Case Study
Case Study: Timber Company Successfully Enforces Trade Secret, Contractual Protections
October 9, 2008
AT ISSUE: Forest2Market developed a unique web-based timber pricing service for its customers. When four subscribers helped start a competing web-based service, Forest2Market asked Womble Carlyle for help in defending its trade secrets.
SUMMARY: The complaint asserted claims for breach of contract, misappropriation of trade secrets, and unfair and deceptive trade practices. However, the defendants removed the case from state court to federal court and sought to dismiss the case, arguing that it should be decided instead under federal copyright law.
Under the doctrine of "Copyright Preemption," federal copyright law takes precedence over any conflicting state laws, unless there is an “extra element” in the case that goes beyond traditional copyrights.
Womble Carlyle attorney Mark Henriques argued that such an extra element was indeed present in this case. Forest2Market said the case involved trade secrets. In addition, the defendants had violated Forest2Market’s terms of use, which the defendants agreed to when they signed up for the service. This constituted a breach of contract. Thus, the case involved more than just copyright issues, Henriques said.
RESULT/IMPLICATION: The U.S. District Court, Western District of North Carolina, agreed with Forest2Market and denied the motion to dismiss the case. The Court found that the complaint drafted by Womble Carlyle sufficiently established additional factors which took the claims out of the scope of copyright preemption.
With the defendants’ main argument defeated, the case—Forest2Market, Inc. v. American Forest Management, Inc., 2008 WL 1820917 (2008)—was subsequently settled to Forest2Market’s satisfaction.
ABOUT THE ATTORNEY: Mark Henriques, a member of Womble Carlyle's Trade Secrets Team, has litigated numerous cases involved trade secrets, unfair and deceptive trade practices, and violation of non-compete agreements. Mark’s cases include the landmark non-compete case of Redlee/SCS, Inc. v. Pieper,153 N.C.App. 421, 571 S.E.2d 8 (N.C.App.,2002).
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