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Zvelo, Inc. v. Akamai Technologies, Inc.

United States District Court, D. Colorado

September 30, 2019

ZVELO, INC., Plaintiff,



         This matter is before the Court on Defendant Akamai Technologies, Inc.’s Motion to Dismiss [Docket No. 28]. The Court has jurisdiction under 28 U.S.C. §§ 1331 and 1367.

         I. BACKGROUND

         Plaintiff zvelo, Inc. is a technology company that offers a database of categorized website addresses, or Uniform Resource Locators (“URLs”), for purposes of domain name filtering, content filtering, parental controls, content categorization, and other purposes. Docket No. 1 at 3, ¶ 12. This type of technology allows companies to filter or block access to certain websites on the companies’ computers. Id. at 2, ¶ 7. Because websites differ so widely, filtering websites based on form or content can be difficult. Id., ¶ 8. Thus, plaintiff’s database assigns categories to each unique URL, such as “news” or “malicious software, ” so that users can filter or block websites based on category. Id. at 2-3, ¶¶ 8-9. Plaintiff also compiles data about URLs that are actively visited to keep its database up-to-date on active and inactive websites. Id. at 3-4, ¶ 14. Plaintiff calls its knowledge of active websites the “zvelo Active Web, ” which, along with the categorizations of the URLs, make up plaintiff’s database – the “zveloDB.” Id. at 4, ¶ 15. Plaintiff contends its database is unique and valuable intellectual property that would be challenging for another company to recreate. Id. at 3-4, ¶ 14.

         Defendant Akamai Technologies, Inc. is a company that offers products and services that provide URL filtering functionality. Id. at 8, ¶ 41. Plaintiff alleges that defendant’s products and services that provide this URL filtering functionality utilize plaintiff’s database and the proprietary information contained therein. Id. at 8-9, ¶¶ 42-43. This allegation is based upon “information made available to the public by [defendant] as well as security measures that [plaintiff] has incorporated” into its database. Id. at 8, ¶ 42.

         Plaintiff filed this lawsuit on January 10, 2019, raising claims of (1) trade secret misappropriation under the Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836 et seq., (2) trade secret misappropriation under the Colorado Uniform Trade Secrets Act (“CUTSA”), Colo. Rev. Stat. § 7-74-101, et seq., and (3) unjust enrichment. Docket No. 1 at 9-13. Plaintiff also seeks injunctive relief. Id. at 14. On February 8, 2019, defendant filed a motion to dismiss for failure to state a claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Docket No. 28. Plaintiff filed a response, Docket No. 38, to which defendant replied. Docket No. 46.


         To survive a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure, a complaint must allege enough factual matter that, taken as true, makes the plaintiff’s “claim to relief . . . plausible on its face.” Khalik v. United Air Lines, 671 F.3d 1188, 1190 (10th Cir. 2012) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The ‘plausibility’ standard requires that relief must plausibly follow from the facts alleged, not that the facts themselves be plausible.” RE/MAX, LLC v. Quicken Loans Inc., 295 F.Supp.3d 1163, 1168 (D. Colo. 2018) (citing Bryson v. Gonzales, 534 F.3d 1282, 1286 (10th Cir. 2008)). Generally, “[s]pecific facts are not necessary; the statement need only ‘give the defendant fair notice of what the claim is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Twombly, 550 U.S. at 555) (omission marks omitted). “[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged – but it has not shown – that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks and alteration marks omitted); see also Khalik, 671 F.3d at 1190 (“A plaintiff must nudge [its] claims across the line from conceivable to plausible in order to survive a motion to dismiss.” (quoting Twombly, 550 U.S. at 570)). If a complaint’s allegations are “so general that they encompass a wide swath of conduct, much of it innocent, ” then plaintiff has not stated a plausible claim. Khalik, 671 F.3d at 1191 (quotations omitted). Thus, even though modern rules of pleading are somewhat forgiving, “a complaint still must contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.” Bryson, 534 F.3d at 1286 (alteration marks omitted).

         III. ANALYSIS

         A. Trade Secret Misappropriation

         Defendant first argues that plaintiff’s trade secret misappropriation claims under DTSA and CUTSA should be dismissed for failure to state a claim. Docket No. 28 at 3. To prevail on a claim for misappropriation of trade secrets under Colorado law, a plaintiff must show: “(i) that he or she possessed a valid trade secret, (ii) that the trade secret was disclosed or used without consent, and (iii) that the defendant knew, or should have known, that the trade secret was acquired by improper means.” Gates Rubber Co. v. Bando Chem. Indus., Ltd., 9 F.3d 823, 847 (10th Cir. 1993). CUTSA defines “trade secret” as “the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value.” Colo. Rev. Stat. § 7-74-102(4). To constitute a trade secret, “the owner thereof must have taken measures to prevent the secret from becoming available to persons other than those selected by the owner to have access thereto for limited purposes.” Id.

         Under Colorado law, “[w]hat constitutes a ‘trade secret’ is a question of fact for the trial court.” Doubleclick Inc. v. Paikin, 402 F.Supp.2d 1251, 1257 (D. Colo. 2005). Courts look to several factors to make this determination, including:

(1) the extent to which the information is known outside the business,
(2) the extent to which it is known to those inside the business, i.e., by the employees[, ] (3) the precautions taken by the holder of the trade secret to guard the secrecy of the information, (4) the savings effected and the value to the holder in having the information as against competitors, (5) the amount of effort or money expended in obtaining and developing the information, and (6) the ...

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