Turret Labs USA, Inc. v. CargoSprint, LLC

Turret Labs USA, Inc. v. CargoSprint, LLC

Opinion

SUMMARY ORDER

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED.

Plaintiff-Appellant Turret Labs USA, Inc. ("Turret Labs") appeals from the district court's March 22, 2021 judgment dismissing its second amended complaint ("SAC") for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Turret Labs USA, Inc. v. CargoSprint, LLC, No. 19-CV-6793, 2021 U.S. Dist. LEXIS 27838, 2021 WL 535217, at *1 (E.D.N.Y. Feb. 12, 2021). Turret Labs alleges that Defendants-Appellees CargoSprint, LLC and its chief executive officer, Joshua Wolf, improperly gained access to Turret Labs' software, Dock EnRoll, and reverse engineered it to create their own competing program.¹ Turret Labs claims misappropriation of a trade secret under the Defend Trade Secrets Act ("DTSA"), [*2]  18 U.S.C § 1836(b), and common-law misappropriation of a trade secret.² The district court dismissed these trade secret claims, ruling that Turret Labs failed as a matter of law to plead that Dock EnRoll was a "trade secret" under the DTSA and common law because the Plaintiff-Appellant did not adequately allege that it took reasonable measures to keep its information secret from third parties. Turret Labs, 2021 U.S. Dist. LEXIS 27838, 2021 WL 535217, at *4-6. We assume the parties' familiarity with the underlying facts, the procedural history of the case, and the issues on appeal.

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] We review de novo the district court's dismissal of Turret Labs' SAC pursuant to Rule 12(b)(6). See Pettaway v. Nat'l Recovery Sols., LLC, 955 F.3d 299, 304 (2d Cir. 2020). To survive a motion to dismiss brought under Rule 12(b)(6), a complaint "must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007)). We are "required to accept all well-pleaded factual allegations in the complaint as true" and "construe all reasonable inferences that can be drawn from the complaint in the light most favorable to the plaintiff," but we need not credit conclusory allegations. Lynch v. City of New York, 952 F.3d 67, 74-75 (2d Cir. 2020) (internal quotation marks and citations omitted).

] Under Section 1836 of the DTSA, the owner of a "trade secret that is misappropriated may bring a civil action . . . if the trade [*3]  secret is related to a product or service used in, or intended for use in, interstate or foreign commerce." § 1836(b)(1). For "financial, business, scientific, technical, economic, or engineering information" to constitute a "trade secret," two factors must be satisfied: (A) the owner must have "taken reasonable measures to keep such information secret"; and (B) the information must "derive[] independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information . . . ." 18 U.S.C. § 1839(3), (3)(A)-(B). Turret Labs argues that the district court erred in concluding that it failed adequately to allege that it took reasonable measures to protect Dock EnRoll's secrecy. For the following reasons, we disagree.

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