Brandport, Inc. v Virgin Mobile
2006 WL 1737867
Decided June 23, 2006
Superior Court of New Jersey
Chancery Division
FACTS:
Brandport, a marketing company, had communications with defendant about developing a marketing program called “ADS4Minutes.†The program would reward viewers by giving them airtime minutes in exchange for their watching commercials. The plaintiff provided the defendant with a test of its marketing format after executing a non-disclosure agreement. Subsequently, the defendant issued a press release in order to market its new product entitled “Sugar Mama,†which rewarded viewers with airtime minutes when they viewed and paid attention to commercials. Defendant entered into a contract with Ultramercial to complete its product.
PROCEDURAL HISTORY:
Plaintiff filed for a TRO. The Superior Court of New Jersey denied the TRO and conducted this injunction hearing. The Court ultimately found that both parties were to abide by their confidentiality agreement. The defendant was entitled to continue its use of “Sugar Mama.â€
REASONING:
The defendant claimed that there was no breach of the agreement between the parties because the advertising strategy used was in the public domain. The defendant also claimed that the marketing strategy was developed by Ultramercial before Brandport was incorporated.
The Court considered that the plaintiff had not suffered irreparable harm, and therefore was not entitled to a TRO against the defendant. It reasoned that “Sugar Mama†users did not have access to privileged information simply by utilizing the product. The Court added that any damage to the plaintiff had been done, and therefore proper damages would be royalties.
The Court also reasoned that the plaintiff had the original burden of proving that the defendant was using programs that were similar to the trade secrets of Brandport. This advertising model, the Court reasoned, could not be a trade secret because of its presence in the public domain. The plaintiff should have claimed that the idea of the interface had been novel, and consequently could have collected damages..
The final piece of evidence that the Court considered is the patent application of Ultramercial in 2000, which was broad enough to include the “Sugar Mama†concept. This application did predate the incorporation of Brandport.
HOLDING:
The Superior Court of New Jersey refused to issue the TRO against the defendant.
ANALYSIS:
In analyzing the effect of Virgin Mobile’s actions on Brandport, the Court takes into consideration the fact that Brandport had meetings with large companies such as Yahoo and Fox. The Court goes on to determine that Brandport’s lack of success is purely speculative.
While I disagree that meetings with large companies indicate likely success, I do agree that Brandport sought the wrong type of remedy in this case. I also think that the majority of the information considered by Brandport to be a trade secret was well within the public domain. Brandport failed to site unique communications within the Ultramercial system or specific codes used to create the system, which would have likely qualified as trade secrets.
2006 WL 1737867
Decided June 23, 2006
Superior Court of New Jersey
Chancery Division
FACTS:
Brandport, a marketing company, had communications with defendant about developing a marketing program called “ADS4Minutes.†The program would reward viewers by giving them airtime minutes in exchange for their watching commercials. The plaintiff provided the defendant with a test of its marketing format after executing a non-disclosure agreement. Subsequently, the defendant issued a press release in order to market its new product entitled “Sugar Mama,†which rewarded viewers with airtime minutes when they viewed and paid attention to commercials. Defendant entered into a contract with Ultramercial to complete its product.
PROCEDURAL HISTORY:
Plaintiff filed for a TRO. The Superior Court of New Jersey denied the TRO and conducted this injunction hearing. The Court ultimately found that both parties were to abide by their confidentiality agreement. The defendant was entitled to continue its use of “Sugar Mama.â€
REASONING:
The defendant claimed that there was no breach of the agreement between the parties because the advertising strategy used was in the public domain. The defendant also claimed that the marketing strategy was developed by Ultramercial before Brandport was incorporated.
The Court considered that the plaintiff had not suffered irreparable harm, and therefore was not entitled to a TRO against the defendant. It reasoned that “Sugar Mama†users did not have access to privileged information simply by utilizing the product. The Court added that any damage to the plaintiff had been done, and therefore proper damages would be royalties.
The Court also reasoned that the plaintiff had the original burden of proving that the defendant was using programs that were similar to the trade secrets of Brandport. This advertising model, the Court reasoned, could not be a trade secret because of its presence in the public domain. The plaintiff should have claimed that the idea of the interface had been novel, and consequently could have collected damages..
The final piece of evidence that the Court considered is the patent application of Ultramercial in 2000, which was broad enough to include the “Sugar Mama†concept. This application did predate the incorporation of Brandport.
HOLDING:
The Superior Court of New Jersey refused to issue the TRO against the defendant.
ANALYSIS:
In analyzing the effect of Virgin Mobile’s actions on Brandport, the Court takes into consideration the fact that Brandport had meetings with large companies such as Yahoo and Fox. The Court goes on to determine that Brandport’s lack of success is purely speculative.
While I disagree that meetings with large companies indicate likely success, I do agree that Brandport sought the wrong type of remedy in this case. I also think that the majority of the information considered by Brandport to be a trade secret was well within the public domain. Brandport failed to site unique communications within the Ultramercial system or specific codes used to create the system, which would have likely qualified as trade secrets.