FORMER TECH HEAD FOR APP MAKER ORDERED TO TURN OVER SOURCE CODE

Fitspot Ventures v. Bier

Mobile fitness application maker Fitspot Ventures LLC has won a temporary restraining order requiring its former coding engineer to provide access to source code and customer lists ahead of a trial on its misappropriation-of-trade-secrets claim.

Fitspot Ventures LLC v. Bier et al., No. 15-cv-06454, 2015 WL 5145513 (C.D. Cal. Sept. 1, 2015).

The maker of the Fitspot app convinced U.S. District Judge Otis D. Wright of the Central District of California that it would be irreparably harmed if its former technical head were allowed to retain control of its customer information, source code and access credentials to its source-code repositories.

Los Angeles-based Fitspot claims its app lets people arrange workouts according to the health information they provide, find gyms, and book and pay for sessions with fitness trainers.

The company created its app with the assistance of software developer Solomon Bier, who was hired in January as a coding engineer and given the title “technical co-founder,” according to the opinion.

Cloud platforms for fitness source code When Bier was hired he signed a confidentiality agreement stating that any “intellectual property, passwords, marketing strategies, files, certificates, and other computer information” would belong to Fitspot, according to the judge’s opinion.

The company also provided him with a laptop and ordinary computer accessories, it said.

Bier used subscription-based “cloud platforms” to store the code and test the app, the opinion said. He opened two accounts, one free, the other paid by Fitspot.

After he was fired from the company on Aug. 5, Bier initially resisted returning the laptop and some accessories but eventually complied, the court said.

However, before returning the laptop, Bier erased all the data on the hard drive and changed the passwords for accessing the cloud-storage accounts, the opinion said.

Fitspot claims Bier copied the hard drive data to a personal device and disabled a tool for allowing communication between the company and one of the cloud-storage accounts.

Fitspot filed suit Aug. 12 in a California state court asserting claims for misappropriation of trade secrets, conversion and breach of contract, but Bier moved to remove the case to the Central District of California.

After Judge Wright granted Bier’s motion, Fitspot filed an ex parte application for a TRO pending the trial.

Source code and customer lists

*2 For a TRO, Fitspot had to show that it was likely to succeed on the merits and suffer irreparable harm in its absence, JudgeWright said. Fitspot argued that Bier “unlawfully usurped exclusive access to the company’s confidential and proprietary information,” which included source code and customer information.

Courts have “consistently found that source code and customer lists are trade secret[s],” the judge said, citing Agency Solutions.com LLC v. TriZetto Group Inc., 819 F. Supp. 2d 1001 (E.D. Cal. 2011).

In addition, the confidentiality agreement Bier signed showed that Fitspot considered such information to be confidential, he said. Because Bier appears to have acted outside that agreement by changing passwords and now works for another tech company called Honk.com that might benefit from certain functions of the source code, Fitspot showed it was likely to succeed on its trade secret claim, Judge Wright said.

Without access to the source-code repositories, Fitspot said it is unable to fix some technical glitches with its system, which has resulted in customers complaining and switching to a competitor’s system. Finding Fitspot will suffer irreparable harm to its reputation and goodwill if preliminary relief is not granted, the judge awarded Fitspot a TRO and ordered Bier to show cause as to why he should not immediately produce data taken from Fitspot.

Attorneys:

Plaintiff: Maurice D. Pessah and Michelle Eshaghian, Pessah Law Group, Los Angeles, CA

Defendant: Kinh-Luan Tran, Lee Tran & Liang, Los Angeles, CA

Judge: Otis D. Wright

Company: Fitspot Ventures LLC

Trade Secrets

By Patrick H.J. Hughes, Managing Editor, Westlaw Daily Briefing

Originally published on Law Tech Journal.