SYNYGY, INC. v. ZS ASSOCIATES, INC.

Filing 212

REDACTED MEMORANDUM AND ORDER FILED 2/11/15. SIGNED BY HONORABLE THOMAS N. ONEILL, JR ON 3/3/15. 3/3/15 ENTERED AND COPIES E-MAILED. (Attachments: #(1) Pt. 2)(mbh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
SYNYGY, INC.

CIVIL ACTION
No. 07-3536

v.
,,,

ZS ASSOCIATES, INC., et al.

February 11, 201j.~:

O'NEILL, J.

MEMORANDUM
Now before me are four summary judgment motions by Novo Nordisk, Inc., ZS
Associates, Inc. and ZS Associates International, Inc. (collectively, defendants) for summary
judgment on the issues of: (I) causation (Dkt. No. 178); (2) Synygy's trade secrets claims (Dkt.
No. 179); (3) Synygy, Inc.'s copyright claims (Dkt. No. 180); and (4) Synygy's state law claims
for unt~1ir competition, breach of contract, tortious and intentional interference, conversion and
unjust enrichment/quantum meruit (Dkt. No .. l81). 1 For the reasons that follow, I will: (I) deny ·
defendants' motion for summary judgment on causation; (2) grant in part and deny in part
defendants' summary judgment motion on trade secrets; (3) grant in part and deny in part
defendants' summary judgment motion on copyright; and (4) grant in part and deny in part
defendants' motion for summary judgment on plaintiffs state law claims.

BACKGROUND
The claims in this case arise out of incentive compensation or "IC" services that Synygy
and ZS delivered to Novo, a pharmaceutical company. IC "is focused on structuring and
delivering the correct financial incentives to motivate the performance of sales representatives
... and managers." Defs.' Causation Mem. at 6. Synygy and ZS "compete in providing

Also pending in this case is Synygy's motion for summary judgment with respect
to ZS 's counterclaims for defamation, commercial disparagement and alleged violations of the
Lanham Act (Dkt. No. 37 in Civ. A. No. 10-4274). I will decide this motion separately.
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,,

software and services for managing sales compensation, sales quotas, and sales objectives."
ZS's Answer to Second Am. Compl.

at~

34. "Synygy is a global software and services

company in the business of providing sales compensation management ... and sales
performance management ... software and services to its clients, many of whom are in the
pharmaceutical industry." Second Am. Compl.

~

10. "ZS is a global management consulting

tirm specializing in sales and marketing strategy, operations, and execution that, among other
things, provides software and services for managing sales compensation, sales quotas, sales
objectives, and other sales processes." ZS's Answer to Second Am. Compl.

at~

10. Among

ZS 's clients are corporations in the "financial, pharmaceutical and biotech industries." Id. at

In the fall of 2005, Novo was in the final months of an automatically-renewed one year
contract term with Synygy for "outsourced services in the form of monthly data processing and
reporting used in the administration ofNovo's incentive compensation program for its sales
force- often called 'IC administration' or 'IC operations."' Defs.' Causation Mem. at 1. In
October 2005, Novo informed Synygy that it would "not renew [its] contract automatically." Id.
at 16. In December 2005, Novo's "manager of incentive compensation," Raja Selvanathan, id. at
9, emailed a final termination notice to Synygy in which he explained, inter alia, that Novo had
located "an alternate provider that is better aligned with our long term plan and strategies" and
would not renew its contract with Synygy. Id. at 16-17.
Novo transitioned its IC administration work to ZS from Synygy. Id. at 17. In or around
October 2005, ZS and Novo entered into a three-year agreement for ZS to provide IC
administration services for Novo. Pl.'s Causation Opp'n Mem. at 22. During the proposal
process and the transition of IC administration work from Synygy to ZS, Novo provided ZS with

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samples of IC reports that Synygy had delivered to Novo in prior years. Det's.' Causation Mem.
at 17. Synygy contends that "Novo has stipulated that it disclosed incentive compensation
reports designed by Synygy [to] ZS" and that "[t]his is also true with respect to the compensation
simulators and software macros contained within those reports." Pl.'s Trade Secret Opp'n Mem.
at 38; see Pl.'s Ex. 57 (ZS Stipulation). ZS has stipulated that it "received those materials from
Novo in electronic native format." Pl.'s Trade Secret Opp'n Mem. at 38. Novo disclosed the
materials in question to ZS "without the knowledge or consent of Synygy." Id.
Certain documents or software files that Novo provided to ZS included notations marking
the documents as confidential and/or subject to copyright by Synygy. Pl.'s Causation Opp'n
Mem. at 23. Also, at least some of the information included in the disclosed reports was
password protected. See Pl.'s Trade Secret Opp'n Mem. 4, citing Pl.'s Ex. 13 ("there are two
worksheet tabs in the Excel file: a static page one (which conveys information to the sales
;

representative in tern{s of how they were performed, (and is also password protected); and a
dynamic page 2 compensation simulator, which enables the sales representatives to change
variables and simulate how they would have performed if the variables changed.''); Pl.'s Trade
Secret Opp'n Mem. at 15 ("the overwhelming majority ofthe files it sent to Novo were password
protected."); see also id. at 39 (same). Synygy contends that "in order to access and use the
Synygy reports ZSreceived from Novo, ZS was required to crack the Synygy passwords.'' Id. at
15. Defendants' expert, Cliff Ragsdale testified that to access information in a document that
was password protected, ZS effectively had two options, first, to request the password from
Synygy, something which ZS did not do, and second to, break through the password using "an
online program or a hexadecimal file editor." Id .. at 39, citing Ragsdale Dep. at 150:4-22.
Plaintiff contends that "as a mandatory prerequisite to receiving [the] custom reports and

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other deliverables [that Synygy prepared for Novo], Novo was required to sign a confidentiality
agreement in which it agreed not to disclose any of the documents, including, but not limited to
the report designs, to any third parties." Pl.'s Trade Secret Opp'n Mem. at 3. Effective April 9,
1999, Synygy and Novo entered into an agreement entitled "Incentive Compensation Services
Agreement." Defs.' State Law Mem. at 7, citing Defs.' Ex. 14 (Dep. Ex 72). In section 8 of the
agreement, under the heading "Confidentiality," Synygy and Novo
agree[d) not to divulge, disclose, convey or permit the disclosure
of any of the Proprietary Information of the other, either verbally
or in writing, to any person, corporation, or third party, other than
employees, agents, subcontractors or independent contractors of
Synygy or [Novo] and their parent corporations, subsidiaries, or
aftiliates who are engaged in performing this Agreement.
Defs.' Ex. 14 at SYN0000700. They further agreed
to bind their employees, agents, subcontractors and independent
contractors, individually, and their parent corporations,
subsidiaries, and afflliates, which have access to the other party's
Proprietary Information, to the same standard of confidentiality
and nondisclosure contained [there]in, and additionally to prohibit
them from using any Proprietary Information for any purpose other
than for the purposes described in [the] Agreement.
Id. Proprietary Information is defined in the agreement as information "which may include but is
not limited to (a) Synygy's Software Processes, Documents, Report Designs, and other
confidential information and (b) [Novo's] data, business affairs, methods of operation, and other
confidential information." Id. Documents are defined as "all documents created, in whole or in
part, by Synygy,- except for those parts of documents which contain [Novo's] proprietary
information." Id. at SYN0000699. Processes are defined as "the data processing, report design,
and report creation processes and methodologies used by Synygy to complete the" incentive
compensation services for Novo. Id. Report designs are defined as "the format, layout, structure
and algorithms associated with all reports designed, in whole or in part, by Synygy, except for
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those parts of report designs which contain [Novo's] proprietary information." Id. at
SYN0000699-700.
The parties agreed that:
Synygy is and shall be the sole and exclusive owner and author of:
(i) the system of software programs and documentation known as
ADEPT used to process and manage data and to design, create and
view reports (the "Software"),
(ii) the data processing, report design, and report creation
processes and methodologies used by Synygy to complete the
Services (the "Processes"),
(iii) all documents created, in whole or in part, by Synygy,except for those parts of documents which contain [Novo's]
proprietary information (the "Documents"), and
(iv) the format, layout, structure and algorithms associated with all
reports designed, in whole or in part, by Synygy, except for those
parts of report designs which contain Novo's proprietary
information (the "Report Designs").
Id. They further agreed that Novo "shall be the sole and exclusive owner of [Novo's] proprietary
information and nothing [in their agreement] shall be deemed to transfer to Synygy any right or
title to [Novo's] proprietary information." Id. at SYN0000700. Novo also retained "the right to
copy and distribute all reports created for [Novo] by Synygy under th[eir] Agreement for the
purposes intended [there]in." Id. The agreement also provided that
Synygy's rights of ownership with respect to the Software,
Processes, Documents and Report designs include, but are not
limited to, the exclusive right to make derivative works of the
Software, Processes, Documents and Report Designs and to exploit
such works commercially. Synygy agrees that any derivative
works made available commercially shall not include references to
Client or its proprietary information.

I will consider each of the pending motions in turn.
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STANDARD OF REVIEW
Summary judgment will be granted "against a party who fails to make a showing
sufticient 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 party moving for summary judgment bears the burden of demonstrating that "there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter of
law." Fed. R. Civ. P. 56( a); see Celotex, 477 U.S. at 322-23. If the movant sustains its burden,
the nonmovant must set forth facts demonstrating the existence of a genuine dispute. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A dispute as to a material fact is
genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving
party." Id. A fact is "material" if it might affect the outcome of the case under governing law.

To establish "that a fact cannot be or is genuinely disputed," a party must:
(A) cit[e] to particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for
purposes of the motion only), admissions, interrogatory answers,
or other materials; or
(B) show[] that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)( I). The adverse party must raise "more than a mere scintilla of evidence in
its favor" in order to overcome a summary judgment motion and cannot survive by relying on
unsupported assertions, conclusory allegations, or mere suspicions. Williams v. Borough ofW.
Chester, 891 F.2d 458,460 (3d Cir. 1989). The "existence of disputed issues of material fact
should be ascertained by resolving all inferences, doubts and issues of credibility against" the
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movant. Ely v. Hall's Motor Transit Co., 590 F.2d 62, 66 (3d Cir. 1978) (citations and quotation
marks omitted).

DISCUSSION
I.

Cau~ation

rn their first motion for summary judgment, defendants seek summary judgment on all
claims in Synygy's Second Amended Complaint "based on the failure of proof as to the essential
element of causation and plaintiff Synygy, Inc.'s failure to demonstrate the existence of any
genuine issues of material fact to the contrary." Defs.' Causation Mot. at 1. Defendants argue
that "each of Synygy's 11 pending claims includes causation as an essential element, for which
Synygy carries the burden of prooC' Defs.' Causation Mem. at 28. They contend that "[t]he
essential causation question at the heart of this case is whether there is any causal relationship
between what Synygy claims to be copying and misuse of its' intellectual property' and Novo's
decision to switch IC administration to ZS at the end of2005." Id. at 29. Defendants argue that
"the evidence is overwhelming that Novo would have inade the very same decision, based on the
long track record of problems in the Synygy-Novo client relationship, Synygy's lack of effort to
improve the situation, and Synygy's failure to support Novo's in-sourcing project." Id.
In response, Synygy contends that defendants cannot prevail on summary judgment with
their two "flawed arguments: 1) [that they] could steal Synygy's work product because Novo had
an alleged bad relationship with Synygy; and 2) [that] Novo did not desire Synygy's work
product." Pl.'s Causation Opp'n Mem. at 27. Synygy asserts that "[e]ven ifNovo was so
displeased with Synygy' s services that it was compelled to terminate its contract with Synygy,
that would not provide Novo with a license to steal and use Synygy's intellectual property." Id.
at 26. Synygy argues that even if defendants could establish that Novo was displeased with

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Synygy's services
and therefore, was compelled to leave Synygy, ... it is irrelevant.
Novo was always free to terminate its contract with Synygy and
ZS was always free to provide IC services. What either of them
was never free to do is engage in the wholesale misappropriation
of Synygy' s intellectual property- regardless of their putative
justification.
Id. Synygy also argues that it "can easily show the reasonable relationship between the
defendants' wrongful conduct and the direct revenues received from that conduct." Id.
I tind that defendants are otfthe mark with respect to their characterization of "[t]he
essential causation question at the heart of this case." Defs.' Causation Mem. at 29. With
respect to Synygy's non-copyright claims, what matters is not simply whether defendants'
alleged improper use of the materials prepared by Synygy caused Novo to switch IC
administration to ZS, but rather whether Synygy can show that ZS's and/or Novo's allegedly
wrongful use of Synygy's claimed proprietary information caused Synygy to suffer damages.
There is sufficient disagreement between the parties with respect to this question that I find that
material questions of fact remain on the issue of causation.
Further, to establish defendants' liability for copyright infringement, Synygy need only
prove: ( 1) Synygy' s ownership of a valid copyright, and (2) the claimed infringers' copying of
protected elements of the copyrighted material. See Feist Publ'ns, Inc. v. Rural Telephone
Service Co., Inc., 499 U.S. 340,361 (1991). If defendants' liability is established, then what
matters for purposes ofSynygy's copyright claim, which seeks an award based on defendants'
alleged profits resulting from their alleged infringement of Synygy' s copyrights, is whether
Synygy can show that the profits that it seeks to recover are '"reasonably related to the [claimed]
infringement."' William A. Graham Co. v. Haughey, 568 F.3d 425, 443 (3d Cir. 2009), quoting
On Davis v. Gap, Inc., 246 F.3d 152, 160 (2d Cir. 2001). In Graham, the Court of Appeals found
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that the plaintiff satisfied its burden with respect to causation by showing that customers of the
defendant received sales proposals containing infringing language, "that the written proposals
were important to [the defendants'] clients, that the infringed language ... contributed to the
success of those proposals, and that [the defendant] urged its employees to use the [infringed
materials]." Graham, 568 F.3d at 443. Here, I tind that there are material factual disputes with
respect to whether defendants' allegedly infringing acts are reasonably related to Synygy's
claimed lost profits. Specifically, Synygy has set forth facts that raise a question as to whether
ZS and Novo's use of the allegedly infringed materials contributed to ZS's success in obtaining
and retaining its contract with Novo. If proven at trial, the alleged repeated use and copying of
software macros and/or reports derived from Synygy's copyrighted materials may establish that
the content of Synygy's incentive compensation report designs was important to ZS and Novo
and support Synygy' s claims that the macros and/or reports had sufficient value to Novo and ZS
such that defendants might be liable for Synygy's claimed lost profits.
Accordingly, I will deny defendants' motion for summary judgment on the issue of
causation.

II.

Trade Secrets
In their second motion for summary judgment, defendants seek summary judgment on

Counts II and III ofSynygy's Second Amended Complaint, which assert claims for
misappropriation of trade secrets pursuant to New Jersey common law and the Pennsylvania
Uniform Trade Secrets Act (PUTSA), 12 Pa. C.S.A. § 5301-5308.
In its response to defendants' motion, Synygy asserts that it
has trade secrets in the specific incentive compensation reports and
management reports it custom designed for Novo. Synygy has
trade secrets that include all aspects of the design (including visual
design as well as background design not visually apparent to the

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end user) of the following types of reports: Incentive
Compensation Reports ... ; Preliminary Payout Factors
Report ... ; Parameter Verification Report ... ; Roster
Verification Report ... ; Circle of Excellence Report ... ;
Earnings Summary-Nation Report ... ; IC Report-Nation ....
Pl.'s Trade Secret Opp'n Mem. at 34. Synygy's response identifies examples of each of the
types of reports identified. Id. Synygy contends that it "does not claim trade secret protection
over the Novo logos, trademarks or trade names that appear in the reports and were provided to
Synygy by Novo." Id. Instead, it claims that it has "trade secrets in all other aspects of the
design including the text, formatting, graphics, design, organization, calculations, formulas,
selection and arrangement of information." Id. at 34-35. Synygy contends that it "has trade
secrets in the use of a separate Excel worksheet within an incentive compensation report for an
interactive simulator, or 'what-if' calculator that utilizes the same look and feel of the report
itself." Id. at 35. Synygy also claims it "has trade secrets in the software macro codes which
appeared with the Deliverables" and cites certain examples of the macro codes. Id.

A.

Specificity

The "starting point" in misappropriation cases is "whether, in fact, there is a trade secret
to be appropriated." Van Prods. Co. v. Gen. Welding & Fabricating Co., 213 A.2d 769, 780 (Pa.
1965); see also Continental Data Sys., Inc. v. Exxon Corp., 638 F. Supp. 432, 442 (E.D. Pa.
1986) ("even wrongful appropriation is not actionable unless the information in question is a
trade secret"). To prevail on its trade secrets claims, Synygy first must
show the existence of a trade secret with "reasonable degree of
precision and specificity ... such that a reasonable jury could find
that plaintiff established each statutory element of a trade secret."
This identification must be particular enough as to separate the
trade secret from matters of general knowledge in the trade of or
special knowledge of persons skilled in the trade.
Dow Chern. Canada Inc. v. HRD Corp., 909 F. Supp. 2d 340, 346 (D. Del. 2012); see also Sit-Up
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Ltd. v. IAC/InterActiveCorp., No. 05-9292,2008 WL 463884, at *11 (S.D.N.Y. Feb. 20, 2008)
("[S]peciticity is required before the court so that the defendant can defend himself adequately
against claims of trade secret misappropriation, and can divine the line between secret and nonsecret information, and so that a jury can render a verdict based on a discriminating analysis of
the evidence of disclosure and misappropriation."). Accordingly, in response to defendants'
motion to compel trade secrets discovery, I previously ordered "Synygy to serve defendants with
sworn supplemental answers to defendants' interrogatories setting forth with reasonable
particularity the trade secrets that Synygy claims were misappropriated." Synygy, Inc. v. ZS
Assocs., Inc., No. 07-3536, 2013 WL 3716518, at *5 (E.D. Pa. Jul. 15, 2013). Defendants now
contend that summary judgment is warranted in their favor on Synygy's trade secrets claims
because Synygy "has failed to meet its burden of identifying the trade secrets with reasonable
particularity." Defs.' Trade Secret Mem. at 24. In response, Synygy asserts the converse: that it
has identified the confidential information that it claims defendants misappropriated. Pl.'s Trade
Secret Opp'n Mem. at 41.
In support of its argument that it has sufficiently identified its claimed trade secrets,
Synygy contends that its CEO, Mark Stiffler "repeatedly testified that the confidential
information of Synygy at issue in this case was the design of the reports Synygy did for Novo."
Id. Stiffler testified that "the easiest way to think about it is that all of the information that
Synygy produces is Synygy confidential except for those pieces or values of data that belong to
the client." Pl.'s Ex. 12 (Stiffler Dep.) at 377:21-378:6. Synygy also cites to the deposition
transcript of its corporate designee JeffEvernham which "is over 300 pages long and goes into
the most minute detail about every aspect. of the incentive compensation reports that are unique
and confidential to Synygy." Pl.'s Trade Secret Opp'n Mem. at 42, citing Pl.'s Ex. 10 (Synygy

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Rule 30(b)(6) Dep. (Evernham)). 2 Synygy does not, however, identify any specific testimony by
Evernham that identities its purported trade secrets. ld. Instead, Synygy explains only that
"Evernham'stestimony includes things such as selection and placement of logos and names,
products, and the use of fonts, among many elements." Id. Evernham testified that "[t]he report
designs, ... all the materials, all the elements and the combination of all of those elements
together are confidential information." Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at
240:21-24. Thus broadly defined, I find that Stiffler and Evernham's references to all of
Synygy's allegedly confidential information are not sufficient to define Synygy's claimed trade
secrets. See IDX Sys. Corp. v. Epic Sys. Corp., 285 FJd 581, 583-84 (7th Cir. 2001) (holding
that "a plaintiff must do more than just identify a kind of technology and then invite the court to
hunt through the details in search of items meeting the statutory definition" of a trade secret and
finding that "a 43 page description of the methods and processes underlying and the interrelationships among various features making up IDX's software package" was not sufficiently
specific to show that the information in question was a trade secret); TNS Media Research, LLC
v. TRA Global, Inc., 984 F. Supp. 2d 205, 238-39 (S.D.N.Y. 2013) (rejecting the plaintiff's
"Dance of the Seven Veils approach to its trade secret claim" as "manifestly prejudicial and
taxing to the Court" where "even though [the plaintiff] narrowed its list of trade secrets, it
reserved the right to rely upon additional documents or testimony related to each trade secret");
gad. Inc. v. ALN Assocs., Inc., No. 88 C 2246, 1990 WL 93362, at *3 (N.D. Ill. June 20, 1990)
(finding it "wrong as a matter oflaw" that a party could "simply persist in the blunderbuss
statement that 'Everything you got from us was a trade secret'" and prevail on its trade secrets
. claim).
2

Evernham's designee deposition is found at both Plaintiff's Exhibit 10 and
Defendant's Exhibit 53.
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I decline, however, to grant summary judgment in favor of defendants solely based on the
specificity of Synygy' s designation of its trade secrets. In its first amended answer to ZS 's first
set of interrogatories, Synygy specifically claims trade secret protection over aspects of the
design of its reports including:
•

A top-down approach to presenting information with a
specific focus presenting a top level payout and layering
each level of supporting data underneath sequentially
thereby creating a story to increase the reader's
understanding of the relationship between payout
calculations, earning calculations by component, and
performance measures. The foregoing includes the
selection and arrangement of the appropriate information;

•

Presenting more detailed information at the bottom of the
report, such that summary information is displayed first,
with supporting information following below, ifthe user
needs it;

•

The compartmentalization of a report into sections, defined
with borders or shading, with each section having a specific
purpose and being labeled appropriately;
·

•

The use of gutters in addition to borders to separate
sections on the report;

•

A clear payout in bold letters placed in the upper right
section of the report with details arranged at the top of the
report in a left to right manner that enable readers to
determine, without additional data and without reviewing
data from multiple sources, how much their incentive
payout would be and how the calculation was performed;

•

The use of extremely small cells in Excel, typically column
widths of0.5 and row widths of 4.5 to create thousands of
rows and columns to easily position information on a page,
create thin gutters, and to ensure the reports are scalable;

•

The use of a separate Excel worksheet within an Incentive
Compensation Report for an interactive what-if calculator
that utilizes the same look and feel of the report itself;

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•

The placement of the client logo in the upper left-hand
corner of the report;

•

The title of the report in the top section of the report header
in the middle;

•

The placement of the vendor name,·and confidentiality or
copyright notice in the bottom footer of the report;

•

The placement of the clients' employee or representative
specific information in the top right-hand section of the
report;

•

The selection and use of Arial Narrow font, of an
appropriate size in the context in which it is being used
(8pt, 1Opt, 12pt or 20pt, or other sizes if appropriate in
context);

•

The selection and use of color and shading to highlight
important information and to segment the report, with
degree of shading selected to preserve legibility even when
report is reproduced in black and white or photocopied;

•

The alignment of information within the report to make the
report as symmetrical as possible;

•

Having a report tit on to one page where possible;

•

Ensuring that the information presented on a report passes a
"calculator test" (i.e., to ensure that a report easily and
intuitively communicates incentive compensation plan
details to uninformed readers;)

•

The selection and use of data visualization elements,
including tables, charts and graphs, to display information,
including the type, size, placement and visual appearance
of the data visualization elements.

Dets.' Ex. 65 (Synygy's 1st Am. Answer to 1st Set oflnterrogs.) at 3-4. I find that this list,
when combined with Synygy's claim in its response to defendants' motion that Synygy has
"trade secrets that include all aspects of the design (including visual design as well as

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background design not visually apparent to the end user)" with respect to a list of identified
examples of specific documents. Pl.'s Trade Secret Opp~n Mem at 34t3

is sufficiently specific to

permit me to proceedtoconsiderwhether genuine issues of material fact remain regarding
Synygy's misappropriation claims. See Dg It Best Com. y. Pasmort Software. Inc., No. 01-C7674,2005 WL 743083, at *13 (N.D. Ill, Mar. 31, 2005} (denying summary judgment because
the plaintiff"did identify specific lines of code and specific software features" as its claimed
trade secrets even though the plaintiff came "dangerously close" to being too general to sustain
its trade secret claim where the plaintitrhad explained that "to determine its trade secret, [the]
defendant need merely look at the lines of code which [theJplaintiff identified and examine the
design, structure and programming techniques and the integration into the code which [the
<·· · : ···:·::::._-/. :... :·: . ::·:::::.:.

::::.:. ::":::::::::-:·.:::::.

.::···

··:·.::::·:.· :·.

··.·.

plaintiff] is using'tJ; se~ also Olympus Managed HealthCare, Inc. v. Am; HousecaUPhysicians.
Inc~, 853 F. Supp. 2d 559, 572 (W.D.N.C. 2012}(finding that a listof"broad categories of trade

secrets" including "contract templates/' "marketing materials,'' "product designs,'' "provided
.

.

.

services," and ''tinancials" was sufficient to \yithstand summary judgment); see also Mike's
Train House~ Inc, v. Lionel. L.L.C., 472 F.3d 3981 411 (6th Cir. 2007) ("When materials , , . are
trade secrets based on a unique combination ofboth protected aJ,l<ilmpr<>!"'x!edtn~~ria1, a ....
plaintiff should not be obligated to identify which components ofthe protected material [are]

3

As is noted above, in its response to defendants' motion, Synygy asserts that it
has trade secrets that include all aspects of the design (including
visual design as well as background design not visually apparent to.
the end user) of the following types of reports: Incentive
Compensation Reports ... ; Preliminary Payout Factors
Report ... ; Parameter Verification Report ... ; Roster
Verification Report .... ; Circle of Excellence Report ... ;
Earnings Summary-Nation Report ... ; IC Report*Nation . , ..

Pl.'s Trade Secret Opp'n Mern. at 34. Synygy's response identifies specific examples of each of.
the types of reports identified. .llL,
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secret.").
Indeed, in their reply briet: defendants concede that Synygy' s identification of "certain
particular design features" including "top-down storytelling, gutters, placement of the client-logo
in the upper left hand corner of the report, having a report fit on to one page where possible and
having a payout box in the upper-right-hand corner of sales reps' scorecards ... was indeed
sufticiently spedtlc to" permit consideration of"whether these design concepts were general
knowledge or not." Defs.' Trade Secret Reply at 3-4.
I will also consider as sufficiently specific Synygy's claim that it "has trade secrets in the
software macro codes which appeared with the Deliverables .... " Pl.'s Trade Secret Opp'n
Mem. at 35. In particular, Synygy claims as trade secrets: (1) "the macro code identified in the
Second Amended Complaint as Synygy Macros No. I, which appeared within the Deliverables,
tor example vyithin the December 2005 Circle of Excellence Report produced as SYN0075531 ;"
and (2) "the macro code identified in the Complaint as Synygy Macros No.2, which appeared in
whole or in part, within the Deliverables .... " Defs.' Ex. 65 (Synygy's 1st Am. Answer to 1st
Set of Interrogs.) at 2. Synygy has identified a number of examples of specific reports which
contain Synygy Macros No.2. Id.
Finally, I will consider as sufficiently specific Synygy's claim that it has trade secrets in
its "custom designed compensation simulator"- "the use of a separate Excel worksheet within
an incentive compensation report for an interactive simulator, or 'what-if calculator that utilizes
the same look and feel of the report itself." Pl.'s Trade Secret Opp'n Mem. at 35.

B.

Existence of a Trade Secret

The question of whether certain information constitutes a trade secret ordinarily is "best
resolved by a fact finder after full presentation of evidence from each side," DSMC. Inc. v.

-16-

Convera Corp., No. 479 F. Supp. 2d 68,, 79 (D.D.C. 2007) (citations and quotations omitted);
see also Bro-Tech Corp. v. Thermax, Inc., 651 F. Supp. 2d 378,410 (E.D. Pa. 2009) ("Whether
information qualifies for trade secret status is ordinarily a question of fact for the jury.").
"[A]though the issue is easily framed, the resolution is more difficult, for the law provides no
precise definition or litmus test of what constitutes a trade secret." Anaconda Co. v. Metric Tool
& Die Co., 485 F. Supp. 410, 421 (E. D. Pa. 1980). "A trade secret is one of the most elusive and

difficult concepts in the law to define." DSMC, Inc., 479 F. Supp. 2d at 79 (citations and
internal quotation omitted). Under the PUTSA, a trade secret is defined as:
Information, including a formula, drawing, pattern, compilation
including a customer list, program, device, method technique or
process that:
( 1) 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.

(2) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
12 Pa. C.S.A. § 5302. "In New Jersey, a common law trade secret may consist of any formula,
pattern, device, or compilation of information that is used in business to obtain an advantage
over competitors who do not know or use it." Mu Sigma, Inc. v. Affine, Inc., No. 12-1323, 2013
WL 3772724, at *8 n.6 (D.N.J. July 17, 2013), citing Sun Dial Corp. v. Rideout, 16 N.J. 252,
257, 108 A.2d 442 (N.J. 1954) (further citations omitted). "Determining whether the information
in question qualifies as a trade secret must be made on a case-by-case basis." Hill v. Best
Medical Int'I, Inc., Nos.

07~1709,

08-1404,09-1194,2011 WL 5082208, at *10 (W.O. Pa. Oct.

25, 2011) (citation omitted). As is set forth below, "to the extent the Court can discern the
parameters of [Synygy's] trade secret claim[s] from the instant record," at least some of

-17-

Synygy's trade secrets claims must fail because not all of what Synygy has identified as its trade
secrets can be found to constitute a trade secret. Big Vision Private Ltd. v. E. I. DuPont De
Nemours & Co., 1 F. Supp. 3d 224, 265 (S.D.N.Y. Mar. 3, 2014).

1.

Secrecy

What is certain is that for something to qualify as a trade secret it must be secret.
Rycoline Prods., Inc. v. Walsh, 756 A.2d 1047, 1052 (N.J. App. Civ. 2000); Youtie v. Macy's
Retail Holding, Inc., 653 F. Supp. 2d 612, 620 (E.D. Pa. 2009). "Secrecy is essentially a
question of fact . . . . [N]o one factor is dispositive of whether [plaintiff] took reasonable
precautions to protect its purported trade secrets." Merckle GmbH v. Johnson & Johnson, 961 F.
Supp. 721, 731-32 (D.N.J. 1997) (citations omitted) (internal quotation marks omitted). ''To be a
trade secret, information must not be generally known in the wider business community or
capable of being easily derived ti·om public information." Fishkin v. Susquehanna Partners,
G.P., 563 F. Supp. 2d 547, 582 (E.D. Pa. 2008) affd in part, 340 F. App'x 110 (3d Cir. 2009).
The. owner of a trade secret, unlike the owner of a patent, does not
have a monopoly over the process or formula. He is only protected
from other persons' gaining access to it either by stealing it
directly from him, or having another to whom it was lawfully
disclosed do so. Others in the field are free to arrive at precisely
the same method and to use the method so long as they obtain their
knowledge through their own independent efforts.
Continental Data Sys., Inc. v. Exxon Corp., 638 F. Supp. 432, 442 (E.D. Pa. 1986), quoting
Greenberg v. Croydon Plastics, 378 F. Supp. 806, 812 (E.D. Pa. 1974).

a.

Text, Graphics, Formatting, Design, Organization or
Arrangement

Defendants argue that certain of the identified "design features [in Synygy's reports] are
widely known and therefore they are not trade secrets." Defs.' Trade Secret Reply at 4. I agree.
Many of the things which Synygy claims to be trade secrets are readily observable including the
-18-

text, formatting, graphics, design, organization and arrangement of the reports in question. For
example, anyone who views one of the identified exemplar reports can easily observe "[t]he title
of the report in the top section of the report header in the middle" or "[t]he selection and use of
Aria! Narrow font, of an appropriate size in the context in which it is being used (8pt, lOpt, 12pt
or 20pt, or other sizes if appropriate in context)." Defs.' Ex. 65 (Synygy's 1st Am. Answer to
1st Set of Interrogs.) at 3-4. '" [T]hings that any user or passer-by sees at a glance are 'readily
ascertainable by proper means"' and cannot be trade secrets. IDX Sys. Corp. v. Epic Sys. Corp.,
285 F.3d 581, 584 (7th Cir. 2002). Accordingly, in IDX Systems, the Court of Appeals for the
Seventh Circuit affirmed the district court's grant of summary judgment in favor of the
defendants on the plaintiffs trade secret claims where "many of the items that appear[ed] in the
43-page description [of the plaintifJ's claimed trade secrets], such as the appearance of data-entry
screens, [were] exceedingly hard to call trade secrets." Id. The Court explained that "[p]erhaps
screen displays could be copyrighted, but no copyright claim ha[d] been advanced, and a tradesecret claim based on readily observable material is a bust." Id.
Further, defendants have shown that many of the features which Synygy claims as its
trade secrets were disclosed to the public in a book authored by Synygy's CEO and owner, Mark
Stiffler, which was published in 2006. Defs.' Ex. 66 (Stiffler Book). "'[I]nformation that is
public knowledge or that is generally known in an industry cannot be a trade secret,' including
information that is available in publications." Big Vision Private Ltd., 1 F. Supp. 3d at 270,
quoting Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984) (further citations omitted). In
Chapter 10 of his book, Stiffler explains the principles underlying Synygy' s report design
methodology:
Good incentive compensation reports show how performance is
translated into some currency- whether it is money, gifts or other
-19-

rewards. They should clearly explain how the incentive
compensation plan works and how results are calculated. The
reports should answer three basic questions: (1) What did I make?
(2) How was it calculated? (3) Why did I make what I did?
Defs.' Ex. 66 (Stiffler Book) at 134 (emphasis in original). He explains that when businesses
prepare an incentive compensation report they "are telling a story" and shouldn't "just show the
calculations," instead, they should
show step-by-step the build up of how the data were used to create
those calculations. Creating visual consistency and visual links
across sections will also help [employees] follow the story. You
might even want to include some "what-if'' analyses to reinforce
the relationship between compensation and performance ....

Id. In Figure 11, Stiffler's book identifies list of 12 "design principles" to make incentive
compensation reports "more effective," including:
2.

To peel away the story of how the person is paid, major
sections of the report should appear in the following order
from top to bottom: payment calculations, earnings
calculations (by component), and performance
measures ....

4.

The payment should be shown in a distinct box on the line
directly below the report banner typically in the upperright-hand comer of the report ....

6.

For every number used in the payment and earnings
calculations, there should be an area of the report that
shows how it was derived....

ld. at 139.
Also, in Figures 9 and 10 of his book, Stiffler includes examples of generic incentive
compensation reports. Id. at 137-38. The example reports clearly feature, inter alia, "[t]he
placement of the client logo in the upper left-hand comer of the report," "compartmentalization
... into sections, defined with borders or shading, with each section having a specific purpose
and being labeled appropriately," and "[a] clear payout in bold letters placed in the upper right
-20-

section of the report with details arranged at the top of the report in a left to right manner .... "
Dei's.' Ex. 65 (Synygy' s 1st Am. Answer to 1st Set oflnterrogs.) at 3-4. The overlap between
the information disclosed in Stift1er' s book and the report design elements identified as trade
secrets in Synygy's interrogatory response is clear. Through Stift1er's book, Synygy "effectively
'freely disclosed' its information [about the effective individual components of an incentive
compensation report] to 'all comers' .... " Big Vision Private Ltd., 1 F. Supp. 3d at 269
In further support of their argument that there has been public disclosure of the design
elements included in Synygy's incentive compensation reports, defendants note that Synygy
shared "similarly formatted generic Incentive Compensation Reports ... as marketing
documents at public trade shows." Defs.' Trade Secret Mem. at 27. At his designee deposition,
Evernham explained that the generic reports were "clearly created for marketing purposes .... "
Defs.' Ex. 53 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 153:15-153:7. In particular,
defendants point to a "Sample Generic IC Report for Company ABC," Defs.' Ex. 74, which was
supplied in a business pitch to a company called Ventiv health. See Defs.' Ex. 73 (Dan McDunn
email, Feb. 6, 2001). In supplying the report to Ventiv, Synygy's marketing employee explained
that the report "demonstrates our basic incentive compensation reporting philosophy at the sales
rep level." Id. As with the sample reports included in Stift1er's book, the sample report provided
to Ventiv clearly features the design elements identified by Synygy as its trade secrets including
a client logo in the report's upper left-hand comer, compartmentalization through the use of
borders and shading and a payout amount in bold letters in the upper right section of the report.
Defs.' Ex. 74.
On this record, no reasonable factfinder could find that [Synygy] undertook reasonable
etTorts to maintain the secrecy of its alleged trade secret[ s]" in the text, graphics, formatting,

-21-

design, organization or arrangement of its reports when they are considered standing alone. Big
Vision Private Ltd., 1 F. Supp. 3d at 269. Accordingly, I will grant defendants' motion for
summary judgment with respect to plaintiff's trade secret claims insofar as they relate
individually to the text or graphics included in or the formatting, design, organization or
arrangement of the types of reports identified by Synygy in its response to defendants' motion
(i.e., Incentive Compensation Reports, Preliminary Payout Factors Report, Parameter
Verification Report, Roster Verification Report, Circle of Excellence Report, Earnings
Summary-Nation Report, IC Report-Nation). See Pl.'s Trade Secret Opp'n Mem. at 34-35. My
finding with respect to the reports that Synygy specifically prepared for Novo as they exist in
their entirety is further set forth below.

b.

Identified reports viewed in their entirety

Viewed in their entirety, it is appropriate to consider the identified reports as potential
combination trade secrets independent from Synygy's identified list of report design elements.
See Ozburn-Hessey Logistics, LLC v. 721 Logistics, LLC, No. 12-0864, 2014 WL 4055826, at
* 12 (E.D. Pa. Aug. 15, 2014) (a "spreadsheet document ... might qualify as a trade secret,
because it is a compilation that took time and effort to create"). Under the laws of Pennsylvania
and New Jersey, "even though each and every element of plaintiff's process is known to the
industry, the combination of those elements may be a trade secret if it produced a product
superior to that of competitors"). Rohm & Haas Co. v. Adco Chern. Co., 689 F.2d 424, 433 (3d
Cir. 1982); see also Synthes, Inc. v. Emerge Med., Inc., No. 11-1566,2014 WL 2579286, at *72
(E.D. Pa. June 5, 2014) (finding manufacturing costs and usage data were "protectable trade
secret information" where "[t]he value ofthe information was in .the compilation, categorization,
and organization of information on thousands of customers and products, which could not be

-22-

easily recreated by a competitor's mere talking with the customers"); Youtie, 653 F. Supp. 2d at
621-22 ("A compilation of data that has independent economic value can be protected as a trade
secret.").
As Evernham testified, Novo's logo "and the color blue that Novo Nordisk uses" are not
"Synygy contidential information, but their use in the presentation and in- ... in the format [in
a particular document] and the totality of what's shown [in the document] for the purpose of
Novo Nordisk' s incentive compensation report is Synygy confidential information." Defs.' Ex.
53 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 243:6-17. Evernham explained,
[a]n individual design decision ... by itself is not ... going to have
a dramatic impact on the overall value [of an incentive
compensation report]. The design decision in the context of all of
the other information that needs to be conveyed because th[ e]
distance [between text and a logo] is a function of the report and is
a part of the total [and] is valuable to Synygy ....
Id. at 249: 11-19. Although there is evidence before me that Synygy publicly disclosed similar
reports including similar information that was formatted in a similar manner, I find that
defendants have not shown that there is no question of fact that the specific reports that Synygy
prepared for Novo were not known or readily ascertainable by proper means. Cf. Giasson
Aerospace Sci., Inc. v. RCO Eng' g. Inc., 680 F. Supp. 2d 830, 841-42 (E.D. Mich. 2010)
("Plaintiffs need not show that each component of their trade secrets are secret, or even
nonobvious over what exists in the public domain..... [A] trade secret can exist in combination
of characteristics each of which, by itself, is in the public domain.").
Further, I find that material questions of fact remain with respect to whether Synygy
undertook reasonable efforts to maintain the secrecy of the specifically identified types of
reports: the Incentive Compensation Reports, Preliminary Payout Factors Report, Parameter
Veritlcation Report, Roster Verification Report, Circle of Excellence Report, Earnings
-23-

Summary-Nation Report, and IC Report-Nation. As Synygy explains, "[e)ach employee is
required to sign a confidentiality and non-competition agreement as a mandatory prerequisite to
employment at Synygy." Pl.'s Trade Secret Opp'n Mem. at 14. Synygy also has internal
security measures in place that "include restriction of access to confidential information to only
those with a significant business need and password protections." ld. Information to be shared
outside of Synygy is subject to a "written policy of marking the documents as "confidential" or
copyrighted as necessary." Id. Under the facts presented, a reasonable jury could conclude that
the secrecy element of the trade secret test has been met with respect to the reports.

c.

Compensation Simulator

Synygy also claims trade secrets in its use of a "custom designed compensation
simulator." Pl.'s Trade Secret Opp'n Mem. at 35. It explains that the reports it creates "often
incl).lde a single-page incentive compensation report and a separate worksheet within Excel
known as a 'what-if' calculator. This complex 'what-if calculator enables sales reps. to simulate
their compensation and calculate how certain variable factors can affect their compensation." Id.
at 31-32. Defendants argue that Synygy' s what-if calculators do not constitute trade secrets.
Defs.' Trade Secret Reply at 6. I agree with defendants. On the record before me no reasonable
factfinder could find that Synygy's what-if calculators are trade secrets.
First, in its response to defendants' motion, Synygy provides no support for its contention
that it "has trade secrets in the use of a separate Excel worksheet within an incentive
compensation report for an interactive simulator, or 'what-if calculator that utilizes the same
look and feel of the report itself." Pl.'s Trade Secret Opp'n Mem. at 35. Merely because Synygy
calls something a trade secret does not make it a trade secret. See Diodato v. Wells Fargo Ins.
Servs., USA, Inc., No. 12-2454, 2014 WL 4411591, at *29 (M.D. Pa. Sept. 8. 2014) (granting

-24-

summary judgment where "Wells Fargo direct[ed] the court to no record evidence to prove its

ipse dixit assertion that the information generally identified in its pleading constitute[ d] a trade
secret"); Bodemer v. Swanel Beverage, Inc., 884 F. Supp. 2d 717, 726 (N.D. Ind. 2012) (finding

that ;'one person's subjective belief about the secrecy of a potential trade secret is [not]
dispositive on the issue oftrade secret protection").
Second, I am not persuaded that, without more, the use of passwords to protect
worksheets containing what-if calculators is sufficient to show that the what-if calculators are
trade secrets. At his deposition, Synygy's designee Thomas Hausch testified that "it was
.. generally a practice to protect any report sheet with a what-if calculator so that end-users,
specifically sales reps, didn't break them, just so they could only click on buttons and click in
certain places where they were allowed to be in." Pl.'s Ex. 29 (Hausch Designee Dep.) at
126:17-21. Asked whether the password did anything "[o]her than protecting the report sheet
from changes by the sales rep," Hausch responded "No. Well, it would have protected it from
changes from anyone who didn't know the password, but .... " Id. 126:22-127:2. This
testimony is not sufficient to support a conclusion that the primary intention behind password
protection was to maintain the what-if calculators as confidential trade secrets and the use of
passwords alone is thus not enough to make the calculators into trade secrets.
Finally, in his book Stiffler explained that in designing incentive compensation reports,
[y]ou might even want to include some "what if' analyses to
reinforce the relationship between compensation and performance
(for example, had you sold 10 more units, your commission rate
would have increased to 3%. Had you sold 15 more units, your
commission rate would have increased to 3%. Had you sold 15
more units, etc.).
Defs.' Ex. 66 (Stiffler Book) at 135. The sample report included at Figure 9 in Stiffler's book
clearly includes '·what if' calculators. Id. at 137. Additionally, defendants point to the report
-25-

prepared by their expert who explains that "using an Excel worksheet as an interactive calculator
and to create charts and graphs cannot possibly be regarded as a secret as this is precisely what
Excel is designed to do." Pl.'s Ex. 34 (Ragsdale Report) at 66,

~

166. As defendants contend,

"(t]he use of 'what if calculators is so common within Microsoft's Excel[] that it is prominently
featured in a drop-down menu." Defs.' Trade Secret Reply at 7. Cf. Fishkin, 563 F. Supp. 2d at
584 (noting that "[t]he spreadsheet itself was a publicly-available Microsoft Excel program" in
support of its finding that a formula and spreadsheet used for futures trading were not trade
secrets). Synygy's "what if'' calculators are based on concepts that are "too widely known and
too readily ascertainable to constitute trade secrets. At most, they constitute general secrets of
the trade .... " Id. (quotation omitted).
I tind that defendants are entitled to summary judgment on Synygy's trade secrets claim
to the extent that it pertains to the use of compensation simulators/what-if calculators.

d.

Software Macros

Synygy also contends that it "has trade secrets in the software macro codes which
appeared with the Deliverables." Pl.'s Trade Secret Opp'n Mem. at 35. Defendants contend that
the software macros are not trade secrets as "discovery has shown that large portions of the
macros were written by Microsoft, contain publicly available ideas from user forums, and reflect
Novo's plan design and therefore Novo's ideas, rather than Synygy's." Defs.' Trade Secret
Mem. at 28. In response, Synygy explains that "[t]he specific function of every line of code was
discussed in great detail in the deposition testimony of Thomas Hausch" and cites broadly to
more than 70 pages of Hausch's deposition transcript. Pl.'s Trade Secret Opp'n Mem. at 35,
citing Pl.'s Ex. 29 (Hausch Dep.) 72:1-144:25.
Defendants correctly contend that at least some portion of the relevant software macros

-26-

were created with the assistance of information obtained in online user forums. Danesh
Sakhmni, a fomi~r Synygy employee, testified that:
if I had a question about how to do someth,ing specific i~ Excel, a
good c- nine times out of ten ~ eight times out often, 1 find a simiiar
question has already been posted andpeople, generally, wilt pose
questions like those in a forum~ so I go see what the question wast
see what the answer was . . . . I would look at how they did it~
modify it to how it's applicable, made it nicer if I needed to and
then implementit myself.
Defs.' Ex, 19 (Sakhrani Dep.) at 93:11-94:2. And indeed, according to Sakhrani's testimony,
some portions of the relevant software macros were created using Record Macro: "a function in
Excel that when you select it, what~wer movements or whatever tasks you have Excel pertbrm, it
will record that for you into the (Visual Basic for Applicatioll$ programmjng language]." Id.at
89: 12* 16;

s~e. ~.i., id. at 1osH~~~j (::tn~ be~~recoll~~~i~~ o~t~~i ~ene~; ~ni;~;ts of~~de was I

did use Record Macro definitely I used Record Macro to figure out how to do that but I
remember having to tweak it quite a bit to finally get it the way I wanted it to work, so thaCs why
I defined· it as partially"); 113:17-21 ("[S]o I used Record Macro to figure out what the syntax .
was and then I modified it to include, for example, .MinorUnit+Range
('"ProdMinorCategoryUnit"). Value!'); 119:2-5 ("t~e. ~esig11.atippgft}le dim'(reflt~elj~s,J gpt thgtl
designation from the macro, Record Macro, when the equation was what I built'); 120:17-23
("Yes, it's based off the Record Macro for the mostpart. It is a repetition of something that was
done earlier in the report, so J could just- it wouldn't have been two separate Record Macro, but
it would have been based off of it initially."),

However, consistent withSakhrani's cited testimony the entirety of the macros were not
written using Record Macro. See also Pl.'s Ex. 29 (Hausch Dep.) at 89:25-90:5 ("Q. So the idea
was Synygy's, but the expression was determined by Microsoft, correct? ... THE WITNESS: As

-27-

far as I can tell on page 365, that's correct. In no other portion of this exhibit is that correct.").
Further, even though Record Macro may have been used to capture some elements of the code
that makes up Synygy's macros, the Macros would not exist without Synygy's decisions
regarding the information that should be programmed into the creation of its IC reports. Hausch
testified that
Synygy's claiming that it authored all the code in [Synygy Macros
No. 1]. Whether or not that code was handwritten or whether that
code was captured through the Visual Basic editor's application to
convert your keystrokes and mouse movements in individual basic
language, somebody at Synygy still determined what the
movement and the keystrokes ought to be that was then translated
into the language - . . . And mouse movement and other functions
ought to be. So the process was still defined by Synygy, and the
majority of the code behind that process was written by Synygy.
And some elements of that code, as captured on page 365, only
were recorded, but the concept was still defined and authored by
Synygy.
Pl.'s Ex. 29 (Hausch Dep.) at 89:5-23. Synygy's macros include at least some information that
cannot be determined by simply looking at Synygy's reports or online user forums or by using
Record Macro. Hausch and Sakhrani's testimony raises an issue of material fact with respect to
whether the software macros are capable of being easily derived from public information. Under
the facts presented, including evidence of Synygy' s efforts to maintain confidentiality through
confidentiality and non-disclosure agreements, 4 a reasonable jury could conclude that the secrecy

4

Hausch testified that
The two primary mechanisms that we use to keep Synygy software
macros, among other things, secret are nondisclosure agreements
with our client base through the services agreement and
confidentiality agreements with every employee at Synygy as part
of their employment acceptance. I'm under one myself. As part of
the ... employee confidentiality agreement, we're obligated not to
disclose our client's information basically outside of the client
team with, you know, some flexibility as we go up through the
-28-

element of the trade secret test has been met with respect to the software macros.

2.

Peculiar Importance and Competitive Value

Because I have found that questions of fact remain with respect to whether the identified
reports in their entirety and/or the software macros were publicly known or readily accessible, I
must proceed to consider whether a genuine dispute remains with respect to whether Synygy's
identified reports or its software macros derive independent economic value from not being
generally known. Defendants contend that summary judgment is warranted because "Synygy
has failed to say how any of what it admits were sui generis reports reflecting Novo's plan
design and containing Novo information could conceivably be of any value to Synygy in any
other context." Defs.' Trade Secret Reply at 17 n.9. They argue that "custom designed materials
that do not reflect any of a plaintiffs concepts or business rules but instead reflect those of the
defendant/customer are not trade secrets because they cannot have 'peculiar importance to the
plaintiff' and do not constitute processes or devices 'for continuous use in the operation' of the
plaintiti's business." Id. (citation omitted). On the evidence now before me, I disagree.

a.

Reports in Their Entirety

To withstand defendants' motion for summary judgment, Synygy must show that a
question of fact remains as to whether its reports have independent economic value from not
being generally known to the public or to other persons who can obtain economic value from
their disclosure or use. "Certainly it is possible that a new combination of known steps or
organization; but we don't talk to one client about ~~ you know,
one client with another client or share the intimate details of one
client with another client team at Synygy. The nondisclosure
agreement with our clients prevents them from distributing our
material outside of their organization. That is a standard part of
our boilerplate services agreements with our client base.
Pl.'s Ex. 29 (Hausch Designee Dep.) at 194:25-195:20.
-29~

processes can be entitled to trade seGret protection." Arco Indus; •CQrp. v. Chemcast Corp,. 633
F.2d 435,442 (6th Cir. 1980). But to succeed, plaintiff must show ~'that the combination
achieved in its overall layout and approach [is] in [some] way novel,'~ !i, or has value from not
being generally known. Accordingly, in National Ri§k Management, Inc. v. BramweUf 819 F. ·
Supp. 417. 43 I -32 (E.D.

Pa.l993)~

the Court explained that "[t]he fact that individual forms in

marketing material orin [theJ plaintitl"s proposal book were compilatio.ns of public information·
does not itself preclude a finding thatthe combination of the included elements affords a plaintiff
a competitive advantage and is not itself in the public domain,,
(T]he combination of information in (the plaintiff's] proposal book
retlected market research perfom1ed by [the] plaintiff and
decisions t~include and, eJSclude. ~e~~n ~~~~t?~ts t~?~· ~<l~ger
poolpf data~ . It isthisvrat~er thant~e Data contained itt tQ.e
individual forms generally known in the self insurance business,
which may argl,lably contain a sufficient degree of novelty,
.however slight, to be excluded from general knowledge and may
. qualify the proposal book as a trade secret.
Id. at 432.
On the record before me, I find that whether the identified reports derive independent
economic value from not being generally known is a question offact. Synygy's expert1 Peter

Lee~ when asked if ~~what[ isJ valuable 1s the [incentive cdfupensatib~j ~¢port as a\Zh~~~>;
responded ''[cJorrect. ... l would say the thing of most value here is the report has a whole, yes."
Defs.' Ex. 47 (Lee Dep.) at 259:10*17. In his expert report, Lee, opines that, when compared to
incentive compensation reports prepared by other entities,
the reports created by [Synygy], using their proprietary report
design process, provided the clearest communication to an
uneducated reader of incentive compensation plan details. These
details were arranged at the top of the reports in a manner that
enable readers to detennine, without additional data and without
reviewing data from multiple sources, how much their incentive
payout would be and how the calculation was perfonned.
-30-

This specific arrangement and design philosophy created a
competitive advantage. Because the [Synygy] reports
communicated payment amounts and payment calculations quickly
and efficiently to readers, this would have reduced the amount of
time that readers/sales people would need to spend to determine
whether they were being paid the right amount.
Defs.' Ex. 4 (Lee Report) at 23.
In contrast, defendants' expert, Tony Buglione, explains that other IC report "designs
referenced in Mr. Lee's report, as well as other designs available to Novo, are also effective, and
require no greater time to comprehend than does the design of Synygy' s." Defs.' Ex. 8
(Buglione Report) at 58. Buglione opines that "the payout number and other elements can be
located in various places on the report and still be effective. This is just common sense: Sales
reps quickly learn where to find the information that is most important to them." Id. at 60-61.
In his rebuttal report, Lee writes "incremental improvements in effectiveness and
efficiency are critical. Although it is possible to have any number of IC report layouts and
formats, the subtleties may be difficult to grasp for those whose primary experience with IC
reporting is as a recipient of reports rather than as a designer of reports." Defs.' Ex. 89 at 7. Lee
contends that Synygy's reports provide "sales representative[s] with imperfect knowledge of
their IC plan" with "a much better chance of correctly deciphering" the information contained
therein. Id. at 10.
Based on the conflicting testimony of the parties' experts, a jury could reasonably find
that Synygy' s reports derive independent economic value from not being generally known. Cf.,
Latuszewski v. Valic Fin. Advisors, Inc., No. 03-540, 2007 WL 4462739, at* 17 (W.D. Pa. Dec.
19, 2007) ("The fact that the same information can be gathered on any one customer by talking
with the customer herself is irrelevant. The value in [a company's] customer information is in

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the compilation, categorization, and organization of information on thousands of customers,
combined with the ability to search and format it into a readily usable form. This is what a
competitor does not have and cannot easily recreate."), aff'd, 393 F. App'x 962 (3d Cir.201 0).
b.

Software Macros

Defendants argue that "the macros perform trivial functions, such as highlighting certain
rows in a sales contest report for Novo Nordisk- something that is not only trivial, but useless
other than in a particular Novo Report dating from 2005." Defs.' Trade Secret Reply at 6. They
contend that the testimony of Thomas Lenox and Dhanesh Sakhrani, who are former Synygy
employees, shows that the macros in question are so specific to the work Synygy performed for
Novo that they would not have value for other Synygy clients. Defs.' Trade Secret Mot. at 30;
citing Defs.' Ex. 19 (Sakhrani Dep.) at 124:24-125:4 (agreeing that "macrocode was specifically
designed ... for particular reports being prepared for Novo"); Defs.' Ex. 32 (Lenox Dep.) at
171 :10-172:9 ("no client has the same IC plan"), 242: 1-11 ("Q. And is it the case that these
macros are so specific ... that it doesn't really make sense to borrow something trom some other
source? ... [A.] In a lot of cases, you could say that, yeah."). Defs.' Ex. 53 (Synygy Rule
30(b)(6) Dep. (Evemham)) at 289:18-23 (responding that there are no "instances where Synygy
registered reports or parts thereof were used in connection with clients of Synygy other than
Novo Nordisk"). But the macros would have value to Novo. And competitors such as ZS, if
given access to Synygy's software macros would be able to produce incentive compensation
reports for Novo without expending the time and money required to develop proprietary software
macros for the task. See Ecolaire Inc. v. Crissman, 542 F. Supp. 196, 206 (E.D. Pa. 1982)
(finding drawings might qualify as trade secrets where, "[a]bsent access to such drawings,
competitors must resort to a costly, time consuming process of reverse engineering in order to

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produce many of the parts described in the drawings."). Synygy's claim is that Novo and ZS
misappropriated the macros for Novo's use. Am. Compl.

~~

76-77. I find that a question oftact

remains as to whether the software macros derive independent economic value from not being
generally known.

E.

Evidence of Misappropriation

Even if Synygy has trade secrets in the identified reports or the software macros, to
withstand defendants' motion for summary judgment, Synygy must show that a genuine dispute
remains as to whether defendants misappropriated its trade secrets. To prove misappropriation
of a trade secret under the PUTSA, Synygy must establish that its trade secrets were disclosed or
used without its consent and that defendants:
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know
that his knowledge of the trade secret was:
(A) derived from or through a person who had utilized
improper means to acquire it;
(B) acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use; or
(C) derived from or through a person who owed a duty to
the person seeking relief to maintain its secrecy or limit its
use; or

(iii) before a material change of his position, knew or had reason to
know that it was a trade secret and that knowledge of it had been
acquired by accident or mistake.
12 Pa. C.S.A. § 5302. See also Hill v. Best Medical Intern., Inc., Nos. 07-1709, 08-1404, 091194,2011 WL 5082208, at* 10 (W.D. Pa. Oct. 25, 2011), citing 12 Pa. C.S. § 5302 (finding
that a misappropriation plaintiff "must show that the defendant used or disclosed information
that it knew or had reason to know was a trade secret and that the defendant acquired such
-33-

information by improper means."). Similarly,
To prevail on a claim for misappropriation of trade secrets under
New Jersey law, a party must establish: "(1) the existence of a
trade secret; (2) communicated in confidence by the plaintiff to
the employee; (3) disclosed by the employee in breach of that
confidence; (4) acquired by the competitor with knowledge of the
breach of confidence, and (5) used by the competitor to the
detriment of the plaintiff."
Ameriprise Fin. Servs., Inc. v. Koenig, No 11-6140,2012 WL 379940, at *6 (D.N.J. Feb. 6,
2012), quoting Merckle GmbH v. Johnson & Johnson, 961 F. Supp. 721, 730 (D.N.J. 1997);
Rycoline Prods., Inc. v. Walsh, 756 A.2d 1047, 1052 (N. J. Super. Ct. App. Div. 2000).
Defendants have stipulated that Novo sent certain ofSynygy's reports to ZS. See Pl.'s

Ex. 37 (Mulroney Dep.) at 161:11-163:5; Pl.'s Ex. 57 (ZS Stipulation). The question is whether,
in doing so, Novo improperly disclosed the information or ZS improperly acquired the
information. 5

1.

Novo

Novo argues that it "acquired all the reports quite properly" and, as a result, cannot be
held liable for misappropriation of Synygy's trade secrets. Defs.' Trade Secret Reply at 10. But
if Novo disclosed Synygy's trade secrets to ZS and, "at the time of disclosure ... knew or had
reason to know that [its] knowledge of the trade secret was ... acquired under circumstances
giving rise to a duty to maintain its secrecy or limit its use," Synygy can prevail on its trade
secrets claim against Novo. "Improper means" is defined under the PUTSA as including "breach
or inducement of a duty to maintain secrecy." 12 Pa. C.S.A. § 5302. Thus "a claim for trade
secret misappropriation may ... be premised on the defendant's disclosure of a trade secret in

5

Defendants' argument that Synygy cannot show misappropriation because it has
not proven that a trade secret exists is unavailing for the reasons set forth in my above
discussion.
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violation of a duty of secrecy." Wentworth*Douglass Hasp. v, Young &.Navis Profl Ass'n.

w.

CV*lZO*SM, 2012 WL 1081172, at *S (O.N.H. Mar. 30, 2012) (applying paraHelprovlsion in
the New Hampshire Uniform Trade Secrets Act).
. Synygy contends that "(t]he evidence in this case is unequivocal in that Novo was only
permitted to receive the incentive compensation reports designed by Synygy under the strict
confidentiality protections contained in the Synygy-Novo Agreement." Pl.'s Trade Secret Mem~
at 37. Under the terms of the agreement, Novo "agree[d] not to divulge, disclose, convey or
permit the disclosure of any of the Proprietary Information of[Synygy], either verbally or in
writing, to any person, corporation, or third party, other than employees:, agents, subcontractors
or independent contractors ofSynygy or [Novo]: and::: their .·.::.;.::<:::.· ..·:·:.::·.·.:.corporations~sul;>sitiiari~.·· Qr
parent .·.:-. -::. ..···:_._:·:. ::. :::.. ····:·: .. ·..:::: :::·: ···:··· ·.·
·:·: . .·.· .. ·
affiliates who are erigagedih pedbnning thisA~;~e~~nt.l;

~l.'~E~.33 atS~OOO~~.

Prior to

finalizing its contract with NQvo, Synygy explained to Novo that its "intent fin making certain
modifications to the contract] is to protect our intellectual property. For that reason we state
ownership of documents that we create and design. This prevents our work from being copied
. and is very important to us... PI.' s Ex. 26 (Email re: Comments on Draft Incentive ·
Compensation Services Agreement, March 23, 1999) atSXNQ199?37.
Defendants counter that "the summary judgment record does not support a reasonable
conclusion that Novo disclosed any 'Proprietary Information' under its contract with Synygy."
Defs.' Trade Secret Mem, at 32. They argue that "Novo reasonably believed its reports were its
reports" and "there is no evidence that Novo was put on notice by Synygy that whatever Synygy
now contends are its trade secrets were trade secrets." Id. at 32-33. Defendants contend that
"any argument that Novo 'should have known' that Synygy was somehow claiming that
something in these thousands of reports was its 'trade secret[ ]' [is] unreasonable as a matter of

law." Id. at 32. They also argue that no dispute of fact remains with respect Novo's non-liability
for misappropriation because Synygy did not follow its own policy on marking any of the
documents or software in question "Synygy Confidential" and claim that because Synygy did not
"put Novo ... on notice that Synygy believed any of its trade secrets were in [the reports
provided to Novo], it cannot be reasonably concluded that Novo ... [was] aware of any breaches
of confidences." Id. at 35.
On the record before me, plaintiff can withstand defendant's motion for summary
judgment on its claim for misappropriation of trade secrets against Novo. Material questions of
fact remain with respect to whether Novo was aware that the information it shared with ZS
included confidential trade secrets. As a result, material questions of fact also remain with
respect to the question of whether Novo violated the PUTSA or breached a confidence under
New Jersey law when it disclosed the Synygy-prepared reports and software macros to ZS.
Accordingly, I will deny defendants' request for summary judgment on Synygy's PUTSA claim
against Novo insofar as it pertains to the reports and the software macros.

2.

zs

I am likewise satisfied that the question of whether ZS misappropriated any of Synygy' s
trade secrets must be left to the jury given the issues of disputed fact that remain with respect to
whether ZS had reason to know that any of the information that Novo shared with it was
"derived from or through a person who owed a duty to [Synygy] to maintain its secrecy," 12 Pa.
C.S.A. § 5302, or, in other words, that it was "acquired by [ZS) with knowledge of [a] breach of
confidence.''- Ameriprise Fin. Servs., 2012 WL 379940, at *6.
Defendants argue that "Synygy can point to no evidence in the record that ZS knew or
had a reason to know that whatever it is that Synygy now claims is its trade secret was acquired

-36-

by improper means by Novo." Defs.' Trade Secret Mot. at 33. Synygy counters that "ZS was
aware of Synygy's contractual relationship with Novo and that Synygy was a direct competitor
who was aggressive about protecting its intellectual property rights." Pl.'s Trade Secret Opp'n
Mem. at 38. Synygy also asserts that it "took the extra step of ensuring that the overwhelming
majority of the files it sent to Novo were password protected," and despite the presence of
passwords, "ZS simply and unlawfully hacked the Synygy passwords." Pl.'s Trade Secret Opp'n
Mem. at 39.
Defendants argue that "review of the various reports Synygy ... asserts are
representative samples of Novo deliverables ... clearly show that Synygy did not use passwords
to protect anything it is now arguing constitute its 'trade secrets.'" Defs.' Trade Secret Reply at
l4. Defendants contend that "Synygy failed to use any passwords to protect the macros in the
Incentive Compensation report .... Nor were the macros protected in the Circle of Excellence
Report, Parameter Verification Report and Earnings Summary-Nation Report ... which were
management-level reports of limited distribution." Defs.' Trade Secret Reply at 15. They
contend that "Synygy's only argument is that one ZS employee provided instructions to another
ZS employee about how to use a publicly-available tool to unlock one password-protected sheet
in one report." Defs.' Trade Secret Reply at 14. Defendants maintain that "no reasonable jury
could find that ZS should h;lVe understood that password protection of one worksheet of Novo·
data in one workbook meant that Synygy was·trying to protect something not found in that one
worksheet .... " Defs.' Trade Secret Reply at 17 (emphasis omitted). I disagree.
Construing the record in favor of Synygy as the non-movant, I find that there is sufficient
evidence to raise material questions of fact with respect to whether ZS had knowledge that the
reports and software macros were acquired from Novo in violation of any duty Novo owed to

-37-

Synygy to maintain the secrecy of the information in question. There is evidence that ZS
removed information associated with Synygy from documents it intended to use as its own. See
Pl.'s Ex. 69 (Neeraj Vashisht email, Dec. 13, 2005) ("Please check the
File>Properties>Summary Tab to ensure that we have no references of Synygy/any other
company than ZS."); Pl.'s Ex. 22 (Lee Report) at 3 ("A comparison ofSYNYGY reports and
· report templates with ZS reports and report templates for NOVO reveals a strong derivative
relationship between the reports generated by ZS and SYNYGY for NOVO and the templates
used to generate those reports."). At least some of the information that Novo provided to Synygy
was protected by passwords. See, e.g., Pl.'s Ex. 34 (Ragsdale Report Report) at

52~54

(report of

defendants' expert analyzing password protection for various documents and identifying
numerous documents with password protected software macros). There is also evidence that ZS
undertook efforts to "unprotect" password protected files. See PL.'s Ex. 35 (Sandeep Upadhyay
email, Nov. 25, 2005) (providing instructions regarding removal of password protection and
explaining that "it takes around 2-3 minutes for the sheet to get unprotected"). Thus I will deny
defendants' request for summary judgment on Synygy's misappropriation claims against ZS
insofar as it pertains to the reports and the software macros.

III.

Copyright
In their third motion for summary judgment, defendants seek summary judgment on

Count I of Synygy's second amended complaint, which asserts a claim against defendants for
copyright infringement. Synygy claims that defendants have infringed its copyrights in Synygy
Macros No. 1 and No.2. See Second Am. Campi.,-[,-[ 38, 94. Synygy also claims that
defendants have infringed its copyrights in Synygy Reports No. 1. See Id. at,-[,-[ 38, 94.
Effective October 14, 2008, Synygy received a certificate of copyright registration for

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Synygy Macros No. 1. Pl.'s Ex. 74. Synygy also received a certificate of copyright registration
for Synygy Macros No.2 effective June 8, 2009. Pl.'s Ex. 75. Synygy Macros No. 1 and No.2
are "an original set of proprietary software 111acros to be used with an off-the-shelf software
program (Microsoft Excel) to generate analyses of sales compensation and sales performance of
pharmaceutical sales people." 6 See Second Am. Compl. ~~ 38, 94
Etiective June 29, 2009/ Synygy also registered with the Copyright Office a collection
of reports called "Synygy Reports No.1." Pl.'s Ex. 63. Synygy Reports No.1 is a collection of
two categories of documents that Synygy custom designed and delivered to Novo during their
business relationship from 1999 to 2005. Pl.'s Copyright Opp'n Mem. at 3. The first are
incentive compensation report scorecards which "tell[] the pharmaceutical sales rep how he or
she is measuring up against the sales goals set by Novo." Defs.' Copyright Mem. at 4.
"[S]corecards were distributed to Novo's sales force monthly via email, and they showed how
much the rep could expect to make for a particular POA and how Novo had computed the rep's
payout." Id. at 4-5. The second category of documents in Synygy Reports No. 1 are "intended
for sales operations management at company headquarters, not for individual sales reps in the
field." Id. at 5. Defendants refer to these documents as "home office reports."

lf4

Plaintiff

refers to these documents as "management reports." Pl.'s Copyright Opp'n Mem. at 3.
"[M]anagement reports ... communicate information to management regarding data
6

In its Second Amended Complaint, Synygy also claims that it has received
copyright registration numbers for the following software products: "ADEPT Viewer," "ADEPT
4.1 Viewer," IC Viewer 7.1; IC Expert 8.0" and "IC Viewer 8.1." Second Am. Compl.~ 73.
However, Synygy's Second Amended Complaint does not allege that ZS or Novo have infringed
Synygy's copyrights in these software products. See id.at ~ 94 (asserting a claim for
infringement of"Synygy's copyrights in the Synygy Software Macros and the Synygy Reports,"
and not the "Synygy Software Products" or "Synygy Software").
7
Synygy registered and deposited Synygy Reports No.1 with the Copyright office
two months before amending its complaint to assert a claim for copyright infringement. See
Dei's.' Copyright Mem. at 9.
-39-

verifications, earnings summaries, and rankings of employees for sales contests." Id.
Specifically, the reports in Synygy Reports No. 1, the collection deposited with the
Copyright Oflice, are identified as "Incentive Compensation Report" scorecards for DC, Maine,
Nation (DCS, DBM, RBD), Regional Business Director and Mid Atlantie' and "Verification
Report- Parameters," "Verification Report- Payout Factor Tables," "Roster Verification Report
- Comparison of Cunent and Previous Territory/Role/EmpiD Combinations," "Roster
Verification Report - Comparison of Cunent and Previous Eligibility," "Roster Verification
Report- Comparison of Current and Previous Names and Email Addresses," "COE Measures &
Rankings by POA - Based on COE 2005 Criteria," "Circle of Excellence Ranking Report (As of
Dec 2005 YTD)," Earnings Summary- Nation," "Circle of Excellence Ranking Report" and
"Preliminary Payout Factor Report." See Pl.'s Ex. 64. Synygy explains that before it deposited
these reports \"with the Copyright Office, Synygy modified data values from the reports, in order
to protect the confidentiality of the data that Novo licensed from a third party data aggregator
... , modified Novo employee ID numbers, and replaced names ofNovo employees with
'Lastname, Firstname."' Pl.'s Copyright Opp'n Mem. at 4.
Synygy claims that "[b]y reproducing, distributing, and using copies of the Synygy
Software Macros, the Synygy Reports, and other Confidential Information and creating
derivative works therefrom, ZS and Novo have infringed and will continue to infringe Synygy's
copyrights in the Synygy Software Macros and the Synygy Reports." Dkt. No. 85,

at~

94. To

prevail on its claim for copyright infringement, Synygy must show that it had ownership of a
valid copyright and that defendants engaged in unauthorized copying of original elements of the
copyrighted work. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340,361 (1991); Kay
Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 203 (3d Cir. 2005); Dam Things from Denmark,

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