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May 29, 2012
Google Wins Trade Secret Lawsuit Over Ill-Fated Coffee Meeting--Booloon v. Google
By Eric Goldman
Booloon, Inc. v. Google, Inc., 2012 WL 1898937 (Cal. App. Ct. May 25, 2012)
Qin Zhang is a technology entrepreneur and an attorney (meaning she's joined the illustrious--and burgeoning--club of lawyers-as-plaintiffs who have sued Google). Zhang claims to have developed language processing technology with applications to search. A mutual acquaintance introduced Zhang to Nick Mote, a Google engineer on the advertising side.
As you may know, Google has a big divide between its advertising and search business units. Google does a number of things to insulate the search business from the advertising business, so the fact that Mote works in advertising means that he should be "walled off" from the search engineers. The strength of this wall proves decisive in this case.
In June 2008, Zhang, Mote and others met for a fateful "coffee." The opinion doesn't definitively explain the parties' expectations going into the coffee meeting. It appears that Zhang thought the coffee was a sales pitch to Google (she did a product demonstration), while Mote thought he was doing a favor casually shooting the breeze with an emerging entrepreneur (Mote sent Zhang some academic citations after the coffee). The opinion doesn't mention that anyone at the coffee signed any written NDAs, a conspicuous omission given that NDAs are the "Silicon Valley Handshake"--although, surprisingly, it wouldn't matter to this ruling even if NDAs were signed. Zhang claims Mote orally agreed to maintain confidentiality and further claims Mote blabbed confidential information disclosed at the coffee to Google's search team, which subsequently implemented features that presumably violated Zhang's trade secret rights.
In support of a motion for summary judgment, Google introduced the following declarations:
* Mote declared he didn't disclose any substantive discussion from the coffee to anyone else at Google until after the legal threats emerged, and specifically that he didn't discuss the meeting with Google employees on the search side.
* declarations from several Google engineers that everything in local search and people search was 100% home-brewed and that Mote had no influence on the product development decisions.
OK, so now what? Zhang said she disclosed confidential information to a Google engineer and that Google ripped her off. Mote and Google say that Mote never further disclosed anything from the meeting and none of its product decisions in search were influenced by Mote or the information he received. Sounds like a typical trade secret he-said/she-said dispute. Superficially, this sounds like it can't be resolved on summary judgment, and the matter should go to trial to let the jury decide who they believe.
But there's a whiff of trade secret trolling underlying Zhang's lawsuit, as evidenced by (among other things) the unspecific/conclusory definitions of what Zhang considered to be confidential information, her desire to stake a claim to Google's fortune based on an informal coffee with a rank-and-file engineer, the long list of junk causes of action Zhang asserted, the fact that Zhang as lawyer-plaintiff is representing herself and did so sub-optimally (e.g., presenting an incomplete trial record to the appellate court), and the non-existent written NDA. So instead of holding this case over to a jury, the court does an atypical burden shift. Saying that Google provided evidence of its internal search-advertising divide (a completely self-serving assertion), the burden shifted to Zhang to introduce admissible evidence that in fact Mote spilled the beans to his search co-workers. Unable to do so, Zhang gets kicked out of the courtroom.
As a matter of trade secret law, I think the court's treatment is a little glib. As a policy matter, though, I think the court's result is spot-on. Trade secret plaintiffs should have to do more work than just alleging the following formula: meeting with company employee + disclosure of unspecified confidential information + similarities in resulting product development. If simply following that formula in a complaint is enough, trolly trade secret plaintiffs have some pretty strong tools to extract cash from honest businesses.
At the same time, it's hard not to think Mote's willingness to have coffee with Zhang was a well-meaning rookie mistake. We should live in a society where friends help out other friends over coffee, but the combination of our society's propensity to litigate (especially law school JDs!) and pliable trade secret doctrines convert such meetings into litigation-bait. As the saying goes, no good deed goes unpunished. My guess is that further requests to Mote to meet for coffee are now met with a link to this opinion. It's sad that we can't just "talk" to each other any more.
Mote could have done better by defining the expectations going into the coffee. I'm reminded of the scene from Grosse Pointe Blank when Blank and Grocer have a business "meeting" over breakfast, carefully eyeing each other as they lay down their guns (hidden in a paper bag and napkin, respectively). Every time we get together for a coffee, we need to establish the ground rules about what weapons are allowed to the meeting, and we have to make a pact to lay down our weapons. Whenever I have an ambiguous business meeting (like someone asking for "my perspectives" on their situation that might really be a fishing expedition for free legal advice), I have a long list of standard disclaimers that I run through at the meeting's beginning so that there's no confusion about confidentiality. Lawyers are more sensitive to these concerns than engineers due to our professional responsibility, but being upfront in a business meeting about what's confidential (and what isn't) is just good hygiene.
Ideally, any non-confidentiality understandings would be in writing. Alternatively, Google engineers can simply refuse off-site coffee meetings and invite all business-related discussions to the Googleplex. Among the many advantages: visitors to Google have to sign a lengthy and onerous NDA walking in the door that could have provided some cover here. If nothing else, that agreement almost assuredly says that any confidential disclosures to Google must be in a writing marked confidential. Given that Zhang didn't give any written materials to Mote at all, the standard contract restriction would have given the judges another way to exit the litigation.
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