The firm recently obtained a unanimous victory for our client Pinterest Inc. in the New York Appellate Division, First Department, which affirmed the dismissal with prejudice of all claims that had been asserted against Pinterest in its very first lawsuit, a trade-secret case alleging that Pinterest’s first investor had misappropriated the idea for Pinterest from Plaintiff Ted Schroeder and given it to Pinterest’s founders in 2009. The comprehensive, 34-page decision is a veritable treatise explaining why Plaintiff—who alleged that the idea for the wildly successful Pinterest website was actually his—failed to state claims against Pinterest for aiding and abetting breach of fiduciary duty, misappropriation of trade secrets/ideas, unjust enrichment and unfair competition.
In late 2012, Schroeder filed a complaint in federal court (later refiled in state court), alleging that his former angel investor and business partner Brian Cohen sabotaged their social media startup, www.Rendezvoo.com, and then handed Schroeder’s ideas over to Pinterest’s founders. Schroeder alleged that Pinterest’s meteoric rise transpired a few months after Pinterest’s founders met and began working with Cohen, and that it was Cohen who led Pinterest’s founders to change their original idea for a mobile shopping platform called “Tote” into a visual curation site called “Pinterest”—which Plaintiff claimed was similar to his now-defunct www.Rendezvoo.com site.
Pinterest, represented by Quinn Emanuel, moved to dismiss the complaint for failure to state a claim. Not long thereafter, the state court issued an order dismissing the entire case against Pinterest without leave to amend. The court adopted Quinn Emanuel’s arguments on every claim, including that Plaintiff’s trade secrets were not actionable because they were either public (having been disclosed to the world via the Internet on Rendezvoo.com) or impermissibly vague (such as Plaintiff’s supposed “business and management information” trade secret).
Plaintiff appealed, and the Appellate Division affirmed in an unusually lengthy decision. The Appellate Division went into great detail regarding Plaintiff’s allegations and reinforced that, under New York law, trade secret and idea misappropriation, unfair competition and unjust enrichment claims require a close relationship between the parties or use of improper means—neither of which the court found to have been pled here. The Appellate Division also declined to extend trade-secret protection to a website’s common design choices, such as color schemes and profile pages, explaining that such information was readily ascertainable by the public. And the court explicitly rejected Plaintiff’s belated request for leave to amend, meaning that Pinterest’s first lawsuit is over.