Neuropublic S.A. - Information Technologies v. Ladas & Parry LLP

Background

Neuropublic alleged that its former attorneys, Ladas & Parry LLP, disclosed an unredacted English translation of Neuropublic’s invention disclosure to PatentManiac while conducting a preliminary patent search. Neuropublic claimed that Ladas & Parry did not tell it that a third party would be used, obtain its consent, or impose confidentiality restrictions on the disclosure.

Neuropublic asserted four claims: misappropriation of a trade secret under the federal Defend Trade Secrets Act, copyright infringement, legal malpractice, and breach of fiduciary duty. Ladas & Parry moved to dismiss the amended complaint under Rule 12(b)(6), which tests whether the complaint states a legally sufficient claim.

Federal Claims

The court held that the trade-secret and copyright claims were barred by their three-year statutes of limitations. Under those laws, the limitations period begins when the alleged violation is discovered or reasonably should have been discovered.

Neuropublic alleged that it did not actually learn until 2023 that Ladas & Parry had sent the invention disclosure to PatentManiac. The court nevertheless concluded that Neuropublic should have discovered the disclosure in October 2020, when it received the Patentability Search Report. The report identified PatentManiac as its creator and stated that the client-provided invention disclosure was understood and analyzed as the first step in the search process. In the court’s view, Neuropublic could have investigated the disclosure by examining the report or asking its attorneys how PatentManiac prepared it.

The court also rejected Neuropublic’s argument that the report did not reveal whether confidentiality safeguards existed. For the copyright claim, the court held that the alleged copying and reproduction were sufficient to start the limitations period, regardless of whether the disclosure was confidential. For both federal claims, the court concluded that reasonable diligence would have revealed the alleged lack of safeguards or confidentiality provisions. The court therefore dismissed Counts I and II with prejudice.

State-Law Claims and Disposition

The legal-malpractice and fiduciary-duty claims arose under New York law. The court was not assured that diversity jurisdiction existed because the amended complaint did not allege the citizenship of each Ladas & Parry partner. The court explained that only supplemental jurisdiction could therefore provide a basis for considering those claims, and that it ordinarily declines supplemental jurisdiction when the federal claims are dismissed early in the case.

The court dismissed Counts III and IV without prejudice. In its conclusion, the court granted Ladas & Parry’s motion to dismiss the amended complaint, directed entry of a judgment of dismissal, lifted the discovery stay, and closed the case.