IP Law Daily, TRADE SECRETS—S.D. Ohio: Summary judgment granted in security company trade secrets dispute, (Mar 24, 2023)

By Kevin M. Finson, J.D.

The plaintiff relied only on speculative allegations and failed to produce any evidence to support its claims against a competing firm.

Summary judgment was granted in favor of the defendant in a dispute between security companies. The U.S. District Court in Columbus determined that the plaintiff failed to produce any documentary evidence or third party testimony to corroborate its claim that the defendant had engaged in unsuccessful purchase negotiations as a ruse to obtain the plaintiff’s confidential information and poach employees and customers (Professional Investigating and Consulting Agency, Inc. v. SOS Security, LLC, March 22, 2023, Marbley, A.).

Professional Investigating and Consulting Agency, Inc. (PICA) was in the business of providing investigating and consulting (C&I), executive protection, and secure transport services. SOS Security, LLC (SOS) was a security company that for some time partnered with PICA to have PICA provide C&I and executive protection services to some of SOS’s existing clients. SOS engaged in discussions with PICA about acquiring it, and as part of the due diligence process confidential documents were disclosed under nondisclosure agreements. Negotiations eventually fell through, and a key PICA employee left to work for SOS. PICA alleged that the purchase negotiations were a ruse to obtain PICA’s confidential information and poach employees and customers and brought suit against SOS asserting claims for trade violation of the Ohio Trade Secret Act, and other state common law claims. The action was removed to federal court based on diversity of citizenship. After the close of discovery, SOS moved for summary judgment.

Trade secrets. PICA alleged that SOS obtained detailed information about PICA’s C&I and executive protection services during the acquisition process and then used that information to provide similar services to customers. SOS was not able to do that prior to obtaining those secrets from PICA. The court found that PICA failed to produce any evidence that the services SOS was providing were similar to PICA’s, such as by use of the same police contacts, lawyers, accountants, and tax people whose identities had PICA claimed constituted its trade secrets.

Breach of contract. PICA alleged that SOS had breached the nondisclosure agreement the parties entered into as a part of the acquisition process by using its trade secrets. The court held that this claim, like the trade secrets claim, failed because PICA could not show any use of the claimed secrets.

Tortious interference. PICA claimed that SOS caused PICA to lose a contract with Microsoft by disparaging PICA’s billing practices to Microsoft when the parties had worked together on a project for Microsoft. However, the court found that PICA had produced no evidence from which a factfinder could determine whether SOS’s statements were a cause, let alone a primary cause, of Microsoft’s decision not to continue working with PICA.

Quantum meruit. Finally, PICA claimed that SOS had failed to pay it for certain work product, specifically a spreadsheet of security operations and logistics for Liberty Mutual during the Rio Olympics. SOS argued, and the court agreed, that PICA had presented no evidence of the circumstances that would show the parties reasonably expected SOS to pay for the spreadsheet, or that SOS had actually used or benefited from it. PICA’s unsupported assertions were not enough to create a genuine issue of material fact.

The court granted summary judgment in favor of SOS on all claims.

The Case is No. 2:19-cv-03304-ALM-KAJ.

Attorneys: Daniel N. Abraham (Colley Shroyer and Abraham) for Professional Investigating and Consulting Agency, Inc. d/b/a Pica Corp. Eric S. Bravo (Gordon Rees Scully Mansukhani LLP) for SOS Security LLC.

Companies: Professional Investigating and Consulting Agency, Inc. d/b/a Pica Corp.; SOS Security LLC

Cases: TradeSecrets OhioNews