is represented by Wilson Sonsini Goodrich & Rosati partners Colleen Bal and Charles Tait Graves and associate Riana Pfefferkorn.
According to Be In, it unveiled CamUp in March 2011 at Austin's South by Southwest conference, which was attended by representatives of Google. The two companies also crossed paths a month later in Cannes, France. Be In then reached out to Google to pitch CamUp.
In mid-May, after signing a non-disclosure agreement, execs from Be In met with Google UK employee Richard Robinson and discussed integrating CamUp with Google's YouTube. Be In's executives thought the meeting went well until Robinson and other Google employees stopped responding to their emails, according to the complaint.
The following month, Google launched Hangouts, which by August was also available through YouTube. In court papers, Be In claims that Google used the precise strategy discussed with Robinson.
In their motion to dismiss, Google's attorneys at Wilson Sonsini complained that plaintiffs' allegations have shifted four times, in part because the company has cycled through at least four different law firms. Attorneys at Clifford Chance and Davis Wright Tremaine withdrew as Be In's counsel citing non-payment. A team from Gibson, Dunn & Crutcher, led by partner Ashlie Beringer, stepped in. And they were most recently replaced in April by the team at MoFo.
"With each iteration of the complaint, plaintiff has whittled down the fact allegations for its key claims, until it is now a shell of unsupported conclusions which do not support viable claims," Google's counsel stated.
Koh's order also waded into near-uncharted legal waters related to website user agreements. Be In contended that Google employees visited CamUp's site and ripped off technology in violation of the terms of service, which prohibit copying information for commercial purposes.
In Internet lingo, Be In employed a so-called browsewrap agreement, under which a visitor to a website automatically agrees to its terms by simply continuing to use the site. A clickwrap agreement, by contrast, requires visitors to click on an "I agree" link to be bound by its terms.
Few courts have ruled on whether browsewraps are enforceable, wrote Koh, who found some guidance in a 2002 opinion from then-Second Circuit Judge Sonia Sotomayor in Specht v. Netscape.
As in Specht, Koh ruled that browsewraps, as commonly designed, do not establish consent to a contract.
Plaintiffs' complaint "provides no grounds, beyond the mere existence of a link, for the court to find that defendants were put on notice that mere use of the website would be interpreted as agreement to the terms of service," wrote Koh.