Sarkissian Mason, Inc. et al v. Enterprise Holdings, Inc.
ORDER & OPINION re: 39 MOTION for Summary Judgment. filed by Enterprise Holdings, Inc. For the reasons stated in this Order & Opinion, summary judgment is GRANTED as to all claims. The Clerk of Court is directed to close the case. (Signed by Judge Lorna G. Schofield on 7/15/2013) (tro)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
SARKISSIAN MASON, INC. et al,
ENTERPRISE HOLDINGS, INC.,
LORNA G. SCHOFIELD, District Judge:
11 Civ. 09472 (LGS)
ORDER & OPINION
Plaintiffs Sarkissian Mason, Inc. (“Sarkissian”) and AutoMatic, Inc. (“AutoMatic”) bring
this action against Defendant Enterprise Holdings, Inc (“Enterprise”), alleging that Plaintiffs
brought a proprietary business proposal to Enterprise, which Enterprise allegedly
misappropriated for its own use. Plaintiffs allege five claims against Defendant: breach of a
nondisclosure agreement, estoppel, unjust enrichment, misrepresentation and misappropriation of
a trade secret. Defendant Enterprise moves for summary judgment. For the reasons stated
below, the motion is GRANTED as to all counts, and the case is DISMISSED.
I. Background Facts
A. The Parties’ Relationship and Negotiations
Defendant Enterprise is a holding company that through its subsidiaries owns and
operates a fleet of rental vehicles under several brand names. Plaintiffs are Sarkissian, a
privately-owned digital marketing agency, and AutoMatic, its wholly owned subsidiary. In
October 2010, Sarkissian and Enterprise entered into a nondisclosure agreement (“NDA”) that
prohibited the public disclosure, use or copying of “Confidential Information” as defined in the
contract and shared between the parties, while they conducted business and explored new
Enterprise had an insight that they could “monetize” the results of a study (the “Polk
Study”) showing that consumers renting cars in the “insurance replacement market” are more
likely to buy the cars they are driving than they otherwise would be because they are in effect
test-driving the car. Consumers in the insurance replacement market are those whose insurance
paid for a rental car replacement vehicle because their car was damaged or “totaled” in an
accident, and therefore these consumers are very likely to be in the market for a car. In March
2011, Enterprise asked Plaintiffs, who were experts in digital marketing, to design a program that
would use the insight of the Polk Study to enhance the value of Enterprise’s insurance
replacement rental fleet to manufacturers. The parties began discussions to develop a concept
ultimately named the AutoMatic Buying Service.
Plaintiffs proposed to Enterprise, through a series of pitches embodied in five PowerPoint
presentations, a way that automobile renters could use their mobile devices in rental cars to
connect with automobile dealers, obtain quotes and ultimately buy automobiles. Plaintiffs made
the presentations in St. Louis, Missouri, and presented a concept that essentially consisted of the
1) Present an auto manufacturer with the marketing program, showing them that
certain areas are ripe for “conquest” – namely a geographic area where the
manufacturer could place its fleet with Enterprise in an effort to grow the
manufacturer’s market share through the insurance replacement market.
2) When the consumer arrives at the Enterprise rental company, tell them about the
opportunity to buy the type of car they are driving.
3) Place a QR code on the car’s key fob and/or elsewhere in the car that would lead
the consumer to a website built and operated by AutoMatic. The website would
contain marketing content “specifically designed to persuade them to purchase the
same model car they were driving.”
4) The consumer could then opt into the program and request a price quote for the
vehicle. These “leads” would be sent to dealers who could contact the consumer
to pursue a sale.
5) Consumers who opted in also would receive emails from AutoMatic providing
them with information such as current sales on the model they drove.
6) AutoMatic would make money by selling the leads to the dealers.
Plaintiffs maintain that they were “always willing to structure the mobile engagement concept to
permit renters to go directly” to the manufacturers’ websites, but never presented such an idea to
In July 2011, Enterprise and AutoMatic discussed the contours of a potential agreement,
exchanging a series of emails highlighting areas of consensus and disagreement. A major issue
was AutoMatic’s insistence that their program and website be used in all Enterprise rental cars to
the exclusion of any alternative. Enterprise wanted manufacturers to be able to choose:
we are all best served by supporting the paths the [manufacturers] wish to pursue. With so many
ideas competing for the [manufacturer’s] marketing resources, we may find some want the
simple engagement linked to existing Mobile [sic] sites while others will choose to pursue a deep
engagement that moves lower funnel consumers to submit for a sales lead.” In July 2011,
Enterprise told Mazda North American Operations (“Mazda”) that Enterprise was working with
Plaintiffs to develop the AutoMatic Buying Service. This was after Plaintiffs already had
discussed the AutoMatic Buying Service with Mazda.
In August 2011, Plaintiffs sent Enterprise their first draft of a “Strategic Relationship
Agreement” that would govern the development and roll out of the AutoMatic Buying Service.
The draft agreement was between Plaintiff AutoMatic and Enterprise, and recited as AutoMatic’s
chief obligation the development of technology using QR codes or other URL referencing
technology that would allow consumers to access online information about their rental cars. The
technology also would collect information about consumers and their experience with the rental
car. The agreement proposed that Enterprise would install the QR codes at the direction of
AutoMatic, and that Enterprise would provide AutoMatic with access to their manufacturing
partners. The agreement also contemplated an exclusivity provision that would prevent
Enterprise from creating any technology that was “similar to” or competed with the AutoMatic
Buying Service concept. That provision added that nothing in the exclusivity provision was
intended to prevent Enterprise from “instituting similar barcode scanning applications into its
Rental Services or Rental Vehicles for other purposes.”
The parties negotiated the contract, which they each understood was not binding without
being signed. Enterprise continued to object to AutoMatic’s exclusivity provision and broad
access to its entire fleet, but the objections did not concern Plaintiffs’ fundamental obligation to
develop technology. In September 2011, as the parties continued their negotiations, they
discussed the “need to sell [the AutoMatic Buying Service] together to [manufacturers] [rather
than] trying to go in after or separately which would be too clumsy,” and further discussed the
need to push manufacturers to the AutoMatic Buying Service, rather than simply letting the
manufacturer “send traffic to their [own] website from the QR code” as there would be “little
value that way and no reason for” AutoMatic to build the AutoMatic Buying Service in that
The disputes proved intractable. In October 2011, Enterprise told Plaintiffs that “to the
extent the [manufacturers] opt to have the renter QR code click go to their own website which
doesn’t offer something as unique, fun, different, and engaging” as AutoMatic could create,
Enterprise had to offer manufacturers that flexibility. The parties never finalized the agreement,
but continued to negotiate a letter of intent that would have allowed AutoMatic to pursue a pilot
program with individual manufacturers. The parties were still negotiating the letter of intent
even after Enterprise announced its own QR code-based service called “OnRamp,” which
offered manufacturers the alternative that AutoMatic had resisted – to have the renter click
through to the manufacturer’s website and advertising content rather than an enhanced website
developed by AutoMatic.
On November 8, 2011, Enterprise announced OnRamp in a press release. OnRamp
initially put QR codes in select Mazda6 vehicles. When a renter scans the QR code with their
phone, the phone opens a mobile-optimized website built by Enterprise called OnRamp
Concierge, which is specific to each make and model of car. OnRamp Concierge provides links
to local attractions, local deals, and the location of nearby gas stations. OnRamp Concierge also
provides a link to car manufacturers’ websites or videos if the manufacturer elects to provide
links to the material from the OnRamp Concierge. The OnRamp Concierge also links to more
information about the car such as model information, pre-existing Enterprise websites for car
rentals or purchases of used Enterprise vehicles, and links that send users to manufacturers’
“dealer-finder” pages, where a user can put in their zip code or use their smartphone’s GPS to
locate a local dealer.
The parties continued to discuss a potential pilot program for the AutoMatic Buying
Service after the release of OnRamp. In a November 15, 2011 email, Enterprise thanked
AutoMatic for its “patience and persistence with this potential partnership,” and attached a letter
of intent hoping that it would provide AutoMatic “with the confidence to proceed toward” a pilot
between AutoMatic, Enterprise, and Chrysler. That program never materialized as Chrysler
never agreed to be part of the AutoMatic pilot program.
B. Defendant’s Existing Knowledge of Advertising Techniques Suggested by Plaintiffs
Enterprise came to Plaintiffs with the results of the Polk study, and with the idea to use
digital marketing to connect prospective buyers who were Enterprise rental car customers with
automobile manufacturers. The Plaintiffs agree that all of the components of their proposal were
widely and publicly available.
Before March 2011, when discussions about AutoMatic Buying Service began,
Enterprise had used a number of advertising tools for the benefit of car manufacturers, including
“post-rental emails and direct mailings (including discounts on the purchase of cars), countertop
advertising, custom key tags, and in car brochures.” Enterprise already had discussed with
Chrysler the Polk study, using post-rental emails and newsletters to promote Chrysler cars to
customers, placing Chrysler cars in branches that serve insurance replacement customers, and
using QR codes for smartphone applications that would lead to web addresses with vehicle
details and call out new features of the car. 1
QR codes were a common advertising tool prior to 2011. The EPA had proposed placing
QR codes in cars for environmental information in 2010. Plaintiffs also admit that placing QR
codes in cars is not Plaintiffs’ confidential information. On January 27, 2011, Auto Data Direct
publicly placed on Youtube a video describing the usefulness of putting QR codes on cars to link
customers to information about a particular vehicle’s history and to “dealers [who] can guide
consumers directly to their website and provide additional details such as price, photos,
dealership hours and other information necessary to help the consumer make a purchase
decision.” In 2010, about twenty percent of consumers obtained quotes online through a quote
request tool on manufacturer websites, which the manufacturer would then sell as leads to local
A. Legal Standard
Summary judgment is appropriate only where the record before the court establishes that
there is no “genuine issue as to any material fact and that the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(c). The Court must construe the evidence in the light most
favorable to the non-moving party and must draw all reasonable inferences in the non-moving
party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); In re “Agent Orange”
Enterprise presented Chrysler with an image of a QR code using the description “bar codes” in the written text,
Plaintiffs argue that Defendant’s use of the term “bar code” in their presentation to Chrysler indicates that Defendant
did not pitch an idea with key-fob based QR codes to Chrysler. This is wrong. A QR code is a “two-dimensional
bar code that is widely used to cause a Web page to download into the user's smartphone when scanned with a
mobile tagging app.” PC Magazine Encyclopedia, available at http://www.pcmag.com/encyclopedia/term/61424/qrcode.
Prod. Liab. Litig., 517 F.3d 76, 87 (2d Cir. 2008). A motion for summary judgment should be
denied “if the evidence is such that a reasonable jury could return a verdict” in favor of the nonmoving party. NetJets Aviation, Inc. v. LHC Commc'ns, LLC, 537 F.3d 168, 178–79 (2d Cir.
2008). Summary judgment is warranted if a party “fails to make a showing sufficient to
establish the existence of an element essential to that party's case, and on which that party will
bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The non-moving party may not rely on “conclusory allegations or unsubstantiated
speculation.” Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir.1998). It cannot rely on mere
denials or unsupported alternative explanations of its conduct. See S.E.C. v. Grotto, No. 05 Civ.
5880, 2006 WL 3025878, at *7 (S.D.N.Y. Oct. 24, 2006). The non-moving party “must do more
than simply show that there is some metaphysical doubt as to the material facts.” Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
B. Choice of Law
The parties agree that Missouri law should govern all of the claims, and specifically that
the Missouri Uniform Trade Secrets Act (“MUTSA”) governs the misappropriation of trade
secret claim. (See Pls.’ Brief at 17.) The parties are correct. The NDA by its terms is governed
by Missouri law, which therefore also governs the claim alleging breach of the NDA. (Pls.’ Ctr.
Stmt. ¶ 24.) Under New York’s choice of law rules, Missouri law governs the remaining claims.
Fin. One Pub. Co. Ltd. v. Lehman Bros. Special Fin., Inc., 414 F.3d 325, 331 (2d Cir. 2005)
(New York’s choice-of-law rules govern in diversity action).
A choice of law analysis is necessary only if the applicable substantive laws of Missouri
(the domicile of Enterprise where negotiations took place) and New York (the forum state and
domicile of the Plaintiffs) conflict. See Matter of Allstate Ins. Co. and Stolarz, 81 N.Y.2d 219,
223 (1993). Here, the only claim with such a conflict is the misappropriation of a trade secret
claim. There is no conflict as to the promissory estoppel claim, as the elements are the same in
both states. Compare Clevenger v. Oliver Ins. Agency, Inc., 237 S.W.3d 588, 590 (Mo. 2007),
with Ripple's of Clearview, Inc. v. Le Havre Associates, 88 A.D.2d 120, 122, 452 N.Y.S.2d 447,
449 (1982). There is no conflict as to the unjust enrichment claim, as both states apply the same
principles. Compare Georgia Malone & Co., Inc. v. Rieder, 19 N.Y.3d 511 (2012), with Hargis
v. JLB Corp., 357 S.W.3d 574, 586 (Mo. 2011). Finally, there is no conflict as to the fraud
claim, as the elements of fraud are essentially the same in both states. Compare Mandarin
Trading Ltd. v. Wildenstein, 16 N.Y.3d 173, 178, 944 N.E.2d 1104, 1108 (2011), with Hess v.
Chase Manhattan Bank, USA, N.A., 220 S.W.3d 758, 765 (Mo. 2007).
Regarding the misappropriation of trade secret claim, New York applies a common law
test. Under New York law, a party must demonstrate: (1) that it possessed a trade secret, and (2)
that the defendants used that trade secret in breach of an agreement, confidential relationship or
duty, or as a result of discovery by improper means. N. Atl. Instruments, Inc. v. Haber, 188 F.3d
38, 43-44 (2d Cir. 1999). Missouri on the other hand applies the Uniform Trade Secrets Act.
Mo. Rev. Stat. §§ 417.450, et seq. (“MUTSA”). To establish a violation of MUTSA, plaintiffs
must demonstrate (1) the existence of a protectable trade secret, (2) misappropriation of those
trade secrets by defendants, and (3) damages. MUTSA at § 453(2). MUTSA, importantly, also
preempts any non-contract based remedy, while New York law does not. Compare Section
II.C.i, infra, with Ashland Mgmt. Inc. v. Janien, 82 N.Y.2d 395, 401 (1993). Finally, in Missouri
the existence of a trade secret is a question of law, whereas in New York it is a question of fact.
Compare Lyn–Flex W., Inc. v. Dieckhaus, 24 S.W.3d 693, 698 (Mo. Ct. App. 1999), with Janien,
82 N.Y.2d at 401.
In tort actions, if there is a conflict of laws, New York courts apply an “interest analysis,”
under which the law of the jurisdiction having the greatest interest in the litigation is applied.
AroChem Int'l, Inc. v. Buirkle, 968 F.2d 266, 270 (2d Cir. 1992); see also Babcock v. Jackson, 12
N.Y.2d 473, 481 (1963). In trade secret cases the Second Circuit and its district courts have
often used the locus of the misappropriation to determine the locus of the tort and the state with
the greatest interest. Softel, Inc. v. Dragon Med. & Scientific Commc'ns, Inc., 118 F.3d 955, 968
(2d Cir. 1997) (applying New York law because “the misappropriation, if any, apparently took
place in New York”); see also Fedders Corp. v. Haier Am. Trading, LLC, No. 00 Civ. 5583,
2002 WL 519733 (S.D.N.Y. Apr. 4, 2002) (applying Illinois law where actual misappropriation
of trade secret took place); see also Torah Soft Ltd. v. Drosnin, 224 F. Supp. 2d 704, 720
(S.D.N.Y. 2002) (applying Israeli law to “unfair competition” claims where all “acts complained
of” took place in Israel).
Missouri has the greatest interest in this case. Defendant has its principle place of
business and its state of incorporation in Missouri, whereas Plaintiffs are Michigan and Delaware
corporations with their principal place of business in New York. All sales pitches took place in
Missouri. The alleged misappropriation with the roll out of OnRamp occurred in Missouri.
Also, the Missouri choice of law clause in the NDA, while not applicable to non-contractual
claims, indicates that the parties reasonably expected Missouri law to govern the question of
confidentiality between them. See Fedders Corp., 2002 WL 519733 at *3-4 (using the location
where a confidentiality agreement was signed as a factor in the interest analysis); see also
Cooney v. Osgood Mach., Inc., 81 N.Y.2d 66, 77 (1993) (“Our decision to apply Missouri law
rests as well on another factor that should, at times, play a role in choice of law: the protection of
reasonable expectations.”) The only interest New York has in this case is that Plaintiffs’ places
of business are here. We therefore will apply MUTSA instead of the New York common law.
1. Misappropriation of Trade Secret
In order to analyze the Plaintiffs’ trade secret claim, reading the facts in the light most
favorable to the Plaintiffs, the Court utilizes the Plaintiffs’ proposal as stated in their five
PowerPoint presentations and Rule 56.1 Counterstatement, as detailed above. That concept was
a “buying service using ‘mobile engagement’ technology to connect renters and vehicle
manufacturers … for the purpose of generating new car sales for [manufacturers].” Plaintiffs
proposed placing QR codes in Enterprise vehicles that renters could scan using their
smartphones. The scans would lead renters to a website with engaging content specifically
designed to persuade them to purchase the same model they were driving. The renters could
then elect to link to local dealers who would provide price quotes. AutoMatic would make
money by selling the leads to dealers.
Plaintiffs argue for a broader definition of their alleged trade secret. They argue that the
concept of using a mobile device to connect renters to information about the car they drive is the
critical concept, and that the details – the use of QR codes versus some other mobile technology;
the role, functionality, content, owner or developer of the landing website – are unimportant. If
Plaintiffs’ seek to define the concept that broadly, the Court cannot find a trade secret, because it
is insufficiently defined. Section I.A, supra. General categories of information are insufficiently
specific to qualify as trade secrets. See Mo-Kan Cent. Recovery Co. v. Hedenkamp, 671 S.W.2d
396, 400 (Mo. Ct. App. 1984) (“The mere existence of some non-defined bidding structure does
not establish a trade secret. [Plaintiff] provided the court with no evidence that its bidding
structure…represented some novel or complicated approach…which could not easily be
duplicated by others.”); see also Luigino's, Inc. v. Peterson, 317 F.3d 909, 912 (8th Cir. 2003);
Porous Media Corp. v. Midland Brake Inc., 187 F.R.D. 598, 600 (D. Minn. 1999) (“Failure to
identify the trade secrets with sufficient specificity renders the Court powerless to enforce any
trade secret claim.”). Further, the broad concept of connecting car consumers to information
about a car through their smartphone – QR code or otherwise – was already in the public domain.
a. The Existence of a Trade Secret
“The existence of a trade secret is a conclusion of law based on the applicable facts.”
Am. Family Mut. Ins. Co., 169 S.W.3d at 910. However, if the facts the Court uses to determine
whether information constitutes a trade secret are disputed, the finder of fact must first resolve
those disputes. Cerner, 667 F. Supp. 2d at 1077; see also Lyn–Flex W., Inc. v. Dieckhaus, 24
S.W.3d 693, 698 (Mo. Ct. App. 1999). On this motion for summary judgment, all questions of
fact are read in the light most favorable to Plaintiffs, but under Missouri law, the existence of a
trade secret based on those facts is a conclusion of law.
Under MUTSA, a trade secret is a “formula, pattern, compilation, program” or other
business idea that: “(a) Derives independent economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by other persons who
can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.” MUTSA at § 450. Courts have
used the following factors to determine whether information constitutes a trade secret under
MUTSA: “(1) the extent to which the information is known outside of [the Plaintiff entities]; (2)
the extent to which it is known by employees and others [within the Plaintiff entities] -- a factor
not relevant here because of the small size of the Plaintiffs; (3) the extent of measures taken by
[Plaintiffs] to guard the secrecy of the information; (4) the value of the information to [Plaintiffs]
and [their] competitors; (5) the amount of effort or money expended by [Plaintiffs] in developing
the information; (6) the ease or difficulty with which the information could be properly acquired
or duplicated by others.” Secure Energy, Inc. v. Coal Synthetics, LLC, 708 F. Supp. 2d 923, 92627 (E.D. Mo. 2010) (citing Cerner Corp. v. Visicu, Inc., 667 F. Supp. 2d 1062, 1076-77 (W.D.
Mo. 2009). These factors are not necessary or sufficient to find the existence of a trade secret,
but rather are facts the Missouri courts have used to determine whether information satisfies the
statutory definition of a trade secret. Cerner, 667 F. Supp. 2d at 1077.
i. Whether the Information is Secret
The AutoMatic Buying System was not sufficiently secret to merit legal protection as a
trade secret. All of the component parts of the idea were publicly known and in use before
Plaintiffs presented their proposal to Enterprise. Even though the combination of ideas into a
single program may have been novel, the proposal never progressed beyond a marketing
concept, which was easily replicated. Plaintiffs never developed the technology or logistics to
implement the program, which at that later stage might have qualified as a trade secret.
Plaintiffs concede that the components of AutoMatic Buying Service were publically
known. Plaintiffs’ expert describes AutoMatic Buying Service as based on “[data that was]
generally available to Enterprise and the industry,” a “widely available data set,” and “data,
knowledge, and know-how that was available to a multitude of other parties, including
Enterprise.” Information that was widely known outside the Plaintiff entities included: the
information in the Polk Study, the placement of a manufacturer’s vehicles in a conquest fleet, the
value of placing manufacturer fleets in target insurance replacement markets, the use of QR
codes in cars to link to information about the car, enabling consumers to use technology to obtain
price quotes from dealers, the sale of leads to those dealers, and post-rental marketing.
Defendant presented many of these concepts to Chrysler before Defendant and Plaintiffs
discussed the AutoMatic Buying Service.
Plaintiffs argue that their proposal as a whole is a trade secret, because the ideas taken
together are “original, novel, and optimal” and that Enterprise never “understood ‘the totality of
the idea’ before it was presented” by Plaintiffs. Plaintiffs rely heavily on their marketing
expert’s opinion to support this argument. Their expert, however, mistakes repetition for
support. He never states a basis for the opinion, nor any research he undertook to determine
whether programs like the AutoMatic Buying System had been implemented or contemplated by
Nevertheless, accepting for purposes of this motion that Plaintiffs’ marketing proposal
was novel, it is not a trade secret because it was easily duplicated. As detailed above, the inputs
of the AutoMatic Buying Service were publicly known. “In some cases, a novel or unique
combination of elements may constitute a trade secret.” However, “mere variations on widely
used [information] cannot be trade secrets.” Id. (alteration in original). Cerner Corp. v. Visicu,
Inc., 667 F. Supp. 2d 1062, 1077 (W.D. Mo. 2009) (citing Strategic Directions Group, Inc. v.
Bristol–Myers Squibb Co., 293 F.3d 1062, 1065 (8th Cir.2002)). In some cases, where the public
information is widely available – such as the names of individuals on a customer list – courts
have found trade secrets because the information, despite being publicly known, was not easy to
compile or duplicate given the amount of effort required to cull or gather the information. See
e.g. Fireworks Spectacular, Inc. v. Premier Pyrotechnics, Inc., 86 F. Supp. 2d 1102, 1106 (D.
In other cases, courts have distinguished between publically available advertising ideas,
and the private technology developed to execute the ideas. In Penalty Kick Mgmt. Ltd. v. Coca
Cola Co., 318 F.3d 1284 (11th Cir. 2003), the Eleventh Circuit addressed an analogous situation
of an advertising company taking publicly known concepts and claiming a trade secret. The
Eleventh Circuit held that, while the technical printing techniques used to create special bottle
labels were trade secrets, the conceptual ideas relating to the placement of a decodable message
on the inside of a soda bottle were not trade secrets as they existed in the public domain. Id. at
1291; see also Gen. Patent Corp. v. Wi-Lan Inc., No. 11 Civ. 6585, 2011 WL 5865194
(S.D.N.Y. Nov. 22, 2011) (rejecting a claim for trade secret despite plaintiff’s claims that
eighteen points including marketing plans and business plans “taken together” constitute a novel
concept); In re Parmalat Sec. Litig., 258 F.R.D. 236, 255 (S.D.N.Y.2009) (holding that
marketing strategies are not trade secrets where the plaintiff “failed to explain what particular
information about the particular ... marketing techniques are not already public [and] are not
already commonly known in the industry”).
AutoMatic Buying Service is a marketing plan like those in these cases, comprised of a
collection of marketing ideas in the public domain pieced together in a novel, but easily
ii. Whether the Information Has Value From Not Being Known or Readily
Under Missouri law, a secret must have value in order to be a trade secret, and it must
derive value from not being known or readily ascertainable. MUTSA at § 450; see also AvidAir
Helicopter Supply, Inc. v. Rolls-Royce Corp., 663 F.3d 966, 972 (8th Cir. 2011) cert. denied, 133
S. Ct. 138 (2012). Sarkissian and AutoMatic expended considerable effort in pitching and
creating their proposal, which suggests it had value. However, no manufacturer agreed to
participate in a pilot program of the AutoMatic Buying Service (which included the fully-fleshed
out system with a third-party website), despite efforts to get Chrysler to do so. No matter the
hypothetical revenue a marketing program might generate, an idea has commercial value only if
there is a market for it and a willingness of its target audience to implement it.
Plaintiffs’ marketing expert suggests various damages theories, based on lost revenues if
the marketing concept had been executed. This also implies some value to Plaintiffs’ proposal,
although those damages also depend on the development of technology, adoption and
implementation which never occurred. Whatever value was to be had in the AutoMatic Buying
Service, it was not in the secrecy of the idea, but in the execution and the creation of a digital
platform that would have generated more leads and more good will than Defendant was able to
obtain through its own combination of publicly available concepts. The draft agreement that the
parties never executed contemplated that the Plaintiffs’ development of technology was at the
heart of the parties’ bargain. Plaintiffs argue that “[a]n analogy is the algorithms used by
Google; highly unique, totally original, massively valuable.” This might be plausible if Plaintiffs
actually had developed the technology to implement AutoMatic Buying Service, but they did
not. Google’s search algorithms most certainly are a trade secret and have value, but the idea of
a search engine is not. This is why Plaintiffs’ draft agreement centered around technological
development for Enterprise, because that is where the value and difficulty lay.
Plaintiffs’ AutoMatic Buying System does not meet the statutory definition of a trade
secret because it does not derive “independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means by other persons
who can obtain economic value from its disclosure or use.” MUTSA at § 450. The components
of the system are widely known, and the concept as a whole is of limited value because it is
readily ascertainable. Thus, AutoMatic Buying System as an unexecuted concept is not a trade
secret as a matter of law. Because of this finding we do not address the additional statutory
requirement that a trade secret must be subject to reasonable efforts to maintain its secrecy,
which was satisfied for the purposes of this motion. MUTSA at § 450.
b. Misappropriation of the Trade Secret
Plaintiff claims that Enterprise misappropriated its idea for the AutoMatic Buying System
with the roll out of OnRamp. Even if this Court were to find that there was a triable issue of fact
regarding the existence of a trade secret, Plaintiffs cannot prove that the AutoMatic Buying
Service was misappropriated by Defendant. Reliant Care Mgmt., Co., Inc. v. Health Sys., Inc.,
No. 10 Civ. 38, 2011 WL 4342619 (E.D. Mo. Sept. 15, 2011) (“[T]o show misappropriation,
plaintiff must present evidence that defendant used a trade secret…without the consent of
plaintiff and that defendants used improper means to acquire the trade secret.”) (internal
quotations omitted). The undisputed facts are that the AutoMatic Buying System – that is, the
detailed program that Plaintiffs proposed rather than the broad concept of any mobile
engagement between car renters and manufacturers – was not misappropriated. The Enterprise
OnRamp program was different in at least two important respects from Plaintiffs’ proposal, and
all of the elements of both programs were in the public domain.
One important difference is that Plaintiffs’ proposal was that renters would connect to a
web page with “engaging content specifically designed” to convince consumers to purchase
vehicles. The websites linked to the OnRamp concierge page is [free of content] and provides
links to websites of manufacturers, [dealers,] Enterprise and places of interest, unrelated to the
car itself. The Plaintiffs’ proposed landing page was itself a destination, while the Defendants’
landing page was a stopping point to obtain directions to the intended terminus.
A second critical difference is that Plaintiffs’ AutoMatic Buying System, by its terms was
a “buying system.” It was consistently pitched as targeted towards lower and mid “funnel”
consumers – that is, those who are seeking out a car in more than a casual way. The Enterprise
OnRamp program was not a buying system. OnRamp was the “simple engagement” option that
Enterprise insisted on retaining for manufacturers, with a direct link to the manufacturer’s
website and advertising content, while the AutoMatic Buying Service was to be the “deeper
engagement” option, with a more elaborate website designed to create sales leads for local
dealers. The AutoMatic Buying System required customers to opt-in to the system, whereas
OnRamp is not an opt-in system.
As AutoMatic told Enterprise, “For AutoMatic Buying Service, we need to have the
customers go to our platform otherwise we will not be able to provide … content that the
[manufacturers] want or provide leads to their dealers that they would be expecting from our
solution.” Enterprise responded that “any direction the [manufactuer] wishes us to pursue, we
must be able to support. If they have creative [ideas] beyond existing [web] pages … we will
push to connect them with AutoMatic.”
OnRamp does not constitute misappropriation. OnRamp and AutoMatic Buying System
are different concepts created from a similar collection of publically available ideas concerning
the use of mobile devices to connect consumers to information about products they are using or
2. Breach of the Non-Disclosure Agreement
Under Count I, Plaintiffs allege that Enterprise breached the NDA signed between the
parties. The Court interprets the NDA pursuant to Missouri law looking to the plain meaning of
the contract. See Foam Supplies, Inc. v. The Dow Chem. Co., No. 05 Civ. 1772, 2007 WL
4210354 (E.D. Mo. Nov. 27, 2007). The parties, before carving out exceptions, defined
Confidential Information between them as
“information about … business information, including business plans, contracts
and contractual relationships, customer names and related information,
intellectual property, including technical drawings, know-how, formulas,
processes, ideas, inventions (whether patentable or not), products, product
development plans, services, forecasts, strategies and information.”
AutoMatic Buying Service, while not a trade secret, is within this description. The parties then
excluded from the definition of Confidential Information any information that: 1) “is or becomes
part of the public domain through no direct or indirect act…of the Receiving Party;” 2) “was in
the lawful possession of the Receiving Party prior to its disclosure to the Receiving Party by the
Disclosing Party;” 3) was “lawfully and properly … disclosed to the Receiving Party by a third
party without restriction on disclosure;” and/or 4) “is developed independently by the Receiving
Under the plain meaning of the contract, Confidential Information excludes information
Enterprise disclosed in connection with OnRamp and in discussions with Mazda. The Court
relies largely on its analysis in the preceding section in holding that exceptions Two and Four
above apply. OnRamp and Enterprise’s discussions with Mazda used only information lawfully
in the possession of Enterprise or publicly available prior to the disclosure of the AutoMatic
Buying System to Enterprise. AutoMatic Buying Service was Plaintiffs’ proprietary know-how,
but the inputs into OnRamp were not novel, and they were not the same as the AutoMatic
Buying Service. While Plaintiffs’ expert concludes that Enterprise violated the NDA, that
opinion is a conclusion of law not properly within the scope of expert opinion. United States v.
Bilzerian, 926 F.2d 1285, 1294 (2d Cir. 1991) (“These cases establish that although an expert
may opine on an issue of fact within the jury's province, he may not give testimony stating
ultimate legal conclusions based on those facts.”). Additionally, as to its discussions with
Mazda, Enterprise did not disclose Plaintiffs’ confidential information because Plaintiffs
previously had disclosed the AutoMatic Buying Service to Mazda.
3. Common Law Torts
The remaining three counts allege tort claims of estoppel, unjust enrichment and fraud
arising out of the same facts as the trademark claim. Each claim is preempted under MUTSA.
MUTSA “displace[s] conflicting tort, restitutionary, and other laws of this state providing civil
remedies for misappropriation of a trade secret.” MUTSA § 417.463(1). Thus, “civil claims that
are derivative of a claim of misappropriation of trade secrets are preempted.” Foam Supplies,
Inc. v. The Dow Chem. Co., No. 05 Civ. 1772, 2006 WL 2225392 (E.D. Mo. Aug. 2, 2006)
(denying a claim for unjust enrichment as preempted under MUTSA); see also Secure Energy,
Inc., 2010 WL 1691454 at *2 (holding that preemption under MUTSA is determined by looking
at the similarity of the underlying facts).
For the reasons stated above, summary judgment is GRANTED as to all claims. The
Clerk of Court is directed to close the case.
Dated: July 15, 2013
New York, New York
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.